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Everyone envisions retirement as the golden years where you live a lavish life off your substantial nest egg. The sad reality is that most retirees find themselves having to get a second job to maintain their standard of living. Everybody should be rich at retirement. All it takes is the proper long-term planning throughout one’s career. Three of the most important keys to retiring rich are sound investment strategies, smart spending habits, and setting financial goals. Let’s look at these three areas in more detail.

Sound Investment Strategies

The biggest difference between retiring rich and having to work a part-time job is sound investment strategies. Research has shown that those with a solid knowledge of investment strategy earn an average of 1.3% more annually than their peers. That amounts to over 25% more in their retirement fund over the span of a 30 year career. So what do these people understand that others don’t?

There are 3 basic principles to a good investment strategy. The first principle is understanding interest rates. Most savings accounts earn an annual interest. For example, you’d accrue $1 in interest on a savings account that has $100 and 1% interest. The problem with savings accounts as a long-term wealth building strategy is the inflation rate; which is the second principle. If you have a 1% interest rate but the inflation rate is 2%, then the value of your money will decrease 1%. Over the long-term your best option is to invest in a money mutual fund. Money mutual funds often let you draw from it as if it was a savings account, and offers an interest rate that is generally higher than the rate of inflation.

The third and most important principle is risk. Managing risk is the difference between the millionaires and the investors who go broke. Beware of the shady stockbroker who will sell you the financial equivalent of snake oil just because it pays a higher commission. Your safest option is to always understand an investment enough to make an educated decision independent of anyone else’s influence. You have to fully understand the level of risk you are comfortable with, and as long as you don’t cross that line you will see sustained return on investment over the long term. One of the less risky investment options is a stock mutual fund, which diversifies your investments into several companies instead of a single stock in one company. This is like hedging your bets at the roulette table.

The final piece of investment advice is to understand the difference between investing in stock and investing in bonds. Basically, you should always opt for stocks over bonds if you’re in it for the long-term. Stocks may be more volatile short-term but they pay exponentially more over the long-term.

Smart Spending Habits

Next to investment strategies, smart spending habits are the most important factor for being rich in retirement. The spending habits regarding your cash is way less important than your credit spending habits. No matter how bad you are with cash, you can’t spend cash you don’t have. The biggest danger of being bad with cash is it forces you to rely on credit more than you should. This starts a downward spiral that makes saving for retirement virtually impossible.

The biggest killer of retirement dreams is debt. Millions of people bury themselves in debt by using credit to spend money they don’t have. This leads to bad credit, which in turn leads to more expensive payments for things like mortgages and car payments.

The best way to use credit is to treat it like a debit card. For example, if you make a $200 purchase you should have that $200 by the end of the month; otherwise, you should not make the purchase. If you stick to this strategy religiously you will never spend money you don’t have.

This purchasing strategy of paying off all purchases at the end of the month lets you avoid interest charges on most cards. It also builds great credit, which saves you money in the long-term through low interest rates.

Be smart when choosing a credit card. There are several options that offer all types of rewards, from cash back to flight points. Do your homework and select the best card that fits your spending style.

Setting Financial Goals

The third and final component of being able to retire rich is setting financial goals. One of the most popular financial goals is the “100 rule”. This rule states that to determine which percentage of your assets should be in stock, you subtract your age from 100. Some experts say this should be 110 minus your age.

The important thing to remember is that there is no such thing as too young to think about saving for retirement. All you have to do is make sound investments from the first year of your career and by the time you retire those stocks will be able to fund a retirement lifestyle fit for the rich and famous.

The other aspect of setting financial goals is a healthy mix of long-term and short-term savings goals. For example, say you have 20 years until retirement and you want a million dollars to live on. You can break down that long term goal as a $50,000 increase on the return on investment of $50,000 each year. This helps make your lofty goals become concrete and obtainable.

When it is all said and done, retiring rich comes down to how much you commit to that goal. Retirement is something most people envision as a right, and they are sorely disappointed when they realize they need to pick up a part-time job to support their lifestyle. The reality is a high quality retirement comes from committing to an investment strategy from day one. Knowing the basics of things like interest rate, inflation rate, and risk is essential. If you can manage your credit well and spend within your means, your investments will flourish over the long-term and by the time you’re ready to retire you will have enough of a nest egg to live the high life.

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Couples sometimes wait until they are married to have important talks related to finances, but these types of discussions need to be had at an earlier stage in a relationship. Marriages can fail because of financial difficulties and disagreements about money, so it is important to talk about these things before a relationship gets too serious. Without open and honest discussions related to finances, couples can damage their relationships due to differences in the ways each individual handles money, their different attitudes toward spending and saving, and their general financial habits. The following topics need to be discussed in relationships. The sooner couples have this talk, the better their chances of working out differences that relate to money management before it is too late.

Discuss each person’s financial histories

Asking a partner about his or her financial history can be a difficult subject to casually bring up in conversation, but having the discussion despite that discomfort can solve many future problems. Having lots of credit card debt or a low credit score can help couples understand the financial position they would find themselves in if they were to get married. It is much better to have this information in advance. Debts can be paid off, and credit scores can improve over time. However, the strain financial problems can put on a relationship can do irreparable damage.

Be open and honest

Each person needs to be honest about debts, credit scores, and general philosophies regarding saving and spending. These discussions should also include information about future financial plans and goals. Based on these types of talks, a couple is more prepared for the financial realities they are likely to face in the future. A couple can also use these conversations to create a plan for joint spending and to prepare for upcoming expenses like weddings or mortgages.

