Credit cards in the US

Almost everyone in the US uses credit cards as a way to pay for debt. Dependency on credit has grown immensely throughout the economy, as lenders in the past were more than willing to extend funds to borrowers. Unfortunately, the recession put a damper on that freedom, when credit card companies were sent reeling by their former over-enthusiastic lending. They began using tactics like cutting people’s limits, even if they had more than that limit charged. This automatically put them in a higher interest rate bracket, and many times unjustly cost them over-limit fees. Credit card companies also began charging higher interest rates without notice to consumers, based on their “adjustable rate” clause in the contract. It was unscrupulous acts like this that pressed the Obama administration to face the credit crisis head on, making legislators step in and find ways of regulating credit card company activity.

Understanding credit cards

To understand what impact credit card companies’ actions have on credit, it’s important to understand how credit is scored. A consumer’s credit score is made up of five different components:

1. 35% is based on history of payments
2. 30% is based on debt percentage, or credit being used versus credit available
3. 15% is based on the length of time credit has been open
4. 10% is based on new credit taken out
5. 10% is based on a mixture of the overall credit a consumer has

Knowing this, the most important thing a consumer can do is pay their bills on time. This is the largest contributor to credit scoring. It’s also important to have a good mixture of all of these elements to maximize a credit score.

Also, length of credit is very important. It’s much more beneficial to have a good payment history with one credit card company than to open new cards that have no history. Consumers should always keep good-standing credit cards open to benefit the most from them.

Debt consolidation companies

Many experts advise against using debt consolidation companies because they do what consumers can do for themselves, for free. A debt consolidation company will charge large fees to negotiate. Experts say that if a consumer wants outside help they should contact the NFCC, the National Foundation for Credit Counsel. They charge a small fee, but it is much less than a debt consolidation firm. The NFCC will communicate with lenders on a consumer’s behalf to work out an affordable plan. They also will work with the consumer to create a workable budget that allows the client to pay down debt as soon as possible.

Debt questions to ask

One important issue to face is what actions led a consumer to having credit card problems. Did overcharging send the credit amount skyrocketing? Did fees due to late payments do the damage? Are credit cards too widespread? These are all questions that need to be addressed for consumers to create healthy relationships with credit. On the other hand, the credit card problems may be due to extenuating circumstances such as unmanageable medical costs. If this is the case, bankruptcy may be a more viable option for the individual. Regardless of what the solution is, it’s important to get to the root of the credit card problem and take care of it. The future after the recession is still unknown and consumers have to work hard to make sure they will be financially sound.

Understanding banks

When it comes to banking, there are some important rules to understand. Every American needs somewhere to put their money. Although grandparents may have kept it at home, in today’s world there is no need to do the same. Today’s market allows for great savings vehicles and although the savings rate is not what it used to be, it still brings in some return on investment.

• Banks and safety. For years banks have had insurance for individual accounts of up to $100,000. Due to the recession, the federal government upped that to $250,000 per account. Although after January 1st of 2010 the insurance will return to the lower number, it is still a great way to protect your savings.

• Bank fees. Remember that every service costs and that includes the service of holding your money. Banks pay lower rates on interest-bearing accounts than brokerages or mutual fund companies, but may take out hefty fees. In particular many people get caught in the “minimum required balance on deposit” trap. This is where a bank charges a fee if a balance falls below a certain predetermined level. These fees can easily add up to hundreds of dollars in a year. Be sure to understand your bank’s rules so you can avoid fees as much as possible.

• Understand interest rate at your bank. Not all banks calculate interest the same way. You want to ask your banker about each accounts’ “annual percentage yield.” Banks normally quote both interest rates and APYs, but only APYs are calculated the same way everywhere. Interest rates can vary greatly.

• Try other savings vehicles. If you don’t have the need for quick cash, try using CDs, or Certificates of Deposit, for your money. These are accounts that offer you better interest rates than just plain savings accounts. The catch here, though, is that you have to agree to leave your money untouched in the account for a specific period of time. That time can vary from 3 to 48 months. If you think you’ll need cash soon, opt for a lower lifespan for the account. On the other hand, if you won’t need the money, then take advantage of the typically higher interest rate on longer life spanning accounts.

• Watch ATM fees. ATMs are one of the most convenient advances of the decade. They are everywhere and allow you to take out money at a moment’s notice. The problem, however, is that they also charge you fees each time you enter your PIN. On average, the fee your bank charges to use another institution’s ATM is $1.50 according to BankRate.com. On top of that, you also will get hit by a fee to use the ATM and that can range anywhere from $2 to $5.

Banking in 2010

Using a bank is a great way to grow your money and protect it. Like with any contract, though, there is fine print. Be sure to understand your bank’s rules and regulations so that you are maximizing your return. You want your money to be safe, insured and in a prime position for growth.

Let’s say you are lucky enough to get a new unsecured credit card. That means that your credit has to be somewhat stable, because credit card companies are no longer handing out credit like they used to. Now there is a rigorous intake process that sorts through applicants and notes those who are most likely to pay their debt on time and those who are most likely to default.

Once you get your credit, you run to the local store to make your first purchase. It could be something as innocuous as dinner for your family, or it could be a big-ticket item that you were waiting to put on credit. It may seem well and good for a while, but then your bill comes. For a lot of people it isn’t until their bills come that they realize the true relationship they have with their credit lenders. Though there is an immediate benefit, there is a long-term payout.

Credit card trends to be wary of

Credit is necessary in today’s market. If you ever expect to get a car, house or any big-ticket item, you have to have a decent credit score. However, now that lenders have been through the recession, they are changing their rules as to how credit is managed. Here are some new characteristics of credit cards to pay attention to:

1. Credit rates will continue to rise. Surveys show that four of every five credit cards have the dreaded “variable rate.” Since the recession, those variable rates have been steadily on the rise. Coming 2010 the trend is expected to continue. Although regulators have managed to change the rules of minimum payments, it still may take consumers much longer to pay off debt if they stick to the minimum payment amount.
2. Great deals are available, but beware. The credit cards with great deals are still going to be introduced to the market, but this time they come with some startling regulations. For example, Discover card advertised a 0% balance transfer deal that requires only two purchases a month. What was hidden in the fine print, however, was a hefty minimum requirement of purchases to be eligible.
3. Fees are on the rise. In the past ten years fees for over-limit purchases and late payments have risen dramatically. It’s a chronic problem with credit cards from most major lenders. For example, Citibank’s Citi Simplicity card offers no late fees when users make purchases once a month. The catch is that if you do go over your limit, the penalty rate kicks in. That rate is well over 30%.
4. Low-rate offers are also sketchy. Sure you may find a great low-introductory rate on a card, but there are many more ways for the lender to increase the fees involved. For example, Chase removed their cap on balance transfer fees for some of its lower-rate offers. That means that if you are transferring a substantial amount, expect to get the lower interest rate, but a higher fee. That fee may just about eat up any savings you got from the lower rate.

The future of credit is still in the lenders favor

Overall credit is still sided to benefit the lender more than the consumer. That’s nothing new in the world of credit, but it is projected to be worse than it was pre-recession. This time lenders are focused on bringing in as much cash as possible, as many ways as possible. They are making themselves ready to act quickly should future payment problems occur. Consumers need to be aware of the fine print and understand that benefits these days are not as transparent as they once were.

Need some cash till payday? Apply HERE!

Though it may seem early to start thinking about saving quick cash for Christmas 2010, many people are already considering the cost. The recession of 2009 made people think twice about their finances. Credit card lenders proved to be unreliable throughout the economic downturn and people had to rely on their cash reserves to make their monthly expenses. Christmas 2009, overall, was a bleak one with many consumers having to cut back drastically on their spending. To avoid the crunch, many consumers are looking for saving options and starting their plans now.

Budgeting in advance

According to Alison Southwick, BBB spokesperson, “Budgeting wisely can greatly reduce the holiday hangover that many overextended families’ experience. A Christmas Club account is a great tool for gradually socking away money throughout the year to spread the financial burden of holiday spending.” The Christmas Club account is the latest tool consumers are turning to as they try to ease the pain of holiday spending.

In the past the Christmas Club account was offered at credit unions or community banks. It’s a savings account that allows holders to deposit small amounts over the year and then withdraw the funds in the fall. There are 78% of credit unions in the US that offer the accounts, according to the Credit Union National Association.

Retailers are joining in the savings plan

Retailers are now realizing that they need to keep up with the financial strain of their customers and changing their own products. Some retailers are offering their own form of the Christmas Club account. The good thing about these accounts is that they offer a place to not only place money, but they also earn interest as well. Of course the stipulation is that the money has to be spent at the retailer holding the account, but it’s proving to be a convenient way to save for the holidays.

The terms for Christmas Club accounts vary widely among retailers. Some allow withdrawals in early fall, while others require the money to be left alone until December. Some also offer higher interest rates than others, so it’s wise to do some searching. For consumers who are worried about having enough quick cash when the holidays come near, these accounts are very helpful.

Understand the fine print

It’s crucial that applicants understand the terms of an agreement when it comes to Christmas Club accounts. Some require a minimum deposit to open the accounts and require a consistent monthly deposit. This can be a good tool for those who are particularly disciplined when it comes to savings. They can treat the deposit like another expense and keep up with payments. The accounts are a lot like Certificates of Deposit that banks offer. They have an interest rate, varying deposit requirements and there is a penalty for withdrawing the money prior to the end date of the contract.

The cautions of Christmas Club accounts

The terms are the most important thing for consumers to watch when it comes to Christmas Club accounts. Also, consumers should make sure that the retailer they choose is a good fit for most of their holiday shopping. Overall, the accounts are great tools to have quick cash for spending and with a little research they can help any family make it through the expense.

Need quick cash? Apply HERE!

Single mothers in need of money now have some choices to make. It’s difficult in today’s economy for anyone to manage, but with the added stress of raising children, it can be a daunting task. There are millions of unemployed Americans in the job market and a good portion are single mothers trying to make ends meet. The hardest part of combining motherhood with work is the schedule. A single parent has to be available in the morning to get children to school, and be ready to pick them up afterwards. There are illnesses to deal with and holidays where children need supervision. Even the best employer may not always be willing or able to accommodate.

Jobs for single mothers

There are some jobs that cater to single mothers due to the schedules and responsibilities. Here are the top five:

1.) Pharmaceutical Sales Representative. Without question, being in pharmaceutical sales is not easy, but more and more companies in the industry are creating flexible policies for workers. For example, GlaxoSmithKline has an official “Flexible Working Policy” that allows home workers, part-time workers, annualized hours, and term-time working. The company also provides workers with on- or near-site daycare services and pay-for-performance incentives.

2.) Teachers. Teaching is one of the top careers for mothers because the schedule is congruent to children’s school schedules. This field is known for its family-friendliness and some professionals choose to work in the same district or school where they reside. It’s much easier for a teacher to be a parent if their child is down the hallway or a few miles away. An added benefit is that teachers can also pick up extra work with private tutoring or teaching additional classes on the side.

3.) Freelance writer. Freelance writing offers a flexibility that few other career choices provide. Some famous freelance writers are Jacquelyn G. Mitchard, author of “The Deep End of the Ocean” and J.K. Rowling, author of the Harry Potter series of books. Most professional writers have some help with childcare but due to being able to set a schedule themselves, most can get by with minimum outside assistance.

4.) Registered nurse. Becoming a registered nurse is a particularly effective way to find money now due to the many bonuses involved. The health care industry is looking for qualified workers and the job market promises to be a continuingly growing one. Americans are getting older and health care is in demand now and is projected to grow exponentially throughout coming years. In addition to high-paying positions, there are also lucrative bonuses ranging from $500 to upwards of $15,000.

5.) Part-time or Temporary Professional. Many single mothers are more prone to having part-time jobs than full-time. Companies like Adecco, Office Team and Accountemps offer a wide variety of part-time jobs that pay well and are flexible for even the most rigorous schedule. For those looking for full-time but flexible professional work, AFLAC may be a good option. Workers make their own schedules and can easily opt for a schedule with no weekends or no nights. In addition, the company offers competitive commissions, incentives and contests for all workers.

Managing parental responsibilities

Single mothers in need of money now have a good selection of options. Each one above is lucrative, but still offers the flexibility needed to parent small children. It may take some searching, but with some good research and skill, any mother can find employment that fits in with her parental responsibilities.

Need money now? Apply HERE!

It’s critical to have emergency money in today’s market, but the New York Times isn’t making it easy. Many avid readers of the New York Times Online are going to be in for a big surprise next year. Mark Zandi, economist for Moody’s Economy.com, said, “The internet is free and more and more people are getting their information directly from it. Gone are the days of paying for a newspaper, except for older generations who don’t have unlimited access to the online news world, or don’t want it.”

