If you are not prioritizing your debt, you may find it difficult to make any headway in paying it off promptly. One of the keys to money management is knowing how and where to spend your money, and taking the time to prioritize your debt has many benefits. First and foremost, if you are managing your money correctly and handling your debts well, your credit score will be generally be higher. Next, you’ll be able to pay off your debts in less time. If you want to get started with your debt prioritization and reduction plan, here is an easy guide to help you on your way.

1. Determine which is more important – high balances or high interest rates (or both).
If you have a credit card that has a very high balance but a low interest rate, this may not be as urgent as a credit card that has a medium balance and a very high interest rate. Take a hard look at the total amount of interest across all your cards as well as your balances. In many cases, the medium balance may actually end up costing you more, especially over the long term. Paying that off first can free up extra money that could be used to tackle the high balance card next.

Conversely, if you have a credit card that has both a very high balance and interest rate, naturally this would be the one that you would want to tackle first.

2. Determine how much you are paying on each card.
If you are struggling to make your payments on one card, but the others are a breeze, paying off that one card quickly is a smart priority to have. Figure out exactly how much you owe, add in what you spend every month on each card and see which cards are dragging you down. By targeting these first, you’ll be able to free up more capital in a few months that can be used to pay off the remaining cards.

3. Loans or credit cards?
If you have a mix of bank loans, credit cards and other forms of credit, you’ll need to decide which one should be targeted first. Typically, traditional loans will have much lower interest rates that credit cards, but there are exceptions to this rule. Take a hard look at just how much money you are paying out every month, and then look at it over the long term as well. If you have a long term loan that will cost you an additional $2000 in interest over several years, paying that off first can be very beneficial.

Once you have your priorities figured out, make a list of what you plan to pay and how quickly you want those debts taken care of. That will help you stay on track and assist you in getting everything paid off in less time. Prioritizing your debts is one of the best ways to easily get a hold of your finances, before they get out of control.

There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.

Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!

Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Never submit your mortgage payments to anyone other than your mortgage company without their approval.

The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times. Click here for more information.

Source: [CNNMoney.com] — The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help - are you one of them?

The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:

First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates.

Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.

Official guidelines won’t be unveiled until March 4, but here’s how to know whether you’ll likely be able to take advantage of either of these options.

Help for those seeking refinancing This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.

Right now, if you’re underwater on your mortgage, owing more than the home’s market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must, unless you’re using an FHA loan.

The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties. But your loan must be owned or backed by Fannie Mae or Freddie Mac.

The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.

Who’s not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.

Those with “jumbo” mortgages also don’t qualify - only those with “conforming’ mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them.

All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn’t yet clear.

Mortgage modification help for at-risk borrowers Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.

Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification.

Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they’ll be required to accept debt counseling in a HUD-certified program.

If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income.

The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.

The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option.

Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time.

President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.

Who’s not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help — all homes must be owner/occupied.

The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.

And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%.

That will disqualify many borrowers who simply can’t afford any reasonable mortgage payment because of illness, for example, or job loss.

“[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford,” said Obama. “In short, this plan will not save every home.”

No mortgages for amounts above conforming loan limits would be eligible.

They’re going out of business! It’s a liquidation sale! The prices will be crazy marked down, right? Not necessarily. Read on to avoid getting ripped off by liquidators. Photo by Cosmic Kitty.

Many an unwitting shopper can be lured into a store with an enormous “50% OFF!” sign strung across the storefront. Even more so when the closure of a chain of stores is highly publicized like the recent closure of Circuit City. Unfortunately, the entire process of liquidating the stock of a store is rather deceptive. Walking past the “Everything must go!” signs and picking up a box marked 50% off could actually mean paying full retail.

First, a brief summary of what liquidation is. When a company is facing dire straits or has already hit the wall of bankruptcy they will— either voluntarily or by legal order—try to convert as much of their assets into cold hard cash as possible to pay off debts and hopefully return some money to their stockholders. The process is usually handled by an external company whose sole goal is to turn the pile of assets into profit—and minimize their risk in the process.

What does this mean to you, the consumer? It means that for the first portion of a liquidation sale you’ll likely be ripped off. Let’s use an HDTV from a fictitious company to illustrate how you’re not actually getting the deep discount you think you are.

