Do Money and Happiness Go Hand-in-Hand?

How many times have you said to yourself: If I only had a few extra thousand dollars a year, all my problems would be solved? The truth is that money usually has very little to do with your personal level of happiness. In and of itself, money possesses no value. It’s not the money – it’s how you use it that determines its worth. It’s important to realize that achieving your goals lies in your ability to see money for what it really is—a tool, no more, no less. Just as your car gets you from one destination to another, money is a financial tool that, when used correctly, can help you reach your goals.
Establish a “Wish List”
Deciding what is important to you is the first step to effective money management. Make a wish list of what you want for yourself and your family. Items such as a new home, new car, vacations, funding retirement or future college costs, or charitable donations may appear on your list. Next, prioritize your goals by deciding what is most important to you. Why? Because in a world of unlimited choices, you may have only limited resources. Finally, put a realistic price tag on each of your goals. For example, you may want $100,000 for college in 20 years. Or, you may like to retire with a $500,000 nest egg in 30 years.
How Do You Achieve These Goals?
Now that you have prioritized your goals, look to achieve short-term objectives through daily money management. A household budget may help you decrease credit card debt, build a savings account, save for vacations, etc. A budget may help you to revise your spending habits, cut costs, and achieve short-term goals.
For long-term objectives, your best bet is to start saving a specific amount on a systematic basis. The more disciplined you are, the better your chances. For example, to accumulate $500,000 for retirement in 30 years, you will need to save about $6,000 a year, or approximately $500 a month. You will need to put aside nearly $2,600 a year, or $210 a month, for a $100,000 college fund in 20 years. (These examples assume a 6 % rate of return and do not take into account the effect of current income taxes. They are for illustrative purposes only and do not represent the return on a specific financial product.)

Set Realistic Goals and Manage Your Money Effectively
Money is not the source of happiness. But when used correctly, money can help you receive the most satisfaction out of what you earn, spend, and accumulate. When it comes to your money, it makes sense to seek the advice of professionals whose job it is to help people realize their goals. Talk to your insurance agent about insurance and other financial products that can help you achieve some of your goals.

By-line:

Braden Howell is an Agent with New York Life Insurance Company and is licensed to sell insurance in the state of Texas.  For more information, please contact Braden Howell, Agent, New York Life Insurance Company, at 972-774-2313.

Credit cards, loans, debt, credit histories and scores, overspending, balances, interest rates, repayments – these are all words in the dictionary of credit. It’s easy today to buy anything you want, without having to pay a single cent – the catch, you’ll pay later, literally, for your indiscriminate spending, usually through your nose. Most people find themselves with large debts that snowball into un-repayable amounts thanks to whopping interest rates, and as a result, with poor credit histories that affect their chances of securing loans or applying for further credit. This situation is largely due to the lack of credit awareness among the general public – not many people are savvy when it comes to managing their money matters. Wising up to the dos and don’ts of credit will help significantly in improving your relationship with money and boosting your credit score.

DO…

1. Your lender wants you to pay late.
Did you know your credit card company can change your payment due date each month hoping you’ll miss your payment?  And lenders can charge that $39 late fee even if you’re only an hour late.

2. You can’t win.
If you have a problem with your credit card company (imagine that), you cannot sue them in court.  Instead, you have to take your complaint to an “arbitrator” – who, 95% of the time, will rule in favor of the credit card company.
 
3. Banks donate more money to politicians than the oil industry.
Clearly, they’re up to something.

4. There are more Payday Loan outlets in the United States than McDonalds restaurants.
And you’ll never guess where they all are:  in low-income and minority neighborhoods.

5. People can’t choose the careers they want. 
In 2001 the average college grad with loans had $20,402 in debt, and young people are taking on higher-paying but less meaningful work because of the debt albatross.

6. Abuse is their business. 
The more we pay in interest and fees, the higher their profits, so the credit card companies are always looking for excuses to add new fees or jack up interest rates on our debts.

7. All those credit card offers that come in the mail are bad for the environment. 
Enough said.

8. The poor pay the most. 
23% of low-income families don’t have a checking account, so they rely on expensive financial services instead.   Payday lending and Tax Refund Anticipation Loans alone drain $5 billion from families each year.

9. Discrimination. 
Anyone smell racism in the mortgage market?  If not, read the stats: over 70% of high-income African American homebuyers in Boston received a subprime mortgage in 2006.  Over half of African American homebuyers and over one third of Latino homebuyers nationwide received a subprime loan in 2006, as compared to one in five white homebuyers.

10. The subprime mortgage scandal. 
Over two million families who received subprime mortgages since 1998 will end up losing their homes to foreclosure.  Many already have. This will cost Americans as much as $164 billion.

If your credit score has plummeted and you desire to get out of debt and increase your credit rating; budgeting and financial planning can help.

Here are some tips:

Budgeting

This can be an effective strategy to paying off debt and controlling credit card spending. When you are creating a budget take into consideration all the money that comes into your household. This includes any investments and other monies you may receive from the government or other organizations. Next, you must determine the expenses you have. Once you identify each of these variables, analyze them to determine if you are living within your means.