The New York Times has long been one of those free news websites, but that is soon to change. Starting next year, the paper is going to be implementing a “metered” system where readers will receive a certain number of news stories for free, but if they want more detailed information they will have to pay. The plan is to draw readers in with interesting articles and then show them the value of learning more about the article’s topic.

Will the plan work?

The big question is whether or not the pay-to-click option will work for The New York Times. They have tried twice before to move to this type of format unsuccessfully. Because of the two failures, executives are taking their time and giving themselves almost a full year to “build the system and figure out the details that are likely to dictate whether the gamble pays off.” The biggest issues are to gauge how much to charge and still keep readers and how many stories consumers will be allowed free access to every month.

Current subscribers to the printed paper don’t have to worry. They will get full-access to the online version with their subscription. The New York Times executives are hoping that this increases the number of print-buyers when they realize that a subscription allows them to read every story online without restriction. Subscribers will also have free access to mobile news, electronic readers and tablet computers for their New York Times content.

Does it make sense for The New York Times?

The question remains if it makes sense for The New York Times to move to this format. It’s still a down economy and most Americans are still prioritizing building their emergency money funds. Will they want to pay for the news when it is so readily available for free elsewhere? The format has worked well for other newspapers like The Financial Times. This is a specialized newspaper that caters to an upper-income set of readers primarily following the stock market, business and the economy while they are on-the-go. Some analysts are questioning whether it makes sense for newspapers that are mainstream to try to follow the same model.

It raises another question on whether or not readers who are turned away by fees will also drive away internet advertisers. Zandi added, “Online newspapers like any other online business get their value by the number of visitors they have… it is possible that The New York Times could lose internet viewers and that would be disastrous for their bottom line in terms of advertising.”

Charging for stories when they are free elsewhere

Finding emergency money in the economy isn’t easy, so charging for stories is an uncertain challenge. According to a study done by ITZ/Belden Interactive, currently about 150 US newspapers charge for internet subscriptions and their fees range from $1 to $35 per month. With a long history of award-winning reliability, The New York Times should be able to gain some online paying customers, but whether or not it will be enough has yet to be seen.

Need emergency money? Apply HERE!

Buying a home can be a challenging journey – especially if it’s your first time on the market. For this reason, many people choose to enlist the services of a qualified real estate agent to help navigate these waters. Because you’ll come to rely on this person to help you through many complicated issues, it’s important to spend some time finding the agent that best meets your needs. Don’t just choose the first person whose advertisement you see or, worse, the person whose picture is on the “For Sale” sign of the house you’ve fallen in love with.

Enlist Your Own Agent

If this is your first time buying a home, you might be wondering, “Why shouldn’t I just call up the agent that’s pictured on the For Sale sign? Wouldn’t that be easier for everyone involved?” What most people don’t realize is that there are typically two agents involved in a real estate transaction – one representing the buyer and one representing the seller. The agent listed on the For Sale sign is representing the seller, and he or she is contractually obligated to look out for the seller’s best interests.

What this means is that if you approach this person to represent you as well and you tell the agent how much you can afford to spend on your new home, the agent is required to report that back to the seller. Obviously, you want someone who’s going to look out for you in that way. You need a buyer’s agent – but how do you go about choosing one?

Look for Someone with Experience

Now, this isn’t to say that there aren’t plenty of young, up-and-coming agents out there, but if you’re a first-time homebuyer, you really need to find someone with experience – not just as a real estate agent, but also with the market where you’ll be buying. An experienced agent will know more about the different homebuyer incentive programs available today, as well as how the neighborhoods in your target city have changed over time. Experienced agents have also been through more transactions than their newer colleagues, so they’ll be better prepared to help you through any unusual situations you may experience.

Ask for Referrals

The easiest way to find a good, experienced agent is to ask friends and coworkers which agents they’ve worked with in the past and whether or not they would recommend them to you. Any agent can put together a great looking website or make bold claims in their advertising materials, so you need to go off of more than just paper. If possible, get recommendations for several different agents and then set up consultations with each agent individually. Take the time to prepare some questions ahead of time and give the agent as much information about your housing needs as possible to see what he or she can come up with. You’ll likely find that one is a better fit for your personality and your needs throughout the home buying process.

The recent government bailout of the nation’s banks, begun under former president George W. Bush and continued under current president Barack Obama, has produced considerable outrage among many Americans, particularly those facing mounting job losses, declining home prices and income, rising variable-rate mortgages and a host of other economic and financial pressures. The $700 billion plus rescue was necessary, government and bank leaders say, to save the nation’s banking and investment system from imminent collapse and to help restore failing banks to financial liquidity and ability to offer credit to America’s businesses and consumers, both large and small.

But the disclosures of large salary bonuses conferred upon bank executives, lavish spending on entertainment and the continued tightening of credit became lightning rods for the public’s anger. When this combined with persistent complaints from consumers about credit card and banking account abuse by banks, Congress finally moved in 2009 to address at least some of the industry’s more aggressive practices.

The Credit Act of 2009 Promises Relief to Consumers

The Credit Card Accountability Responsibility and Disclosure Act, or CARD, enacted by Congress in May 2009, is being called a major step forward in reining in some of the banking industry’s excessive practices. While there are undoubtedly some specific curbs that consumers can be thankful for, there are also clear limitations to what the new law is empowered to regulate. Plus, the time gaps in implementing the various measures are allowing banks to find alternate ways to charge fees and raise interest rates, actions which have raised the ire of consumers in recent years.

What the Credit Act Will Regulate

The first phase of CARD took effect back in August 2009. Since August, card issuers must announce any interest-rate increase 45 days before it takes effect, and the notice must be in writing. Cardholders have the right to refuse the increase by closing the account and are also allowed to pay off the balance within five years under the old terms. Some banks are allowing their customers to keep an account open but no new purchases may be made on the card until the balance is paid. Another change since August requires card issuers to deliver account statements at least 21 days before the due date, up from 14 days.

A second phase takes effect in February 2010. Banks will then be prohibited from raising interest rates on current balances unless a customer is at least 60 days behind on a payment. This restriction will apply as well to the widely detested practice of raising interest rates on one balance simply because the bank learned a customer was behind on another account with a different card issuer. In addition, a customer whose rate is increased for being 60 days late must be allowed to earn back the earlier rate with successive on-time payments for six months. But these protections have several exceptions: banks can still charge increases on introductory rates, temporary hardship rates and established variable rates.

Highlights of other rules to take effect in 2010 include: for balances with different rates as a result of special transfer offers, payments above the minimum payment must be allocated to the balance carrying the highest rate; banks can only charge an over-the-limit fee for a purchase if the customer authorizes the bank to allow purchases that push him or her over their credit limit; and cardholders cannot be charged for payments made over the telephone, online or by other means unless the customer requests expedited service.

Will the Act Make a Genuine Difference?

CARD thwarts several egregious practices imposed upon consumers by many banks. What shines particularly are the limitations to how rates can be increased and the manner in which excessive payments are distributed to different balances on the same account. Of course, constricting over-the-limit fees and extending notice periods are helpful as well. But what can banks still do to generate revenue and not be overruled by CARD? As Bill Hardkopf, chief executive officer of LowCards.com, a Web site that tracks the industry, says: “There are so many things that issuers can do that the Card Act doesn’t touch.”

What issuers have been doing leading up to CARD’s full implementation is to arbitrarily raise interest rates, including on fixed-rate agreements, slash credit limits and, in some cases, close accounts, all in the name of “a challenging economy.” What they will be allowed to do after implementation is to close accounts, switch fixed-rate agreements to variable-rate ones and start charging annual fees on some cards, including new cards. For these actions, the Act offers no protection.

Where the Consumer Now Stands

Congress has acted to provide some real benefits and protections to credit-card users and it is to be praised for that. At the same time, it didn’t act on other, onerous bank practices. For instance, there is nothing in the Act that prohibits banks from charging exorbitant interest rates that have been as high as 30 percent and more, levels traditionally associated with usury. In addition, they can charge these rates retroactively after the 60-day period of being late. These actions have been taken by banks usually in response to customers missing a payment and being deemed in default of their account. Banks have shown some flexibility for one-time late customers, particularly if they have consistent payment histories. But they almost invariably impose a late charge for missing one payment. Thankfully, the Act now limits the late charge to a maximum of $39 per occurrence and at least offers the payer 60 days to mend his or her late status before major changes occur.

If and when a card user’s bank imposes severe changes on the account, the user should communicate with the bank and ask for modification of those changes. Specifically, the consumer should ask to have the credit limit raised again if drastically lowered, ask that rate increases be lowered if drastically raised and ask that a variable-rate status be returned to a fixed-rate agreement. If a large number of consumers undertook such action, the banks could be pressured if they started to see their customers leaving them for other banks offering better credit-card terms. Also, remember that being properly informed about one’s financial rights protected by law limits the opportunities to be taken advantage of. Consumers can learn more about CARD at: www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders .

Finally, consumers can always, and should, write or call their Congressperson asking him or her to work to expand the consumer protections in the Credit Card Accountability Responsibility and Disclosure Act of 2009.

Bank statements, installment loans, accounts payables and receivables are all parts of a small business that owners must be aware of. With the market as unstable as it is, a lot of people are looking into becoming entrepreneurs. Though it sounds like a good plan, experts are cautioning that it isn’t as easy a move as some are hoping. In fact, the overall assessment of entrepreneurial capability can be broken down into three different questions:

• Do you have confidence in your plan and yourself?
• What is your core motivation?
• How broad is your vision?

These three questions can tell a lot about a person’s entrepreneurial spirit, or their lack of.

Confidence in the plan

The primary focus of any successful business owner is their plan. James V. Koch, researcher and author, said that the “classic entrepreneurial personality seems to combine the self-confidence of Muhammad Ali with the sunny-eyed optimism of Little Orphan Annie.” Koch’s belief is that entrepreneurs are “born and not made.” The main distinguishing factor of a true business owner is that they are committed wholeheartedly to their plan. Koch added, “We ran into entrepreneurs who had failed four or five times in a row, and they were absolutely convinced that this next time they were going to strike gold.” The confidence a true entrepreneur has in his or her plan is resilient, determined, and focused.

The Core Motivator

Another important characteristic entrepreneurs have is their desire to do something significant with their business lives. John Down, director of the Center for Entrepreneurship at the University of Portland, said, “They don’t view what they are doing the way a lot of people may view their jobs—as a means to a paycheck that allows them to do other things outside of their work. For the entrepreneur, the work itself is the goal.”

The goal of doing the work makes the typical entrepreneur extremely focused and determined. Down added, “Whatever a business owner needs to tackle, they tackle. Whether it is a complex spreadsheet, an amortization schedule for installment loans or an in-depth contract, a business owner will tackle the issue quickly.”

How broad is the vision

Finally, experts cited the entrepreneur’s vision as a key factor to knowing if self-employment is the right choice. Koch stated true business owners tend to be “more strategic in their thinking… more big-picture oriented.” It’s this vision and ability to hold up large plans that allows owners to face the vast number of challenges that come up during any business venture. It’s this reason why most business owners studied have a good group of people surrounding them who have a talent for details. Koch added, “Entrepreneurs tend to not have time for the minute details of a plan… rather they focus the entire business entity and on staying true to the vision while others concern themselves with the everyday activities the organization needs to survive.”

Entrepreneurs in 2010

In 2010, analysts are projecting a record number of entrepreneurs entering the market. It takes a lot of determination and vision, but the true business owner seems to have similar characteristics. Studies are showing that traits are shared among entrepreneurs. Not only are they adept at managing installment loans, bank funding, hiring and firing, but they also have more intrinsic qualities that serve them well in the market.

Apply for Installment Loans HERE!

Now that Americans are getting back to buying and selling real estate, many are willing to use instant cash loans to fund various unexpected costs. One of the biggest concerns for any home seller is their appraisal. Although the price of a home can be based on the market assessment value, the appraisal can make, or break, a home price. Here is a common scenario in the world of selling real estate: A home is listed for $450,000 and the buyer offers $400,000. They eventually settle on a price of $425,000. Then just prior to closing, an appraisal is done where the maximum the mortgage company is willing to lend is $410,000. The buyer and seller are now left with a shortfall of $15,000. Walter Molony, senior public affairs specialist with the National Association of Realtors, said, “This has proven to be a fairly significant problem in today’s economy.”

