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It is best to plan for an emergency before it happens. You should start an emergency fund that contains at least three months? living expenses. Note that this is not just three months? rent, but three months? worth of money to cover all of your expenses: rent, utilities, car payments, daycare, groceries?everything.

Emergency money has to be something that you can access in an emergency. This means that you can?t have it in an investment that you won?t be able to get at. You might choose to keep it in a separate account than your normal account. The challenge is that if your money is easy to access, you might be tempted to use it for purchasing things on a day-to-day basis. Your emergency account is not for daily expenses or impulse purchases. It should be used for medical expenses, unexpected car repairs, and in case you lose your job.

Be wise with your emergency account. If there are layoffs happening at work, you might need to consider adding more money to your account. If your car repair bill is something you can cover without using your emergency money, don?t use your emergency money.

You need to choose an account that you will be able to access. You might choose to go with a savings account. You might also choose a money market account which will earn you more money. You want an account with no fees. Ask your banker about what account is best for you. Sometimes, to have no fees, you need to maintain a minimum balance in the account. This might even be an incentive to not spend the money in your account.

It might seem difficult to make payments into an emergency fund, especially if money is tight. Regardless, you should start with as little as $40 a month, or as much as you can afford (remember: more is Read more…

There are many misconceptions about credit scores out there. There are people who believe that they don?t have a credit score and some who think that their credit scores don?t really matter. These sorts of misconceptions can hurt your chances at jobs, good interest rates, and even your chances of getting an apartment.

The truth is, if you have a bank account and bills, then you have a credit score – and your credit score matters more than you might think. Your credit score may be called many things, including a credit risk rating, a FICO score, a credit rating, a FICO rating, or a credit risk score. All these terms refer to the same thing: the three-digit number that lets lenders get an idea of how likely you are to repay your bills.

Every time you apply for credit, apply for a job that requires you to handle money, or even apply for some more exclusive types of apartments, your credit score is checked.

In fact, your credit score can be checked by anyone with a legitimate business need to do so. Your credit score is based on your past financial responsibilities and payments, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits.

In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially – and give you better or worse rates when you apply for a loan. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide whether you can be trusted in a high-responsibility job that requires you to handle money.

The problem with credit scores is that there is quite a bit of misinformation circulating around, especially from some unscrupulous companies who claim they can help Read more…

You’ve probably heard of a debt consolidation loan. Just what is a debt consolidation loan, and how can it help you improve your financial picture? A debt consolidation loan is basically a secured loan taken out to pay off many other financial obligations, typically unsecured debt, such as credit cards or store accounts. Credit cards and store charge cards tend to have comparatively high interest rates. In addition, many of these types of accounts have annual or monthly fees associated with them that raise the cost of your credit even further.

Because they are unsecured debt, credit cards have to charge these higher interest rates. By using a loan that is secured by a stable, high value asset, such as real estate, the loan can have a much lower interest rate. In many cases, the term of the loan can be fairly long as well, typically 5 ? 10 years or so. The combination of the lower interest rate and the long term of the loan means that your payment on your new debt consolidation loan will be fairly low. It will be much lower than the total payments of the credit cards you used the new loan to pay off.

The reduction in your monthly financial obligation can be a huge help. You now only have one low payment each month. This one payment replaces a payment for each of your credit cards you are now paying for. The multiple payments for all the credit cards add up to a much larger bill every month than the new consolidation loan’s payment. This can obviously improve your monthly cash flow picture considerably.

There’s another, huge benefit as well. Because you’re only making one payment each month, instead of many smaller payments, it is much more convenient, and takes much less of your time. Instead of going through your credit card statements and laboriously writing a bunch of checks, you can be doing something else. Probably the best thing about a single payment is that it’s almost impossible to accidentally miss a payment. The costs for accidentally missing a payment or having a late payment can be severe. You’ll be Read more…

While many people turn to their usual bank when opening a business account, it?s advisable to shop around. There can be some advantages to using the same bank for personal and business accounts ? your manager may be more supportive if you are known to the bank and have a sound financial track record. However, each bank offers different services and has different bank charges.

