Expert Savings Advice

Debt is a fact of life for most people in today’s society. Whether it is monthly mortgage payments, the balance owed on credit cards or loan repayments, most of us accept a level of debt in our everyday lives without really thinking about it.

The uncertain times that we live in, however, can often mean that a change in personal circumstances, for example, being made redundant or having to fund a major purchase such as a new washing machine unexpectedly, can have a significant impact on your ability to repay your personal debts.

If you have concerns about the level of debt that you have and your ability to meet your monthly repayments, then it is important to seek advice sooner rather than later. Even if you have reached the point where bankruptcy seems like a real possibility, it is worth exploring possible alternatives.

Where to go for advice

There are a number of organizations that can provide advice and support on debt-related matters.

The Government provides information on a wide range of issues on its Directgov internet site. This includes a Money, Tax and Benefits section, which can be found here; http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/index.htm. There is a lot of clear and practical information here on a variety of subjects, from general advice on how to deal with debt, to specific sections about mortgage arrears and bankruptcy.

The National Debtline, which is part of an organization funded by a number of banks, building societies and retailers, provides a confidential helpline that can help with providing information on ways of dealing with your debts. It is an independent service and, if you wish, you can speak with their advisers anonymously. Details can be found at http://www.nationaldebtline.co.uk.

The Consumer Credit Counseling Service, a national charity, offers a free debt counseling service which can be accessed either by using an online tool or speaking to one of their customer advisers. Details of this service can be found at http://www.cccs.co.uk/Services/Debtadvice.aspx

A specialist debt charity, the Debt Advice Foundation, also provides help and support with managing debt. There is plenty of information on their website, http://www.debtadvicefoundation.org and, as well as having a telephone helpline, they also provide a number of tools such as budget planners that can help with organizing your finances.

Ways of managing debt

There are a number of different ways of managing your debts. The most appropriate for you will depend on your individual circumstances. For some people, consolidating their debts works well as it makes them more manageable. For others, looking into debt help advice, or Individual Voluntary Arrangements provide the solution. These need to be set up by independent specialists such as those found at www.iva-expert.co.uk. For some, bankruptcy, administration orders or debt relief orders are the most appropriate way forward.

Different options can have an impact on your life in a number of areas. For example, they can affect your credit rating. Any assets that you own can also be affected and there could be future restrictions on the type of office that you can hold. It is, therefore, important to take advice if you are struggling with debt issues. This will ensure that you find the best way, for you, of getting back in control of your finances.

A recent study has shown that IT experts are looking for long-term contracts, even though they pay less than more unreliable freelance work. Umbrella company Giant have conducted research that shows that temporary workers in the IT sector much prefer the security of longer contracts despite the fact that a more casual arrangement might pay more in the short term.

According to the survey, two-thirds of IT contractors would take on a less lucrative job even when faced with the opportunity to accept a higher paid temporary role. This suggests that job security is one of the most valued elements of a job, especially in the current economic climate which could be described as ‘uncertain’ at best. Just over one third of those surveyed indicated that they would plump for the higher-paid contract, with the vast majority indicating that long-term stability is preferable to salary.

Anyone who has taken a job with a lower wage can at least work out what they will end up with after tax and other deductions by using a take-home pay calculator. In addition, any advice you may need regarding IR35 law and regulations is available from your accountancy firm, who will be well-versed in all aspects of the law when it comes to these issues.

The survey also showed that IT contractors are experiencing fewer and shorter periods out of work, with 80% of those questioned reporting spending 31 days or less without employment. The year before the same research showed this figure at 78% – while at the same time the retail industry invested more heavily in IT as modern developments guide their thoughts toward mobile commerce. 17% of IT contractors surveyed reported work from the telecoms sector – an increase of 43% compared with 2011.

A word of caution for IT contractors, however – the stability of long-term contracts is great, but be careful not to put all your eggs in one basket. This point of view comes from the experience of those who have found themselves becoming too involved with one firm in particular, leaving themselves open to recent changes in IR35 regulations. Standing alone as a contractor rather than an employee gives much greater freedom.

If you’d like to talk to someone about the pros and cons of taking on long-term contracts with the same company, contact Nixon Williams today and see what impact this could have on your taxes.

I have always been quite careful with my money, probably something I inherited from my parents. Take care of the pennies and the pounds will take care of themselves used to be my fathers mantra when I was growing up. I do try to watch my outgoings, but have never thought about insuring myself against hardship until a friend of mine was made redundant recently after a long illness. I decided to look into an income protection policy to ensure my essential outgoings would be covered every month if something happened to me. After visiting the Permanent Health Insurance website I was able to get myself very generous cover for a much lower premium than I was expecting. I have also got myself some life cover, so I can now sleep soundly at night, safe in the knowledge that me and my loved ones won’t lose the roof over our heads no matter what happens to me. Saving money is all well and good but if you were off long term sick how long would that last?  Not as long as my income protection policy would continue to pay me out for. I am trying to spread the word, so that no other members of my friends or family are left at risk.

