The Settlement Market

With all these settlements awarded to people, a market for settlements was formed from the need for people to turn future payments into current cash. Companies that deal specifically in assisting beneficiaries in converting their structured settlements are becoming more common. Still, the cost of redistribution of funds can be costly.

Those who have received (or are still receiving) regular payments are well aware of the unsolicited proposals from individuals and companies hoping to take advantage of mismanaged finances. The more unscrupulous companies have discounted the future annuity payments by as much as 40%, locking in a sizable risk-adjusted return. Due to this situation, about two-thirds of US states have enforced restrictions surrounding tax-free structured settlements.

Also, some insurance companies will not assign or transfer annuities to third parties in order to discourage the sale of structured settlements.

Some institutions will allow the partial sale of future payments. A majority of structured settlement sales are arranged in this manner, in which beneficiaries sell only the minimum portion of payments necessary to cover the most immediate of circumstances.


If you're considering selling all or a portion of a structured settlement, study the reputation of the company providing the payments. Don't get involved with a company that might become insolvent before paying out your buyout money. Also, consult with an attorney and a tax advisor before entering into any transactions. Approach potential buyers through a structured settlement broker who can compare and contrast differing offers for you and has the resources to provide legal and transaction guidance.

Take my money,

Phil

Image from examiner.com

Are Structured Settlements Right for You?

Part 3 of the Structured Settlement posts, this will briefly explain why a structured settlement would be good (or not) for you.

Structured settlements are a good way to solve your financial issues as a personal injury claimants or a beneficiary of a large money claim. Other than the tax benefits and security of receiving periodic payments, structured settlements are beneficial for people who don't want to deal with investing their proceeds or who don't have the knowledge to do it correctly.

Structured settlements may be right for people who:

• are temporarily or prematurely disabled
• have limited financial expertise
• are minors or unable to handle their own financial affairs
• require savings for housing, education or other large future obligations
• have been injured or have ongoing medical expenses

Take my money,

Phil

Structured Settlements Payments

Back to structured settlements. As a reminder, these are regular compensations given to people who are awarded large amounts of cash, usually from a civil suit or a claim.

The installment payment arrangements are structured agreements that pay periodically. These periodic payments vary in form.

1. Yearly Payments: Payments are divided into equal amounts and distributed for the duration of the agreed-upon period.
2. Inflation Hedging: Payments are made in inflation hedging can fluctuate over time, depending on inflation or deflation in the economy.
3. Monthly Indexed Installments: Payments that can change in amount due to some financial index that is tracked over time.
4. Differed Payments: Payments are paid in unequal amounts over a fixed period of time in order to cover expected expenses over the contract period.
5. Measures for the Future Care of the Recipient: Payments are made to cover such things as periodic medical or housing expense that may vary from period to period.

Annuity Payment Pros
The advantage of receiving annuity payments is the tax benefit. Many structured settlements are not taxable, or may significantly reduce a person's taxes as compared to a lump-sum distribution. Even those structured settlements that are deemed taxable can provide tax benefits. Income taxes can be deferred to the period in which the payment is made, as opposed to paying the lump-sum tax in the period in which the award is made.

This is the reason lottery winners are given a choice between receiving their winnings as an annuity or in entirety. In some cases (usually in the case of minors or people deemed unfit to manage their own finances), a lump sum is not awarded by design.

Annuity Payment Cons
Once the arrangements of distribution in a structured settlement are made, they cannot be changed. Depending on the legal structure of the settlement, the beneficiary may or may not use a structured settlement as collateral for a loan or another investment option. This is especially true if the payments are not taxable, since federal law prohibits the encumbrance of these tax-free benefits.

Take my money,
Phil

Inheriting an IRA

An IRA, Individual Retirement Account, is a personal retirement account. Contributions to IRAs are either pre-tax (traditional IRA) or after-tax (Roth IRA).
If a someone passes away before his IRA is depleted, his heirs may inherit the IRA. Here are a few frequently-asked questions about the consequences of inheriting an IRA.

Q: What should I do? Should I cash out the IRA?
You're legally allowed to withdraw that money, but doing so is generally not recommended, because you'll lose the IRA's tax benefits.
If you decide to make withdrawals (which are known as "distributions"), it's generally best not to do so in one giant lump sum. If you've inherited a Traditional IRA, you'll be hit with a huge tax bill when you make that withdrawal.

Q: How Can I Maximize the Tax Benefit?
Delay making withdrawals from the IRA for as long as legally possible. The longer the money stays in the account, the longer it can grow tax-free or tax-deferred.
At a certain point, you'll be legally required to begin withdrawing money from the IRA. (The rules regarding the length of time before you're legally mandated to withdraw money from the IRA are extremely complicated. Seek the advice of a legal and tax professional.)
When that happens, take the smallest possible distribution that you're legally allowed to take. Why? Because IRA's are tax-advantaged. The longer you leave money in it, the more time that money can grow.