What sellers can do

The question in this case is: What can sellers do to avoid the shortfall? A new problem more and more sellers are facing is the short appraisal. The recession created a decline in overall house values throughout the country. With the huge number of foreclosures in most neighborhoods, it’s difficult for appraisers to come up with comparable values that are accurate. Add to the mix the relative inexperience a lot of appraisers have with the new unstable market, and disastrous appraisals are imminent. Molony added, “Appraisers can be uneducated to begin with, but add to that the post-recession market and it’s a formula for problems.”

Buyers need to take proactive steps to protect themselves from the short appraisal. When talking with lenders, buyers can specifically request appraisers who come from their county. This can be helpful because the appraiser may have more experience in the area and have inside information on what the true neighborhood is like. Buyers can also request that the appraiser is certified. Various organizations like the Appraisal Institute’s Senior Residential Advisor or Appraisal Institute certifications can both signify a more intense education on how to appraise properties. Finally, buyers should also meet with their appraiser as they are doing the inspection so they can share information on the area. Leslie Sellers, president of the Appraisal Institute of Chicago, said, “Many appraisers are just pulling data out of MLS, or Multiple Listing Service, or off the deed at the courthouse and not checking it out. Most good appraisers will appreciate the information.”

The instant cash loan and appraisals

More homeowners are using instant cash loans to fund small house improvements. To make the process of an appraisal as simple as possible, homeowners are cautioned to do their own walk-thru of their home. Sellers added, “It can be helpful to have a few candid family friends walk through the house as if they were going to buy… let them be impartial and listen to their criticisms. Then fix the issues as quickly as possible prior to the assessment.” The key to pre-appraisal home improvements is to have the work completely finished before the assessment and to keep on budget. Small things like cleaning clutter, buying organizational tools, putting items in offsite storage and keeping things in order can make a huge difference when an appraiser comes in. Coupling affordable updates with first-hand information on the location of the property can greatly aid the appraiser in formulating their final documentation on the home.

Help the appraiser all you can

In the end, selling a house can be difficult in today’s market. If you are looking to sell, remember that there are some wise things you can do to help your appraiser target an accurate sales figure. The number he or she comes up with will dictate how much of a loan will be needed to get the property sold. For this reason, it is always best to try to offer as much information on the home as you can. If you can get as fair a price as possible, it may mean the difference between having to eat a large loss and needing small instant cash loans to handle the shortfall.

(Image from Emilio Labrador, Flickr.com)

Every year, rental car agencies sell the older vehicles in their rental fleets and restock with the newest models. Larry Lovejoy of Automobile Consumer Services Corp (ACS) states, “These cars can be a great deal for the average buyer. They have been well-maintained, so in essence you are buying a nearly-new car with no worries about mechanical problems. Furthermore, (if you buy a rental car from a car dealership) some dealers might extend the warranty for the full term or you can drive it under the balance of the warranty.” This means that every year rental car agents sell thousands of cars in great condition which are to be replaced by newer cars, either to private citizens or to dealerships that re-market the cars as “program” or “fleet” vehicles.

Rental Car Reliability

In order to keep customer satisfaction high and ensure repeat rentals from customers, a rental car agency must maintain their vehicles in optimal condition, both mechanically and physically. This means the drive train, interior and exterior are very well maintained on rental vehicles; after all, no agent wants to have a client stranded on the road with a break down or be unhappy because the power seats do not operate properly.

Each time a rental vehicle is returned to the agent, it is checked over with care and cared for with attention to detail to prepare it for rental by the next client. The engine and transmission are checked and any noises or noted problems are repaired. Periodic maintenance is performed on schedule including oil changes, transmissions fluid changes, radiator flushes and fills, wiper blade replacements, belt and tire replacements, windshield wiper fluid refills, antifreeze checks and fills, and brake adjustments or replacements. This quality of maintenance may not be performed by a private vehicle owner, resulting in a used car on the market which is in much poorer condition.

Interior and Exterior Maintenance

Often, private citizens fail to perform much-needed maintenance on the inside and outside of their vehicles. Rental agencies can’t afford this neglect. Their vehicles must appear as nearly new as possible so that people will want to rent them. This means that after each and every rental, a vehicle is detailed inside and checked for any wear and tear on seats and carpet. When problems appear, they are repaired before the minor damage becomes noticeable. Exterior dings are quickly repaired and the paint job is maintained by washing and waxing the vehicle in order to maintain a shiny, like-new appearance.

Where to Buy Rental Cars

Now that you understand why former rental cars are great buys, where do you locate those which are available for purchase? Lovejoy of ACS said, “(Used car) dealers like these cars because they can get them at low prices and sell them at a good profits.” Often you will find advertisements in the newspaper indicating special sales prices on “program” or “fleet” cars at a new car dealership’s used car lot or even at a dealership selling only used cars. The CarFax.com report on the vehicle will indicate that it was formerly a rental car. You can also contact rental car agencies directly to learn of any vehicles they have available for purchase. Some rental agencies advertise their available vehicles in newspapers and sell them directly to private buyers; often you can get the very best price by going directly to the rental car agency.

Unsecured personal loans saved a hefty portion of consumers throughout the 2008-2009 recession. Many people who believed that they were safe financially got a wake up call when the economy took a turn for the worse. They realized that financial tools they used in the past quickly became irrelevant. Lenders closed their doors to everyone except their premiere customers. Home values declined severely putting people in even more debt. It was a difficult time and it is first now that consumers are seeing some hope that the market will return to normal. One thing that many people recognized, however, was the need to educate themselves and their children on how to manage money. With an unstable economy, it’s imperative for people to be ready with tools to manage and pass those tools onto the next generation of consumers.

Things to teach children regarding money

The next generation of savers and investors need to be taught the general rules of managing money. It’s no doubt that the global market is shifting and it will be critical for young people to be able to make wise decisions. Here are some tips to follow:

1) Educate children on the value of the dollar. When children are in school they learn about reading, writing, and arithmetic. Most of their schooling is centered on the basics of maneuvering value, but unless they delve deeper into the field of finance when they get older, that’s the only education they will get on the topic. “It’s sad how we teach children about binomial functions, something few will ever carry into their adult lives, but neglect finance, something they will need every day for the rest of their lives,” said Mike Mooney, of BankRate.com. It’s up to parents to education children on life’s fiscal challenges.

2) The sooner the better. Anyone who has seen a retirement savings schedule knows how time is key to maximizing money. If children can be taught that value of saving, they can also be taught the value of starting a savings account early. Mooney also said, “Children need to be taught to develop strong saving habits, learn how to make smart purchases, begin to understand the true meaning of ‘investment’ and why delayed gratification is number one when it comes to money.” Education should begin with simple topics like how to save, but then move on to more complex issues as a child ages. Things like payday loans, car loans and investments need to be addressed when children are ready.

3) Mom, dad, and money. Most children think that money comes from their parents. It isn’t until they push too far with buying that they get an explanation of the hard work involved in earning money. It’s best to teach children right away that work means compensation. Small chores are the best way to teach value. As a child grows, bigger compensations can be given for bigger responsibilities.

4) Saving is exciting. One of the best tools to use is teaching children that saving money is a good thing. Piggy banks, shoe boxes and all the old tools are the most appropriate for young children. Older children and young teens can use bank accounts to be introduced to financial institutions and how they work.

Making sense of money

Mixing money with a recession is a formula for financial confusion. No one knows the future or what the economy will be like when today’s children are adults. It’s best to teach children from the beginning about saving, investing, unsecured personal loans, mortgage loans, stocks, and credit. Taking their training step by step as they age is the easiest way to empower them financially for the future.

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Last September, Sadie Frankel of Pasadena, Calif., had to use payday loans consistently throughout the month to cover her bills. She said, “When I got to the point where I needed that extra money to pay for necessities, I knew I needed to do something quickly.” Frankel did do something quickly—she downsized. “It’s just a better life. It really is,” she said.

More and more consumers are letting go of their mortgage payments and renting. Shana Richey, of Palmdale, Calif., also moved to renting status. Her home declined in value more than 50 percent since she purchased it in 2004. Her decision was to get rid of her $3,700 mortgage payment and rent a larger home for $2,200. She said, “I don’t have to worry about paying property tax, homeowners’ insurance, the landscaping, cleaning the pool or any repairs.”

Time to rent

Experts say the most important warning signs that indicated it was time for Richey to make the  move were:

• Having purchased the home with a no-down-payment loan
• Paying $430,000 for the property, well over the market value
• The 50 percent decline in value

The other sign was when her negotiation efforts with the mortgage company didn’t work. The fact that her home was valued at $200,000 post-recession left her with a loss of $230,000. When she requested a mortgage modification from her lender, she was offered a monthly payment of $3,300, just$400 less than her old payment. In the end, she ended up short-selling the property for $195,000.

Know the signs

Analysts are coming to the conclusion that the key to avoiding further financial disaster and starting economic recovery is to know when to walk away. Christopher Thomberg of Beacon Economics consulting firm said, “It’s a stealth stimulus. The quicker these people shed their debts, the faster the economy is going to heal and move forward again.”

For anyone having difficulties, it is important to know the warning signs and act on them. Studies by First American Core Logic are showing that about 25 percent of all U.S. homeowners now owe more on their mortgage than their home is worth. And in the most precarious states — Florida, Arizona, California, Michigan and Nevada — about 40 percent of homeowners are paying loans larger than their homes’ worth. Thomberg added, “These are the consumers who continue to struggle, and it gets to the point where it’s like beating a dead horse. … How far are they going to get?” If consumers are consistently having problems funding necessary bills and having to turn to payday loans or family help, then it may be time to turn things around proactively.

Avoiding disaster

It’s important for consumers to avoid disaster. Andres Duque, hotel worker in Miami, was struggling to pay his mortgage on a $125,000 condo. He purchased his home in 2005, but since the recession condos in his building were selling for just $35,000.

He eventually decided to let the property go into foreclosure and said, “I was able to pay off all my credit cards.” He added, “In a way it was the best thing that happened to me because all my income is not being consumed by this freaking monster of a debt.” One thing experts are noting is that there is no longer the stigma of “home foreclosure” to deal with. Many homeowners have fallen to financial problems and are seeing foreclosure as a way to rid themselves of huge debt.

Some analysts are critical of the government

Law professor Brent T. White wrote a thesis on government action regarding the real estate industry. He said:

“I question why banks that made bad loans are getting a federal bailout but homeowners are pressured to do everything they can to keep paying those loans. The government was encouraging people to buy, telling people that it was a good investment to buy. Real estate agents pushing people to buy, banks pushing people to buy … and then when the market collapses, the homeowner alone is left holding the bag and forced to bear the burden. And so I think we need to talk about the disproportionate burden that is falling on homeowners.”

Regardless of the burden, experts are noting that cash-strapped people are seeing ridding themselves of a large mortgage as a positive move. They are becoming renters and shedding the responsibilities of homeownership. For anyone having to use payday loans or other borrowing consistently, moving to renter status may be the wisest option.

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Check out where the jobs will be.

Specialists in short term loans, finances and money in general, are set for the next decade, or so says a recent study of the hottest jobs around. According to the study, Financial Examiners and Compliance Officers should be the nation’s two hottest career choices in the next 10 years.

The Labor Department reported the information this past week. Although financial analysts were high on the list pre-recession, now they have fallen totally off the top 30 list. Robert Johnson, Senior Managing Director at the CFA Institute said, “The finance industry grew so rapidly that people were attracted for the wrong reasons. People were buying and selling assets they didn’t understand.”

The Financial Examiner position

The Labor Department is projecting that Financial Examiner positions should grow throughout the next decade by 40 percent. Banks, insurance companies and financial firms need Financial Examiners and so do government agencies, by the way.

For anyone looking to start a new career, it’s a great option to look into. Johnson added, “In particular targeting a career towards government agencies can be highly beneficial to a worker. These are the types of jobs that will be needed and most likely won’t go away any time soon.”

The Compliance Officer position

The Compliance Officer is similar to a Financial Examiner but they are mostly employed by the government and financial firms. The job forecast for this career is set to increase by 30 percent by 2018, reported the Labor Department.

The total need will be for about 341,000 Compliance Officers able to handle the detailed work of maintaining legal conformance to new government protocols regarding finances. Because of the new model of lenders, there will be a wide variety of needs for these positions. Governmental involvement with a wide variety of money-handling corporations will call for a Compliance Officer’s aid.

Other jobs set to grow

In addition to Financial Examiners and Compliance Officers, there are other career choices set to be in demand. Accountants and auditors are needed. Over the next 10 years, these two markets are projected to add 279,000 jobs.

According to the Labor Department, the two professions “will benefit from an increasingly complex regulatory environment.” Congress is contemplating sweeping legislation to govern Wall Street and its financial dealings in the future. Companies will need experts in the field of short term loans, financial rules, and government protocols on tax filings to help them sort through the new legislation.