It is often the biggest mistake we make when attempting to refinance by overlooking and disregarding equity lines that are right around us and that can possibly be sourced with a little ingenuity. You never overlook any possible source of finance when building a property portfolio. This is a common mistake that can cost us a lot in the future as without the right financing we will be subject to things such as higher interest rates as well.

When we look at the equity available around us we also often limit it to our own belongings. This is not a bad practice however when looking to build out we have to think at a deeper level. In our list of equity lines we should in addition to our belongings have a potential list of persons that we can approach to sign with us as guarantors or even as joint owners. This is important to consider in tandem with refinancing.

There is no need to look too far when compiling this list and in fact this list should be close to home for the most part. Ask yourself this question, “Do you know anyone that owns their own home?” I am certain the answer will be an outstanding yes. What about someone that has their own business? These are all options when you are looking for someone to give you that last edge towards getting a loan or even in given you the additional boost so that refinancing is easier to accomplish.

You can use your own resources such as your own equity and any savings you may have and refinance as well but the importance of a guarantor is often overlooked. It is hard to get that loan if you have the requirement of a large amount or sum of money. Even with equity and savings there is no guarantee that the person that is approving the loan will be sufficiently convinced of your ability to repay and hence refinancing is easier with that additional guarantor. It also helps that this person is willing to go out on a limb for you so the provider of the loan is able to establish some level of trust that you are capable of repaying.

This is where building a trust relationship comes in handy. Institutions do not approve loans. We go to many places to source loans such as:

“Banks “Credit Unions “Private Lenders “Wealthy Investors

These are just a few of the institutions that we can approach. However it is the people in these institutions that we have to convince that we are capable to handle a refinancing of our loan and repay it efficiently. We also have to convince them that our plan is one that will be profitable. They are in essence putting there security at stake when they approve a loan for us and as such there must be a certain level of trust in your ability to fulfil the obligation of a loan.

Refinance is one of the most convenient ways to repay a loan because refinancing means to apply for another loan to pay back a previous loan on the same mortgage. The most common mortgage is generally one’s home.

Refinance advantages -

“Refinance reduces the risk of losing ones property.

“Refinance can lower the interest rates on the mortgage and thus reduce the monthly payment of interest with the principal amount. This way the borrower can save a lot of money and utilize it in other resources. If savings increase it also helps the borrower to pay back the loan before the closing of the loan term.

“If the original loan had an adjustable loan rate Refinance helps the borrower to change the loan rate type to fixed loan rate thus reducing the risk on the part of the borrower. This process also lowers the interest rate because when it’s fixed it remains at the same level and does not change with the prime index rate of the market.

“Refinance also allows the borrower to utilize the equity accumulated in the house or any other real property in concern in the term of ownership by turning the equity into cash.

Refinance loan can be opted for at any point of time and there are no special requirements for it. The procedure of taking the loan is the same as taking any other loan in most of the banks. But still the borrower is suggested to take prior information from his bank before applying for the loan.

Refinance loan may have a fixed rate of loan interest and an adjustable rate of loan interest. It is wise enough to select a fixed rate of loan interest as the rate of interest remains static for the life of the loan thus reducing the monthly payments. The adjustable rate keeps on changing and also increases the monthly payments of interest and the borrower’s expenditure. The rate of interest may vary from bank to bank and it is profitable to do a thorough research on banks to find out which bank offers the lowest rate of interest with other facilities.

Refinance can be of two types as given below:

1.Cash out 2.No closing cost

In case of cash out refinance the monthly payments are not surely reduced but the borrower gets other advantages. The borrower can pay off credit card debts, can utilize the money for improvement of home and for medical expenses and so on. This can only happen if the equity in ones home qualifies for the applied amount of loan. Cash out Refinance lets you take an amount of money in loan which is higher than your present mortgage and thus you get the left over money from the present loan. This amount is completely the borrowers property.

No closing cost refinance is suggested only for those borrowers who can pay upfront fees i.e. paying a large part of the loan in the beginning of the term. This reduces the rate of interest of the loan for the rest of the period. Generally the upfront fees are termed as points. The more points you pay early the more beneficial it would be for you in future.