Q: Can I Put the IRA Into My Own Name?
If You Are the Spouse of the Deceased: Yes. You can name yourself the account owner or you can combine it with your own pre-existing IRA. You can contribute new money to the IRA.
If You Are NOT the Spouse of the Deceased: No. You can, however, set up a "beneficiary IRA" that carries both your name and the name of the deceased.
If your name is John Doe, for instance, and the name of the deceased is Jane Smith, you can set up a beneficiary IRA called: "Jane Smith, Deceased 01/01/1980, F/B/O John Doe." This signals that you're the named heir and beneficiary to the IRA.

Q: Do I Have to Pay Taxes?
If it's a traditional IRA, yes, you have to pay taxes on all the money that you withdraw. (This is true regardless of whether its an inherited IRA or your own personal Trad IRA.)
If it's a Roth IRA, then no - you can withdraw money tax-free. (Just bear in mind that you'll lose the compounding tax advantage when you withdraw that money).

Q: Can I Make Additional Contributions to the IRA?
If you're the spouse of the deceased, yes. If you're not the spouse, no. Of course, you can always set up your own IRA if you're eligible to do so.

Q: When Will I Be Legally Required to Withdraw Money from the IRA?
If you're the spouse of the deceased, and you take over as the account owner by either naming yourself on the IRA or merging the account with your own IRA (see above), all the normal rules governing IRA distributions remain in effect. The fact that it's inherited will have no bearing.
If you're not the spouse, and the person from whom you inherited the IRA was already taking mandatory distributions, and that person didn't take a distribution during the calendar year in which he/she died, then you must take a distribution by Dec. 31 of that year.
If you're not the spouse and the person from whom you inherited the IRA took a mandatory distribution in the year in which he/she died, you'll have to take a distribution by Dec. 31 of the following year.
Every year thereafter, the amount you're legally mandated to take out is dictated by the IRS, based on either your own life expectancy or the non-readjusted life expectancy of the deceased (the life expectancy that the deceased would have, if he/she hadn't passed away). These formulas and rules are extremely complicated. Always consult a tax professional, legal professional and licensed financial professional before making any financial decisions.

Whats a structured settlement

The basics

A structured settlement is a financial or insurance agreement that a person accepts in the case of injury, rather than taking a one-time monetary payment. Settlements usually arise from some legal claim, and provide a person with a specific amount of money for a fixed period of time. Although structured settlements can provide comfort for a period of time, this method of payment may create problems for people who require liquidity in order to take care of current financial obligations, like in the case of emergency situations when the structured payments aren't enough to cover expenses.

Due to the number of structured settlements that are active each year, a market for these has developed and allows owners of these settlements to trade them if their financial situation requires it. These options, although possibly a good thing for people experiencing short term financial issues, should be considered as a last resort. An example of the use of this market would be to sell your life insurance policy to avoid high premiums.

Types of Structured Settlements

A structured settlement is usually a method of compensation paid to a person who has been awarded a large amount of money from a civil suit or an insurance claim. There are two common ways to fund the obligation which a party responsible for paying the claim will generally use. First, the buy-and-hold method. The party purchases an annuity from a life insurance company. Second, the assigned method. The settlement obligation is assigned to a third party, which in turn purchases an annuity like in the first method. 

Take my money,

Phil

How to get cheaper house insurance

Part 2 of the "How to get cheap insurance"!

Homeowner insurance premium is based on the quality of construction of your house, location, and amount of security. You can't do much about the first 2 things, except move to an other house, which isn't practical.

Anyway, here are a few tips on lowering your home insurance premium:

1. Think about increasing your deductible. If your current deductible is low and you would be able to spend more than that if you where to make a claim unexpectedly then lowering the deductible amount is the first go-to way to reduce your premium.
2. Compare your current coverage with other competitors. Not all plans are equal, some might be better suited for you, so review the policies of other competitors when the time comes to renew your coverage.
3. Potential deals and discounts. 
• Some insurers will offer you a discount if you insure both your auto and home insurance from them. 
• Some insurers might offer senior discounts for people as young as 50 years old. 
• Like auto insurances, see if you can get insurance via your company to get a group discount.
• Consider security equipment, simple things such as smoke and carbon monoxide detectors will usually get you a discount. Other equipment would be burglar alarms, dead-bolt locks or even sprinkler systems. Make sure to check with your insurer prior to purchasing these though to make sure the devices qualify for a discount.
4. Do the inventory of your belonging and approximate a replacement cost. Your rate is also based on the contents of the house, if you've recently gotten rid of stuff or replaced appliances, notify your insurance company with your new replacement cost.
5. Try to avoid claiming for minor stuff. This will potentially increase your rate.
6. Stop smoking. Smoking increases the rate on all your insurances, since it's a health & life hazard, and smoking is potentially dangerous for your house & car.