Last year SuperPow television company released the SuperPow H9000 HDTV. The manufacturer suggested retail price (MSRP) was $2500. It was sold at HappyBox electronics stores for $2200 when it first came out and as newer models arrived it was eventually sold for $1250. HappyBox has a bad run and ends up filing for bankruptcy. Their inventory is now controlled by a liquidation company. The company responsible for the liquidation advertises that products in the store are deeply discounted, some things are even 50% off already! You walk in to check on the SuperPow H9000 and see that the price is $1250. You remember the TV was really expensive and that seems like a great deal for a nice TV, after all it’s 50% off! The only problem is that you’re getting 50% off the MSRP, which nobody paid even when the TV was the hottest model on the market. It may be a month or two into a large liquidation before that TV is actually marked down 50% from the actual street value to a wallet-friendly $625—and most likely someone not realizing they aren’t getting a very good deal would have bought it well before that.

How can you make sure you’re not the sucker that the liquidators count on to reap their profit? With a little knowledge and some handy tools, you’ll get the most for your money.

Know The Market

Don’t go shopping blind. If you’re heading to a going-out-of-business sale, take a few minutes to do some cursory research on whatever it is you’re looking to buy. Compare prices with price comparison engines like BeatMyPrice and make sure to check out deal-tracking forums like SlickDeals and FatWallet—both were reader favorites for finding the best deals online. You may not even know the exact model you’re going to find at the store, but checking deal sites like FatWallet will give you an idea what the general price ranges are for things and what deals can be had on them. A 40″ HDTV “marked down” to $1500 won’t look so appealing when you know that similar models are going for half that thanks to a little research. 

Use Your Phone as a Price Checker

If you have an internet-enabled phone with you, it’s easy to compare prices right in the store. The quickest, if least specific, method is to plug the product name or model number into the mobile version of Google Product Search. If you’re without internet access but you can text message, you can take advantage of the Amazon/eBay price-comparison mashup provided by MobSaver. Text the ISBN or UPC code of an item to save@mobsaver.com and it sends you back the current prices on Amazon and eBay. When you’re really in a bind you can use—as I’ve often done—the most analog method and call a friend to run a quick price search online for you. A few minutes pecking on your phone or making a call can save you hundreds. 

It’s never a good sign when companies are shuttering their windows—for the economy or for the displaced workers—but that doesn’t mean you should pay extra for their bad luck. Armed with the tips above you’ll never be the sucker paying MSRP for 2007’s castoffs. If you have your own learned lessons about liquidation sales, sound off in the comments below and help save your fellow readers some cash.

via: [LifeHacker]

For newlyweds, the first big financial decisions go beyond how to pay for the honeymoon and how to invest all those checks. They also involve starting a new household on solid ground financially. “Financial incompatibility is a primary reason for a significant number of failed marriages,” said Lee Bowman, National Coordinator for Community Affairs. “Achieving harmony regarding financial matters before marriage, or as early in the marriage as possible, is critical to sustaining the relationship and preventing conflicts.”

Before exchanging wedding vows, have a candid discussion about your finances. Be open and honest about matters that could be a source of friction in the future, such as major outstanding debts from student loans or credit cards.

Some experts suggest that both of you order your latest credit reports and then, together, sit down and review them to avoid major surprises. Credit reports include information on debts outstanding and, for example, whether someone has filed for bankruptcy. By federal law, you can receive one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies (www.AnnualCreditReport.com or call toll-free 1-877-322-8228).

Set short-term and long-term financial goals. Figure out how much money each of you should be able to spend for “fun” and how much you should set aside for important goals, perhaps to buy a home. Financial advisors suggest that young couples consider preparing and following a monthly budget.

Understand the risks and responsibilities of jointly held accounts. If a husband and wife are co-owners of a credit card and one of them goes on a spending spree, the other spouse may be held responsible for paying the bill. Likewise, irresponsible use of a jointly owned credit card by one spouse would be reported on both of their credit histories, and that could damage the “innocent” partner’s chances of getting a good loan or credit card in the future. And when two people use the same checking account, they should share one checkbook and record all transactions, because otherwise they risk losing track of their balance and paying charges for insufficient funds.

As a teen, you’re beginning to make some grown-up decisions about how to save and spend your money. That’s why learning the right ways to manage money…right from the start…is important. Here are suggestions.

Save some money before you’re tempted to spend it. When you get cash for your birthday or from a job, automatically put a portion of it — at least 10 percent, but possibly more — into a savings or investment account. This strategy is what financial advisors call “paying yourself first.” Making this a habit can gradually turn small sums of money into big amounts that can help pay for really important purchases in the future.

Also put your spare change to use. When you empty your pockets at the end of the day, consider putting some of that loose change into a jar or any other container, and then about once a month put that money into a savings account at the bank.

“Spare change can add up quickly,” said Luke W. Reynolds, Chief of the FDIC’s Community Affairs Outreach Section. “But don’t let that money sit around your house month after month, earning no interest and at risk of being lost or stolen.”

If you need some help sorting and counting your change, he said, find out if your bank has a coin machine you can use for free. If not, the bank may give you coin wrappers.

