Month : April 2011

Guest Post

How important is your financial literacy?

Making informed financial decisions can be difficult. You have monthly bills to pay, and you might wonder where the money is going to come from. Most Americans have no idea how to control their money. Therefore, it helps to become educated on how to better manage your finances.

What is Financial Literacy?
In order for you to be financial literate, you need to know how to deal with credit. You should be aware of the process of saving money, and you must know how to budget your finances. You need to have a plan for how you are spending your money.

April is Financial Literacy Month
President Obama has announced that April is financial literacy month. Financial literacy is the capability to comprehend basic economic provisions and conceptions related to your family or business. The White House wants to help Americans better understand their personal finances, so they are trying to help citizens become financial literate.

Ways to get started in becoming financially literate

• Read: Find information in books, magazines, and newspapers. Become skilled in the world of finance.
• Be willing to make changes: You must be flexible. You cannot expect to spend money frivolously.
• Be patient: You cannot become financially literate overnight. It takes time to get a grip on your finances.
• Take a class: There are investing and financial planning classes that are offered. Check in your community to see what financial classes that you can take.
• Get advice from other people: If you know someone that seems very financial literate, ask for their advice.
• Look for help online: There are many online forums where you can discuss financial decisions.
• Quit making excuses: Don’t complain about not having enough money. In order to manage your money effectively, you need to change your attitude and be positive.

Study your Paycheck
Your education and job have a huge impact on your income. Therefore, when receiving your paycheck, you should know the difference between your gross and net earnings. Be aware of what you are actually bringing home.

Plan a Budget
After realizing how much money you are actually making, then you should plan a budget. Keep your checkbook balanced, so you can keep track of your money. Know exactly what you are spending, and set your goals accordingly.

Loans
You should not get a loan or borrow money unless you know that you can pay it back. You should not charge unnecessary purchases on your credit card. Interest can really add up, so keep your credit card balances low.

Save money for Emergencies
You need to also save money each month. Sometimes, you might encounter emergency expenses, and having extra money available will keep you from having to take out a loan or put it on your credit card. Your emergency fund should cover 3 to 6 months of living expenses.

Know your Credit Score
It is a wise decision to know your credit score. You can get a free copy of your credit report annually. You can keep track of your credit, so you can make sure it is accurate and up to date.

Being financially literate can help you secure the financial future that you deserve. You should make good financial decisions so that you can use your money wisely.

This is a guest post from Advisorworld

Guest Post

Avoiding Predatory School Loans

Few people associate the words “predatory lending” with college students and school loans, but predatory lending in the area of student loans is a growing concern. Alan Collinge points out in his book “The Student Loan Scam: The Most Oppressive Debt in U.S. History and How We Can Fight Back” that the default rate for student loans ranges from 19% at four-year public colleges to 51% at private, for-profit colleges. When default rates on any type of loan is that high, it’s usually a dead giveaway that there’s something wrong with the lending, not the borrowers.

Predatory school lenders count on borrowers who are unsophisticated enough not to recognize their unscrupulous practices. You can protect yourself from predatory lending by educating yourself on those practices and by asking important questions before you sign the papers to accept any student loan. These ten tips will help you avoid predatory school loans.