Hopefully some of these tips will help you lower your home insurance premium.

Take my money,

Phil.

How to get cheaper car insurance

You're probably paying too much for your insurance, there are a few ways to lower your premium you pay without lowering the coverage and quality you get from your insurance company.

So, without further ado, here are a few tips:

1. Install an anti-theft device on your car. Most cars have one built in, but if you don't, you're paying extra. Depending on the terms, you might get a cheaper rate if you use a steering wheel lock.
2. Install a "Usage Based Auto Insurance Device". This device is installed in your car and tracks your driving information and sends it to your insurance company so they can adjust your rates depending on how well you drive.
3. Multiple car discount. If you own two cars, have them insured together, your rate won't be as high as it would be if you where insuring both cars separately. Make sure to ask for this discount when you are discussing your insurances with your agent.
4. Get a long term policy. Getting the longer policy will freeze your rate for the length of the policy, versus taking a shorter policy which is subject to price changes more often.
5. Keep track of your mileage. When your insurance company asks you how many miles you drive to work per day, make sure to give them an exact number (or in any case, not any higher), so they can place you in the right price bracket. If you're close to a mile bracket, this goes doubly.
6. Group discount. If you're affiliated with an organization, you can probably get a discount from your insurance company. Call your insurance provider and ask them a list of organization affiliations.
7. Check out the Storage Coverage. If you're planning on leaving your car stored, it is cheaper to just keep the comprehensive coverage, since you won't be getting in any kind of collision accident.
8. Do direct payments instead of mail payments. You will usually get charged a fee for doing mail payments. Have your payments automatically deduced from your credit card.

Of course all these tips might not apply to you, or your insurance company might not offer rebates for some of these points, but it's worth contacting them and seeing what you can do to lower your rates. In most cases, there is always you can do to lower your auto insurance rates down to affordable auto insurance rates. If it still doesn't work out, call an other company and ask for an auto insurance quote that would meet your requirements.

Take my money,

Phil

Day Trading as a living

You shouldn't try to make a living with only day trading if you don't have at least 50,000$ in risk capital, money that is put in a high-risk high-reward situation. Don't use your kid's college savings or retirement funds.

Things can go wrong when you're lured by the easy money trap. When you're trading with money you can't afford to lose, you eventually do bad decisions and lose that money you can't afford to lose (what now...). For many people, day trading from home is a dream job. The quick profits, being your own boss, working short hours in your own home and being independent is the best kind of job. After reading some easy-money success stories, you might feel like you're ready to quit your day job and start day trading as a career. But in reality, day trading is still a job, it's different, but it requires work, planning, preparation and caution, like any business venture.

The main concern with following this career path is money. You have to have enough capital to be able to trade, and you must be able to lose some, as with any risk-involved activity. Most people have a hard time accepting the fact that you will lose some money eventually. When you trade, you should always divide your profits in 3; 1/3rd in your pocket, 1/3rd back in your capital money, and 1/3rd saved for when you either lose money trading, have to take a break (vacation, medical), and well, because you should put money aside for rainy days.

Your main capital is for margin trading. This money is fluid, goes in and comes out quick, so the amount available to be invested is usually the same. But sometimes you will invest long-term in shares, and that money won't be available for day trading. Which is why you should always keep on increasing the amount of capital available; because once you put money into long term investments, you have less capital to day trade with, and in turn you make less money per day. Ideally you should have 2 polls of money, and always keep the pool for day trading available, and always keep to pool for investments invested (so it's not idle- idle money could be in your day trading pool to be used).

And you have to realize that you're not the only "player" in the market; there are many many more people, some of them with better information networks, better reaction times (automated machines) and more money than you. So day trading as a career is something reserved to someone who has done enough part time trading to understand that day trading is not all fun, games and easy money.

Take my money,

Phil

The mindset of the day trader

Before you make your first trade, you must understand the nature of the markets and the special role of the day trader. Day traders server one and only one function: They are middle men in the buying and selling of stocks. As middlemen, day traders are not worried about the same things as investors. How is the market doing? What will it do over the next few days, weeks, and months? Day traders couldn't care less about any of these issues. Because they are not concerned about the next six months, they are concerned about the next 6 minutes.

Think of how successful middlemen operate. It doesn't matter what they are buying and selling. Middlemen should not care if the goods they are buying are expensive or cheap. Only one thing matters: buying and then selling higher. As long as middlemen can do this, they will make money. The same is true of day traders.