The future of job seekers

It’s clear where the future is headed. After the recession almost every company will need financial experts to maneuver the way through hefty changes in rules. In particular financial institutions will need both Financial Examiners and Compliance Officers to help them stay current with all laws.

In addition, the Labor Department projected the usual need for continued growth in the health care industry. The aging population is creating a bigger demand for nurses, physician assistants and home health aides. For example, physician assistants are expected to jump by 50 percent and create 1.4 million jobs by 2018. Part of their popularity is because they normally can offer the same care that doctors do, but at a much more cost efficient rate.

The Labor Department

The Labor Department releases its job projections every two years, and it predicts how many jobs the economy is expected to generate over the following decade. Financial specialists who understand short term loans, long term asset management, financial projections and investments are going to be in high demand. So will Compliance Officers who can maintain a company’s legalities, and as usual, nursing and health care are high on the list, too. For any consumer looking for the next career move, these are telling signs of where the economy will be heading.

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Millie Benger, 73, of Toledo, Ohio, needed to take out installment loans to help her stranded granddaughter. She received a call in the middle of the night. The caller claimed to be her granddaughter and said her car broke down in Montreal. The solution? She requested that Benger Western Union her $4,000 so she could get home safe.

Benger used a combination of quick loans to come up with the funds. When she went to her local Western Union office, she luckily ran into some opposition. A particularly shrewd Western Union agent started asking questions. First of all, Montreal is known to have a reputation for fraud. When the agent asked if her granddaughter had any credit cards, Benger recalled that the woman on the phone said her card wasn’t accepted in Montreal. The agent asked more questions and Benger realized she had most likely been duped.

Using Western Union to Wire money

More and more thieves are using Western Union and an elderly target to make money. In fact, it’s estimated that the “grandparents scam” has already taken the elderly for more than $3.5 million nationwide. It’s a scam where a fake grandson or daughter calls an unsuspecting and concerned grandparent and asks for emergency money. The amount could be small, or it could be a large chunk of money. The scammers normally say that their credit cards aren’t accepted in the country they are visiting, and they usually fail to give their name. A worried grandparent does everything they can to find the money quickly.

The “grandparents scam” is a routine

The way thieves dupe the elderly with the “grandparents scam” is pretty routine. Here are the warning signs:

• A distressed young person calls in the middle of the night
• He/she has an emergency that needs immediate funds
• They rarely are forthcoming with their name, but rely on the elderly, who out of hasty concern, divulge their relative’s name first
• They suggest Western Union for immediate funds — they have an “emergency” after all!
• The grandparent looks for immediate solutions like installment loans, savings or credit to provide the cash

If you or a loved one are the victim, be smart. Ask questions. Sergeant Carl Pouley, detective for the Middleton, Ariz., police department, said, “It’s pretty easy to take a thief off guard because they have a routine. If their scam is up, they quickly move to another person. …Asking for the name of a pet or childhood toy is not unheard of. Most likely your crook will give up.” Pouley added that most of these scammers have “hundreds of names” to get through daily and if they think you are onto them, they will end the call pretty quickly.

Protect yourself against thievery

People need to be wise. Rather than getting emotional and distressed when a loved one calls, the elderly are cautioned to be calm and think rationally. Would loved ones really turn to their grandparents for emergency funding via savings, credit or installment loans? Most likely a grandchild in distress would first turn to parents and friends for aid. Sergeant Pouley added, “Grandparents these days are on fixed incomes so the likelihood of asking them for cash just isn’t that great.”

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During the recession, payday loans replaced credit card spending. Consumers have always used credit and have become growingly dependent on it for purchases. In particular big-ticket items were always bought with credit. In late 2007, credit problems began. Lenders pushed more and more credit onto the consumer and paid no attention to whether or not they had the ability to pay the money back. It caused many people to go into default on their loans and sent credit card companies reeling with outstanding debt.

Credit lenders started using tactics of their own to mitigate their losses. Some credit companies cut people’s spending limits drastically. For example, Mara Lindley, consumer in Toledo, Ohio, said, “Our credit card limit was $30,000 pre-recession. Then our credit card company cut that limit in half, even though we had $16,000 in charges on the account. … Then they started charging us huge over-limit fees, but we didn’t have anything to do with being over our limit!” Lindley is not alone. Many consumers saw credit card companies get aggressive.

Post-recession: what can consumers expect

Now that the recession is deemed “over” by some experts, what can consumers expect from their credit companies? It seems that most credit card companies are still trying to manage huge losses but are ready to start offering consumers services and specials again. Here are some benefits of credit cards that people should take advantage of:

• Credit card companies will arbitrate discrepancies. One of the biggest advantages of having and using credit is that if there are problems, companies will go to bat for the consumer. For example, if a consumer finds a charge on their statement he or she can call customer service, but say that gets them no where. Or, say the company insists they pay the charge regardless of their argument. The buyer can still turn to their credit card company and file a formal dispute. The company then contacts the party that charged the account and they hash it out. A lot of times a credit company has more power to sort issues out on the behalf of their clients than individuals do.
• Automatic bill pay is invaluable. Let’s face it: today’s world is a busy one. Who has the time to remember when every utility bill is due or when every payment is sent out? The best way to handle finances these days is to use the auto-bill-pay option credit card companies offer. Consumers can sign up and let the credit card company automatically issue payments. This is a great tool for anyone with a busy life. It can help a consumer avoid having to use savings, payday loans or family lending to cover expensive late fees.
• Protection against identity theft. Finally, using credit cards can be a great way to thwart identity thieves. For the most part, consumers will have a said amount of time to dispute a charge, normally 60 to 90 days. Once they do, the credit card company will investigate, issue them another card if necessary and the matter is taken care of. It’s invaluable to have a large company working alongside a consumer to protect their personal information and bank account.

Payday loans still viable options

Although credit cards are becoming a reliable tool for consumers to manage their debt, payday loans are still on the table as a good option for immediate cash needs. These short term loans are a great way for consumers to find extra money for emergency medical bills, car repairs or other surprise expenses. While credit cards may not work in all situations, payday loans are secondary funding options that prove their worth time and time again.

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Christmas this year may have to still be funded by cash advance loans. Though pessimists claim this is bad news, some new studies show that it may not be as bad as they think. The pessimist looks at data and claims that it’s a sign that things are not returning to normal. The recession is over, but its aftermath is weighing heavily on the economy. People who are still wary of using credit cards or do not have cash to spend, and are turning to payday loans. With all due respect to the pessimists, a recent survey has revealed a brighter side to the story.

The survey

In a recent survey, Context-Based Research Group and Carton D’Onofrio Partners were the two companies that held the survey found that 43% of Americans believe the recession forced them to make healthy changes to their financial habits. One analyst summarized the apparent feelings of citizens as “less work, but more time with family” and “less credit, but smaller spending.” These two sentiments also seem to be the most prevalent among those surveyed. It is somewhat surprising for analysts who believed that most consumers would be more negative about in their reflections about the recession and its affects.

The results

Contrary to analysts’ predictions, the survey had a lot of positive results. With people being more aware of their spending habits and learning that they really can get by with less, there is a there is a new resilience evidence among Americans. Carton D’Onofrio analyst Stephen Dobbs said, “People realized that a financial catastrophe can happen, and things can be difficult, but they have the power to maneuver…and when they come out of the problems, they are not as critically damaged financially as they thought they would be.”

Case in point

One family used cash advance loans to get them meet monthly obligations and surprise medical bills. As a result, they now believe that they “know how to budget, to make up for a shortfall with short term loans, and then get back on track quickly.” Though plenty of experts predicted that people would collapse under the financial pressure of the recession, relatively few did. Yes, many went through foreclosures, repossessions and credit issues, but in the aftermath there are resources available to help them recover more quickly. They also are more capable of handling problems now that the immediacy of the financial disaster has passed.

New consumer view

In the end it seems that most consumers have a new healthier view of managing their finances. They are more frugal and more vigilant, but they are also open to various methods of obtaining credit. For example, cash advance loans are now being used as a staple in many people’s budgeting, rather than as only an emergency option. This shows that people are more open to various alternatives of getting through difficult financial times. The recession has taught people that flexibility is key when maneuvering the tumultuous waters of managing money in a difficult economy.

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Americans are still keeping a tight hold on their cash.

Warren Buffet seems to believe that, despite what other experts are saying, consumers won’t find debt relief any time in the near future.

“Everything I see about the economy is that we have had no bounce,” says Buffet. “There were a lot of excesses to be wrung out and that process is still underway and it looks to me that it will be underway for quite a while. In the annual report I said that that economy would be in shambles this year and probably well beyond, and I think that is true.”

Buffet claims the biggest contributor to the lagging economy will be unemployment. Buffet believes that this unemployment spike will continue to “depress consumer demand for everything from energy to cars and homes.” Unfortunately, much of the economy’s turnaround is dependent on consumers getting back into spending. The signs are showing that this is unlikely to happen.

The economic turnaround

Ben Bernanke, chairman of the Federal Reserve, has cited nascent signs of economic recovery abounding throughout the market. He has been a strong proponent of consumer anticipation of better times on the horizon. However, Buffet’s argument is based on some telling facts about the market. The decline in home building dashed many hopes that the economy and credit industry turned around enough to once again push people to start buying big ticket items.

Buffet claims that debt relief for the masses is a long way off because of the seemingly unstoppable unemployment rate. “It looks like we’re going to need more medicine, not less,” he stated recently, implying that the country will need a second stimulus if it is ever to recover.

Cautions for the future

Despite some changes and government intercession, Buffet claims that more is needed. He also believes that the stimulus and programs the government has already introduced will impact the economy in adverse ways. “We have done things that raise the probability of high rates of inflation at some point,” he added. He stated that some of the government’s movements have been necessary, but could push the value of cash to record lows.

People’s futures

So people are left to wait it out and see what results the stimulus really will bring. Many people have seen the fall of large corporations and bankruptcy filings by huge companies. They take this as signs that they must continue to be cautious about their own finances and make due, rather than go out and start buying again. However, everyone agrees that consumer buying is key to true economic resurgence. Without some confidence in the market, however, that buying seems to be an impossibility. Consumers are opting to do without rather than stretch their budgets in an unknown economy.

Despite Buffet’s words

Despite what Warren Buffet is professing to the public, people are going to have to make their own judgments on what their future holds. They will have to be vigilant with their finances to find debt relief and still be able to save for retirement, college and emergencies. In the end, only time will tell how well the economy will bounce back and what state it will be in once it does.

Businesses are still looking to short term loans as a way to fund debt. Debt has always been around and most likely, always will be. Just ask John Paulson—he’s a hedge fund manager in New York. Back in 2006 his company was like a lot of other investment companies. It was mired in debt with a reasonable amount of income. Its ROI was moderately healthy and its expenses were manageable. Then the recession hit.
While a lot of businesses had a sob story to tell after the recession, Paulson’s never did. Here are his company statistics: His company earned about $20 billion between 2007 and 2009 and he personally earned about $4 billion, which averaged out to $10 million daily. So what was his secret? While other businesses didn’t even make it through the recession, he found a gold mine.

Paulson’s secret

Part of Paulson’s secret was to predict the market correctly. At the onset of 2006 he theorized that the housing market was on the verge of a collapse so he started buying insurance. In fact, he spent more than $1 billion in 2006 to buy insurance on “risky mortgage investments.” That put him in a prime position to recoup his losses, and then some. In fact, one of his funds brought him more than a 500% return in 2006 alone. In retrospect, Paulson noted a few key lessons investors should stick to:

1.   Don’t rely on financial analysts and experts. Back in 2006 bankers were pushing people towards investing. Wall Street directed millions of people into the risky market, knowing full well it was dodgy at best. Paulson knew that analysts and experts were looking in the wrong direction for their indicators and went the opposite route with his investments.

2.  Be aware of debt markets. Paulson and his team knew there was going to be a market crash because they were closely watching smaller issues like the subprime-mortgage bond market. These “little” markets can indicate what’s coming in the near future and give some insight into what the next move should be. Real estate investors need to know what is going on in the short term loan market, the mortgage bond market and the stock price index to adequately predict where bigger chunks of the market are headed.

3.  Insurance works. Paulson used insurance to build his fortune. Although many investors were becoming more and more concerned about the market, few were proactive about managing their futures. That’s where Paulson’s team differed—they used insurance to protect their assets and investments. When the recession hit, they were not only protected, they were able to recoup any losses over and over again.

These are just some of the methods of managing investments. Paulson also noted that good old luck was a big factor to his success. Sure he did what he could, but did he really have any control over the big picture? Probably not, but he did learn to not “risk too much” on any one investment regardless of believing it to be a “sure fire” hit.

