30 Jun
2010

We all have them: bad money habits that keep our emergency funds thin and our debts more robust than they should be. There are ways to out-sneak these bad money habits easily:

1) Make it harder to get at your money. Have your bank make it a little more inconvenient to get at your savings or buffer account money (for example, some banks can set up an account that does not offer online, phone, or ATM banking attached, so that you have to go into a branch to withdraw cash).

2) Make it automatic. Have your bank automatically withdraw a certain amount each month to your savings account. That way, you’ll be adding to your savings each month. If you haven’t been saving, you probably have lots of excuses – and no savings. If budgeting does not help, automatic withdrawals to your savings account are one of the sneakier ways to save.

3) Say no to one thing a day. If you constantly buy things you don’t need, make it a rule that you put back one item on every shopping trip. It’s an easy way to cut down on spending without really sacrificing much.

4) Add up the little things. If you have a hard time getting yourself motivated to save, consider doing the math. If you spend  $50 in restaurant meals a month,  your spend $6000 per decade on eating out. Imagine what else you could do with $6000.

5) Have your bank do the work. Your bank has all sorts of neat solutions to help you outwit your bad money habits.  There are also online banking resources to consider. Some banks will automatically alert you when you spend more than your pre-set limit, for example. Some banks will automatically round up your debit card purchases and invest the difference. Find out what products and services your bank offers and take advantage of them.

30 Jun
2010

If you need an emergency loan or personal loan, you have lots of options. There are credit unions, large lenders, private lenders, investors, banks, and even online lenders are willing to lend money. However, there are many reasons why you might want to try your bank first if you need a loan:

1) You have a relationship with your bank. If you have had a checking account or multiple bank products with a bank over a period of years, you have a relationship with your bank. Your bank may be willing to offer you loan solutions in order to keep your business.  If you have a shaky relationship with your bank, your relationship may not work in your favor, however.

2) Your bank can usually offer you a better rate. Since banks are very large companies with huge financing, they can generally offer very competitive rates and terms.

3) You may have an easier time keeping your finances under one roof. If you have all your loans, insurance, and accounts with one bank, you may get multi-product discounts. As well, it might be easier to keep track of your finances if everything is with one institution.

30 Jun
2010

All banks offer multiple services – to personal customers, businesses, investors. It’s time to look at what else your bank can offer you:

1) Checking account. Just about everyone needs a checking account. You need it to pay bills, write checks, and even qualify for some cash advances. Look for the lowest-fee account.

2) Online savings accounts. Online savings accounts are great because they often have few or no fees and good interest rates. They also make it a little harder for you to access your money, which is great if you want to build up an emergency fund without being tempted by impulse buys.

3) Bank credit card. Bank credit cards obtained through your bank often offer good interest rates as well as added security features.

4) Investment options. Most banks have entire departments dedicated to investments. If you want to invest in CDs, stocks, or something else, there are people at your bank who can help you get started.

5) Free advice. Many banks have free services – such as seminars or workshops – about financial topics. This is a great way to learn more about money. Many banks also offer one-on-one advice sessions, which allow you to meet with someone to discuss your investments, retirement plans, house plans, and other major financial decisions. In almost all cases, this professional advice is free.

6) Loans. In many cases, you should go to your bank first if you need an emergency loan or personal loan. Banks are large lenders and therefore can generally offer very competitive rates. As well, if you already have a good relationship with your bank (because you have been a customer for a while) you may find it easier to apply for loans with your bank.

7) Insurance, security, and protection. Banks offer a number of products to keep you safe. They generally offer lots of insurance products that you can even bundle together to save money. They usually offer security features such as overdraft protection, which can help protect you financially. Your bank will also usually have safety deposit box, which can help keep your valuables and documents completely safe.

29 Jun
2010

You’ve probably had a checking account for years, but there are some things about your account that you probably don’t know (or haven’t thought about):

1) Your money is secure – up to a point. The money in your bank is secured by the government. If your bank goes bankrupt, your money will be protected. However, if you have very large investments or deposits with your bank, not all your cash may be protected.

