My Loans Consolidated

Today I had an interesting conversation with a friend of mine who just received some money. He did not have a steady income and he was not a very good money manager either. So I volunteered to help him look at his finances in a different way than he does now. He came and consulted me about how he should spend his money. He received $200 which is a lot of money in a third world country. His ‘goal’ was to try and live on that $200 until the end of the month. He had to pay bills that added up to $60 and had to use the rest of the money to live for another 14 days.

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In today’s global economic crisis, more people are choosing to keep and maintain their cars as opposed to buying new ones. Now as their car is getting older and older they are forced to find ways to save money by cutting back on car insurance costs. Over a year now into the global crisis, more and more people are shopping around for rate quotes and even find cheaper rates from online car insurance companies.

As modern cars usually last longer than older cars from previous decades, it does make sense for people to keep the cars for several more years. But due to depreciation, old cars lose their value rapidly and a lot of car owners don’t realise that their old cars are overinsured. Generally, car owners easily lose track on the value of their cars which increases the possibility of buying more coverage than they actually need.

If you have an old car and its value has now dropped to only a few thousand dollars, you should consider cutting back on collision and comprehensive coverage in your car insurance. Collision coverage pays for damages resulting from road accidents. Comprehensive coverage pays for theft and damages that are not caused by another car.

But car owners should not reduce liability coverage, which covers damages that you and your car are causing to other people or property. The reason to carry plenty of liability insurance is to be covered if you should have a collision with an uninsured motorist. According to an Insurance Research Council report, one in seven drivers in the US was uninsured in 2007. They also expect that in 2010 the figure will reach one in six drivers.

If you are not sure what your vehicle is worth now, you can do so at websites such as Edmunds.com or Nadaguides.com.

There are also other ways to cut back on car insurance or online car insurance cost. One is by using a pay-as-you-drive car insurance. This insurance will let you pay only for the miles that you drive. The more you drive, the more expensive the premiums.

The shaky employment situation and financial pressures have kept people away from new-car dealerships. If you can keep your current car longer and cut back on car insurance, that will definitely help your difficult financial situation.

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Putting a teenager in your auto insurance is nowadays outrageously expensive. But if you decide to still let your teenager drive your car, it is very important to do so. The importance of teenage auto insurance outweighs the cost.

If you have a teenager that actually shows some responsibility, there are many ways to get the auto insurance premiums lowered. Here are 5 tips that can help you do so.

1. A lot of auto insurance agents can provide discounts for teenagers that maintain a grade point average above 3.0. But they need to participate in driver safety courses and other qualified programs to be eligible for the discounts.

2. Explain to your teenager that it only takes one count of drunk driving or hit-and-run or speeding to change the premium rates to thousands more per year! Keeping a clean driving record will count towards lowering the policy rates and your child should also be informed about this to involve them in the family’s finance management.

3. Cars like a Camero or something else that are fast will actually double the auto insurance rates. Providing your teenager with a safe car, such as Nissan Sentra or Honda, can save you half of the auto insurance cost. Besides that, the safety features in a newer car such as airbags or antilock brakes and others will also count towards a cheaper rate.

4. Auto insurance companies consider teenagers that are active and are members of programs such as Boy Scouts or others as responsible. They are considered to be helping the community and less likely to drive irresponsibly. This will help you save more money on auto insurance rates.

5. Add-on safety features will help lower the risk of an accident. Auto insurance companies ‘love’ seatbelts that automatically lock, side impact airbags, traction devices and so on. Just install plenty of these safety features and you will be rewarded with a lower auto insurance rate.

The key is to figure out how to cooperate with your teen to drive responsibly and safely. This will help you save money hundreds of dollars per month on premiums.

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Here are 7 tips for you to take care of your financial health:

1. Total Housing Payments. Your total expenses on housing payments, such as mortgage, insurance, rents and so on, should not exceed 28% of your gross income. As housing prices soared in the past years, too many home buyers broke this old rule.

2. Total Debt Payment. Your total debt payment (including mortgages, loan payments, credit card debt and all other kinds of debt that you might be paying for now) should not exceed 36% of your gross income.

3. Emergency Fund. Too many people are neglecting this one. You should keep three month’s worth of living expenses in a bank savings account or a high-yield money-market fund for emergencies. If you have kids or rely on one income, make it six months’.