Many banks are currently offering free business banking for a set period ? six months or a year ? as an incentive. There are also a variety of support packages, such as free business software and dedicated advisers to help with your business plan. Choose a bank that will give the best all round deal for your particular business ? you may also want to consider corporate ethos and ethical banking when deciding which bank to take your business to.

Choosing Your Accounts

Depending on your business type and size, you may need different accounts. If you are likely to be making frequent transactions, for example, you may be better off with an account that charges a fixed monthly fee, rather than a fee per transaction. If you need to process debit and credit card payments, you will need a merchant account.

For overseas trading, you may want a foreign currency account. As with personal accounts, it may be worthwhile to hold more than one type of account ? for example, a current account for day-to-day banking and a deposit account for investing profits. There?s nothing to stop you having different accounts with different banks ? although you might get a better deal if you hold all your Read more…

In today?s ever-changing world, people need more and more flexibility when it comes to borrowing and mortgages. With this in mind, more and more lenders are offering what they term as ?flexible? mortgages. However, the term ?flexible? can mean a lot of different things. If you are unsure about which mortgages are flexible and what the benefits of a flexible mortgage are, then this article might be helpful to you.

What does flexible mean?

Although there are a lot of mortgages that claim to be flexible, there are some things that define a truly flexible mortgage. There are four main characteristics you should look for when determining if a mortgage is flexible. These are:

? Being allowed to overpay
? Being allowed to underpay
? Being able to take payment holidays
? Interest is calculated daily

Overpayments

One of the best features of flexible mortgages is the ability to overpay. With traditional fixed repayment mortgages, there is no easy way for you to pay more than your fixed repayment each month. If you have a flexible mortgage, then you will have the ability to pay as much as you can each month. This means that during the good months you can speed up the process of paying your mortgage back. If you regularly overpay then you can save yourself thousands of pounds in interest payments.

Underpayments

Underpayments are another useful feature of flexible mortgages, but they should be used sparingly. If you are unable to make the repayment in a given month, then you can just pay as much as you can, effectively underpaying on your mortgage. Although this is good as it stops you from defaulting, there are penalties involved. The more you underpay, the longer the mortgage will last or the higher your repayments afterwards will be.

Payment holidays

Payment holidays are similar to underpayments, but they let you completely halt payment for a period Read more…

If you have only been able to rent property in the last few years due to poor credit, you may feel the time is right to buy a property using an adverse credit home loan. However, buying a home can be a daunting prospect, especially if you have had credit problems in the past. This should not deter you though, because even with poor credit you can still find the house that you want. All you need to do is find and secure the right adverse credit home loan.

Before looking for a property you should find out more about securing an adverse credit home loan. It pays to know about how much you can borrow before house hunting, because otherwise you will face disappointment when you find the house of your dreams but you are unable to afford it. However, if you follow a few simple steps then finding an adverse credit home loan can be much less troublesome than you might think.

Finding a lender

The very first step on the path to finding an adverse credit home loan is to find yourself a lender who is willing to offer you a loan. This may seem like a near impossible task to you, but in fact there are a fair number of lenders who might be able to help you. Property is an attractive item for lenders because if they need to take possession then it will be relatively easy to sell. Take the time to look around to find a lender you are happy with.

One of the best ways of finding a lender is by using the Internet. This saves you the time of travelling to lenders who cannot help you, and also allows you to search specifically for those lenders who specialise in offering adverse credit home loans. As well as searching online you should visit mortgage lenders and banks in your area. The more research you do, then the more likely you are to find the first adverse credit home loan for your needs.