Some supermarkets and other non-banking companies have self-service machines that quickly turn coins into cash, but expect to pay a significant fee for the service, often close to 10 cents for every dollar counted, plus you still have to take the cash to the bank to deposit it into your savings account.

Keep track of your spending. A good way to take control of your money is to decide on maximum amounts you aim to spend each week or each month for certain expenses, such as entertainment and snack food. This task is commonly known as “budgeting” your money or developing a “spending plan.” And to help manage your money, it’s worth keeping a list of your expenses for about a month, so you have a better idea of where your dollars and cents are going.

“If you find you’re spending more than you intended, you may need to reduce your spending or increase your income,” Reynolds added. “It’s all about setting goals for yourself and then making the right choices with your money to help you achieve those goals.”

Consider a part-time or summer job. Whether it’s babysitting, lawn mowing or a job in a “real” business, working outside of your home can provide you with income, new skills and references that can be useful after high school or college. Before accepting any job, ask your parents for their permission and advice.

Think before you buy. Many teens make quick and costly decisions to buy the latest clothes or electronics without considering whether they are getting a good value.

“A $200 pair of shoes hawked by a celebrity gets you to the same destination at the same speed as a $50 pair,” said Reynolds. “Before you buy something, especially a big purchase, ask yourself if you really need or just want the item, if you’ve done enough research and comparison-shopping, and if you can truly afford the purchase without having to cut back on spending for something else.”

Be careful with cards. Under most state laws, you must be at least 18 years old to obtain your own credit card and be held responsible for repaying the debt. If you’re under 18, though, you may be able to qualify for a credit card as long as a parent or other adult agrees to repay your debts if you fail to do so.

An alternative to a credit card is a debit card, which automatically deducts purchases from your savings or checking account. Credit cards and debit cards offer convenience, but they also come with costs and risks that must be taken seriously.

Protect yourself from crooks who target teens. Even if you’re too young to have a checking account or credit card, a criminal who learns your name, address and Social Security number may be able to obtain a new credit card using your name to make purchases.

One of the most important things you can do to protect against identity theft is to be very suspicious of requests for your name, Social Security number, passwords or bank or credit card information that come to you in an e-mail or an Internet advertisement, no matter how legitimate they may seem.

“Teens are very comfortable using e-mail and the Internet, but they need to be aware that criminals can be hiding at the other end of the computer screen,” said Michael Benardo, manager of the FDIC’s financial crimes section. These types of fraudulent requests can also come by phone, text message or in the mail.

For more guidance on how to guard your personal information, see Protect against fraud.

Be smart about college. If you’re planning to go to college, learn about your options for saving or borrowing money for what could be a major expense — from tuition to books, fees and housing. Also consider the costs when you search for a school. Otherwise, when you graduate, your college debts could be high and may limit your options when it comes to a career path or where you can afford to live.

For more information on saving and borrowing for college, visit www.students.gov, a Web site with information from the U.S. government and other sources.

For more help or information for teens: Read “Start Smart: Money Management for Teens,” a special edition of FDIC Consumer News from the Summer of 2006 with information to help teens (and many pre-teens) learn how to make good decisions about their money. Find it online at www.fdic.gov/consumers/consumer/news/cnsum06. Also see our tips for anyone at any age.

A great way to ease some of the pain of excess debt is to start a home based business.  Think about your favorite thing to do and you may find a great business idea there or find one of the many MLM’s you can get you heart into. MLM’s are a great way to learn how to start a business, get good training, and meet new people. All of these things can help ease the pan of just sitting at home festering over those damn bills. 

Here are a few good tips to help you once you’ve started your new business.

To be a successful  home business entrepreneur, it is compulsory to develop and follow consistently a plan of action. Adherence to this plan guarantees success in your home business.

Here are seven Tips for long term success of your home business.

1) Make a Firm Decision- Decide what you would like to earn by the end of the year. Having decided your yearly earnings from sales, proceed to work backwards to acquiring weekly and monthly figures to meet your targeted yearly income.

2) Build Your List- Your list comprises of valued customers and prospects forming your database. This is your greatest asset and is built over time. There are no guarantees in any business, however with your own list, you are more confident that a percentage of your customer would make purchases from you. The key is to do the work one time of building your list and get paid over and over again.

3) Advertise your product or service -Take every opportunity to use different medias to advertise your business. Driving increased visitors to your site from various media placements is likely to give you good sale conversions. The key is creating a response to your advertising by ensuring that your ads are captivating.

4) Track and Evaluate Your Business - It is very important that you evaluate and track your business so that you can take quick action to correct any shortcomings. Start operating your business as though you are already a big company. Do not get caught up in shuffling paper clips with no serious business strategies in place. Successful people embrace the idea of tracking their business success.