If you determine you gross $5,000 monthly and are spending $6,500 you can assume you will be in debt within a few months. This is why it is important to budget your income so you can pay off your debt quicker.

Financial Planning

Financial planning can be a useful tool to pay off your debt and improve your credit score. Consolidation is one of the tools you can leverage in financial planning. This will consolidate all of your credit card loans into one monthly payment with a fixed interest rate; in most cases, lower. Loan consolidation can save you hundreds of dollars per month and can be extremely successful in eliminating debt.

You can utilize financial planning to determine the best way to reduce debt and improve your credit score. This can be executed by transferring high interest rate credit cards to lower interest cards or developing a long-term strategy to concentrate on certain debt first.

Utilizing these tools is one of the most resourceful and effective ways to eliminate debt.

Global Advantage Credit Solutions utilizes federal laws to dispute inaccurate and unverifiable information reporting to your credit reports.  Contact a Credit Consultant today for more information!

FHA loans are loans that are insured by (HUD) Housing Urban and Development. FHA loans have been around since the 1930’s right after the “Great Depression.” This was when 4 out of 10 households owned a home. (FHA) Federal Housing Administration is the savior for our current market just like it was back during the roaring 30’s.With FHA loans especially during a credit crunch like we are currently are in, you can rest assure banks are willing to be more lenient to approve credit challenged borrowers with FHA financing. The reason is FHA loans are insured by HUD, and if the borrower looses the home HUD will pay a claim to lender for the loss. FHA is the largest single insurer of loans in the world.

FHA Advantages:

• Lower interest rates, typically interest rates are lower on FHA loans with the banks since they are government insured loans
• Only requires minimum investment from borrower of 3% down payment, which can be eliminated by Down Payment Assistance. So essential you can get a 100% financing with FHA loans. Note: Requires Seller participation
• If you have less than perfect credit you can typically can get a loan with FHA, they usually like to see 12 to 24 months clean credit report history. You can even get a loan while in chapter 13 bankruptcy.
• No Credit Score Requirement
• Recent loan limits increased-varies from state to state; go here to find out. For example you can buy a home in the state of Texas with FHA up to $271,050. Depending on if your state is a high cost area; obviously this loan limit would be higher.
• Will allow alternate lines of credit if not good history is on credit report.

Example:
1. Letter from any utility company stating you have been on-time with your payment history for that last 12 months.
2. 12 month payment history from car insurance company, cell phone company and even daycare will work.

If you are currently in the market to buy or maybe you feel like you need credit repair, what ever your direction is, getting a FHA loan is not as hard as you think. FHA gets people approved that may not get approved with other loan types. The first step is to examine where you are at with a lender and get the ball rolling. IN this current market some lenders are requiring you to either have a 580 credit score or higher. They will also allow no credit score but your interest rate is higher than current market rates. This is going on even though FHA has no credit score requirement; this is due to bad performance of loans below the credit score benchmark of 580.

About the Author: Mike Clover is the owner of http://www.creditscorequick.com/. CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, identity theft protection, secured credit cards, student credit cards, mortgage loans, auto loans, insurance and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

• In medieval Italy, when a businessman did not pay his debts, it was the practice to destroy his trading bench. From the Italian word for broken bench, “banca rotta,” comes the term bankruptcy. (Source: BankruptcyData.com.)

• Bankruptcy costs the average U.S. family $500 a year through higher consumer prices. (Source: National Retail Federation press release: “Retailers: Attach Bankruptcy Reform to Ag Bill,” Jan. 28, 2004.)

• The dollar value of accounts discharged in personal bankruptcy in 2004 is estimated at $40 billion. (Source: Testimony of Todd J. Zywicki to the Senate Judiciary Committee, Feb. 10, 2005.)

• Consumers rushed to the courts in record numbers to file bankruptcy before the deadline of the new bankruptcy law, enacted to lessen abuse of the bankruptcy system. In the three–month period immediately preceding the new law, more than 500,000 cases were filed?an increase of 36 percent from the same period the year before. (Source: American Bankruptcy Institute press release, “Bankruptcy Filings Set Record on Eve of New Law,” Dec. 15, 2005.)

• The number of personal bankruptcies filed each year has tripled since 1986. (Source: American Bankruptcy Institute, Annual Business and Non–business Filings by Year, 1980–2004.)

• The number of consumer bankruptcy filings over the past decade equates to one in every seven U.S. households. (Source: American Bankruptcy Institute, U.S. Census Bureau figures.)

• Consumer bankruptcies represented 98 percent of all bankruptcy filings in recent years. (Source: American Bankruptcy Institute, Annual Business and Non–business Filings by Year, 1980–2004.)

• WorldCom Inc. is the largest business to file bankruptcy, with over $103 billion in pre–bankruptcy assets. Enron Corporation was the second largest, with over $63 billion in pre–bankruptcy assets. (Source: BankruptcyData.com.)