4. Portfolio in Stocks. Stocks can provide good growth, but pose plenty of risks in the short-term. Bonds offer more stability. If you’re saving for retirement and want a quick idea of what percentage of your portfolio should be in stocks, subtract your age from 120.

5. Don’t put all your eggs in the same basket. In a bear market, it’s tough to find a safe-haven. A lot of stocks in your portfolio will be sinking too. But don’t compound the risk by holding too much in any one stock. Best to keep it below 10%.

6. Care for your family’s future when you’re gone. You need enough life insurance to replace at least 5 years of your salary – as much as 10 years if you have several young children or significant debts. But you might not need it at all if you have no dependents.

7. Saving for your retirement. How much you should be saving for retirement depends on a lot of things, like how much of your pre-retirement income you expect to draw each year after you quit working, how much your nest egg will continue to grow and how long you’ll live. If you are in your 20′s and you just started saving for retirement, you should be saving 10-15% of your income. People starting to save in their 30% should be saving 15-25%. Starting at 40 -45 years old to save for retirement, save 25-35%. If you are older than 45 see the table below:

The sooner you start saving for retirement, the better.

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In today’s financial meltdown, income tax rebates are one of the ways by the government to help stimulate the economy. In the past years, the US tax recovery has not exactly helped the economy to boost up as it had been expected to do, but many people have been helped to get through difficult financial time.

Basically, to receive these tax rebates checks you simply have to make sure that you filed for your income tax return on time and also pay the taxes that you owe besides some other small requirements. There are, however, people who qualify for an income tax rebate check even thought they do not file or pay the previous years tax. These people include low-income families, receivers of Social Security benefits and also war veteran beneficiaries.

What I just found today in the internet is that you can even receive tax rebates from your gambling winnings! If you are a Canadian or International visitor from certain countries, you may qualify for a 30% gambling tax refunds on your gambling winnings.

To help you get your gambling taxes back, I found this website, CasinoTaxRebate.com, who offers a guaranteed service where you only pay for their service fee when you get the refund. If you are into gambling in the US and are from Canada or other certain countries as specified in their website, you should try and apply… who knows, maybe you’re eligible and if not, you don’t pay anything for the service they provide.

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Here are some types of income that you do not have to pay tax for:

Company’s Compensation

The following compensations paid by your company is tax free: health insurance premiums, hospitalization insurance premiums, life insurance coverage of $50,000 or less, cafeteria plans and education fees. Your company can also give you discount fare cards or passes to take public transportation to work tax-free.

Selling Your Home

If you have been mainly living in your house the past 2 out of 5 years and you would like to sell it, as much as $250,000 in gain or $500,000 on a joint return can be excluded. Also, you can claim the exclusion every two years!

Income from Interest

If you earn interest from bonds that were issued by a state, territory, municipality or any political subdivision is free from federal taxes, their tax benefit increases in value as your marginal tax rate goes higher.

Car-pool

Any income that you receive from a carpool to carry passengers to and from work are commuting costs and are not deductible.

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It’s very painful when you are driving an expensive car, and that car goes and collides into other car. Auto insurance is something which a driver cannot afford to leave without. Traffic nowadays has become very dangerous and so I believe that having car insurance is really a good investment to make. Although many people consider car insurance to be very expensive, yet is a very good investment especially for bad drivers.

Before choosing one of the many auto insurance companies and applying for the car insurance, it is important to understand each and every term related to it.. From this point of view it is good to keep your driving record clean. The most important factor for car insurance is the age and drivers here usually belong to high risk category. This decision was taken by the Auto Insurance board when the survey showed maximum number of accidents that took place was of age between 20 and 30 years.

It is advisable to be a part of  safe drivers club, then the prices will be automatically lower. Car insurance officials don’t like to deal with people who pay irregular premium rates.

It is also advisable to read all the terms and conditions before applying for any kind of insurance. Many times it happens that certain rules are written with very small characters in the bottom of the pages of the contract. Before signing the contract you must know exactly in what circumstances you will be able to claim your insurance if any unexpected event occurs. We should always remember that what matters is our life; we should not play with it.

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A few days ago I read Jonathan Burton’s article titled ‘How you can save more money when money is tight‘. In his article he tells the story of Christopher Pollard whose fiancee had just been laid off and they were still looking forward to their luxurious vacation to Europe. The first paragraph that mentioned about this luxurious vacation in difficult times as this was what caught my attention.