5)Develop a Professional Approach- Project a professional image in simple ways such as setting up a mailbox at a UPS store in your area, acquiring a phone in your business name and opening a separate account for your checking business. This approach can help your home business excel.

6) Hire A Business Consultant- Your business consultant can be a coach or advisor towards the successful development of your home business. Seeking expert advice on ways and means to improve your business can accelerate business performance to a large extent. This is a good way to continuously grow your business.

7) Develop Good Customer Support- An effective customer support system in place for your home business can increase your sales revenue tremendously. This strategy allows customers and prospects to build good customer business relations and place more confidence in your business entrepreneurship.

 

Set Goals Worthy of Yourself

I have learned a lot about setting goals over the past 17 years studying in the personal development industry. Some goals I have attained and others I have not. It was not until I was coached myself by my mentor that I truly understood that there is a way to set goals and a mindset that guarantees your success in achieving them.

 

First we have to understand that people set goals 3 ways:

1)    They set goals based on what they know they can achieve

2)    They set goals based on what they think they can achieve

3)    They set goals based on what they want and don’t know how they will achieve it

The first two ways are logical thinking, circumstance driven and combine the what with the how. In the third way, there is no how, there is only the what. In setting goals there is only one golden rule: you should never mix the what with the how.

Michelangelo, the painter said that “you should not be afraid to set goals so high that you may never achieve them, but of setting them so low that you always do.”

You see, there is no stretching, no reaching, no faith and no passion involved in the first two ways. It is the same reason why people who set a goal to lose 50 pounds make it, and people who set a goal to lose 5 pounds never do. It is because the goal was too easy, too reachable and too close to where you started. It goes against our logical thinking, but the greater the goal, the greater the chances of achieving it.

When you set a goal and you have no idea how you will achieve it, there is a certain amount of tension like when a rubber band is stretched to its maximum. When it snaps back, it snaps back so much faster than another rubber band that is barely stretched. This is creative tension and is necessary because creativity is where all the passion, love, and inspiration come together into visible manifestation. When the goal is so far from your starting point, and so high that you have to stretch to get it, you develop passion and faith. Your mind starts to work in ways it hasn’t had to before. Your excitement is an energy that magnetizes and aligns you with all the people, events and resources necessary to get what you want.

Set goals that are worthy of you. Your time here passes anyway whether you go for those big dreams or go for those 5 little pounds. You will find that if you do go for your dreams, those 5 pounds will melt off in the process.

My mentor always says: When you finally reach your goals, you will find it is not the goal itself that was as important as who you have become in the process of attaining it.

 

Who do you want to become?

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It is that time of year again when we reflect on what we had hoped to accomplish in the past year and what we plan to accomplish in the next. Most times we look back and realize that we did not quite measure up to our hopes and dreams. As a business advisor and executive coach I have found that people tend to make the same mistakes when setting goals for both their business and personal lives:

1. Goals do not support your life or business main purpose. Put another way, the goal is not aligned with what you are trying to accomplish. It has been said that the two most important days in your life are the day you are born and the day you discover why! Make sure your goals support your reason for being.

2. Lack of continual action. Goals usually die from inactivity. Make sure you take one positive step towards your goals every day. Make it part of your to-do list and schedule time to make it happen.

3. Lack of commitment. Many times we set a goal because it just seems like it should be completed or someone else thinks we should do it. Think of all those fitness and weight loss goals that start strong and fail by the end of January. It seemed like a good idea but we really were not committed to it.

4. Goals that do not inspire. Goals should excite you. Plain vanilla goals usually never get off the ground. Set your goals high - goals that have a WOW factor.

5. Loss of focus. Goals tend to get lost in the mundane issues we face every day. Keep your goals visible. Write them down and post them where you can see them every day. Create a photo album of things that represent your goals. Make it your screen saver or the background on your computer screen. What you see clearly gets accomplished.

6. Goals are not positively focused. All goals should be written with a positive focus. We are drawn to things positive and repulsed from things negative. Refocus negatively written goals to highlight the positive when they are achieved.

7. Goals are not SMART. SMART goals are those that are specific, measurable, achievable, relevant, and timely. SMART goals tend to give you a laser focus and keep you on track.

While avoiding these 7 mistakes will not guarantee your success, they will greatly improve your results for the coming year.

Improve your goal setting techniques with a free copy of the SMART Goal worksheet by sending an email to: smart@thecoachacademy.com

Dr. Dennis Hocker is an internationally recognized expert in helping executive coaches and business advisors better serve their clients. He is co-founder of TheCoachAcademy.com which provides specialized training to coaches around the world.