• Kmart Corp. is the biggest U.S. retailer to declare bankruptcy, according to data going back to 1980, with total pre–bankruptcy assets of more than $17 billion. (Source: BankruptcyAction.com.) 

• Bankruptcy stays on an individual’s credit report for seven to 10 years, depending on the type of bankruptcy filed. Obtaining credit after a bankruptcy can be difficult and expensive. (Source: CBM Credit Education Foundation Inc.)

• Alimony, child support and most taxes are not dischargeable and will still be owed after bankruptcy. (Source: American Financial Services Association.)

• The $2.3 billion recovered by third-party collection agencies on purchased accounts in 2005 represented 19 percent of total receipts in the industry. (Source: Value of Third–Party Debt Collection to the U.S. Economy: Survey and Analysis, PricewaterhouseCoopers, June 2006.)

• Over $110 billion in face value of debt was purchased in the United States in 2005. The global debt buying market was estimated at $158 billion. (Source: “Welcome to a New World of Debt,” Collections & Credit Risk, pg. 26, Vol. 11, No. 5, May 2006.)

• The vast majority of purchased debt has been charged-off credit card receivables—accounting for 90 percent of the face value of debt purchased in 2005. But as the debt purchasing market matures, it is increasingly common for companies such as telecommunications providers, hospitals, physician groups and other businesses to sell their nonperforming accounts. (Source: “Welcome to a New World of Debt,” Collections & Credit Risk, pg. 26, Vol. 11, No. 5, May 2006.)

• Asset buyers are considered “debt collectors” under the definition established in the Fair Debt Collection Practices Act (FDCPA), the primary federal law regulating third–party collection agencies. The FDCPA, enacted in 1977 with the support of ACA, is designed to help protect consumers from unfair and abusive collection practices. (Source: “Federal and State Law Issues for Debt Purchasers,” ACA International FastFax Document.)

• State law determines how long a debt is legally enforceable. An “out-of-statute” or “time-barred” debt is one the holder may no longer recover by suing in court. The length of the statute varies by state, generally ranging from three years to 10. The debt does not go away after a statute has expired, and (except in Wisconsin and Mississippi) the law allows a collector to request payment on a time–barred debt. (Source: “Time–Barred Debts,” Federal Trade Commission Consumer Alert, October 2004.)

1.  Pay off your credit card balance each month. You’ll avoid frittering away hundreds and even thousands of dollars to interest and fees every year.

2.  Think before you charge. Unless you’re in the habit of paying your credit card bill in full each month, don’t use the cards for anything you can eat or wear.

3. Avoid using credit cards to buy “wants” such as a new stereo or TV. Wait until you have the money to buy it.

4. Leave your credit cards for emergencies — when the washing machine takes its last breath or the car breaks down.

5. Get rid of all of the credit cards but one. Take that one and make it hard to impulse shop with — freeze it in a bowl of water in your freezer.

6. Keep receipts on all purchases. Unfortunately many products are made cheaply. With a receipt, you can bring back the product for a replacement or refund.

7. Don’t take cash out of your credit card. The rate for cash advances is much higher. And there is no grace period — you start paying interest right away.

8. Did you really think they’d give you something for nothing? Throw away those offers that come in your credit card statement.

9. Read your monthly statements carefully. Look out for hidden charges, such as credit insurance.

10. Don’t pay for theft insurance on your credit card. You don’t need it. If your credit card is stolen, you’re only liable for $50, at most.

11. Forget credit card disability insurance. It will make debt worse, if it ever kicks in. Even though you don’t have to make payments, the debt piles up all along.

12 Avoid those $39-and-growing fees by not exceeding your credit limit.

13. Pay more than the minimum. It’ll take forever to pay off your balance if you only pay the minimum.

14. Check your statement to see what time and date your payment is due and send it in early. If you’re five minutes late it could cost you $29.

15. Always use the envelope provided in your statement. Credit card companies sometimes change their payment P.O. Box. If you send it to the old address, you’ll be responsible for the late fee and, likely, an increased interest rate.

16. Don’t be late on any loan or credit account payment. Credit card companies frequently check their customers’ credit reports, looking for any late payments to justify raising the interest rate.

17. Negotiate better terms with your credit card issuer, especially if you’ve had a year of on-time payments.

18. Consider transferring your balances from high-interest cards to a low-interest credit cards. Then, make the same payment as before, or double the minimum.

19. Consider a home equity loan to consolidate credit card balances. Home equity lines and loans offer lower interest rates and are usually tax-deductible.

An inquiry is placed on the credit bureau report when a consumer applies for a new loan or a new credit card.  The lender will pull a copy of the credit bureau report which then places an “inquiry” on the consumer’s bureau.  Currently, today’s consumer has had one or fewer inquires on their accounts within the last year.  When searching for new credit; less than 6% had 4 or greater inquiries deriving from new credit applications. 

Save the world.  Get good credit.