2) Checks should be used with caution. When you give someone a check, you are giving them some of your banking information and some access to your account, so it pays to be cautious. For example, void checks should only be given to companies that you know are legitimate. With a void check, a company could, theoretically, withdraw more money than you have agreed to or withdraw at different times than you agreed to. While your bank will likely make it right if the company overdraws, that is not a hassle you need. Similarly, if you give post dated checks (such as to your landlord) make sure that you cancel them at your bank if your agreement changes. If you move out early, for example, your landlord could still cash that final post dated check. Always check your account balances at the end of the month to look for unauthorized transactions.

3) You may be overcharged for your checking account. Checking accounts often carry higher fees than many other accounts. Switching to an online account or a different kind of account (most banks have several types of accounts) can save you money each month.

4) You will want to have a savings account and rely on it more than your checking account. Even if you have a checking account, you will still want to open a savings account (preferably a low-fee account). You should not keep large sums in your checking account. Just keep enough in to cover checks, bills, and fees. Keeping most of your money in savings, even if you have to transfer it from time to time to your checking account, will allow you to make some money in interest.

5) It is possible to be denied for a bank account.

29 Jun
2010

Applying for a personal loan, car loan, mortgage, or payday advance can be stressful. You are being evaluated and of course you worry about being rejected for a loan. You can improve your chances by avoiding these common loan application mistakes:

1) Inconsistencies on your application. Small inconsistencies – such as misspellings in your address or writing your way in different ways on different pages (with your middle name on one page and without on the next) can send red flag signs to a lender. Before submitting a loan application, always check it over for accuracy.

2) Not enough information. Fill out the loan application completely. If you need help, call your lender or the lender’s customer service line for help. Blank spaces on an application form will sometimes mean that your loan application is rejected out of hand.

3) Dishonesty. Don’t claim to make more money than you do or falsify your birth date. Not only will it be embarrassing when you are caught, but all lenders will reject dishonest applicants. How can they trust you to repay a loan if they can’t trust you to fill out a form correctly?

4) Lack of professionalism. If you need to meet with a lender, dress professionally and act pleasant. Fill out your forms with pen. Acting like an adult reinforces the idea that you can be trusted with money.

5) Not enough preparation ahead of time. Before you apply for a loan, check your credit rating and work on your credit so that you can put forward the best financial picture possible. Carefully research lenders and loan products so that you are ready to apply for the right loan for you.

29 Jun
2010

Scam loans are a huge problem for the loan industry. They make customers suspicious of all lenders and also deprive customers (and legitimate businesses) of cash. In some cases, loan scammers even steal identities and cause years of ruined credit, legal problems, and other headaches for customers. While loan scams are not always easy to spot, here are some red-flag signs you should look for:

1) Bad contracts. When applying for personal loans, payday loans, or other loans in person, read over the contract and even take it home with you before you sign it to have someone look it over for you. Often, bad terms and hidden fees are hidden in the fine print of contracts and unless you know what to look for, these clauses can be hard to spot.

2) Requests for money up front. No legitimate payday lender or personal loan lender will ask you for money up front. Usually, only car loans and mortgages require a deposit. Scam lenders will sometimes pressure you to send money via wire transfer, MoneyGram or a cashier’s check. Never do this. No legitimate company will ask for money this way because your money cannot be recovered if you send it this way – even if you later learn the lender was a fraud.

3) Insecure websites. If you are applying for online loans, look for valid SSL (security certificates). Also, look for VeriSign, McAfee/Norton, Better Business Bureau, Truste, and other security companies links. Be wary of companies that provide just the graphics for these security companies, without valid links. Also, do not trust sites that do not have a clear security guarantee and privacy policy on their websites.

4) No clear contact information. You should know exactly who you are getting money from and you should have a business name and contact information so that you can verify the legitimacy of a company. Also, this contact information is important in case you need help with your loan later on.

28 Jun
2010

Once your debt settlement or debt relief program is over, you need to continue to work to stay out of debt. However, many creditors run up debt almost immediately after getting debt free. A few basic mistakes are what are most likely to thwart your good intentions:

1) Returning to bad habits. While you are part of a debt settlement or debt relief program, there is someone watching over your shoulder and making sure your bad habits (such as overspending or impulse buys) don’t derail your debt repayment plan. Once your work with a debt settlement or debt relief program is over, however, you are free to return to your usual bad habits – and run up a big debt again. To counteract this, good budgeting and careful record keeping can help keep you on track.