Getting pre-approval

Once you have found the lender you think is right for you, then you need to get Read more…

Many people in the United States today have bad credit, and the numbers have continued to rise. It isn’t just those who are lazy who end up with bad credit. Many hard working people who are well meaning end up in situations where their credit is ruined. The best way to avoid this is to look at the different warning signs that can indicate that you’re headed towards a situation where your credit can be destroyed.

If you don’t have medical insurance, this is one sign that you’re headed towards financial trouble. Statistics show that a large percentage of people who end up with bad credit are those who have outstanding medical bills. As the cost of healthcare continues to increase, getting sick or hurt could put you in debt that is difficult to get out of. If you don’t have health insurance, it may be time for you to get it. If you are maxing out your credit cards, this is another sign you are headed towards bad credit.

Credit cards are a key factor that causes many people to end up with bad credit. Their high interest rates combined with late payment fees and universal default can make them a nightmare for people who don’t use them properly. It is best to keep your credit card balance as low as possible. Only use your credit card when you absolutely need it. Always pay your bill on time and avoid maxing out your card at all costs. Many people also make the mistake of using the equity in their homes too much to pay for expenses.

While using the equity in your home can be a good idea for those who want to remodel their kitchen or bathroom, they should be used cautiously. Before you use the equity in your home, make sure you will be able to make the monthly payments with ease. You want to avoid situations where you could default on your payments. Living paycheck to paycheck or not having adequate savings is another sign that you could end up with bad credit. It has been shown that about 40% of American families have less than $1000 saved up.

This is alarming for a number of reasons. First, if you get into an emergency, you will have little money to protect you. This will leave you open to using a credit Read more…

The Reserve Bank Governor of Australia has issued a warning to households over the high level of debt that many have taken on as a result of recent boom times. Mr Ian Macfarlane said that while the overall economy is not under threat, individual households are vulnerable to a downturn. He appealed for them to scale back their borrowing.

According to media reports, household debt has increased 14 per cent a year on average over the past decade and now stands at about $530 billion while the ratio of debt to income rose to 125 per cent from 56 per cent over the same period.

Recent Australian mortgage statistics show that there are more Australians paying off a mortgage than the number of persons who own their home outright.

Also the average size of the Australian Mortgage has significantly grown in recent years.

According to the CommSec chief equities economist Craig James, the increase in the number of people with mortgages shows that property buyers are more confident and prepared to take on debt. Craig James believes that there are two main reasons for the fact that those with mortgages now outnumbered those who owned their home outright.

First of all – “Interest rates have come down over time, with mortgage rates now around 7 per cent,” he said. Mr James said buyers were less concerned they would see a return to interest rates at 18 per cent, as occurred in the recession of the early 1990s.

Secondly, items such as cars or household goods were taking up a much smaller part of family budgets, “so people can rationalise, they can afford to take on more debt (to buy assets)”, he said.

Australia’s largest mortgage broker, Australian Finance Group (AFG), has found the average Western Australian mortgage is now $305,000, making it the second largest behind New South Wales, where the average is $369,000.
Queensland’s average is $278,000, Victoria’s is $276,000 and South Australia’s is $211,000.

AFG said that since March 2005 all new mortgage sizes had increased by less than 10 per cent in all states except Queensland where the average jumped 12.5 per cent, and Western Australia, which Read more…

Although I am sure that someone at the State Department will argue otherwise, Cyrus The Great (590 ? 529 BC), founder of the Persian Empire, was no terrorist. Quite far from it. Although one might not have wanted him as next-door neighbor, Cyrus II of Persia was very illuminated for his times, according to the Greek historian Herodotus. Cyrus, in fact, beheaded only those who would not bend under his rule. But all others were spared. Such was the case with Croesus of Lydia, whose life was spared by Cyrus after the battle of Pterium, and that of Nabodinus after the battle of Opis and the siege of Babylon. However Cyrus, like all military geniuses, had his … shall we say … pet-peeves: if he ever caught anyone charging interest on loans, he would order him tied at the stake, would personally pull out his Zippo and … woosh, set him ablaze right there and then.