Clearly define financial goals

Talking about financial goals early on gives couples time to plan the best strategies for achieving their goals. If credit scores need to be improved, if debts need to be paid down, or if more credit is needed to build a solid rating, those things can be addressed. Waiting too long can mean having to put off purchases like homes, cars or other things that can greatly affect a couple’s quality of life. If one person in a relationship has a very different idea about how money should be spent, these discussions can lead to compromise. Alternatively, they can also help a couple understand where their philosophies differ, and alert them to potential deal-breakers early on.

Look at each individual’s credit scores

When people get married, they suddenly begin to share lots of things they did not previously share. A credit score is not one of those things. Each person in a union still has a personal credit score, and each of those scores matter. After marriage, joint accounts may help the person with the lowest score obtain credit that the person would not have qualified for on their own. Joint accounts, however, must be handled carefully to avoid damaging both partners’ credit scores. When joint accounts are opened, that is reflected on each individual’s credit score, but missed or late payments will also appear on each person’s credit report. These types of oversights can then damage both individual credit scores. Sitting down together and looking at credit reports might not sound like a romantic evening, but this information can help a couple determine a long-term strategy for handling finances.

Disclose Debt

People sometimes think that hiding debt from a significant other is a good idea. However, this can be damaging to not only a relationship, but also to both partners’ financial future. Because credit-to-debt ratios are factored in when determining a person’s overall credit score, secret debt can damage both individuals’ credit. If a partner takes on debt without having an accurate idea of the overall amount already owed by the other person, this can push the debt-to-credit ratio high enough to increase interest rates or cause credit to be denied. Situations like this can be avoided by being open and honest about debt. That individual will not be nearly as disappointed to hear that information coming from a significant other as they would be if they had to learn it from a banker while applying for a loan and being denied.

Talk about buying a home

When couples apply for loans, lenders check each person’s score and use the lowest one. This means that planning for a home purchase needs to be discussed early on in a relationship so that both individuals can work toward financial health. Wise homeowners put as much down as they can in order to get a lower interest rate. They also wait until they can afford home improvements and furniture. Put down at least 20% on a house in order to avoid private mortgage insurance, and wait until each person has at least a credit score of 720 before applying for loans.

Create a financial plan together

A couple that begins planning early for big expenses like homes and weddings can save lots of money in the long run by saving up for these things in advance. This can mean paying little or no interest on large purchases, and it can mean getting practice working together financially to achieve goals. Having a financial plan is important, and it is especially important for couples. They need to be able to work together to achieve financial goals if they plan to save up for retirement together. If one person is not good at sticking to a spending plan, this is good information to know early on in a relationship. It may not be the end for the couple, but it could prevent one person from being tasked with financial responsibility that individual can’t handle.

Joint bank accounts versus individual bank accounts

Be sure to also talk about bank accounts. Not all couples opt to have a single joint bank account. Many couples choose to have a joint account that covers shared expenses, but also main separate accounts for individual spending. This helps both individuals maintain solid credit ratings, while also allowing them to easily share the costs of certain expenses they are both responsible for paying.

Talking about finances is important in a relationship. Couples who learn how to discuss these topics openly and honestly fare better than couples who make money talks off-limits before marriage. Finances affect lots of other aspects of life, and couples who plan their financial strategies early can avoid certain money-related relationship problems in the future. This often neglected conversation is one that all couples need to have.

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Valentine’s Day is there for you to show your lover how much you treasure him or her. In line with tradition, you need to do some things that will show your partner that you love them. However, you don’t have to break the bank to put a smile on that special someone. Here are various ways you can make the day great, and save money in the process.

Make a Romantic Dinner Together

Do you know that in most households the practice of cooking dinner is a one-sided affair? It is always left to the woman of the house to make the meals. Why can’t you change this trend and show your woman that you have the skills by making dinner together? The purpose here is to create a connection between the two of you in a place that isn’t the dining room or the bedroom.

Working together and having fun in the kitchen will allow you to connect at a new level, at a low cost – something that befits such a day.

Rent a Romantic Movie

It doesn’t take a lot to get something to do with your partner on valentine’s day. Why not rent a romantic movie and watch it together? Go to the local movie store, rent a DVD or two of your choice, and enjoy the movie in the comfort of your home. You can snuggle up close and watch the movie as you enjoy a bowl of popcorn.

Relive Your First Date

There are several milestones that you might have gone through as a couple. One of the most important milestones is the day you had your first kiss. That day might have special memories that you can relate to. When Valentine’s Day comes, you can relive your first date. It is most likely that the venue of your first kiss was inexpensive. Go ahead, head to this venue, and relive your memories.

It can mean you going to the Chinese restaurant that led to the kiss, or taking a walk down the beach that you first kissed on. At the end of the day, you will have showed your spouse that you love them and that you cherish every moment you have shared with them before. You do all this at a low cost.

Don’t limit yourself to the place you had your first kiss though, go ahead and celebrate other milestones such as the place that you proposed.

Create a Mixtape

Obviously, your partner has a favorite list of songs that she sings along to or listens to repeatedly. Why not download the videos of these songs and create a playlist just for her? You can upload the playlist to her smartphone or iPod so that she can carry it everywhere. You can add in some of your favorite songs to make the experience much better.

You can do this alone or sit up all night compiling the songs with your partner. You can get a bowl of popcorn and listen to the music as you compile them.

Create a Personalized Gift Basket

At times, you don’t have to let someone else think for you. This concept applies to a Valentine’s Day gift basket. Understand what your date likes and fill the basket with these items. However, make sure the basket is interesting otherwise, you won’t get the desired effect.