Refinancing can be considered a means with which a person replaces his/her current loan with a new loan in order to save money. The loan can be of any type. It can be any consumer debt or a credit card debt or a mortgage.
Many people shelter to refinancing nowadays because it has many pros:

As it helps people to reduce interests, risk, and periodic payment obligations by either lowering the interest rate owed on the loan or extending the period of loan. Also everyone looks for refinancing in order to be able to achieve equity faster.
There are too many individuals who are “house rich and cash poor.” What value is it if your house is paid off in full, but you do not have any liquid cash to support? Keep in mind that your house will no doubt appreciate over the next few years. It will do so whether or not you have a large or a small mortgage. The more equity you have in your house will put more money in your pocket when you sell it, but while you are living in the house it is only “dead equity.”
In essence refinancing can be used to transform available equity in one’s house into ready cash, available for other purposes or expenses.
refinancing an adjustable-rate mortgage into a fixed-rate one, ensures a steady interest rate over time, by removing the risk that interest rate might increase terribly.

As no one is perfect, also there is not good thing without some risks and cons:

Lenders sometimes offer no-cost refinancing, charging you zero points for your mortgage loan. Generally, you will pay a higher interest rate than on an otherwise comparable mortgage with points, and you’ll still have to pay the other costs associated with the loan. there are also closing and transaction fees typically associated with refinancing a loan or mortgage. In some cases, these fees may outweigh any savings generated through refinancing the loan itself.
Some sub prime lenders charge excessively high fees, but you can screen these out by comparing mortgage rates.

All you need is to determine the goal behind seeking a refinancing, collecting information about several lenders options and then work on your refinancing.

Finally it became aparent that refinancing, as hasing lots of advantages it also has disadvantages and risks. You should pay great attention that some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan, depending on the type of loan used to refinance the existing debt.

So you have to be carefull and Calculate the up-front, ongoing, and potentially variable costs of refinancing while making a decision on whether or not to refinance and you have to Check your mortgage agreement to see whether it contains a prepayment penalty, and try to avoid prepayment penalties in any refinanced mortgages.

If you use credit cards, drive a car, have a bank account or just have a Social Security number, you could be at risk for identity theft. According to the Federal Trade Commission, more than 9 million people each year are victims of identify theft–one in every 25 Americans-resulting in costs to consumers and businesses of more than $50 billion annually.

It’s a horror story that happens daily across the country. For example, Kathryn Lasater of San Jose, Calif., is a typical college sophomore with just enough in her savings account to cover rent and utilities every semester. You can imagine her surprise when she received a phone call from a bank in Omaha, Nebraska, regarding a defaulted home loan taken in her name. Kathryn learned that someone had used her Social Security number to apply for and receive a home loan in her name. She spent the next six months making countless phone calls and penning dozens of letters to restore her good credit.

Unfortunately, most people who commit identity fraud are never caught or penalized. While the U.S. Secret Service investigates frauds over $2,000, most credit card criminals stay below this threshold.

The single most effective way for consumers to prevent ID theft is to “freeze” their credit with the nation’s three credit bureaus (Experian, TransUnion and Equifax). Once activated, a credit freeze prevents financial institutions from issuing any credit–including new credit cards-without the explicit permission of the consumer. Credit freezes, currently available under state law in more than a dozen states, stop the problem of identity theft at its root.

Retail industry lobbyists have begun to fight for changes in state and federal laws to protect consumers and merchants from fraud, but the credit card industry has opposed many of the requested laws. Now Congress is considering a bill that could deny consumers the rights they have under existing state laws to freeze their credit reports. This federal legislation, if passed, would effectively hand over control of credit freeze to the credit bureaus.

Consumer advocates are urging Americans to contact their members of Congress and ask them to oppose this legislation, currently known as HR 3997.

While many people dont like to talk about it unemployment is something very real that has the potential to be very damaging for the ill prepared. Due to poor planning and denial, many people once unemployed find themselves in a severe financial struggle. Credit card companies are calling them at home, at their old offices, and in some cases contacting them via mail and e-mail. So not only are they being stalked by creditors they are also, more than likely, getting calls of rejection from potential employers. What a way to spend a day. So how can you keep yourself from being in a similar situation? The key to surviving unemployment or an abrupt interruption in employment with out major blemishes on your credit report is setting up an emergency fund, and developing a plan which includes purchasing credit insurance, and contacting your creditors to let them know about your situation.

The first thing that all households should do regardless of whether you have credit cards or not, is to establish an emergency fund to cover your household expenses for up to six months. At a bare minimum this should include the sum totality of your mortgage, car loans, credit cards, and student and other installment loans for six months. By having this emergency fund available in an easily accessible form, like a savings account you can ensure that your bills are still covered for some time while you are seeking employment.

Also when you begin to apply for credit cards, you should look beyond the available credit, interest rate, and perks to the credit insurance. Many companies now offer credit insurance that will cover your monthly payments for a certain period of time while you are unemployed or temporarily disable. While you will still be accruing interest charges on your account during this time, what you are concerned with and paying for is the protection that this insurance provides from negative markings on your credit report from the 30 day, 60 day, and 90 day mark of nonpayment.