So what are day traders looking for? They are looking at one thing: supply and demand. In the short term, the stock market is very inefficient. Second to second, minute to minute, it is a constant state of flux. When the stock market moves in any one direction, it is to rectify an imbalance between buyers and sellers. For every buyer, there is a seller. When buyers and sellers agree, the stock trades. When they don't, the market readjusts its prices until they do agree. It's that simple. This is what I was talking about when I mentioned that the market followed the mass in the "Doing some day trading" post on my blog.

Within that framework, day traders look to make tiny profits on these microscopic supply and demand imbalances. How big are these profits? As little as 5 cents per share. How do day traders do this? By being temporary buyers when the market needs buyers, and temporary sellers when the market needs sellers. Remember, day traders are nothing more than middlemen.

Take my money,
Phil

The day trader's online broker

If you're going to be a day trader, your main tool of the trade will be the online broker. And as a day trader, you will learn very quickly that part of the trading experience with an online broker is dealing with problems. The second something goes wrong, you will realize how much you are depending on your online broker. There is nothing more annoying and frustrating than those times when you cannot place a trade because the system is down. Late fills, system crashes, back office problems, commission overcharges, and trade discrepancies are all an inevitable part of life for the online day trader. And the always seem to happen at the worst possible time, when your money is at risk. You must prepare yourself accordingly.

Choosing an online broker

One of the most important decisions the day trader can make is to choose the right online broker. The problem is that the investing world is saturated with online brokerage firms. How do you know which one to choose? Simple: cost first, service second. Why price? Because the difference between a 8$ trade commission and a 14$ trade commission over the course of a year can be very substantial.

Setting up two accounts

When choosing an online broker, there is really no way to tell how reliable the firm's service is going to be. It is always going to be a case of trial and error. That way, if there are consistent problems, you can merely move your money from the old firm to the new one. With no down time, no missing out on potential earning.

Problems that can happen

The online brokerage industry is notorious for system failures, and no one is immune to these problems. Some firms are better than others, but unfortunately, you may find this out the hard way. I think the most annoying aspect of trading online is the late fill. This occurs when you buy a stock, and minutes or hours later it is still not in your account. Even worst is when the entire web site is down. In this case, you will be prevented from accessing your account to get up-to-the-minute information until the system is running again.

A unpredictable situation is that the site is bogged down due to heavy traffic, and your operations might be delayed, and the system might end up doing something undesirable, i.e you place a buy order, but the system is so slow that the price increases before the order is completed, so you actually buy it at the higher, unwanted price.

An other rare situation would be that the system has no recorded your operations correctly, or mistakes where committed by the online broker, or trade discrepancies arose, for example getting hit by commission overcharge. There are of course worst things that can happen, like shares disappearing from your account. The only way to deal with this is to keep a meticulous logbook (hour, date, confirmation number, stock amount and name, etc) and contact customer support.

Take my money,
Phil

Doing some day Trading

Day trading, day trading. Owning shares and stocks, trading shares and stocks, selling shares and stocks. Most financially-aware people these days own a few stocks in a few companies, they invest some idle cash into the stock market. They either let their investment idle there slowly making accumulating worth, or actively day trade stocks, buying and selling stocks for pennies in difference, but in quantities that, at the end of the day, return some tidy profits. All of this is done on an online system called an "online broker".

Of course, if you are so inclined, have enough money, and/or enough knowledge, you can turn day trading into a full time job, working from home on your PC. But let's start out being a casual trader, the "profession" isn't for everyone, it takes a certain type of person to do this all day long, and successfully at that. Start out by doing some research, select a few stocks to invest in (don't put all your eggs in the same basket!). Once you've got that down, watch how they perform; some stocks are seasonal, some are trends, most of them fluctuate in relation to changes in the market.

Once you've got your stocks researched, and you know them well enough, you can start buying low, and selling high. This is pretty much the whole idea of day trading; buying low and selling high. The margin between buying price and selling low doesn't have to be large, the amount of stocks traded capitalize on that small difference (100,000 stocks at a 1 penny margin means 1,000$ of profit). Of course, useless you specifically select stocks that aren't worth much (and their margin is even smaller), you have to invest a lot of money to buy 100,000 of those 25,38$ stocks.

On the other spectrum, you can watch the market and the economy as a whole very carefully, and capitalize on trends and events to sell a stock much higher than you initially bought it for. This requires more time investment, and is riskier, because things might go wrong during that time (i.e you buy at 20$, and while waiting for an event, the price dwindles down to 16$ due to other factors).