A personalized gift basket will mean more than a generic basket. You will also save money on this day.

Give a Massage

Massaging can add a touch of intimacy and romance. If you have had a homemade dinner, get out the massage oil and light some candles for some relaxing fun.

Go for a Picnic

The outdoors are fun, and will provide an ideal setting for a romantic getaway. You don’t need much to plan and execute a successful picnic. All you need is to identify a suitable site, make some sandwiches, and get a bottle of wine and you are good to go.

Design Your Own Cards

There are some DIY projects that you can undertake to save money on Valentine’s Day. One such project is the DIY Valentine’s Day cards. All you need is a bunch of heart-shaped pieces of paper you can write on. You can customize these heart-shaped papers with some images to make everything personal. If you don’t have pre-cut papers, you can use a pair of scissors to do the trick.

Write a Romantic Letter

With the advent of mobile phones and the internet, people don’t write letters anymore. This is your chance to be unique by writing a love letter to your partner. You can add some photos or memorabilia to make it more personal. Hand deliver the letter to her workplace so that you make it a surprise.

Skip the Roses

Valentine’s Day is associated with rose flowers. At this time, everyone will be aiming for the roses and scrambling for them. Florists understand that everyone is after roses and will increase the price due to the high demand. To avoid extra costs, opt for other types of flowers such as tulips or daisies. They can still do the trick without sacrificing on style.

Search for Deals

As Valentine’s Day approaches, many dealers provide deals for their customers. Most of these deals come in the form of coupons that reduce the cost of an item. Check out the sites offering deals such as free shipping on flowers or chocolates. Make use of these daily deals so that you pay less than what you would normally pay for an item.

Make it a DIY Project

There are various ways you can make this Valentine’s Day a DIY project. After you buy the individual rose stems, you can go ahead and create a bouquet by yourself. You can also buy a vase at the dollar store instead of getting one from the florist, which can be more expensive.

You can also deliver the flowers by yourself especially if your spouse is within the locality. You will end up saving money on various tasks that would have otherwise made it costly.

Final Thoughts

Valentine’s Day is essential for a relationship to flourish. However, you don’t have to spend a lot of money to make it memorable. All you need to do is make sure you understand what your partner likes, and the opportunities available in your region.

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When it comes to finance, you need your information to be in real time. The markets today move quickly and you need a way to keep up with them. There is no more convenient way to do so than through text alerts.

What about my finances should I be monitoring in real time?

There are many things about your finances that need up to the minute reporting. If you have any plans to make a big asset purchase in the future, then the time to get your money together is now, not later. Your credit score is one of the most important aspects of your personal life.

With the prevalence of ID theft today, you can lose your ability to make a house or a car purchase in a matter of seconds. If you find out that your credit information has been stolen months later, it may be too late to make a change to your record – you will be stuck with the results of something that someone else did to you!

It is much easier to reverse the negative effects of ID theft if you catch it earlier. You can receive information about suspicious credit activity in real time if you receive text alerts. Imagine being fully protected from ID theft under your own power without having to pay hundreds of dollars for a credit protection services that may not even inform you in time!

You should also be able to keep up to date with the many financial announcements that directly affect your personal well being. With text alerts, you will understand the financial markets much better because you will be able to see the news as it happens.

- Monitoring Your Personal Accounts

Have you ever been in a store waiting to make a purchase unsure about the amount of money that you had in your account? There is usually no way that you can check your balance in a timely fashion: You either have to risk making the purchase and incurring late fees or incur the embarrassment that comes with stepping out of line and being unsure about your personal finances.

With text alerts, this becomes a nonfactor. You will immediately be able to view your personal accounts and determine whether you have enough cash or credit to make the purchase at hand.

- Denied Transactions

If you have ever been through the embarrassment of a “transaction denied” interaction while trying to make a purchase, odds are that part of the embarrassment comes from not knowing exactly why your credit cards are not working at that time. If you receive text alerts, then you will be able to rectify the situation immediately. You may be able to correct a mistake that did not have any business happening in the first place. This is also how many people find out about identification theft and suspicious credit transactions that are on their record.

– Keeping Up with Bills

In the course of day-to-day life, it can be quite difficult to keep up with all of the bills that you have to pay. In many cases, people will only become aware of an overdue bill when the lights or electricity go off. If you are taking text alerts, then you do not have to worry about these large inconveniences because of a small bill.

Text alerts can keep you aware of bills that you have to pay well ahead of time. This way, you will also avoid the penalties and late fees that come with overdue bills, saving yourself a great deal of money at no cost to you.

– Posting Payments

You may not have a problem with keeping up with your bills. However, this does not mean that all of your creditors keep records as stringently as you do. Getting text alerts about payments that have been posted is a great way to automatically keep a record of bills and debts that you have paid.

If a creditor sends you a bill twice for the same debt, you may have a great deal of trouble getting your money back if you pay twice. If you have the ability to receive notification of payments that are posted on your behalf with the text alert, then you will always have a record on hand of things that you have paid off. This will help you avoid a great deal of trouble if you ever have to go to court against the creditor. It can also help to avoid litigation, as many unscrupulous creditors will be sufficiently warded off after they see that you have a consistent and accurate record keeping operation.

– International Transactions

If you travel overseas with any frequency, then you should receive text alerts for your convenience. Many foreign countries do not have the same safeguards over your money that your home country may have. If you do not have a credit card that is compatible with the country that you are traveling to, you may also run into some financial situations that can slow down your productivity overseas.