Apparently Christopher Pollard and his fiancee are not wealthy but are very creative when it comes to saving money. However, for Pollard, saving money is not really about cutting out morning lattes or cakes but most importantly completely changing your entire relationship with money. This tip was probably one of the best I have heard on personaly finance and managing money.

A friend of mine is struggling with money as everybody else nowadays. When he has extra money, he doesn’t seem to know what to do with it except spending it on things that I think is unnecessary. A lot of people have no idea that prioritizing their expenses should be the first thing to do in order to be able to save money for, say, a luxurious vacation or just save money for an emergency fund. Jonathan Burton writes that your top priority should be your shelter and your health. If you have extra money this month, use it to trim your debt such as your mortgage in order to keep your shelter. The next thing should be health insurance.

Another thing that I learned a few years ago about managing my money is to pay myself first. In the past every time I got my monthly paycheck the first thing I used to do was giving a significant portion of my paycheck to other people, for instance to my credit card provider. But after reading one of Robert Kiyosaki’s book, I changed my habit and the first thing I do now is put aside 20% for offering to my God (through charity or church) and then another 20% to pay myself first. The savings that I put aside then can be either for emergency fund or for the vacation that I have always wanted to do.

Of course for some people 20% is too big to save or maybe too small. Also, for some, 20% for charity or church sounds too much or even nonsense, if you are not a believer. So you might want to adjust the percentage of how much you are willing to save for yourself and how much you are willing to give to others.

Just as Christpher Pollard is being creative in saving money by taking advantage of discounts and deals, it is also very helpful to be creative in making extra income. You can use the internet to find the best deals and discounts, such as CouponCabin.com, DailyDeals.com, RetailMeNot.com and CoolSavings.com. To earn extra income, there are countless ways to do so online. Research the internet and find ideas on how to earn a bit of money, whether it is online or offline.

The most important key to save money in this difficult times is communication with your spouse and family. Discuss with them what the priorities to save money for are. Whether it is a luxurious vacation or something else, just talk to them about money values and your short-term and long-term goals to save money. Together, try to decide how you can fulfill it as a family. Regularly review your expenses with them and be very open and honest. This will build a stonger base for your family finances and a start for a better circumstances in your finances.

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Today I just stumbled across an article about one of the top 10 personal finance blogs based on traffic. The article is about Bargaineering.com, a personal finance blog that is so successful that the owner decided to leave his 9-5 job for full-time blogging. Jim Wang makes $10k per month from his blog now, 4 years after his first post in 2005.

While other bloggers are in debt and have no clue about money, Jim Wang was raised in a family where personal finance and money was taught from a very young age. His father even persuaded him to open a Roth individual retirement account when Wang was a teenager!

The blog’s traffic skyrocketed late 2005, a few months after his first post, because it was mentioned in the New York Times, covering blogs that reveal the owners’ financial details. Wang writes down everything that he does in his life, especially about his personal finance. In his blog you can find lessons that he had learned when buying a house or getting married.

His philosophy: Save money on things you don’t care about; spend it on things that are important to you. He learned that from his parents, who kept the thermostat low to save for visits to their native Taiwan. At the moment, Wang is teaming up with blogger J.D. Roth, founder of GetRichSlowly.com to launch an online radio show, the Personal Finance Hour.

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In today’s global economic crisis, the world’s toughest survivors through financial hardships have come together to share with their readers how they have risen above tough times, so their readers may too.

Robert Kiyosaki’s Rich Dad website has posted some of the topics in the book, discussed between Kiyosaki and Trump. Although Robert Kiyosaki and Donald Trump achieved their wealth differently, they both share a common passion to help raise financial literacy around the world.

Robert Kiyosaki is a successful businessman who is also the consummate educator. He is best known for his series of motivational books on personal finance, the Rich Dad, Poor Dad series, to raise financial literacy of his readers. On the other hand, Donald Trump is the consummate deal-maker. He is the Chairman and CEO of a US-based real estate developer, the Trump Organization.

Together, these two financial giants joined forces in their bestseller Why We Want You To Be Rich. In this book, their contrasting life experiences are shared to explain why exactly everyone should take responsibility in raising their own financial IQ. The book also explains the inner workings of economy within each person.

Here is the video where Trump and Kiyosaki talked about The Power of Debt.

Here is another video of Trump and Kiyosaki’s discussion. This one is about Increasing Your Financial IQ.

Recommended books from Robert Kiyosaki and Donald Trump.

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