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Archives for April 2017

Three Reliable Ways to Improve Your Credit Score

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When you get the news that your credit score is low, it’s easy to feel helpless. Most people don’t give their credit score a great deal of thought in daily life. It’s easy to ignore, but it becomes relevant at the most inconvenient times: like when you want to borrow money.

Every day, thousands of people have loan requests denied because their credit scores are too low. This can stop personal momentum in its tracks, as people learn that they can’t get the car they wanted, or they won’t be able to get a mortgage loan for a new house.

If you’ve been denied a loan because of a low credit score, this isn’t the end of the road. All you have to do is improve your credit score. Because most people have no idea how credit scores and credit histories work, these techniques aren’t exactly common knowledge. But they work, and here they are:

  1. Repay Late and Missed Payments. Your credit score exists so that lenders know how reliable you are when it comes to repaying borrowed money. If you have missed credit card payments (or any other kind of payment, for that matter) in the past, this will be reflected in your credit score. Click through to find out how long late payments stay on your credit report, as different situations have different consequences. If you pay off outstanding debt like these, make sure you go to your credit report and “dispute” the items in question. This will verify that they have been paid, and the items will be removed, causing your score to increase.
  2. Pay Off or Relocate Debt. People who have too much debt for their income level see it reflected in their low credit scores. This is because, if you have too much debt already, it’s reasonable to assume that you can’t handle more with your present income. Another factor is credit limits associated with specific accounts. If you have two credit cards, both with $10,000 credit limits, you should only use up to 30% of each limit. If you have an $6000 balance on one and no balance on the other, you should move $3000 to the other credit card. That way, you won’t have exceeded 30% of either credit limit, the point at which most analysts agree your credit score starts to suffer.
  3. Stop Requesting Loans. If you frequently request money and credit, this causes your score to fall. This is because it makes you look like you are desperate for money. Whether or not it’s true, frequent credit requests make it appear that your personal finances are hanging on by a thread. If you need an important loan in the future, put a hold on all credit requests until you’ve given a few months for your credit score to recover.

Your credit score makes sense, but only when you learn the factors that go into its fluctuations. Spend time improving your personal finances, and you’ll find that your credit score goes up on its own. These specific steps are three important ways to see real change fast.

Coming to Terms with Your Financial Mistakes and Moving On

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Financial problems, such as debt, is one of the top stressors that most everyone is likely to encounter at least once in life. When facing debt, many people feel like that are in over their heads and can’t get out. While it may feel that way, there are always options, and even if it takes awhile to get out of debt (which it will), financial control and freedom are possible.

If you’ve made some financial mistakes or fear that you’re on the road to getting deeper in debt, here are some tips for getting past your debt and moving on:

Be Honest About Your Finances

Are you an impulsive shopper or have unopened credit card bills piling up? It can be difficult to look at your financial issues head on, but it’s the only way to truly know where you need to make improvements.

Look at your bank statement and focus in on all of your spendings. Examine everything from your purchases at the local coffee shop to your utility bills.

Make Sure You’re Not Spending More Than You Earn

When people spend more than they earn, it’s a common financial problem that will continue to get worse if changes aren’t made. Once you’ve looked at your spending, are you spending more than you earn? Are you skipping out on bills or making late payments so you can buy “fun” things or get your daily latte?

Start Making Cuts

Once you’ve started taking a closer look at your essential and not so essential expenses, it’s time to make some cuts and get serious about a budget. This is difficult for many people but can do wonders for financial problems.

What do you cut first? Obviously, credit card payments, household bills, and student loan payments are off the chopping block. How often do you go out to eat? Do you stop at your coffee shop on a daily basis? Is buying lottery tickets part of your daily routine?

Time to Make Changes

Before you started creating a budget, you probably had no idea how much you were spending on lattes, lottery tickets, and eating out. Cutting back and even eliminating could save you hundreds of dollars a month.

Rather than eating out, try to recreate some of your favorite meals at home. Instead of getting a five dollar latte every morning, treat yourself to one day a week and invest in good coffee beans to brew at home.

Let Your Financial Stress Go

Realizing you have financial issues can be hard to stomach and embarrassing, but denial will only make you feel worse. Recognize the things you need to change, make them your financial priority, and look ahead to a debt free future.

It’s also a good idea to address some of your problematic spendings. Are you worried that you may spend too much money on lottery tickets? Seek out a gambling addiction resource for help.

Do you spend money out of boredom or to make you feel happier? Find free things that make you happy like going for walks with friends, meditating, gardening, or other activities that won’t cost you anything. It’s always good to remind yourself that being frugal is not a bad thing, but rather a way to regain financial control.

 

5 Common Financial Mistakes in Retirement

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5 Common Financial Mistakes in Retirement

In your twenties or thirties, purchasing your first home is the most daunting financial decision you’ll probably make. But as you progress toward retirement, a much bigger decision looms large: how to fund your lifestyle when you’re no longer working. The stress of living without employment income, the pressure to live up to your own retirement expectations, and the uncertainty of the whole undertaking conspire to trigger unwise decisions even in otherwise financially savvy people. Here are the five biggest retirement mistakes.

 

Delaying Insurance Purchases

Insurance such as life insurance and long-term care insurance can feel like money down the drain when you’re living on a fixed income, particularly if you don’t know whether you’ll ever actually use long-term care insurance. These policies increase in price as your age goes up, so the time to purchase is always now. By making the decision now, you may lock in a lower rate, not to mention protect yourself against financial disaster.