Keeping up with international regulations as well as your own records through text alerts will ensure that you do not have any sticky situations overseas. You will know exactly how to pay for things no matter where you are in the world. You will also have the ability to record all payments so that you can show records to your credit card companies if there is some unscrupulous activity while you are across the border.

– Overdrawing an Account

One of the best reasons to have text alerts on hand is to keep you informed of when you have overdrawn account. Most banking institutions have severe penalties for overdrawing accounts; however, there is usually a grace period before they assess these penalties. If you are notified of the overdraft before the grace period ends, you can rectify the situation before the penalties are assessed and you lose money for no good reason at all.

– Investments

Your investment portfolio should be something that you keep up with on a day-to-day basis. However, if you are constantly on the move, it can be difficult to receive all this information on a mobile phone. Text alerts are the best way to keep up with all the action in your accounts without having to look over complicated graphics or sign into your banking institution every time you want to look at a transaction.

These are only a few of the reasons that you should sign up for text alerts. With the ability to save you all kinds of money and make your life more convenient, why would you do anything else?

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We live in an exceedingly consumer-oriented culture. Everywhere you go, there are products and services to buy, from a simple cup of coffee to a new car. Morning until night, we are surrounded by advertising. It appears on TV, in magazines, online, and on the streets. The modern world is a non-stop barrage of temptations to spend and promises that each new purchase will improve your life and make you a happier, more fulfilled person.

Victims of Advertising?

It’s no surprise, then, that overspending and excessive shopping are common, virtually ubiquitous problems of contemporary life. They are so common, in fact, that many people hardly even recognize them. After all, we all buy things we don’t need. At what point does spending money on non-essential items go from normal to problematic?

It’s also probably unfair to place the blame for our fixation on shopping solely at the feet of advertisers. They are just giving people what they want. If we didn’t respond so effectively to ads, they’d quickly disappear. While it can be appealing to cast ourselves as the hapless victims of heartless, money-hungry corporations that virtually “force” us to overspend with manipulative ploys and calculated deceptions, that’s surely a bit simplistic.

A Primal Instinct

While it’s true that advertisers are experts at manufacturing desire, we also need to take responsibility for our own role in the situation. The fact is, acquiring goods is an ingrained survival mechanism inherent to human psychology. Amassing more stuff than you need will help you weather harsh times in an uncertain and chaotic world. Acquiring flashy and unnecessary objects is an evergreen way of signalling social status and attracting romantic attention. For better or worse, we’re “hard-wired” to be always buying things, given the opportunity.

When Shopping Goes Too Far

So, while having a healthy desire to buy things is natural and largely unavoidable, when we give that impulse too much power it can have disastrous results. Excessive debt, maxed out credit cards, and a home cluttered with unused, unnecessary products are all common outcomes. Things that seemed so exciting initially soon end up just taking up space.

In order to get out of the pattern of constantly buying things, it is important to identify what triggers and motivates this habit. While each case is unique, there are a few specific behavioral and emotional factors that underscore most people’s tendency to spend excessively.

The Unquenchable Desire for the New and Exciting

We all know the feeling. You see that shiny new flat screen TV, designer handbag, video game console, pair of shoes, or other flashy consumer good. Suddenly, you are overcome by an enormous desire to own something that, just a moment before, you hardly knew existed. Does this make any sense? After all, before you knew about this new prize, life seemed okay. Are things really going to change just because of a new purchase?

It’s easy to see that they probably won’t if you step back and analyze the situation logically. What’s occurring in this common scenario has little to do with logic, though — it’s a purely emotional response. Our natural attraction to novelty is being aggressively stimulated.

People have an inherent drive to try new things and have new experiences. Most experts believe this plays an essential role in helping us to learn about he world and figure out the how to survive and be successful. Buying something new is an easy, accessible, and risk-free way to scratch the novelty “itch.”

Many people don’t have much novelty in their everyday lives. Each day its the same thing: make the same commute, work at the same boring job, talk to the same coworkers, watch the same TV shows at night, and slip into bed at the same time. Buying something new is a quick and easy cure to the lack of novelty that this sort of routine entails.

Keeping Up With the Joneses

Competition and jealousy are also common triggers that lead to excessive and unnecessary spending. When we see someone else has something new, we often begin to want that thing for ourselves. Especially among those we view as our peers, we have a strong aversion to appearing less successful. Of course, one of the clearest ways most people view success is by the quality and amount of our possessions. This accounts for the perennial popularity of “status symbols.” Whether they take the form of a Mercedes-Benz sedan, a shiny gold Rolex, or a pair of Louis Vuitton heels, these sorts of goods are valued for the status boost they imbue upon their owner, perhaps more so than for what they actually are.

There’s nothing inherently wrong with being a bit competitive. It’s only natural that we judge ourselves in relation to our peers. While psychologists and self-help gurus alike may argue that we should only be in competition with ourselves, this is an ideal that few will realistically ever achieve. The key for most people will be managing the impulse, rather than trying to stamp it out completely.

Boredom, Depression, and Other Emotional Issues

For many, constant buying functions as a sort of “band aid” for an existing area of dissatisfaction. Perhaps an individual is stuck in an unhappy, loveless relationship or in a dreary, dead-end job. The distracting rush of shopping is an easy, immediate, and reliable way to enjoy a temporary escape from ongoing problems. Ironically, though, excess spending (and the accumulating debt that goes along with it) can make many problems worse, including job and relationship ones. It soon becomes a vicious circle, where a person spends to feel better but the negative effects of spending only add to the original problem that motivated the spending in the first place.