In the event that your emergency funds run out or you dont have one, to at least ease the amount of stress placed on you from multiple calls from your credit card companies, you should be proactive by contacting them and informing them of your situation. While this may not help your credit score, it will at least give you peace of mind. Additionally, the companies may be more willing to work with you as you try to get things back together because you have been upfront about your situation rather than avoiding them by screening your calls.

At some point or another you or someone you know may be faced with unemployment. When unemployment raises its ugly head, to ensure that you are left standing, you must have a plan. This plan should consist of developing an emergency fund that includes enough money to cover your living expenses including your mortgage, car, student and other installment loans, and monthly credit card payments for at least six months. In addition to having this money available for a rainy day, you also need to be more forwarding thinking in your future actions. For instance, any time you think about completing an application for a new credit card, you should consider purchasing credit insurance as a back up plan in the event that you are out of work. While you may believe that your skill set will allow you to obtain a new job within a week or so of being released, purchase the insurance any way in case you are wrong and your emergency fund is not fully funded to last for six months.

When looking towards retirement many people just think about the joy of not having to work anymore. Unfortunately, even though a person retires they still have bills to pay. The need for careful planning is perhaps the most overlooked part of retirement. Having a set plan in place before retirement will help to ensure the golden years are golden.

The following list gives some great points on how to plan for retirement.

1. Save money. Before retirement setting up a savings account or 401K will get a person prepared for life without a steady paycheck. A 401K is usually sponsored through an employer where the employer matches contributions the employee makes. Money put into a 401K also goes untaxed which can mean immediate savings. IRAs are also another way to save for retirement. These accounts are also not taxed.

2. Determine your expenses after retirement. A person should have a fairly good idea what monthly expenses they expect to have after retirement. Having a rough idea will help a person determine how much they need to save to be able to make it. Then considerations also need to be made for special purchases like cars and trips.

3. Working after retirement. Many people chose to take on a part-time position after retiring. Most often it is to supplement their income, but for others it is a way to socialize and gives them something to do with all the spare time they now have. If a person is not planning on working anymore at all then they should have some idea what they do want to do with their time. Many retirees find that retirement can be boring after years spent in the work force.

These three points will give a person something to think about when planning for retirement. Getting a good financial plan is the first step. It is also important to consider what life will really be like once the daily work schedule is gone.

I am eligible to retire from my current job on April 4, 2010. And that is the day that life without work begins.

My retirement will be different than most in that my monthly take home will increase over the years. This is due to a government pension, military retirement and social security.

When I hit 57 years and 4 months, I will be able to call it quits. I will have 5 years working with the US government and will be eligible for a small pension. It will not be enough to live on, but I also have a Thrift Savings Plan (TSP) which is very similar to a 401(k). Unlike the 401(k), I can withdraw my TSP when I retire as long as I am at least 55 years old. I will use this to supplement the small pension.

I also have a 401(k) that I invested in while I was a government contractor for 5 years. I can start making withdrawals at 59 and must have it depleted by 70 .

Once I hit the ripe old age of 60, I become eligible for my US Army Reserves retirement. This will triple my monthly income and make living a lot better. Then, at 62, I can add in my Social Security. I can also defer this until 66 or 70. I will have to crunch the numbers to see which one is most beneficial and find the break even points.

I also plan on selling my house when I initially retire and will use this money to purchase my retirement home in Thailand. Yes, I will leave Hawaii and move to Khon Kaen, Thailand. The cost of living is way less than Hawaii and I will be able to live out my golden years easily.

Add into this mix, I live online and make some money marketing on the Internet. I make money from ads and banners, affiliate hotel rooms, credit cards and a few more. This will provide beer money for me and keep me occupied.

For most retirees, their money starts to dwindle as they get older. For me, at least for the first five years, it increases. Plus, I still have some “gravy money” in my 401(k) and some other investments.

All of this didnt happen overnight. And it didnt happen because I saved for 40 years. Granted, the military retirement is based on 30 years service, but all the rest is over the past 7 years. Contributing to a 401(k) and now to my TSP makes it easy to see that I will be taken care or, and that I wont be a burden on my family.

I look forward to that day when I can walk away from my desk and never have to return. Starting work at age 12 with my paper route and being able to retire at age 57 is a long time but not as long as those who have to wait until 65.

Right now I put in the absolute IRS maximum allowed into my retirement fund and add as much as I can to my mortgage payment in hopes of paying it off early.

It may be hard to save when you are young and plan for retirement, but, trust me, it is well worth it. You want to have everything all set up once your work days are over.