One thing to keep in mind, is to never try to outsmart the market. You will never win, the market is a very powerful machine. Don't be arrogant, don't think you're right about something and the rest of the world of wrong about it. The market will follow the mass; if everyone thinks a stock's price will go up, it will go up, even if nothing actually happens to that stock's intrinsic worth.

And a little word of parting: There are commissions for each trade you do; so you actually have to invest enough when doing day trading to make enough profit to cover the commission and put some money in your pocket. This means investing enough money, or not jumping on small price fluctuations.

Take my money,
Phil

4 Ways to Lower Your Monthly Mortgage Payment

Are you being overwhelmed by your home mortgage bill? Want to lower the monthly payments? Here are a few ways you can do that.

Refinance Your Mortgage

Should you refinance? The answer depends on the age of your loan and the difference between your current and potential new interest rate.
Home loans amortize, which means you pay mostly interest towards the beginning of the loan term and mostly principal towards the end of the term. As a result, interest rate is most important towards the start of a term. The interest rate makes less of an impact towards the end of the term, when your payments are predominantly principal.
Translation: the newer the mortgage, the stronger the argument that you should consider refinancing.
But refinancing turns the amortization clock back to square one, and also gobbles a few thousand in closing costs, so a small difference between your old and new interest rates -- say, 0.25 percent -- might not be justified. Run a spreadsheet to see if refinancing is right for you if the interest rate spread is 0.5 -- 1 percent or higher.

Drop Your PMI

Are you paying private mortgage insurance, or PMI? If you bought your home with a down payment that's less than 20 percent, you might be paying PMI, which is adding hundreds or thousands to your mortgage each year.
There's good news, though: you won't be stuck paying PMI forever. First, repay enough of the mortgage that you've gained 20 percent equity in the house. (You can also gain equity faster if your home value rises -- but, of course, you have no control over that).
Then contact your lender to inquire about the process of dropping your PMI. Lenders won't drop the PMI automatically -- you'll have to request it. Many lenders will send an appraiser to determine the home value before the lender verifies that you own a 20 percent equity stake.

Get a Longer Loan

Suffering under the hefty monthly payments that come with 15-year or 20-year mortgages? Extend your mortgage into a conventional 30-year term in order to cut your monthly payment. The bad news: your interest rate will rise. The good news: you can still choose to make additional payments on the mortgage, as if you were paying a 15-to-20-year loan. These extra payments will help you satisfy the loan more quickly, without obligating you to make massive payments if, say, there's an emergency that leaves you cash-shy for a month or two.

Challenge the Tax Assessment

Here's an uncommon way to lower your monthly home payment: fight the tax assessment.
A conventional mortgage payment consists of your principal payment, your interest payment, and your "impounds," which is a monthly payment that the lender puts towards your property taxes and homeowners insurance.
If you default on your property tax bill, the county can put a lien on your house. The governments lien will take priority over the lenders lien.
As a result, the lender collects your property taxes each month in order to protect its interest in your home. This payment sits in escrow until the yearly property tax bill is due.
Property tax is based on the county's tax assessment of how much your home and land is worth.
Many of these assessments are too high, especially in the wake of the housing crash, which diminished home values. Sometimes assessments are also too high if the area has been re-zoned, the new zoning has caused home prices to decline, and the declined prices aren't reflected in the assessment.
Homeowners can protest the assessment by filing a protest with the county or requesting a hearing with the state Board of Equalization. If the protest is approved, the homeowner's taxes drop, which means that their monthly mortgage payment also drops.
(Note: an "assessment" is different from an "appraisal." The county does an assessment for tax purposes. A private company does an appraisal, generally for loan and purchasing purposes.)

Source : budgeting[dot]about[dot]com

Are You Ready to Buy a Home?

Owning a home is a usual goal for many Americans. A home provides a feeling of stability and community. You can develop relationships with your neighbors and establish roots in your community.You can customize and shape that home to your liking; add a room or knock down a wall; the choice is yours. People like owning things and this includes homes.

However, homeowners in many parts of the country have watched the values of their property decrease in recent years. While this isn’t good news for sellers, it does offer an exceptional buying opportunity for many people. Real estate is cyclical; values fall and values increase, but historically real estate has proven to be a good investment. It’s difficult to predict when the absolute bottom of the market will be reached in any particular area, and savvy investors may want to act now to take advantage of the low mortgage interest rates.