Escaping the Overspending Trap

While constantly buying things is an easy habit to get into, there are things you can do to prevent falling into this negative pattern — and to pull yourself out if you’re already in trouble. One simple but effective strategy is develop a habit of stopping and asking yourself a series of pre-planned questions before making any non-budgeted purchase. These should be things like:

  • Do I really need this?
  • Is it reasonable to suspect I’ll regret this decision later?
  • What am I really going to use this product for?
  • Is this something I can wait to purchase until a later date?
  • What are some other (potentially more important) things I could use this money for?

If you’ve already amassed a decent amount of credit card debt, it may also be useful to use one of the many available online debt calculators to see just how much you will end up spending in interest payments before your existing purchases are payed off. When you realize how much money you’re giving up unnecessarily to cover interest charges, you will likely be more careful about acquiring additional debt.

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If you have a child, you are familiar with how expensive it can be to raise a son or daughter from birth to adulthood. However, your son or daughter may incur debt related to going to school, using a credit card to pay for living expenses or buying a home. If your child has significant debt, should you feel obligated to pay off that debt?

Can You Afford It?

The first question that you need to ask is whether or not you can afford to pay off your son or daughter’s outstanding debt. Unless you have maxed out your 401k or other retirement accounts, it may be more beneficial to put your money to work for you. You should also avoid paying your child’s debts if you do not have an emergency fund in case you lost your job or incurred a large debt.

What Will Your Child Do After the Debt Is Repaid?

Another important question that you need to ask yourself is whether or not your child is going to incur more debt after he or she has existing debt paid off. The last thing that you want to do is pay off your child’s credit card debt only to find out that he or she has gone out and charged another $10,000. Therefore, you should limit the type of debt that you are willing to pay off if you are able to do so at all. Paying off a secured debt such as a car or mortgage leaves your child with an asset that at least can be leveraged in the future if your child runs into future financial difficulty.

What Options Do Your Children Have to Repay Their Own Debts?

There are many different options that your children will have when it comes to repaying loans or keeping up with debt during times of financial issues. For instance, your son could ask for a student loan forbearance or for a modified repayment plan on his mortgage. Your daughter could refinance her credit card debt or transfer the balance to a 0 percent interest credit card. Doing so may allow your child to take care of his or her own problems and learn what it means to be financially independent.

Did You Cosign for Your Child’s Loans?

If you decided to cosign on your child’s loan, you may be on the hook if he or she stops making payments. For example, if you cosigned for your son’s student loans, you essentially agree to pay that money back if your son doesn’t. That also means that your credit could be damaged or other actions taken against you if you don’t make the payments even though it isn’t your loan. For some, it may be easier to simply pay the debt off now if possible instead of worrying that a $10,000 auto debt or credit card debt could impact how you spend your retirement years.

What Do You Get From Paying the Loan?

It may be a good idea to repay your child’s loans if you are going to get something out of it. For instance, your daughter may decide to have you pay off the original loan and then pay you back over a period of several years. The benefit to your daughter is that she may not have to pay as much interest over the repayment period. To ensure that payments are made, you may wish to sign a contract that provide consequences for failure to repay on time. For instance, you could place a lien on certain property or give yourself the right to go to court just like any other creditor.

Take Equity In Your Child’s Business

If you are asked to pay off a business related debt or loan, you may wish to ask for an equity stake in the company. What this does is makes you a part owner of the company in exchange for the funds. This could turn into a long-term arrangement that helps your child now and helps you out as the company becomes more successful.

Are Your Children Entitled to an Inheritance?

Instead of waiting until you pass on to give your child his or her inheritance, it may be better to give your child his or her inheritance now. Doing so may help your child get out of debt and move on with his or her life. If your children are working and otherwise financially stable, eliminating a student loan or mortgage debt could help provide for your grandchildren. Money that would go toward a mortgage payment can now go toward paying for braces or saving for their college funds. In the event that money is being taken out of an inheritance, make sure to communicate this to your children. Otherwise, it could create tension later on.

Have Your Children Done the Same for You in the Past?

Paying off a credit card debt or making a student loan payment may be a nice thank you for financial assistance that you have received in the past. While you should still only do so if you can afford it, there is nothing wrong with helping those who have helped you when you needed it. If this money is meant as a gift and a thank you, make sure to stress that you are not expecting the money to be repaid.

There is nothing worse than being saddled with debt at a young age. However, it doesn’t mean that you are obligated to help your children overcome their own mistakes or circumstances in life. While it may be difficult to tell your kids no, only spend as much as you can afford as you don’t want to become financially vulnerable yourself helping your kids.

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Many people don’t keep close track of their spending and have no idea how much money they spend each month on things they don’t need. Taking a look at some of the things you spend your money on can help you stop throwing away money. Here are 10 ways in which you may be throwing away your money.

1. Food

You might not think you could throw away money on a staple you need for survival such as food, but most people probably spend a lot more than than they need to. For example, if you are eating out every day for lunch, you are likely throwing away money. Say you are conservatively spending $8 a day for lunch five days a week. That’s $40 a week. You could take your lunch every day for about $2 to $3 a day, saving $20 to $25 a week, which is over $1,000 a year.

2. Insurance

It’s easy to throw money away by paying too much for insurance. With the various types you need, there are numerous opportunities for you to pay too much. For example, if you don’t bundle policies with the same insurer, you could be missing out on discounts of 10 percent or more. You also might have lower deductibles than you need. If you have a $500 deductible on your car insurance, for instance, your premium will be higher than if your deductible is $1,000. You can also save on car insurance by not carrying coverages you don’t need, such as comprehensive.