In this day and age of mortgage and lending interest rates as well as returns on investment and yields, it is interesting to look at how the very concept of interest – both active and passive interest – has developed throughout the centuries to the point of where we acknowledge and understand it today. Looking back at how things were once seen is always gratifying, to the extent that it provides us with a measure of how times have changed.

The ‘phenomenon on interest’ as it was once called first became the object of question only in the form of loan interest for a full two thousand years. What especially caught the attention – and the ires – of our ancestors was the fact that loan interest has its source not in labor but, as it were, in some bounteous mother-wealth. In societies of the past where work and productivity stood at the very essence of existence, making a profit by – quite literally – not producing anything for the common good must have looked almost sacrilegious. The acquisition of wealth without labor, moreover, ran diametrically opposite to many early religious tenets, both Pagan as well as Christian.

The history of the interest phenomenon, therefore, begins with a very long period in which loan interest, or usury, alone is the subject of investigation. This period begins deep in ancient times and reaches down to the Eighteenth century. It is occupied with the contention of two opposing doctrines: the elder of the two is hostile to interest, while the later defends it. In the early stages of economic development there regularly appears a lively dislike to the taking of interest. Credit has still little place in production. Almost all loans are loans for consumption and are, as a rule, loans to people in distress. The creditor is usually rich, the debtor poor; and the former appears in the hateful light of a man who squeezes something from the little of the poor in the shape of interest to add to his own superfluous wealth.

It is no wonder, therefore, that both the Ancient World and the Christian Middle Ages were exceedingly unfavorable to usury. The Ancient World, in spite of some few economical flights, had never developed very much of a credit system and the Middle Ages, after the decay of the Roman culture, found themselves – in industry as in so many other things – thrown back to the circumstances of primitive times. As a result, in both eras several laws were enacted forbidding the taking of interest, or the paying of it.

Perhaps the Greek philosopher and thinker Aristotle in his book “Politics” is the most vociferous opponent of interest. Here is what he wrote : “Of the two sorts of money-making one, as I have just said, is a part of household management, the other is retail trade: the former necessary and honorable, the latter a kind of exchange which is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term usury, which means the birth of money from money, is applied to the breeding of money, because the off-spring resembles the parent. Wherefore of all modes of making money this is the most unnatural”. Quite a statement! One may want to bring this up to the attention of his banker when applying for a loan the next time around.

Aristotle’s thinking may be summed up this way: money is by nature incapable of bearing fruit. As such, the lender’s gain cannot come from the peculiar power of money. And, consequently, it can only come from a defrauding of the borrower. Interest is therefore a Read more…

Surprisingly, despite current trade, there are still large numbers of people who are setting up in business. Proof perhaps that the well ingrained entrepreneurial instincts of the American people live on. However, you might think that with all the stories in the press, that the banks are now completely unwilling to lend their support by way of finance, loans and line of credit. But in actual fact, you would be wrong. It is true that banks are now, thankfully, much more cautious about whom they are lending to. And that is a good thing for the rest of us. However it still remains the case that the banks make their money by lending it in the first place, and they simply could not afford to stop lending money to people who want to be in business.

Of course it is not like the late eighties or nineties, when getting finance was sometimes as easy as buying a snack for lunch. Those were the times when house prices apparently only appreciated and often at a tremendous rate. The banks were more than happy to grant loans if you were happy to use your house as collateral. Nowadays house prices are as liable to fall as rise, and your bank manager knows that this is not such a great form of security as it once was. So just how do you go about getting the finance you require from the banks in the economic climate that now prevails?

First remember that if you speak to anyone high up in the banks they will tell you that there is still money to be lent, so don?t be put off when your associates tell you that you?ll never get financed.

Once you have developed your business plan in detail, make sure that it is presented in a first-class manner. Ensure that the plan looks as Read more…