If you need a mortgage loan to purchase a home, the first thing you should do is to talk with a mortgage broker or banker. You can start with the bank where you have your checking or savings account. Call the local office and make an appointment to speak to a loan officer. Bring the last two years of your tax returns with you to the meeting. Loans are difficult to obtain and a loan officer can look at your credit report and discuss various options that are available to you. There’s no charge for the meeting.
A bunch of numbers on a lender's schedule do not really indicate whether or not you can afford a house, because they say nothing about how you manage your money. Before you start looking at houses or talking to real estate agents, follow these steps to see if you're ready to buy a house.
The most common requirements for a residential, owner-occupied mortgage loan are two years of steady work, no recent foreclosures or bankruptcies, a minimum credit score of 640, U.S. citizenship or resident alien status and monthly debts – credit cards, auto leases, alimony, child support, projected housing expenses -- shouldn’t be more than 36 percent of your gross monthly income. This is also known as your debt to income ratio.

If you fail to qualify for the mortgage, the loan officer might be able to help you improve your situation. Low credit scores can be improved by paying off some debts and lowering the amount you owe on the credit cards; you can also ask for a higher credit limit on an existing card. If you don’t have two years of continuous employment, plan on delaying the purchase until you meet that milestone. If your income is insufficient to qualify, you might be able to add a co-borrower who has sufficient income and a good credit score to the mortgage. The loan officer will explain the details to you. Lastly, don't forget about the closing costs involved in buying a home. They can add up to thousands.

However, even if you qualify for a home loan, are you really prepared for ownership? When the house needs repairs, there’s no landlord or property management company you can call; maintenance is your responsibility. Property tax and homeowner’s insurance costs may periodically increase and a high insurance deductible means that you’ll pay out-of-pocket for many repairs.

Do you have a stable job? If you lose it, do you have enough of a cushion saved that allows you to continue to make the mortgage payments until you find new employment? Many families live paycheck-to-paycheck and accumulate little in savings. While this may be an acceptable situation for a tenant, a homeowner can be faced with many unexpected costs.

Look at your lifestyle and financial health and determine if home ownership is right for you. If you do decide to move forward, be sure not to make a major credit card purchase until after the closing. The increased debt may kill the deal. Otherwise, have fun looking at homes and choose your advisors wisely.

Source : financialplan[dot]about[dot]com

Financing Your Child's Education

As a parent of a child, you have probably had thoughts about them attending college and how they will pay for it. At the same time you’ve probably also thought that you can procrastinate that since they have a couple of years to go before college. Unfortunately, this is usually not true for most households. Especially since even a modest undergraduate college degree could cost over $100,000.

Estimate How Much You’ll Need

Taking the first step in saving for college is always the hardest. You’ll be asking yourself how much you should save and where you should put the money. Once those questions have been answered it becomes much easier to start making those deposits.
First, you need to estimate how much that education will cost. To give you an idea, for the 2009-2010 school year, the average annual price for tuition, room, and board at public universities was over $12,000. At private universities this number jumped to over $32,000. So, a four year degree today will cost anywhere from around $50,000 to well over $100,000.
Keep in mind that these are today’s prices. If you have a newborn on your hands, that means you’ve got 18 years before college, and the cost then will be significantly higher. To give you an idea, 18 years ago tuition prices were roughly half of what they are today. That means if the cost of tuition continues to increase as it has in the recent past, you can expect to spend around double today’s numbers. Knowing that, a public university four year degree may ultimately cost over $100,000 by the time your child is ready to attend college.

Think About Financial Aid

The good news about higher education is there are programs out there to help with some costs. Financial aid comes in the form of scholarships, loans, and grants. So as a parent, you aren’t necessarily expected to foot the entire bill. While you may want to be able to provide for your child’s entire education, they aren’t completely out of luck if that isn’t possible.
So, keep financial aid in mind when planning for how much you’ll need to save. Granted, you shouldn’t be counting on a full scholarship and put off saving completely, but there will be some opportunities available when it’s time for your child to addend school.

Coming Up With the Money

The hardest part is coming up with the money and putting it to work in the right place. Obviously, the easiest thing to do is to simply take some money out of every paycheck and put it into a savings account. While that’s a good start, due to low interest rates you’ll never be able to achieve your goal.
So, you’ll need to look at better methods for saving and investing that money. Probably the most common vehicle for college savings is the 529 plan. These plans have many advantages from tax deductions on contributions, tax-deferred growth, and tax-free withdrawals for qualified expenses. If the tax breaks aren’t good enough, these plans also provide a variety of investment choices to choose from that will allow you to earn more than the fraction of a percent you receive in a typical savings account.
Each state administers their own 529 plan so there isn’t a universal account out there for everyone. The best thing to do would be to start by looking at your state’s plan and examine the benefits. There are situations where another state may offer a better plan and it may be worthwhile to use it instead.
Once you’ve found a plan you’ll want to look at your investment options. Most have portfolios already created that cover everything from the most conservative to the most aggressive investment styles. Again, this will be up to you to choose and you should only invest with what you’re comfortable with. But even the most conservative options will likely generate a modest return compared to the bank or CDs.
To give you an idea of how a little bit goes a long way in a 529, consider this. If you have a child age one or under and begin contributing just $200 a month into a conservative portfolio that generates an average of 5 percent returns a year, by the time your child is ready to begin college you’d have $70,000 saved up! Sure, it still might not be enough to foot the entire bill, but it will make a tremendous dent and keep your child from resorting to going into substantial debt by taking out student loans. A little bit goes a long way when you start early.