  1. Learn all you can about the different types of loans available for your education. Knowledge is your strongest ally.
  2. Research deceptive lending practices so that you’ll recognize them. Beware of bait and switch loans, interest-only loans and loans with balloon payments. They each have their place, but many lenders offer them to unsuspecting students and parents who don’t fully understand how they work.
  3. Use federal student loans first. They carry lower, fixed interest rates and offer options for deferment and consolidation after you leave school.
  4. Request the interest rates for any loans you are considering in writing. The financial aid offices at many schools don’t mention interest rates at all.
  5. Ask the financial aid office for the names of whom they work with and research them to find out if they have been named in any class action suits with regards to student loans.
  6. If the school provides you with a preferred lenders list, ask the financial aid officer how the school decides which lenders are added to the list. Again, do your research. District attorneys in several states have found that lenders often offered kickbacks to schools in return for being listed on the preferred lenders list.
  7. If you must take out student loans from private lenders, ask for loan quotes from several lenders and compare them with each other. Insist that each lender provide you with the interest rate you’ll be paying and the total cost of the loan so that you’ll be comparing apples with apples.
  8. Avoid loans with low teaser interest rates. Many lenders offer student loans with a low interest rate through graduation or for a number of years after graduation. If you do choose one, find one that specifies the interest rate to which your loan will adjust so you’re not surprised in five years.
  9. Choose a fixed rate interest loan. Adjustable or variable interest rate loans can be tempting because they often start out at lower rates than fixed rate loans, and it’s easy to believe that there’s a chance the interest rate will go down in the future. In reality, it’s far more likely that the interest rate on your student loan will continue to rise.
  10. Never sign anything you haven’t read carefully and understand fully. Don’t let a financial aid or loan officer tries to pressure you into signing before you’ve read the full loan agreement.

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to begin building wealth and gaining financial freedom! Download your copy today at TheWayToWealthBook.com

Guest Post

Common Tax Mistakes to Avoid

With less than two weeks to go before the Tax Man comes around, people who have yet to file are scrambling to get their receipts and W-2s in order as quickly as possible.

With so many people in such a mad rush to get their returns out the door, mistakes are bound to happen.  And mistakes on the most important documents you’ll file all year aren’t exactly the kind you want to make.

With that in mind, we at MyCreditGroup have put together a list of some of the most common tax mistakes consumers make, and how to avoid them:

Forgetting to file on time

According to the IRS, up to 20% of Americans wait until the last week to file their taxes, so if you haven’t filed yet, you’re certainly in good company.

That said, waiting until the 11th hour to file your taxes can cause a lot of unnecessary stress as you race to gather your financial records together and try and make sense of them all; which can be stressful enough without having to worry about a looming deadline.

Consumers who end up missing the April 15th deadline can expect the IRS to start hitting them with interest payments (which are compounded daily) as well as penalties for filing late, which vary based on how much you owe and how late you filed.

So if you don’t want to end up paying the IRS even more than you may already owe, you might wanna start prepping your tax information NOW.

Forgetting to carry the 1

I have a confession to make: I’m absolutely horrible at math.  Pretty much any task that involves number-crunching (or really numbers in general), means I’ll be needing a calculator to help me through it.

That’s why tax software is one of the better ideas man has come up with, much like the trusty calculator.  Those of us having to figure our taxes out on our own suddenly don’t have to worry so much about forgetting to carry the 1 – assuming we’ve got the rest of our numbers in the right place, that is.

While some mistakes can work in your favor, such as receiving a bigger return than expected, it can just as easily turn sour, such as you owing the IRS more than you thought.  So make sure you double check your work before you mail your tax forms in.

Shredding your older tax returns

I’ve got a box full of old files that I’ll probably never look at again; most of it stretching back further than I care to remember.

If you’re smart, you have at least a drawer full of similar documents, hopefully containing your past tax returns as well.  If you’ve ever found that you’ve messed up on any of your back taxes, you’ll need these to help set your records straight.

Not filing at all

We saved the biggest tax mistake you can make for last.

No one likes the thought of having to pay taxes.  Paying the government more hard-earned money out of your own pocket?  Yeah, I can see why no one’s lining up for that…

Still, while taking the time to file your taxes is almost as fun as paying a bunch of old parking tickets, it’s not something you can skip out on, either.  If you don’t file your tax return(s) because you don’t want to have to pay the Tax Man, you’ll only be hurting your wallet in the end.

Thankfully, the IRS offers options to file applications for extensions (for up to six months) and payment plans for those who are worried about breaking the bank to pay their taxes.  Both go a long way towards making filing your taxes just a little less painful if you didn’t save the date.

Keep these tips in mind when you sit down to do your taxes, if you haven’t already, and you’ll be with one less worry.

This is a guest post from Marc Chase, President of Product Development for MyCreditGroup, a leading credit repair services company.