3. Credit cards

If you are carrying monthly balances on your credit cards, you are likely throwing away a ton of money. Even the best credit cards have interest rates in the double-digit range, meaning you can rack up significant finance charges on even small balances. If you can’t afford to pay off your balance each month, you should stick to cash. Other ways you wind up throwing away money with credit cards is paying extra fees for things such as late payments or cash advances and failing to fully take advantage of any rewards programs. If you are carrying high-rate credit card balances, look into balance transfer deals that will allow you to get a lower rate.

4. Utility bills

Another easy way to throw away money is to pay too much on your utility bills, such as your electric and gas bills. Remembering to shut off lights when you leave a room, lowering your thermostat in the winter and raising it in the summer and quickly fixing small plumbing leaks are all ways you can cut down on unnecessary spending on utility bills. You can also do more pro-active things, such as using energy-efficient light bulbs, weather stripping doors and windows and installing water-saving devices.

5. Entertainment

Few people want to live cooped up as a hermit in their own homes, but you could be wasting a lot of money entertaining yourself. For example, if you go to the movies weekly, you could be spending $40 to $50 a month just on tickets. Stay in and watch a movie a couple of times a month instead and you will cut that expenditure in half. The same goes for other events. Taking in a free play or concert instead of paying to see major acts can save you a lot of money.

6. Drinks

Alcohol and coffee are two drinks that can drain your wallet quickly. If you get a daily latte, it’s probably costing you $3 or more a day. Brew your own and you can cut that cost in half or more. Likewise, if you go out for drinks a couple of times a week, you can spend a significant amount of money. Inviting friends over instead and buying a bottle of wine of six pack of beer can be a much cheaper option.

7. Smoking

If you smoke, you definitely are throwing away money. A pack-a-day smoker can easily spend $2,000 or more in a year on his habit. In addition, smokers are more likely to have health problems and miss days of work, which costs additional money. Quitting smoking can save you big time.

8. Gambling

You don’t have to go to the casino to throw away considerable amounts of money gambling. Simply playing the lottery or buying scratch cards regularly can mean you are throwing away hundreds of dollars a year, with very little chance of winning much if anything. Illegal gambling, such as card games and betting on sporting events, is another good way to waste your money.

9. Phone

Unless you need your land-line phone line for DSL Internet, there’s probably no need to have a wired phone at all. You can stick with just a wireless phone, but make sure you don’t throw money away there, either. Don’t opt for unlimited talk, text and data plans if you don’t need them. Gauge your usage for a month or two, and if you can, move to a cheaper plan.

10. Cable TV and Internet

One of the biggest areas where people waste money is on their cable TV and Internet bills. For example, one cable movie channel usually costs as much or more per month as a streaming movie service. You also want to make sure you aren’t paying for tiers of channels you don’t use, such as a sports tier if you aren’t a sports fan. If you watch mostly scripted shows and don’t mind waiting on new episodes, you can cut the cable cord altogether and rely on streaming services. On the Internet side, make sure you know how much data speed you really need and don’t pay too much. And make sure to bundle your TV and Internet service if you can, because you are likely to save on your monthly bill.

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The last couple of weeks before the New Year mark a time when people relax and have fun. However, this is also the time when financial worries loom over most people’s heads. A new year can be a new beginning for all areas of life and finances are no different. The following are some New Year’s resolutions that would save people a lot of money –

1. Improve Savings – Saving rates are at an all-time high in America as compared to the past couple of years. The reason is that people have realized the importance of short term saving in light of long term saving. The economic situation has been sobering to the majority of the population and this has led to more money being saved in the bank. Thus, instead of going with the “save what is left after spending” approach, people need to adopt a “spend what is left after saving approach”. Depending on the condition and financial goals, saving money must come before spending money in every individual’s life.

2. Analyze Income – In order to understand finances, two important areas need to be considered – incomes and expenses. A budget cannot be created without having thorough knowledge about every income and saving earned or saved in the month. Thus, individuals need to sit down and make a budget. Most people think that they have a lot of disposable income and refrain from making a budget. By the end of the month, they find things getting rocky. To prevent this from happening, an understanding of the reason for saving money, exploring avenues and resources, and budgeting accurately is extremely important.

3. Analyze Expenses – Most people don’t know where their money went at the end of the month. To prevent this from happening, there are a lot of apps or good old pen and paper to note down the littlest of expenses. This would aid individuals in making an accurate budget. There are some expenses which cannot be controlled like – rent, telephone bills, conveyance, utility bills, internet, et al. However, some other factors like eating food in a restaurant on a regular basis, having a high speed-high cost internet plan, using cell phone when free calling apps are available, et al can be controlled.

4. Use Credit Cards Carefully – As per credit experts, Americans have changed their credit card usage and are using their credit cards more carefully. Every individual can use this statistic in their life. In the last 3 years, many individuals have paid off their credit card balances in full. The New Year’s resolution for the coming year should be about paying off one credit card in full. This doesn’t mean that the credit card with the highest interest rate should be chosen – it means that the card with the lowest balance should be paid off first.

5. Start an Emergency Fund – An emergency fund offers an individual peace of mind because it is a practical fund that can be used in the event of a medical emergency, loss of job, sudden expenses, necessary repairs and almost everything else. Another under-appreciated benefit of an emergency fund is the relaxed feeling that comes with it. An emergency fund doesn’t have to be too fancy either. It can just be in the form of a savings account. In fact, the most important factor of an emergency fund is that it should be easily accessible during an emergency situation. Withdrawal should be hassle free.