Source : financialplan[dot]about[dot]com

Managing your credit card debt

So, you've used your credit card, and you can't make the full payment. Maybe you've been like that for a while, barely able to manage the loan you have with your credit card company. That is not a good situation to be in, each paycheck you get, you have the looming threat of your debt.

To pay off your debt, you need to, every month:

• Figure out your budget. Write down all your income, and write down all your necessary expenses. Food is necessary, beer isn't. That new Blu-ray player isn't, paying the electricity bill is.
• Figure out how much you need to pay. List all your credit cards with their current balance, minimum payment and interest rate.
• Prioritize. The cards with the largest interest rate are top priority. Then in that category, the card with the highest debt is your first priority.
• Meet the minimum. On all your cards, find enough money to pay the minimum monthly payment for all your cards. If you can't pay that amount on all your cards, pay the ones that are prioritized (see previous point).
• Start paying it off. Once you've met the minimum, you can now start losing that debt. Start paying off the high priority card, dollar per dollar. You have to exceed the minimum amount on the top priority card, otherwise you won't be going anywhere. Once that top priority card is paid off, go to the next one. Always pay off the one that has the highest debt and interest rate.

The first couple of months will probably be the hardest, considering the minimum payment is a percentage of your loan for that credit card. Once you start paying it off, that amount will shrink as you pay it off, so you will have more money to use to actually pay off the card, instead of just paying the bare minimum, which will make your debts go away quickly.

If you're in a bind, you can try to call your credit company and see if they will reduce your rate. It will not always work; you're asking them to make less money off of you. But some will if you've been a good client (paying off your debt on time). Calling them won't cost you anything, and the worst thing that can happen is that they refuse. You can always try later in a few months, after you've started paying off your loan and keeping a good record with them.

I realize that this will take time, months and months, but a debt is a debt, banks won't just let you walk free after taking a loan. Plan ahead next time, and don't live above your means.

Take my money,
Phil

Finding a job as a student

As a student, you'll probably need money. Actually, you always need money. So you need to get yourself a part time job that has a good synergy with your schedule. Thought the job itself isn't that important; you can always discuss and change your schedule once you've been hired. As I said, the job itself doesn't really matter; Ideally it's something that you know how to do already, but when you're looking for a student job, you aren't very picky, and neither are the employers. Most student jobs are pretty simple, don't require training and if they do, it's just to learn the ropes of the store, and it's done on-the-spot during your formation period.

Some typical student jobs would be:

• Fast food or restaurant bus boy / clerk / cleaner 
• Cashier work 
• Store floor work at a grocery / large store 
• Movie theater staff 
• Sales clerks (i.e clothing stores) 
• Babysitting 
• Lawn mower 
• Camp counselors 
• Office/Secretarial positions (much simpler than you might think) 

Look for a job near where you live, or near where you study if you must. This way, you know the way to get there, and you're always near, so there is less transit time, and maybe you can come back home during lunch break and save on buying a lunch.

When you've made a list of potential establishments, dress up neatly; you don't need a suit, but leave your torn pants and provocative t-shirts at home. Dress casually.

Go to the establishment in person, and ask if they are hiring part time employees, or ask to see the manager if the person you stumble on doesn't know if the store is hiring. Have a curriculum vitae with contact information with you. After talking to the person, ideally the manager, even if they aren't looking for someone, give them a copy of your C.V., and tell them that you're available for whatever work they have. Visit every nearby establishment repeating this, even if you find a store that is looking for someone; unless they actually hire you on the spot, don't assume you have the job. You might be one of many applicants, and might not get the job. So keep handing out your C.V.

Once you're done, hopefully you get hired. Call back if you don't get any news from the most promising establishment after one week. If you're hired, try to get a good schedule, and don't be picky about the schedule they initially give you, unless the hours conflict with your classes. Try to talk it out and explain that you are attending school. And you can always "trade" your shifts with an other worker. As a last note, don't expect any more than the minimum salary; you're just doing grunt work.

Importance of budgeting

Back on the topic of loans, finances, and budgeting, as a young person, unless you’re the offspring of wealthy parents (or grandparents) who have left you a large amount of money, you need to save money to accomplish your personal and financial goals, or even to just get by. Early in your working years or even before, saving money can be hard. Although you’re likely not earning large sums of money, you can live life and still buy the items (like a car and entertainment) you need.