2) Stopping financial reviews. When you are part of a debt settlement or debt relief program, there is someone forcing you to look at your spending, debts, credit score, and other financial facts. Once you are on your own, though, you can go right back to denial – which can mean that your finances get out of control quick. To counteract this, create at least a monthly review of your finances and sign up to receive your credit report at least once every six months.

3) Not having a “stay debt free” plan. To stay out of debt, you need to have a plan. This means having long-term and short-term financial goals and having a budget for every month to keep you on track. Regular contributions to an emergency account can help, too.

28 Jun
2010

Lending scams can deprive you of cash and can ruin your credit rating. Whether you are applying for a personal loan, payday loan, or another type of loan product, watch out for these scams:

1) Pay first, get your loan later. This is by far the most common type of scam and it takes many forms. A lender may ask you for a deposit or a fee (sometimes called an application fee, processing charge or application fee). Or, a lender may tell you that your credit is so bad that you need to send some payments in advance. In all cases, these are scams. The lender will take your money and disappear. You will not get a loan and you will lose your money. Legitimate lenders do not ask you for money up front. The only exception is a car loan or a home loan, which involves a down payment.

2) Give up your collateral. Some lenders ask you for collateral. While this is typical for legitimate secured loans, scam lenders will ask for cash as collateral or will ask you to actually give them your collateral (by deeding it) before giving you a loan. No legitimate lender does this.

3) Unfair terms. Some lenders create scams by asking you for unfair terms. In fine print in your contract, for example, they give themselves permission to seize your collateral for no reason or charge huge administration or interest fees. Before signing any loan contract, have a professional review it.

28 Jun
2010

If you are trying to pay down your credit cards, personal loans, payday cash advances, and other debts to get out of debt entirely, beware of these mistakes that could keep you in debt longer.

1) Overpaying for debt help. Debt settlement companies and debt relief companies charge varying amounts for their services. Some even have hidden charges. The more you pay to a company, the less is going towards your actual debts, so shop around to find and affordable solution. If you can afford to at least keep all your bills current, you might even be able to pay down your debt yourself – without paying for help.

2) Taking on new debt. While you are trying to get out of debt, it is very important to avoid new debts. Cut up your credit cards if you have to, but avoid new debts at all costs. If you do not, your debt will just keep growing.

3) Not being aggressive enough. You need to budget and carefully put as much as you can towards your debts. Just paying the minimum on your loans will keep you in debt for years – and will cost you more in interest.

4) Putting all your cash towards debts and not saving anything. Even if you are trying to get out of debt, you still need to be putting something towards your emergency account – even if it is just a little bit every month. This way, you will have emergency cash in case you do face a crisis. Your savings account will keep you away from expensive emergency loans and cash advances.

5) Not giving some bills priority. It is important to pay off your highest-interest loans first, because that way what you save on interest can be used towards your lower-interest loans. Keep all your loans current, but put extra cash towards your highest-interest loan and focus on paying off one loan at a time.

27 Jun
2010

It can be tough to motivate yourself to get debt-free. While you may enjoy the idea of not having payday loans, credit card debts, or personal loans to pay off, the daily round of budgeting and saving can be tough – especially if you have a long road ahead of you before you have paid everything off.

There are lots of ways to motivate yourself, but one great option is to imagine a great way to celebrate being debt free. Once you see that you owe nothing, what would be a great way to celebrate for you? Would you throw a party? Buy that special something you’ve always wanted? Would you treat yourself to a great vacation?

Create a separate savings account for your celebration and put aside a small amount each month until you have enough for your celebration. You may want to find ways to increase your income or find ways to bring in extra cash in order to afford your debts and your special treat. Make sure you don’t take on new debts to pay for your celebration! On the other hand, keeping that prize in mind can make it easier to give up smaller purchases along the way. And it will make getting debt free that much sweeter.