Lessons learned

The biggest lesson to learn when looking at John Paulson’s story is to think about investments with a combination of ingenuity, experience and research. For example, his company did its own research into short term loan popularity and subprime-mortgage bond market growth before making the decision to move forward with investments. They were well-versed on their own, so relying on industry experts and analysts wasn’t necessary. Paulson added, “We were never following. We never listened to anyone. We were proactively doing our own research and creating our own indicators to live and invest by…it all paid off in the end.”

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Online resources can provide financial education.

Our modern economy is extremely complex, and there are many ways that you can use your money beyond simply exchanging it for goods and services. In fact, learning about all the options and opportunities that are available can be an incredibly daunting task. However, taking the time to acquire a financial education can – and frequently does – pay very real, tangible rewards to those who go to the trouble.

Knowing how to use you money for maximum benefit and how to make it grow is truly one of the primary differentiating factors between successful people and others. The old maxim “knowledge is power” is fully applicable to money management regardless of your financial situation. Effective money management and taking advantage of the opportunities available can benefit people in any financial position, from someone making minimum wage to the extremely wealthy.

Where to look to get financial education

Many people get their first introduction to the concept of money management from school. Both high schools and colleges usually offer a wide array of courses that focus on various aspects of how the economy works and how you can both manage and invest your money to achieve desirable results. However, this is just an introduction to the concept. Students who go on to major in business or finance obviously learn a lot more about financial opportunities than other students do, but this is not the only way to acquire a financial education. Today there are many resources available to help anyone and everyone learn more about how money works and how to use your money more effectively, whether or not you have a background in business or finance. This is even more common today, in the current economic climate, where many people are looking for ways to make every dollar go further.

Government resources

There is an enormous number of government resources available to the general public that can help people learn about various aspects of money management as well as various opportunities and government programs that might be helpful. In fact, virtually every government agency – both federal and state – that deals with financial matters offer consumer tips and resources to the general public. There are so many resources available from the government that frequently they have to create special divisions that serve as a portal to educational resources. For example, the federal government has the U.S. Financial Literacy and Education Commission (mymoney.gov) that attempts to put many of the federal government’s education resources under a single umbrella. Further, if there are specific ideas or concerns – for example, taxes or securities – one can look at the websites of the government agency that oversees these topics and one is bound to find a lot of educational resources available.

Non-profit organizations

Beyond government resources, there are also many local, state, regional, and national level non-profit organizations that specialize in helping average Americans acquire financial literacy. Some of these focus on broad, general topics such as the National Endowment for Financial Education or the Foundation for Financial Planning. There are also many more specialized non-profits that help people learn more about particular aspects of financial literacy, such as issues related to buying a home or credit card debt. Almost every metropolitan area in the United States has one or more of these non-profit organizations and local ones are particularly helpful because they have a better understanding of local conditions and local opportunities that may not be available to people living elsewhere. Many of these non-profits have brick and mortar offices that you can visit and even run free – or inexpensive – classes and seminars for people wanting to learn more about effective money management.

Online resources

Both the government and non-profit organizations provide much of their information to the public via the Internet, but there are also many other resources to be found online. Many of these include free tools and resources that you can use to help make more prudent financial decisions, such as the famous mint.com. You can also find a lot of interactive resources online that you can use to get very specific information about various topics related to money management and prudent financial decision making. However, when looking online one has to be careful about the information that you find. There is a lot of mistaken, outdated, or outright false information online, so if you come across resources or advice that you would like to use, it is essential that you take the time to determine whether this material is valid or not.

Whether you are creating a brand new, home-based business or recreating it to make a fresh start or help with debt relief, there is always a lot of work to do. You need to do market research to see how your product or service will be received by the public.

There are a number of ways to do this, including telephone surveys or paper surveys. However, these tactics are becoming somewhat outdated, and they are time consuming considering the amount of response that is received. Taking this to the internet is a better idea.

Beginner’s Websites

Just putting a business online is a little more difficult than fixing an already existing one, especially if you don’t know how to create a web site. You can obtain free web site templates through WordPress from sites like TheBuckmaker.com, or you can purchase them and receive backup support included with the cost.

These come with instructions and tutorials to help. Web sites such as 4CreatingaWebsite.com supply you with all the information you need to create your web site, or you can hire inexpensive help from freelancer web sites such as eLance.com.

Business Blogs

If your business is based online, you already have a web site, but creating a blog to go along with it will drive more traffic to your site. Using search engine optimization to do this targets the specific market you want to draw to your site and blog. If you create fresh content for your blog every week that uses appropriate keywords with tags and titles, you can improve the traffic flow to your blog and potentially to your site.

Using Social Networking

If your business is based on the internet or you have just created a web site for your home based business, social network forums are a great tool. The most common ones right now are Twitter, Facebook and LinkedIn. All of these huge social networks create connections between people.

For a company, it is an opportunity to reach millions of people. To give you an example of how widely these are used, there are 14 million visitors to Twitter per month, and only half are actually registered users. By the end of this year, the number of registered users is expected to rise to 12 million.

Article Submissions

To direct more traffic to your site or blog, you can submit articles to directories. That way, people who have searched under a certain topic and have found these pieces will see them. The articles must be interesting and unique to keep the reader’s interest and entice them to visit your web site. You must be careful in the directories that you choose to submit articles to.

When you peruse the internet, you will find companies that promise 12,000 submissions, but not all of these will actually render you any benefit. There is more advantage to submitting articles to 500 directories that have thousands of visitors, then 12,000 directories that only have 100 viewers. You can find the very top article directories at FridayTrafficReport.com. To find information concerning determining the best directories, you can visit WebmasterWorld.com.

Link Directories

Link directories are sites where you can post your link, and people who are searching for related items can find it. The same rule applies to these as goes for the article directories. It is important to choose the right ones and to place your link in the right category.

For example, if you are opening a business selling souvenirs, then you can pick your link directory and post your link under gifts. There could be a number of categories to post your link so use your best judgment. The site, StrongestLinks.com has a list of directories that can help the search for the best link directories.

Links and Backlinks

These are created in a number of ways. There are three-way, two-way, and one-way links. The best of these is the one-way or the backlink. This means that a person has placed your link on their site and is recommending your site.

These are created by all of the above categories, and it is a way to dramatically increase the number of visitors to your site. It is also a good idea to have links on your site that lead to professional business or information web sites. This will add credibility to your service and reputation.

Growth in Internet Business Sales

If you can utilize these tools effectively, you will see your home-based business profits increase tremendously. Moving a business to the internet is now the norm. In 2005, there were almost 14 million small businesses online. Since then, these businesses have seen an average of 15 percent increase of sales per year. This means that in the last four years, that home-based business saw a 60 percent increase in sales.

Making Your Dream

Not all businesses have seen this and not all will, but it is certainly more than possible if marketing tools are used correctly. There are millions more businesses on the internet, and they are all trying to get a piece of that profit. It takes excellent marketing strategies to do this, but these tools will help.

Parents looking for some debt relief can find aid trough a tuition tax credit of up to $2,500. Part of Obama’s stimulus bill is the higher-education tax credit. The stimulus, signed into law in February, should hopefully help Americans who are financially struggling.

This particular tax credit aims to help parents who are paying for college tuition this year. One of the benefits of this credit is that it requires no additional paperwork or a hefty financial aid application. Students only need to file their tax returns on time to take advantage of it. Jackie Perlman, analyst for H & R Block stated, “This will definitely help people.”

Complicated tax code

Like all tax code, the tuition credit does come with some complexity. In return for sorting through its regulations, however is a “bigger and more inclusive [tuition credit] than previous higher-education tax credits, which were so complicated that more than a quarter of eligible taxpayers failed [to get them],” according to Perlman.

Those who were able to collect normally saw a return of about $900. This time around the $2,500 tuition credit promises to be much simpler to manage. Perlman stated, “Any professional tax preparer knows how to use the credit and parents filing themselves can still do it relatively easily.”

How the credit works

Perlman explained the rules by sorting out some of the details:

• Taxpayers can utilize the credit for a reduction of their 2009 taxes.
• The credit can be up to $2,500, and even if taxpayers owe no money, they can still get a credit of $1,000.
• The tuition credit covers tuition, fees and books that were paid for throughout the 2009 to 2010 school year.
• The tuition credit is available to undergraduates who are enrolled at least half-time.
• Taxpayers with $80,000 adjusted gross incomes or $160,000 jointly-filed incomes are eligible for the full tax credit.
• Taxpayers who earn more than $90,000 and $180,000, single and joint filers, respectively, do not qualify.
• Because the credit covers only tuition, fees and books, students who have scholarships or grants that cover these are ineligible.
• Students with any drug felony convictions are not eligible either.

In the end, the tax credit is useful to a wide variety of taxpayers who are seeking small ways of finding debt relief. They need to follow a few rules to take advantage of the credit. Taxpayers can claim 100 percent of the first $2,000 they spend on tuition, fees or books and 25 percent of the next $2,000 spent. For example, if a parent has a $4,000 expense for tuition, fees or books, they can take $2,500 off of their 2010 taxes. If they owe less than the $2,500, then the government will return 40 percent of “whatever extra credit they qualify for, up to a maximum of $1,000.”

Finding help with college

Parents should utilize every tool they can to help defray the costs of college. It’s standard practice that tuition, fees and books increase every year as colleges and universities try to manage their own debt in a difficult economy.

With potentially an additional $2,500 in tax credited money, consumers can find some debt relief to help with their budgets. It may take a professional to sort through the complete tax code, but in the end it is worth the added trouble.

Many businesses are looking to layoffs as a method of finding debt relief, but research is showing that this knee-jerk reaction to the economy isn’t always a good option. Peter Cappelli, director of the Center for Human Resources at Wharton School, stated, “It’s hard to save money if the jobs will be refilled within a year or so.”

The reality is that it costs to lay people off. There are severance costs, and unemployment insurance, not to mention possible litigation costs. In the end, there’s also the cost for rehiring and retraining replacement employees once the business gets going again. Here are some ways to cut back before resorting to layoffs.

New SBA programs

The Small Business Association is creating easier ways of procuring traditional loans by decreasing fees, increasing guarantees and changing eligibility requirements. A new program also was unveiled called the American Recovery Capital Loan Program, or ARC for short. It offers struggling small businesses loans if they can prove they have been profitable in prior non-recessionary years.

The purpose of these loans is to allow businesses to find debt relief by paying it down substantially. It also can be put toward freeing up money for other day-to-day expenses like payroll. Jonathan Swain, spokesman for the SBA, stated, “We estimate that we’ll be able to make about 10,000 ARC loans across the country. Based on the interest and the inquiries that we’ve been getting over the last several weeks, we do expect that these are dollars that will get out the door in a relatively short period of time.”

Shared work programs

Another way to avoid layoffs is using a shared work program. These are programs that offer partial unemployment benefits to employees whose schedules have been diminished. The Department of Labor estimates that Shared Work programs have prevented more than 75,000 workers from completely losing their jobs. Chief economist for the Labor Department Alexandre Mas stated, “When employers have to cut back, it provides an option for them so that when you have workers who have specialized skills” you don’t lose that knowledge.”

Each state can design their own rules for Shared Work programs. For example, in New York an employee’s work schedule can be cut by 20 to 60 percent to qualify for the program. They can collect benefits for up to 53 weeks. Pam Thayer of New Buffalo Shirt Factory stated, “Our business is seasonal, and we found when we did a generalized layoff, when we were ready to go full-bore production again it was very difficult to get our employees back.” Instead of laying off people, the company opts for the Shared Work program. A shared work program can also help employers find seasonal debt relief, without completely losing their workforce.

Furlough

A furlough is another strategy to avoid layoffs. A furlough is when employees are asked to take a week or more of unpaid time off to avoid layoffs. It can end up saving thousands of dollars in pay, freeing up money for other expenses.

A furlough, however, must be done under strict legal guidelines. Employees need to be notified in writing well in advance. There are also very different rules for salaried and hourly employees in terms of how furloughs work, so employers should check with an attorney. Employers can also check with the Fair Labor Standards Act for more information.

Layoffs aren’t an easy answer

Although layoffs sound simple, in the end they are not as cost-effective as an employer might hope. Employers should try other options to find debt relief prior to resorting to layoffs. Government assistance, Shared Work programs and furloughs are all options to look at.

A restaurant in New Orleans suggests "Foreclose on the Banks." Image from Flickr.

The media and Uncle Sam want us to believe that times are getting better and that we are crawling out of the recession. In fact, there are some economic indicators that the economy is starting to come around.