When you’re first starting out, your salary is probably somewhat low, if not at the minimum, and after essential expenses such as rent or mortgage, food, travel, etc, you may not have much money left for fun spending, let alone putting some money aside in your savings account. Remember, though, that when it comes to saving up money, it doesn’t matter what you how much you make, it’s how much you spend and, therefore, are able to save up. Many wealthy people didn’t get rich based with just their big salaries, but through disciplined savings and wise investing over time, just like common folk. It's the same with people who win the lottery, if you don't have any restraint or planning, you might as well ruin your life with all that money, leaving yourself and perhaps people around you (wife, children) even poorer than when you bought that ticket.

Anyway, People usually learn their financial habits and traits at a young age. During childhood, most people are exposed to messages about money, both at home with their parents and siblings and also in the world at large, such as at school and their friends. All these messages shape up your internal "value" of money, and spending ethics.

Just remember, spend wisely, think about it when you're about to buy something, even if it's just a cup of coffee. Most of the time, you don't need it, it's just a temporary craving. It's not too late to turn around even when you're at the shop in front of the item.

Take my money,

Phil

Loans and debt?

Taking loans and having debts part of today's society, or at least that's what I seem to observe around me. People loan money for stuff, they use up their credit card to buy stuff they can't pay on-the-spot. I don't see why people do this; If you can't buy it with the money you currently have right now, then don't buy it. Of course some might think, "Well, I need to buy food! I can't wait!". Well that's what having a budget means. Also known as not spending your paycheck on useless stuff.

I think one of the exceptions would be student loans in the US, because the tuition price is so high that they can't exactly save up, assuming they are paid minimum wage at a part-time job, while attending high school. Unless they take a break from school to save up. Which isn't really efficient considering the jobs a young student with no experience can get, unless he (his parents) has good relations with high-placed people.

Anyway, if you look at common things, like clothing, food, entertainment, means of travel (car, transit, bike, walking), people don't seem to prioritize things, hence they spend a fair chunk of money on stuff that is low-ranked on Maslow's hierarchy of needs (link: http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs) and when time comes when they actually NEED to buy something, like food, or a subway pass, or new clothes, or pay the rent, they have to go in the red. Of course this example isn't quite strong; what is 50$ outstanding on your credit card.

I rather abide by the principle that if I can't pay the item on-the-spot with cold-hard cash, then I can't afford it, I won't use my credit card. At one extreme, if you are completely broke, that means you can't buy anything, including food, which is bad. But it's a progressive thing, you start thinking like that when you have some money, let's say at the store, you've got 20$, well you won't buy that new t-shirt or CD, keep that money, and when you go do the groceries, you'll have that 20$ to spend, so you won't be in a bind when buying what you really need. I've saved up money, so I can buy stuff that I want, but I always compare the price with stuff like my hourly salary, to see what kind of effort this item is worth.

Anyway, this might be a bit incoherent to read, but the main idea is that debts and loans shouldn't be a normal part of your life; if you're having financial difficulties, I think that planning out a budget should come first, and not taking a loan, because nothing is free in this world, and a loan certainly isn't. And I don't mean  having to pay off the loan. I mean the interests and other small-print things that come with "free money", those things will cost you money. It's not a friendly-friendly agreement; the bank wants more money than it lent you.

Take my money,

Phil

In-house brands...?

Just a little anecdote that happened to me a few days ago that I want to share with you all.

So I was working at a pharmacy today, and this man came up to me and asked me where the Polysporin was, so I brought him where it was, as a good clerk, and showed him the Polysporin in all its flavors; Complete HealFast, Antibiotic HealFast, Triple, Double, etc. 

Of course, we had the store brand next to it, and he asked me what the difference was. And I didn't know what they were. I barely knew what Polysporin itself was used for anyway! So, trying to be as helpful as possible, and with the pharmacy counter being about 6 feet away, I refereed him to the counter to seek professional advice. Much better advice then what he would get from a what-is-Polysporin-anyway guy.

To this day, I still don't know what the actual difference between the in-house brands and the "big" brands, the first always being cheaper in price. I assume it's the ingredients they use in medicines and other medical products, maybe the Q&A level, or perhaps it's just the big name is putting a mark-up price for a product with a big name on it.

Take my money,

Phil.

Welcome to my blog!

Hey guys!

Welcome to my blog, it's brand new, and I hope you guys will enjoy the future content I have planned for y'all.

In the meantime, enjoy the view of a virgin blog-- oh wait, too late!

Take my money,
Phil.