 

Moving Without Careful Thought

Sick of the cold and want to join other retirees in Florida? Ready to downsize to a smaller, safer home? Hoping to save money by renting a small townhouse? Think carefully before you take the plunge. You need to have a clear understanding of what your new living situation will be like. Don’t rely on fantasy.

 

Remember also that your home is probably your biggest investment. It can be a source of cash in times of need, and if it’s paid off, provides significant financial stability. If you’re over 62, you can even access your home’s equity in the form of a reverse mortgage. This loan doesn’t have to be repaid as long as you remain in your home and follow the loan’s terms. So think carefully before bowing out of the home that gives you this flexibility.

 

Expecting a Lifestyle You Can’t Afford

Your fifties were likely the time that you earned more than ever before. When you’re earning big, it’s easy to become accustomed to lots of vacations, lots of eating out, and a lavish lifestyle. Retirement may require you to scale back. Even if it doesn’t, you’ll have more time to fill than before. Don’t fill it all with expensive meals and expensive entertainment, or you’ll soon find yourself looking for another job.

 

Not Being Realistic

We all have our biases. Some of us are blindly optimistic, while others can’t shake negative thoughts. An unrealistic bias in either direction can undermine your retirement. Pessimists may underestimate the strength of their savings, living a more frugal and stressed-out life than is really necessary. Optimism can convince you that the economy is stronger and your savings more abundant than is really the case, spurring you to overspend. Get a reality check with a financial planner, and stick to a spending plan based on ongoing assessments.

 

Relying on Hobby or Consulting Income

Selling vintage goods, consulting, an Etsy store, or an Ebay empire are all excellent strategies for bringing in extra income. If you have to rely on them to survive in retirement, though, you’re already in trouble. These streams of income are inherently unreliable. If you need a second income and know you have to earn a specific amount each month, consider a part-time job instead. Consulting and hobby income can offer a little spending money, but these strategies offer little assurance of reliable income.

3 perks to consider to reduce your car costs

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Of all the prices you pay during your lifetime, the price of a car can easily be among the highest. Therefore, when the time does come to purchase a new vehicle, you should tread carefully at every stage of the browsing and shopping process to see where savings can be made. You could be surprised by just how much is trimmed off the total price provided that you are seriously determined. Below, we detail three perks that you could find especially cost-effective.

A company car

Initially, receiving a car from your employer can seem a wonderful perk. You get a vehicle that you don’t need to make any initial financial outlay for and, in the United Kingdom, there’s even a great tax break for the car user, as Auto Express explains. However, the company car on offer in your case might not be as financially efficient as it first looks – not least for tax reasons.

The UK tax-collecting authority Her Majesty’s Revenue and Customs – or HMRC – will treat that car as a benefit-in-kind and so tax it at a rate they deem accurately reflects the car’s value. HMRC consider a company car part of the user’s earned income, as the employer effectively pays for it in addition to an annual salary. How much company car tax you have to pay will be affected by the vehicle’s carbon dioxide emissions and your annual salary.

Therefore, as Tax Donut notes, you might actually want to turn down a company car if its emissions are high and a higher salary is on offer as an alternative. When you choose that alternative, the extra money could help you to purchase a low-emissions car for use in place of a company car. This brings us nicely onto the subject of how you can help yourself to make a wise choice of eco-friendly vehicle.

An environmentally friendly car

Another good reason to buy a low-emissions car instead of accepting a less planet-friendly company one is that this could appreciably lower how much you have to pay in VED. This is more properly known as Vehicle Excise Duty and must be paid on any car, even if it is a company one.

VED is payable on the vast majority of new cars from day one. However, all zero-emissions vehicles are exempt in the first year, while low-emissions vehicles with a list price of £40,000 or under stay exempt in subsequent years. Still, even those vehicles where the list price exceeds £40,000 require only £310 in VED payment over years two to six.

This compares favourably with the VED necessary to pay for petrol, diesel or alternative fuel vehicles over the same period. Thus, you could easily overlook that low-emissions cars, which come in electric and hybrid forms, can require larger upfront payment. Your favoured model might even come with a government grant; the BMW i3, for example, includes such a grant of £5,000.

An electric car could also hold its value relatively well over the years, making it ideal to sell for a healthy return later down the line. MoneySavingExpert.com has cited Tesla, one of the most successful companies in selling electric cars, as the third most effective brand in helping to preserve its cars’ value. That value was reported to fall by only 33% per year.

A carefully chosen car insurance policy

To use a car on the roads, it is legally necessary that you have car insurance for it. MoneySavingExpert.com advises you to secure that insurance ahead of becoming the car’s legal owner – as, should anything occur to the car, you will be responsible. Even if you take very good care of that vehicle, you can’t entirely rule out an accident like another car driving into the back of yours just after you have driven it out of the dealership.

If your car has insurance, you could benefit from having a good look around when the time comes for you to renew it. Maybe, when you originally bought that car, it already came with insurance. While renewing the existing policy could seem like the most straightforward strategy, it might not necessarily be the kindest on your bank balance. Furthermore, taking account of policies from different insurers does not have to be as time-consuming as you currently expect it to be.

If you live in the UK, one time-efficient tactic is arranging for an independent insurance broker to pore over different policies on your behalf. Your chosen such broker could be Call Wiser. That company, operating at Andover in Hampshire, can consider what over 30 of the leading UK insurance providers are offering as it searches for the most suitable deal for you. An appealing quote could be sent your way in just 10 minutes when you submit an insurance application to Call Wiser.

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