The last few weeks have provided an increase in consumer spending, a slight decline in the unemployment rate, and the Dow Jones even broke 10,000. However, this may not be enough of a change to get excited yet. There are major economic indicators that are not providing such positive results.

The high rate of foreclosure

The 3rd quarter of 2009 has seen a record number of homes in some stage of foreclosure. The total number of foreclosures for this period was 938,000 compared to 890,000 for the previous three months. It is estimated by RealtyTrac Inc. that the total number of foreclosures for 2009 will exceed the 3.5 million mark. This is up from 2.3 million for 2008.

Gradual increase in total foreclosures

The pattern for all of 2009 has pointed toward an ever increasing number of foreclosures. Each quarter this year has provided even more staggering numbers than the quarter before it. The first quarter ended with 803,489 which was an increase of 9 percent over the last quarter of 2008. This was followed by an increase of 10.5 percent in the summer months and a 5 percent increase the past quarter.

Total foreclosure filings

The indicated foreclosure rates include default papers, auction sale notices and repossessions. These numbers are being partly blamed on the unemployment rate that is at a 26-year high.

Another major factor of this rate is that housing prices have plummeted, and some homeowners are severely under water – meaning they owe more than their homes are worth. These combined factors can remove the incentive for homeowners to keep up with mortgage payments.

The Government’s solution

The Obama administration has implemented steps to try to curtail home foreclosures from plummeting even further out of control. These steps have been aimed at encouraging financial institutions to offer mortgage modifications to those homeowners that are distressed. One of these programs is Hope Now, an organization set up to assist with mortgage modification negotiations.

Obama announced the beginning of October that 500,000 homeowners have been assisted by the government’s mortgage relief effort. While this is certainly a milestone that should be recognized, this help has been provided to 500,000 distressed homeowners out of the over 2.5 million homeowners that have faced foreclosure so far in 2009. The problem is that the rate of new foreclosures exceeds the rate of those that have been assisted. “The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we’d all like” said Rick Sharga, RealtyTrac’s senior vice-president for marketing.

Some areas have seen improvement

While the National numbers are up the rate of foreclosures for some states are actually on a decline. New York has reported a drop in the amount of foreclosures for the third quarter of 2009. The overall numbers of foreclosures for the third quarter in New York were up 19 percent over the same period of the year before, but they are actually down 10 percent from the rate of the previous quarter.

Other states have seen signs of improvement as well. The first quarter of the year, California and Florida had the highest number of foreclosures. As of the third quarter they are ranked third and fourth with Nevada topping off the list.

September’s foreclosure rates are lower

RealtyTrac reported that the number of foreclosures nationwide for September were 344,000 down 4 percent from a month earlier. However, this number is still the third-highest month since the report started in early 2005. It was also the seventh straight month in which more than 300,000 properties filed foreclosure. These numbers may imply that the peak has been reached and the turn-around is slowly beginning. Only the rest of the year will indicate if this trend continues.

Debt relief is a hot topic in today’s recession. Many consumers are searching to find extra money for savings, bills and personal expenses. They also are seeking ways to fund retirement, college and other large expenses that will require thousands of dollars. Due to the recession, however, there are many changes in business’s dealings with their employees and how they are able to help them manage their finances.

Changes in the 401(k)

One surefire way to plan for retirement has always been company-matched 401(k) retirement savings accounts. They are tax free, up to a level, and have proven to be a great way to store away money, little by little. Unfortunately, the recession’s aftermath has changed the way employers handle this account.

New research is showing that, in an effort to save money, 25 percent of U.S. employers are either eliminating or ending matching contributions to employee 401(k)s. According to a study done by Charles Schwab Corp, an additional 25 percent of employers are also planning on utilizing a “limited enrollment” plan, rather than the standard open savings plans available to all employees. Steve Anderson, director of the retirement division of Charles Schwab, stated, “Most view this as a temporary step. They don’t see that as a long-term approach.”

Research on 401(k)s

According to research done by Charles Schwab, consumers are looking at their 401(k) as their primary debt relief tool as they retire. They also said that their most valuable feature was the company’s matching contribution. If this contribution is eliminated, even if for just a period of time, they would consider other methods of saving for their futures. Anderson added, “Although companies are using the method of scaling back 401(k) contributions temporarily, many workers are interpreting this as a tactic their company may utilize at any time in the future.”

Another result of cutting into the 401(k) as a money-saving tool is companies are losing employee trust and loyalty. Of the 107 human resource and 112 senior finance executives polled, 63 percent said that added worries about their retirement savings were “creating a more difficult work environment.” Lonnie Richardson, financial analyst, stated, “It’s hard to work for a company for 20 years, build up a trust and then have them threaten your retirement security. …I’m not saying they purposefully did it, but just knowing it is an option makes it hard to rely on them for my family’s future. Now they are saying ‘We’ll contribute to your retirement if we can.’ That’s a lot for me to stomach.”

Consumers have to be proactive

Despite the Charles Schwab study, many consumers are still looking positively at the 401(k). They are mostly realistic and understanding. Charles Avery of Glenbrook Massachusetts is one of the many workers for a company that discontinued the 401(k) contribution. He believes that it’s a necessary action. “For my company to stay afloat they cut everything … some pay, some workers, contributions. …I’d rather have to deal with that than have the company fold and have to start over job-wise. Plus I can always get a second job to create more savings for retirement in the meantime.”

Avery is like many Americans who are proactively working to solidify their financial futures. Many people will have to do the same, as businesses are still wading through the murky waters of the recession. To handle bills, find debt relief and still manage to save is going to be difficult, but not an impossible task.

In uncertainty, sometimes what we need is something like short term loans to hit us on the nose. (Photo: flickr.com)

Many people are turning to short term loans in order to get through unexpected expenses. The world is a very confusing place. It’s impossible to estimate exactly how much you will have to spend each month. There are all sorts of problems which could result in costing you more than you have budgeted. If your car breaks down, then a payday loan could help to tide you over until you actually get paid.

No Need for a Credit Check

Short term loans are provided as a form of cash advance. This means that you can get some of the money from your job before you actually get paid. Taking out one of these loans is very easy because it shouldn’t require the use of a credit check. Few people enjoy credit checks; they are horrible for everyone concerned. Being told that you can’t have something because your credit score is too low is terrible. As long as you or your partner is currently employed and has a regular monthly income, then it should be possible to take out a short term loan very easily.

Cash Flow

Most people will get paid monthly or sometimes weekly. This means that you will have a long time without any income. If there are any unexpected expenses during the time when you are not paid, then you may struggle to make your payments. Short term loans can provide you with some of the money from your paycheck before you actually get paid. Using a fast short term loan can ensure that you get the money you so desperately need as quickly as possible.

Make Ends Meet

Most people only make just enough money to survive each month. They are just managing to make ends meet and that’s why any unexpected expenses can quite easily push you over the edge. Quite often you will spend your entire salary very quickly and then wait the rest of your time for your next paycheck.

Secured or Unsecured

Most other types of loans are secured against something; this could be your car or property. Fast Payday loans are an example of an unsecured loan. This means that the lender assesses how much they can lend you by listening to the information you tell them. There is no need for property valuations to be carried out. Because the loans are unsecured, you will be limited to how much you can borrow. Once you have built up some goodwill with the lender, then it may be possible to borrow more.

Who Qualifies?

If you’re interested in short term loans, then you will want to know who qualifies. Most people qualify for these loans. Normally speaking, anyone who is employed or has a regular income can apply for these loans. You also need to be over 18 years old and have a bank account. Depending on the loan company, you might also need a check book to write a post dated check. You will simply write a check with the date when you get paid; this is how the lender will be repaid.

To apply for short term loans, click here!

Couples need to make debt relief a priority discussion when considering marriage. A new national survey for Fidelity Investments is showing some interesting results. Many couples aren’t in agreement on basic financial issues and don’t even discuss finances in any depth. Here are some of the topics those questioned stated they didn’t cover with their significant other:

• When is each person planning on retiring?
• How much money do they need to save to retire on time?
• What types of debt will be considered priorities to pay off?
• How much insurance coverage is each expecting to have?
• What budget will they follow and for how long?

Oddly enough the same poll was given two years ago and there has been a general decline in communication, although the economy has drastically turned for the worse. For example, two years ago 79percent of couples stated they didn’t agree on retirement plans, including the time to retire or if they would continue to work after retirement.  This year’s survey showed that same number is up to 82 percent. Other numbers in the most recent survey follow suit.

An expert predicted the results

Nicholas Yrizarry, a financial adviser in Virginia, stated that he thinks the results of the most recent survey are accurate and logical. His belief is that the recession has pushed people to focus on “putting out fires, dealing with debt relief, worrying about interest rates, credit card debt, over-mortgaged homes and job insecurity.”

Although reason suggests they should be making financial discussions a priority, most aren’t. Yrizarry added, “You’d think it should raise some eyebrows, and they would say we’d better start thinking about this, but actually they just shelve it even further, defer the inevitable.”

The survey

The 2009 survey shows that only  45 percent of couples make decisions together on daily household management of finances like budgeting and expense payments.  The norm is for one person to take the helm at finances.  Amy Gunnerson of Pittsburgh, Penn., a agreed with her husband that she would pay bills. “My husband doesn’t want a part in the daily decision making. He’d rather focus on work, while I decide what the priorities are. …It works for us.”

President of Barber Financial Dean Barber said this is typical of families because normally one spouse is “adamant” about finances while the other “really could care less. … It makes it very difficult, though, and puts a lot of stress on a marriage.” Experts agree that this isn’t the most beneficial way to handle life because when one person has different expectations, there could be potential problems.   Also, if the family dynamic changes, say with divorce or death, the financially passive spouse is left in the dark.

Discussions about retirement are also put on hold by 62 percent of couples.  Again, this could potentially cause problems if one plans on retiring early, but there aren’t enough finances to maintain their lifestyles.  Financial Planner David Summerhill of Summerhill & Franke stated, “Retirement planning isn’t just about an amount of money. It’s about having an age when the retirement is going to happen for each person, having a plan to make it happen and having a contingency plan if it doesn’t.”

Financial discussions

One of the most surprising results of this year’s survey is that only 15 percent of all couples believe they could handle full responsibility for household finances if necessary.  With these kinds of numbers it’s imperative couples begin having dialogues about finances.  Retirement planning, debt relief, savings goals and investing options are all topics that need to be discussed and decided up on periodically throughout a marriage.

(Photo courtesy of wikimedia.org)

Analysts and political pundits are watching closely to see how the economic stimulus package affects consumer debt relief and the unemployment rate. The $767 billion stimulus plan Obama unveiled promised to do a lot of good for the struggling economy.

One of the main pledges was the creation of 3.5 million new jobs by the end of next year. The focus on job creation, Obama maintained, would help consumers find debt relief and in the recession, this would be the best way to invigorate the market.

What the critics say

Many critics say that Obama’s stimulus plan and promise to create jobs are unrealistic. Newt Gingrich calls Obama’s constant reference to creating jobs “meaningless metric.” Tony Fratto, former spokesman for former president George W. Bush, said Obama’s intent is nothing more than a political trick.

Economic assumptions

At the heart of Obama’s job creation formula are the following two economic assumptions:

Assumption No. 1: Every dollar spent by the government trickles down through the economy, creating a greater effective value. For example, if the government funds the building of a highway, it channels money to contractors. The contractors pay workers, who then pay rent or mortgages and buy food and other goods and services. Landlords, banks, grocers, and movie theaters, in turn, enjoy increased revenues. The government estimates that every $1 it injects into the economy will have a $1.50 effect, overall.

Asumption No. 2: For every 1% increase in the economy, approximately 1 million jobs are created.  Reinvigorating the economy by about 3.5%, which will achieve the goal of 3.5 million additional jobs.

The job creation plan assumes that savoir-faire politicians can literally estimate the creation of 3.5 billion jobs, and then extrapolate further to make debt relief approximations.

Mathematical flaws

Critics believe that Obama’s math is flawed because his assumptions are wrong. In reality, they say, cutting $250 billion in taxes might create more jobs, while spending $500 billion might create fewer jobs. One critic stated, “Think of Obama’s formula as reliable as a weather forecast. Obama is using it like a thermometer.”

Christina Romer, chairwoman of the Council of Economic Advisers, who also helped to create the formula, stated that it was always intended as a prediction. To get a real number, specific numbers have to be entered such as unemployment figures, manufacturing rates, building and construction data, and county-specific job reporting. She added, “Once we’ve spent the money, we can’t just assume the model was right. The proof is going to be whether or not the overall economy recovers.”