6. Living Beneath Instead Of Over One’s Means – The concept is simple – given the current economic imbalance and uncertainty, if individuals lose their job, they take an even bigger hit because they are not used to the life they are forced to live. The biggest reason is that everyone is living above what their pockets can manage. Thanks to easily available credit everywhere, this hasn’t been a problem so far but in case of a crisis, it would be. Thus, even if a Mercedes is affordable, people should look for a lower priced car that would be easier to maintain when an emergency hits.

7. Consolidating Credit Card Debt – A lot of people have difficulties paying off their credit card debt. The first step should be to pay off the card with the least amount of debt. However, it isn’t that simple for everyone. Many individuals have multiple outstanding credit cards and to deal with all this debt, they can use credit counselling. Experts can help them consolidate their credit card debt and they would be able to pay off the debt with lower interest rates. Not just that, counselling can also reveal some important flaws in their budget and spending habits.

8. Pay Back At 0% Interest Before Last Date – The credit card companies do not charge any interest if the debt is paid within a month. However, when borrowers fail to do so, the interest rates jump from a meager 0% to an astounding 15%. To avoid this hefty interest rate, attempt should always be made to repay the borrowed amount before last date. A helpful tip is to wait till the last day to make the payment. In that way, the money can earn some interest in the savings account too. It is a way of avoiding interest and also improving one’s credit score.

9. Funding 401(k) Plan – Experts advice that the 401(k) plan should be funded even before a liquid saving account is started by an individual. The plan should be one that matches the employer’s plan. In fact, it is always a great idea to max out 401(k) contributions. The benefits of doing this are long term. Retirement can be a safe, secure and peaceful time if early funding of 401(k) is done. The fund can be chosen depending on risk tolerance and investment philosophy. A fund manager’s services can also be used for ensuring proper allocation of funds.

10. Learn to Save Unexpected Income – People tend to spend all their unexpected windfall incomes on luxuries. Instead, the rule of One Third should be applied when such an income is received. This means that 1/3rd should be used for paying off past debts, 1/3rd should be put in a long term saving account and the rest should be used for any present purchases, shopping or luxuries that are needed. This rule will make saving grow and debt shrink in the life of an individual.

With proper planning and a few practical resolutions, the coming year can be smooth and fuss free. The biggest tip is to think about the future, about the necessities and requirements, set aside some money for luxuries and ensure that the financial precipice is always far away.

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There are many reasons that a credit score can drop. Some of the reasons are obvious, while others are subtle. In some cases a credit score can drop far, while at other times a credit score may only drop a few points for reasons that escape the consumer. The following are things that can affect a consumer’s credit score in ways that may not be obvious. Keep in mind that some of these causes can influence a credit rating more than others.

One Late Payment

Although most people are aware that late payments can bring down a credit score, it only takes a single payment for this to happen. Often a person will make a late payment and forget that it happened. Later, when looking at their credit score, they discover that it has dropped, but they forgot about the late payment. This can happen because there can be a significant delay from the time of the late payment until the time it affects a credit score. It’s also true that people think that a payment needs to be more than 30 days late before it is reported to a credit agency, but this is determined by the policy of the lender. Many consumers believe that as long as the account did not go over 30 days, it will not be reported. Later, when their credit score drops, they don’t understand that it was a late payment that was responsible for the drop in the score, even though the late payment was not over 30 days.

A Large Purchase on Credit

Even when a person is making all of their payments on time, a credit rating can drop because of a large purchase on credit. Part of what makes up a credit score is the factor of the percentage of debt a consumer has relative to the total credit available. For example, if an individual has a total amount of credit available of $10,000 and has an outstanding balance of $1,000, their balance represents 10 percent of their total credit limit. If a person were to suddenly add a purchase of $2,000 to his or her total debt, this would bring the percentage to 30 percent. Going from 10 to 30 percent may be enough to drop an individual’s credit score.

A Change in the Type of Debt that is Owed

A mortgage is not given as much attention in factoring a credit score because it is considered investment debt. Most people who are paying on a mortgage have a home that is worth more than the amount owed on the mortgage. However, other types of debt are treated differently. Loans secured by collateral show good credit worthiness, but when a consumer has a lot of unsecured debt, such as credit cards, then the debt can lower your credit score. Open credit accounts should reflect more than credit cards, or a credit rating can be penalized. This is especially true when an unsecured account reaches its credit limits. Once this happens, a credit score may dip downward, if only slightly.

Closing an Account

Most people wouldn’t think that closing an account that goes unused would hurt a credit rating, but it can happen. The reason is that one of the factors in calculating a credit score is the amount of time that an account has been open. This is calculated on all open accounts to give an average length of time that all accounts have been open. The longer the time, the better it will reflect on a credit rating. The problem for many people is that they will have an old account that is no longer used, so they decide to close it. After all, if it is not being used, there is no reason to keep it open. However, this is not true. Once the old account is closed, the average amount of time that all accounts have been open may drop, and this will lower the credit score. This is a common reason for a credit score to drop for people, when there is no apparent reason for a score to drop. As a general rule, old accounts should not be closed, even when they are no longer being used.

