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Saturday, February 23, 2008

Using a Debt Consolidation Program to Help you Out of your Financial Jam

Author: Jon Arnold | Posted: 22-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.

You don't want to think about debt consolidation. Sometimes debt can catch up with you before you even realize it has been chasing you for a long time. Most people do not intentionally dig themselves into a debt pit. But sometimes the financial obligations can be overwhelming to the point where you need to look at the best options to get back on track.

In fact, the majority of consumers in the US who find themselves with more debt obligations every month than they have income have found themselves in that position due to no real fault of their own, at least not directly. Most people find themselves in this very undesirable place due to circumstances outside of their direct control, such as a divorce, a job layoff, very high medical bills, and similar things that they have little to no control over.

But the reality of it is that sometimes you have no choice and need to keep yourself afloat financially. Typically, this period of hardship is hopefully a temporary one, where you just need to be able to weather this temporary setback until you can get back on your financial feet.

Seriously consider a good debt consolidation program. This is also applicable to new college grads that have a ton of student debt, where the same company can usually provide a student bill consolidation to accomplish the same purpose. A debt consolidation program is much better than taking out a personal loan, because with a personal loan you are simply digging your hole deeper, which is not the direction you want to go. Bankruptcy is probably not your best option either, since the long term negative effects of bankruptcy will haunt you for the next 7 to 10 years via a huge blemish on your credit report.

But be aware of what a debt consolidation company does and what they don't do. They do not pay off your debt all at once. You turn your bills over to them and then you make payments to them every month. They work with your creditors to lower each of your payments and reduce your interest. So if you had say $3000 a month going out before to satisfy your monthly bills, the bill consolidation company might be able to reduce that to perhaps under $2000 a month, giving you the financial breathing room you need right now.

These companies are very experienced in doing this, and can frequently also reduce or sometimes even waive the accrued interest that has built up on some of your outstanding financial obligations. This aspect in itself can save you a ton of money.

Another huge benefit to you is that you only need to make ONE payment each month, which is to the consolidation company. Compare this to making separate payments to 10, 15, 20 or more different creditors each month at different times of the month.

Seriously consider a debt consolidation program to help you out of your current jam. It's nothing to be embarrassed about and can put you back on the right track from a personal finance aspect.

Posted by Suhaimi at 3:06 AM 0 comments
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Buy Repossessed Cars Wisely – Where and How

Author: Davion W | Posted: 22-02-2008 | Comments: 0 | Views: 3 | Got a Question? Ask.

You may be inspired by profits individual car dealers make, want to flaunt driving a posh or rare model, or simply have a tight budget that doesn’t allow you to purchase a new car – in any case, information on where and how to buy repossessed cars is the answer to your needs.

Daily, vehicles of all models and conditions get repossessed by financial and government agencies from those individuals who failed to pay back their mortgage or loan. These repossessed vehicles then become the property of the lending institutions, their idle assets. Not willing to bear expenses on the autos’ maintenance, the institutions tend to get rid of them as soon as possible in order to recover at least a part of their price. So, they are more than happy to sell them off at repossessed car auctions, sometimes as low as mere 10-20% of the vehicle’s market value.

Although repossessed cars are very similar to seized cars, the latter are often taken from criminals and therefore, there is a greater chance of them having defects. At the same time, you can buy a repossessed car in a well-maintained or nearly new condition in most cases.

Locating a repossessed car auction in your area is the first step to owning a vehicle of your dream. This can require a lot of patience and dedication, since you will have to scan local and national newspapers, contact auction companies and banks, make online research for possible auction announcements, etc.

To make things faster and easier, however, you can use online auction directories. They normally charge a small fee for their services, but since you are granted up-to-date and comprehensive information at a few mouse clicks, it is totally worth it. You really can’t afford wasting time if you want to buy a repossessed car at a fantastic price.

If you have never participated in auctions before, it may turn out to be handy to have somebody experienced along with you. Make sure to assess the condition of the cars as well as their estimated value before the auction starts. Be practical and set a certain price limit for each of the cars you are interested in, otherwise you can easily get involved in a bidding war and eventually raise the price to unreasonable heights.

If you are determined to buy a repossessed car that is really cheap, be ready to lose the auction and let a lot of vehicles go off your hands. View every auction you take part in as a learning platform, an opportunity to master your bidding skills. To buy a repossessed car is no big deal, but to buy it wisely and eventually save tons of money is definitely an achievement.

To find out more information, check out my auto blog below.

Posted by Suhaimi at 3:05 AM 0 comments

Thursday, February 21, 2008

Before you Cash Out, Catch Up on Choices

Author: Daniel J Wansten | Posted: 20-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.

GRAND RAPIDS, MI - There's a growing trend with U.S. workers who change jobs - they're cashing out their retirement accounts. A recent survey of 401(k) participants, done by Hewitt and Associates, shows that about half of employees that leave their jobs choose to cash out their 401(k) plans instead of rolling them over. This trend might seem harmless at the time, but it can jeopardize future retirement.

There are several reasons why people are choosing to cash out now, instead of saving the money for retirement. A common reason might be the increase of health insurance premiums. People aren't used to paying several hundred dollars a month to insure their families. Insurance costs combined with a loss in stock value or other investments; make people feel the need for extra money now. They also believe that they'll make up for it down the road. Many people would rather pay penalties and taxes than wait for a larger return. The rising value of real estate has people believing the value of their homes will replace retirement savings. And it's true that a lot of money can be tied up in real estate, but it shouldn't be your only source for retirement savings.

People need to look at what they will lose by cashing out. You have to pay income taxes on the withdrawal, which could end up putting you in a higher tax bracket. Plus, there's a 10 percent penalty if you're under age 59½ and more importantly, you give up years of tax-deferred compounding. With longer life expectancies, you're going to need enough savings to cover long-term health care. After you look at what you're going to lose, look at why. Is it because you need the money to pay off high interest credit card bills or is it because you don't want to go through the hassle of transferring the money to another account? To avoid regret, you should look at all your choices before making a decision.

Choice #1: Rollover into an IRA - You won't be limited by the investment options in a new employer's plan and you can take distributions from the IRA without penalties under certain circumstances. In short, you'll retain the ability to borrow from the account.

Choice #2 : Rollover into New Employer's 401(k) - Not all companies allow such rollovers. But if you like the plan, the rollover will allow you to consolidate your savings in one place.

Choice #3: Rollover a Portion - It doesn't have to be all or nothing. This can be a great option for those that need money now, but realize they will also need it later.

Choice #4: Liquidate - If it's really going to improve your life, then it can be a viable option. But there's a difference between life and lifestyle. Be careful to distinguish between the two.

We all have trouble saving money, but everyone can do it if they have a plan. If you're unsure about what you should do with your 401(k) or retirement plan, seek the advice of a financial professional you trust. The initial consultation is usually free.

Posted by Suhaimi at 5:24 PM 0 comments
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