Time will tell

The question remains whether or not Obama’s job creation promise — and concomitant consumer debt relief — is valid. With the unemployment rate expected to continue increasing in the near future, it’s difficult to say whether or not the promise of new jobs will be fulfilled. Experts agree, however, that the Obama administration’s superficial usage of the formula is not what its creators intended. Only time will tell if the stimulus plan will bring the much-needed job reinvigoration the American public is hoping for.

In an effort to attract new customers, banks are starting to help consumers with debt relief.  If you do an online search for “banks and deals,” you’ll surely find a wide variety of choices.

Banks are now realizing that to bring customers in, they need to  view the economy from the consumer’s point of view. Potential customers are wary about investing due to the recession, but saving is still a primary concern.  To capitalize on this, many banks are advertising specials that truly have a customer focus.  Here are some of the advantages you can find as reported by Bankrate.com and Money-rates.com.

Reward cards

A reward card can bring you as much as a 6 percent return by opening the account.  With these types of cards there are some rules to follow. First of all, you’ll need to make a certain number of debit purchases per month.  You’ll probably have to sign up for direct deposit and your transactions will be paperless.  If you fail to meet the requirements, though, you’re limit could drop to 0.5 percent, but if you can heed them, there are considerable savings involved.

The top three reward cards currently available are:

• Southern Missouri Bank. This bank offers an APY of 6.01 percent if you set up direct deposit and make at least 12 debit card transactions a month.   You can also hold a balance of up to $25,000 and still get this rate.
• Kansas State Bank. This bank offers the same APY, but you only have to make 10 debit card transactions monthly.  You have to sign up for direct deposit and must be an active online-user at least once a month.  This type of account also has a $25,000 cap.
• Rocky Mountain Bank. Again, this bank offers the same APY, but there is no requirement for debit charges.  You have to sign up for direct deposit and the deposit cap is $25,000.

Rewards cards can be very useful if you are an online user and frequent debit-card user.  It isn’t difficult to find these types of cards with a large returns that help to maximize your savings.  The extra money can help you find debt relief quicker.

Bonuses

Many banks are offering lucrative sign-up bonuses to new customers.  One tip for finding them is to look to your community banks rather than huge nationwide names.  Many smaller local banks are extending great savings to the public to lure new customers.  Here are some banks offering bonus programs to new customers:

• Wainright Bank and Trust in Boston offers a $200 savings bond for any new customer who opens an account with an initial deposit of $10 or more.  You will have to maintain a $500 balance, however, to avoid monthly fees.
• Citibank is offering a $25 bonus on their Ultimate Savings Account with $1,000.  It comes with an APY of 2.1percent, but you have to keep your balance for a minimum of 3 months to get the bonus.
• HSBC is offering bonuses of $25 to $75, depending on the plan you choose.  For a minimum $1,500 deposit, you will get you the higher bonus and you have to maintain a $15,000 combined HSBC account balance.  With a $500 deposit and maintaining a $1,500 combined balance you can earn the $25 bonus.

Online-only savings

Going online is still one of the easiest ways to find deals when it comes to banking.

GMAC is offering an APY of 2.65 percent for accounts opened online. The minimum deposit is $1, and there are no minimum balances or service fees.

Beverly National Bank Online is offering an APY of 2.6 percent for $5,000 minimum deposits.  You must maintain the $5,000 minimum to avoid monthly fees.

Heartland Bank Direct is offering an APY of 2.55 percent  on minimum deposits of $500. Again, there are  no minimum balances or monthly fees if you maintain the $500 balance.

Consumer savings

Consumers are looking for additional savings to help with debt relief. The recession depleted savings, stretched budgets and left people in an overall state of fear.  Fortunately there are banks that are providing beneficial services that will help you to increase savings quicker.

Would it be smart to lease a SmartCar? Image from Flikr.

Many consumers are using personal loans to fund car leasing. But do they really understand the terms?  It’s important to understand what car leasing is, as opposed to purchasing.

Leasing a car is to buying a car what renting an apartment is to owning a property.  For a certain period of time — two, four, even five years — the customer will make payments to use the car, but never own it throughout the leasing period. There can be an option to buy the car at the end of the lease, but this needs to be understood clearly by the potential buyer.

Deciding factors

The length of the lease is very important.  Normally a car lease will last anywhere from 24 to 60 months, and that adds up to a large amount of money. Be sure to calculate out how much money is actually going to go into this vehicle and whether it’s worth it to lease instead of buy.

Also, consumers should know how many miles they are going to put on the car on average.  Companies can offer low-mile leases, standard-mile leases and high-mile leases.  Customers need to be pretty accurate when it comes to estimating how many miles they anticipate using because overages can come with heavy charges.

Normally companies charge anywhere from 7-10¢ per mile over the limit. While this doesn’t sound like much, the charges can add up to significant amounts if the overage is substantial.  For example, a low-mile lease will have a lower payment, but the mileage will be limited.  In the end, if a customer opts for this type of lease but then goes over on mileage, any savings they would have had can quickly be eaten up by the extra mile charges.  Be careful when estimating the amount of mileage used and be sure to include miles to work and back and recreational time driving into the total.

Other laws to be aware of

Any leasing company should give a detailed, written statement that cites the total consumers will be paying.  This document should cover any down payment information, registration fees and security deposits. Customers need to be sure to have a specific total so they can apply for personal loan that covers the complete amount.

Another law is that the leasing office must tell the consumer what insurance requirements are for the vehicle. Again, this amount needs to be factored into the loan amount the customer applies for.  There are also warranties to understand. Consumers need to ask about the warranty and find out exactly what it covers, and what it doesn’t cover.  They need to know who is responsible for servicing the vehicle in different scenarios.

There will also be a wear-and-tear assessment to understand. This is how a consumer knows the acceptable amount of damage the vehicle will be returned with.  Companies know that cars have normal  wear and tear issues, but they need to specify what the stipulations are.  The law states that wear and tear must be “reasonable”, but it’s up to the consumer to understand what the leasing company’s definition of reasonable is.

Car leasing made simple

Car leasing can be a solution for people who opt to not purchase.  If drivers are able to calculate how much they drive and want to change cars frequently, leasing maybe the most viable option.

Consumers have to be aware, though, that estimating the full payments is a detailed process.  If they are using a personal loan to fund the cost, this is particularly important. Leasing a car can be beneficial to drivers if they are detail-oriented and precise with  estimating cost and mileage.

Get your Personal Loans HERE!

Barack Obama touts health care everywhere he goes. Image from Wikimedia.

Many consumers are struggling with debt relief because of the huge cost of health care.  Congress has taken the cause up as one of its most pertinent issues to sort out, and President Obama is targeting it as a strong focus throughout his presidency.

Although the topic is much cause for debate among congressional leaders and experts, they all agree that at the center of the issue lies the average health care provider.

Patient-centered medical home

The health care industry has introduced a new term: “patient-centered medical home.”  This refers to the primary location for doctors to care for their patients, normally the doctor’s office.

At a patient-centered medical home, doctors would offer services ranging from flu shots to the management of chronic diseases. They would use the patient-centered medical home as a hub to coordinate care with nurses, pharmacists and specialists.  A study showed that if every patient had a central location for their health care needs, the resulting efficiency could reduce health care costs by 5.6 percent, or $67 billion annually, which would be a possible solution to debt relief for the industry.

The current doctor’s office

Today’s doctor’s office is a far cry from the optimum patient-centered medical home of the future. Research shows that the average patient spends just more than 7 minutes with their primary care physician, who gives superficial answers that focus on symptoms. Often times doctors send patients to chronic care specialists unnecessarily.  Many of these chronic ailments could be managed by the physician if he or she were willing to spend more time with the patient.

Another issue to address is the inefficiency of emergency rooms. Often  patients rush to emergency rooms for immediate care when their physician could realistically handle the issue.  Again, it becomes an issue of time and individualized care by doctors.

Reform

The patient-centered medical home is reminiscent of the “gatekeeper” model of the 1990s. Managed-care was set in motion with the primary goal of managing costs.  Today’s model has a new focus: patient care.  Experts are touting that with new digital technologies to help, it is easier than ever for true health care industry reform to happen.

Health care today is known to be “disorganized and wasteful”, according to Dr. Paul H. Grundy, health-care transformationalist for IBM.  He also noted that health care eats up almost 18 percent of the U.S. gross domestic product.  Most of the cost is shouldered by the private sector, that covers about 60 percent of the nation’s insured consumers. Grundy added that “employers can drive the medical-home idea as buyers of care.”  He believes that IBM’s Patient-Centered Primary Care Collaborative, a coalition of more than 500 employers, insurers, consumer groups and doctors, can help to transform the industry as a whole and spur debt relief for the consumer.

There are also four large medical societies endorsing the medical-home concept, and beta programs are currently running in several states.  President Obama is also looking to the idea, saying that any health-care initiative should “encourage and provide appropriate payment for providers who implement the medical-home model.”

The optimum model

In Newport, Va., Dr. Peter Anderson is using the medical-home model. One example is his recent patient, 72-year old Gretchen Parker. Parker was diagnosed with diabetes last year and rather than put her on immediate insulin shots or medications, Dr. Anderson took a model approach.

He developed a plan for Parker to lose 55 pounds through diet and exercise. His team worked with her to best model a new lifestyle for the patient. Her blood sugar is now back to normal. This is an example of how the future of health care is going to be developed.

Health care

In the end, physicians are the key to reforming health care.  Though the model involves more detailed care and more time, the resulting efficiencies will be well worth it. If the health care industry can scale back costs and help employers, consumers, insurers and physicians find debt relief, then the changes will be well received.

Experts are estimating that mortgage loan modification will help millions of Americans by the end of the recession but how does it affect credit repair, credit score and overall financial long-term viability? Consumers are concerned with the long-term effects of loan modification. This includes what tax implications are pending because of modifications. These concerns are appropriate in a time of economic uncertainty, where Americans are struggling to gain a footing on their personal finances.

Refinancing and its long term affects on credit score

In general a refinance should not affect a credit score. In general terms, a refinance is merely the same mortgage, only reworked to fit the customer’s changed needs. This holds true especially for homeowners refinancing under the federal program because one term of eligibility is that the person may not have missed a payment within the previous 12-month period. Norm Magnuson of the Consumer Date Industry Association warned that, “it is unclear what impact a federal loan modification will have on credit profiles…regulators have not yet determined how the loan modifications will be reported, if at all.”

Applying for a loan modification under the “Making Home Affordable” however, means that the homeowner already missed payments, and already hurt their credit health. In the long run, this program will help them get back on track, thus creating a positive payment history. This will help the credit score, long term.

Tax implications

The charges involved in mortgage refinancing are tax deductible. The appraisal fees and attorney costs are not. The total of charges that are deductible should be evenly divided and deducted over the entire life of the mortgage and not just taken as an upfront credit. Homeowners also have to be ready to adjust mortgage interest deductions if their mortgage interest rate goes down. This also will affect the deductions available.

Credit repair

Credit repair is a hot topic with so many Americans going through financial hardships during the recession. Squaring away a manageable mortgage payment can do immeasurable good to a credit score. After a few months of positive reporting due to payments on time, consumers should see their credit score moving upward slowly and be able to reap the benefits of their hard work.

Mortgage refinance or modification alone

Many homeowners are looking to save the added cost of a mortgage loan modification by doing the negotiating themselves. Experts say that this is a viable option if the homeowner is not eligible for a federal program. They need to be ready with documentation and the proper paperwork to assure their lender they are truly wanting to change their payment history, and have a way of getting back on track.

Government officials are warning people however, about programs that are reaching out to do negotiations for consumers under the guise of “loan modification specialists.” Many of these programs are fraudulent and charge consumers between $1,000 to $3,000 for their efforts. In the end, government-approved counselors are available to consumers and ready to aid them through mortgage difficulties, for free.

The recession’s aftermath

Credit repair, credit score and taxing after the recession is difficult to predict. Almost all analysts agree that credit will follow along the course of the economy, by stabilizing and gradually improving over the coming months. Tax benefits may, or may not, help the consumer depending on a variety of factors. In the end, though the upswing to the economy is a long-anticipated benefit that everyone is looking forward to.

Installment loans are remaining staples in budgeting as the economy struggles. One indicator of how the economy is doing can be seen by watching the auto industry. On average, Americans purchased 16 million cars yearly for the past decade. In 2009 the projection is that only 10 million will be sold. The big car manufacturers are all suffering. Here are some startling statistics on two auto manufacturers alone: Chrysler filed for bankruptcy and GM is cutting 2,600 dealers and eliminating or selling Pontiac, Hummer, Saturn and Saab. With these two industry giants struggling, it’s no wonder the American public is flailing for help through the economy.