Too Many Inquires

Every time someone checks a person’s credit, there will be an inquiry listed on a credit report. There is little, if any, information to accompany this notation. Of course, everybody who applies for credit is going to have an inquiry, and this alone will not affect a credit rating. The problem is when there are several inquiries on a credit report in only a short time frame. This is a red flag, and it makes it looks like that a consumer is desperate to find credit from several sources. This usually won’t drop a credit score greatly, and when it does, it will usually be only a few points. If this is the only reason for a credit score drop, over time the score will move back up to where it was previously.

Incorrect Information

This is a big problem with credit scores, and is one of the main reasons why consumers need to check their credit reports once a year. It is also a good idea to check a credit report before shopping for a major loan such as a car or a mortgage. An individual’s credit rating can drop slightly or even greatly due to inaccurate information on the report. It is possible that a lender has reported the correct information to the wrong account, and in this case, the lender will need to be contacted to have the information removed. In more sinister situations, a person’s identity can be stolen. A credit report can show a delinquency on loans that were never taken out. It was simply a case where a person’s identity was used without them being aware. It is also possible to have credit cards stolen, and then used without a person’s knowledge. This can happen with accounts that are not used often.

Conclusion

It important to keep in mind all of the factors listed above, so a credit rating can be kept as high as possible. Lower credit ratings mean spending more money over time when anything is financed, and in the case of a mortgage, this can mean 30 years.

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Nobody wants to be poor yet, somehow, it always seems like you can never achieve financial freedom. No matter how hard you budget or plan, the savings never grow. Take a deep breath and take a step back. Maybe it’s the people around you thwarting your financial potential.

The Child

Kids are expensive, costing the average person around $245,000 for 18 years of support. On top of this, over half of the population’s pregnancies are accidental, forcing many to simply stumble through their financial life, hoping they stay employed long enough to rear their child or children. The best thing to do is simply plan for a child. Make sure you are in a good financial place with a clearly laid out plan before taking any chances. If that doesn’t work, no one said you had to keep the child.

The Spouse

People all come with their own issues in regards to money. Some are draconic, hoarding everything they make for fear of not having enough to stave away the apocalypse. Others, however, are spenders, choosing to seize the day at face value no matter how much debt it will put them into. When these two personalities combine, as they often do in marriages, the results can be disastrous. The husband who believes he deserves toys every week for working his full time job or the wife who will settle only for the name brand stuff can quickly run any savings into the ground. In addition, when you do marry, their bad financial set up is now your bad financial set up, resulting in bad loan rates or debt.

Aside from that, if both spouses work full time jobs, you can unintentionally but easily shoot up into the next financial bracket where taxes are doubled and the cost of living is much more expensive. Honestly look to see if this is happening. If so, it’s time the lower paid spouse quits their job and takes on an active at home role. While it may be a kick to the ego, it makes for a much more comfortable financial situation, affording you the ability to enjoy what you are making.

The Pet

Though not as expensive as children, pets are nonetheless an investment, totaling in at an average of $15,000 per pet per lifetime. This includes their food, their toys and any vet visits they have to endure. Even smaller pets like hamsters or snakes end up costing a pretty penny in the end. Figure out how much it will cost you and work that into your budget. Also, make some changes to keep your pets healthier. For instance, making outdoor cats permanently indoor cats can greatly reduce how much they cost if only because you don’t have to make monthly vet calls.

The Parents

Not all parents are financially responsible. Some are leeches just waiting to suck out whatever support they can get from their adult children. On the bright side, many are just victims of the recession that hit, wiping out many people’s retirement funds just as they hit retirement age. No matter the situation, parents are a little worse that children because children at least have a cutoff age. Parents, however, can go on living well beyond 18 years while still needing full financial support. Trying to care for both is a drain on all resources, both mentally and financially.

Now that you are an adult, it’s time to lay down the rules with your parents on what they can expect from you. They might have made poor choices in the past, prompting you to learn better habits, but they will never improve if you keep enabling the abuse. Openly set down your guidelines. If they need the help, they will take it. Also, reach out to a counselor who can help them get back on their own feet, freeing you from the fiscal responsibility you, arguably, should never have had in the first place.

The Boss

Know your value. Too many of us work underpaid jobs under the guise that we’re lucky to even be working. This is a lie to keep you in check. You would be surprised how much you can make for what you do if you only go out and look. Ask your boss for a raise. Track what your market value is. If your boss is unwilling to match or even consider paying you more, it’s time to start looking for another position. When you go in to hire, know what salary you will work for and what you won’t. In the corporate world, it’s up to you to make your own financial progress.

The Friends

If you can’t afford something, don’t buy it. It is not shameful to admit your budget doesn’t cover the new flat screen TV all of your friends are raving about. Peer pressure drives people to do a lot of crazy things they wouldn’t normally do on their own. In its own right, it is a healthy practice but only if it helps you grow as a person. Giving in to the request of friends making more than you will only set you back from your dreams of saving for retirement and otherwise improving your standard of living. In these cases, the best thing you can do for yourself is to learn how to say “no”. It doesn’t have to be mean, but it does have to be firm. Also, you can be the one to suggest outings that fit your budget. This way, you can all still enjoy time together without breaking the bank.

The Helpers

Cleaning ladies, gardeners, babysitters and pet sitters are all under this “other” category. They are extra expenses that save you time for a price. Unfortunately, there’s a good chance you just don’t have the means to keep them paid. Think of it in hourly pay. If you make $10 per hour of an eight hour day and a cleaning lady once a week costs $60, you just spent six hours of your day working to pay for her to tidy up your house or apartment in maybe an hour to two hours. Is it that worth it? You could probably take care of all of that stuff on your own in less time and save yourself $60.

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