There are some basic policies car manufacturers have to come to terms with should they turn their industry around.

1. In the past, car sales grew faster than the population. This is because urban sprawl brought the need for 2 vehicles per household. Now those numbers are evening out because the US can’t keep at that pace forever. It’s estimated there are 200 million drivers on the road and already 250 million cars in American driveways. It’s foolish to think that the sales of cars will remain the same, especially because of the disparity.
2. A lot of the past popularity with car sales can be attributed to the “keeping up with the Joneses” mentality. Urban sprawl also brought about competition between neighbors. With a driveway a few feet away, many urbanites wanted to have the same, or better, vehicle than people next to them. It’s foolish to think this will last, particularly in a recessive economy. People everywhere are in financial straits and a new car is the last thing they are looking to purchase.
3. The car business has been on a decline since the 60s. In particular the profit and loss statements of GM from 2005-2007 were all in the red. Most revenues come from lending, and not from manufacturing or sales of vehicles. It’s beneficial to take a good honest look at the numbers and realize that with the number of cars being manufactured, a loss is sure to be a reality sooner or later.

When industry giants are facing bankruptcy, it’s no wonder that the American public is under the same financial strains. Some consumers are relying on family loans, installment loans or credit cards to get them through to the next payday.

The future

So what does the auto industry’s future hold? No one knows for sure, but it seems like the cars that are truly holding on in sales are small, efficient cars and hybrids. People also are keeping their cars for longer periods of time. In 2000 people kept their cars on average for just 39 months. Recent years have shown that people are now keeping their vehicles for more than 50. Janice Ianne of Maplewood Minnesota stated, “We used to love buying a new car every two years, for both me and my husband. Now that’s a long-gone luxury we just can’t afford.” Ianne is not alone as most Americans are following suit, preferring to repair sturdy cars than purchase new ones.

Evolution

Hopefully the auto industry will move through an evolution where only the strongest survive and in the end, flourish. Until then, it’s up to the American people to continue their reliance on wise decision-making policies, additional funding such as installment loans, and each other for solace.

College graduates see the affects of the recession and are trying to tackle debt relief early on. Recent graduates know that high-paying jobs are few and competition for them is fierce. They are seeing their parents struggle, as a result of the economy and are trying to set themselves up for financial success as soon as possible.

First steps

The first step for college graduates is to get on a good budget. While high-paying jobs are not a certainty regardless of the type of degree a student has, jobs are available. Using a good job search tool can help find the right position and maximize income. Once a job is secured, graduates know how much they have to work with monthly. Questions need to be answered:

• Are entry-level workers going to get an apartment?
• Are workers going to live with parents until some savings are acquired?
• What tactics are available to save money, i.e. public transportation, coupon usage or getting a roommate?
• What additional expenses are going to be involved in the chosen lifestyle?

These questions will give graduates some knowledge on what their budgets are going to look like. For example, if they spend $850 on rent, but heat and water are included, and a roommate is found, that is going to cut back drastically on expenses. If they can use public transportation to get to and from work, that cuts back on gas usage and wear and tear on a vehicle. It’s these types of small changes in expenses that are going to increase net income.

Debt relief

Most college students are going to have to face student loans once they are employed. Student loans can take a substantial amount out of income. Care should be put into taking the expense into account and if possible, paying it down quicker than scheduled. Paying college loans down will save money in the long run. If payments for student loans are too high, there are debt consolidators who can help to negotiate payments down. The important thing to handle debt relief is to be consistent. Consistent payments over a period of time will pay down debt and increase credit ratings. New workers need to use these tools to their advantage from the beginning of their adult life.

Credit card traps for young people

It’s no secret that young people are being targeted by credit card companies. These companies know that college-aged students are their future client base and they are using aggressive tactics to woo them. Some banks are advertising credit cards at college events such as sporting games, dances and club-meetings. College students who have already opened cards need to be wary of usage as they move into employment. It’s too easy to rely on credit cards to make payments, and then overcharge. Credit card companies are using small infractions of rules to charge customers huge fees and hike interest rates, in an effort to increase their revenues. The newly employed need to be aware of these tactics and use credit sparingly.

The future of entry-level workers

The financial future of entry level workers is in their hands. Wise decisions on how to find debt relief, fund retirement as soon as possible and create savings can mean the difference between moderate and exceptional financial growth.

Cash advance loans may have to aid consumers a bit longer since credit card companies are limiting borrowing drastically. According to the AP, “Consumer borrowing plunged in March at the fastest pace in 18 years as Americans put away their credit cards and hoarded cash amid the worst recession in decades.” The Federal Reserve showed that borrowing dropped 5.2% in March, which is the biggest dip since the fall of 1990. In dollars and cents, that means that borrowing is down by approximately $11.1 billion, a drop that hasn’t been seen since 1943.

In response to the recession, the personal savings rate moved up 4.2%. What this tells analysts is that people are spending less and trying desperately to replenish their savings. Consumer spending fell 0.2%. This wouldn’t be so bad if the country weren’t in a recession that needs to be refueled. Consumer spending accounts for approximately 70% of overall economic activity.

The stimulus

Most consumers are waiting the recession out cautiously, hoping the $787 billion stimulus program will work its way through the economy and bring about economic growth. Unfortunately, they are not spending, the very action that could bring the economy to an end sooner. Most consumers are focusing on other things. Anne Radman of Nashville, Tennessee stated, “We don’t have money to spend right now. We are using all our extra money on bills and paying off our credit cards.” Radman is not alone, because many consumers are overwhelmed with bills. They are using cash advance loans like never before. They are penny-pinching like their parents did. They are finding new ways of saving money. Although much of the recession depends on Americans buying again, it doesn’t seem like this will be happening in the near future.

What the experts predict

Most economists predict that Obama’s stimulus of $787 billion is truly what will have to turn the economy around. The stimulus and tax incentives, along with increased government spending will need to boost the market. Many people are being cautious right now making spending the last thing on their minds. The overall attitude is “wait and see” what the government has to offer in terms of solutions to the economy’s problems. This is why a true change is predicted to occur around the end of 2009. By this time, people will have enough time to see how things change and slowly work spending back into their budgets. It also will give people time to see how credit cards will once again be useful to them. This cautious attitude may hamper the economy from immediate growth spurts, but it most likely will be the way people work their way back into normal spending habits.

The good news

The good news is that many retail outlets performed above expectations this past March. Stores like Wal-Mart, T.J. Max and TJX Cos. Inc., all reported sales that were well above projections. Granted revenues were still down due to debt, but it’s a good start to see people slowly putting their money back into the economy. Although some are still relying on cash advances and family lending for funding, people are anticipating getting back to where they were prior to the recession.

Businesses and schools are shutting their doors and forcing some people to seek refuge in unsecured personal loans to overcome the loss of income. Are the scares real or are they media-induced? Is it really necessary to shut down businesses and schools and create income losses for many people? The question is one about which many people have differing opinions—some feel the heat of the scare while others believe it is no worse than any other strain of flu. The problem lies in the fact that not everyone thinks the same way and as such, many are feeling the financial burden of losing time from work because of a fear of a pandemic.

The fear creates unnecessary needs

The fear of a pandemic of swine flu creates unnecessary needs for containment. Certainly there is the need to protect oneself from becoming infected but to create a global fear is not the solution to the problem. The solution is to educate each person so that they know how to make sure they are safe from any kind of infection. Following simple rules we have learned all of our lives will protect us better than running scared and closing schools and businesses. That doesn’t mean if we know there are germs inside we shouldn’t contain them but to put people out of work and students out of school for a week or more is excessive. Of course, it creates more business for some sectors of the industry, such as hand sanitizers, but it also generates more debt for the consumers who are faced with having to borrow money to subsidize lost days at work.

Choose the path that is right for your circumstances

The loss of work hours are more financially draining to some people than others. Although the thought of using unsecured personal loans to help you through a financial crisis is appealing, you have to keep in mind that the loan will still be there when all of the threats of a pandemic of swine flu are finished. The loss of income is temporary but the terms of the loan are permanent, so you want to ascertain there is no other way to work through the situation and you will have the financial resources to repay the loan when you return to work.

Avoid taking unnecessary financial risks

With the threat of a pandemic of swine flu on top of an already depressed economy, you want to analyze your situation carefully before you make any moves. That is not to discourage the use of unsecured personal loans but rather to advise each person to avoid borrowing more than they need in order to come through this part of the crisis. There will always be financial setbacks but you want to make sure you allow yourself some leverage to help you with ordinary daily situations. Exercise caution when borrowing money so you don’t take on more debt than you can handle.

In the financial climate of the last year, rapid payday loans have become the supplement of choice for many households. Ben Stein describes the financial events as being a “terrifying ride.” He also indicated that there may have been some valuable lessons learned from it. A careful perusal of the his statements that followed would no doubt offer the teachable student some excellent advice on what areas to cut back in to protect what assets are still profitable, and on how to look into the financial future and avoid making the same mistakes of the past.

However, there are some other interesting observations. For instance, the past several months have helped many average Americans identify alternative sources of income. Sources not necessarily located around the corner in the glass-faced high-rise that houses the local bank. For many Americans trying to survive the financial crunch while having their banker meet them at the door of the lending institution shaking his head no before they could even apply, a rapid payday loan has proven to be their only savior.

Looking around us

While the business landscape is littered with the financially dead and dying, there are some signs that the markets are bracing back up. This in no way implies that our woes are over. In fact, the analysts who are finally talking once again of a stabilizing of the economy are also being careful to maintain that we have a long ways to go to be out of the woods.

They remind us that the GM crisis is far from over, that Chrysler has not yet shown any promise of recovery, and that many lending institutions are still feeling the aftershocks of the adjustable rate mortgage disaster. This is the world that the average, middle class family is trying to survive in. Although the markets may be beginning to stabilize, the American family may find the occasional rapid payday loan to continue to be their source of deliverance from the big bad wolf of debt.

Looking ahead of us

After the mistakes of the past have been studied, and the current resulting crisis has been analyzed, the future must be planned for. How will the majority of the working class today plan for tomorrow? There are things like Social Security Benefits, 401K’s, IRA’s, Retirement Pension Funds, Insurance packages, etc. All these tools are in the box of the average person planning for those difficult days of a fixed income.

The individuals must ask themselves questions like, “am I putting away enough of my income so that I can profitably buy into some type of a retirement program?” or, and this is a more important question to ask one’s self at the outset-“How much can I afford to lay aside for retirement?”

The answers to these questions and perhaps others will once again turn the eyes of the asker toward a rapid payday loan. It may prove to be the only way to jump start the retirement savings plan while keeping the money available to handle other bills and necessities.

For the first time, senior Americans are looking to short term loans as an option to pay for health care costs. The AP reported that Social Security and Medicare are quickly decreasing in funds as a result of the recession, making their collapse sooner than previously predicted. For the first time in 2008, Medicare paid out more than it collected. Social Security is predicted to be completely gone by 2037 according to an annual report, which is four years sooner than predicted a few years ago. The Medicare trust fund should be bankrupt by 2017.

With numbers like this to face, senior and middle-aged Americans are worried. People already collecting Social Security will not receive the normal cost-of-living increase starting in 2010. Social Security commissioner Michael Astrue stated, “We should neither be casual or hysterical about the revised insolvency dates…The Social Security system will weather this recession. However, the sooner we get on with the task of reforming the system, the easier it will be to make the tough choices.”

Funding for Social Security and Medicare

Both Medicare and Social Security are funded by payroll taxes. Because of the heavy unemployment rates, cited by a loss of 5.7 million jobs, fewer taxes are being put into both funds. To further matters, aging Americans and rising health care expenses are taking their toll on the funds.

Both funds are in the form of government bonds that are backed by the U.S. government’s “full faith and credit” but not by actual assets. Much of the funds have been spent on other financial demands. To bulk up the funds once again, taxes would have to increase or the government would have to borrow in public markets.

Martha Bell, senior American in Flint, Michigan, stated, “For the first time I had to use a short term loan to get my medications. If this is any indication of the future, I don’t k now what I am going to do once I try to retire.” Treasure Secretary Timothy Geithner stated, “The most effective entitlement reform measure will be a major health reform that helps bring down the growth rate of national health care spending.”

The President has been trying to do just that, but there is no agreed-upon solution on how to make it work. Senator Max Baucus of Montana stated, “The report [on Medicare and Social Security] underscores the urgency of action on comprehensive health care reform this year…as costs continue to rise, the Medicare program so important to so many American families in jeopardy.”

Change is necessary

Critics of the current health code maintain that the U.S. cannot afford another government-run system. Senator Chuck Grassley of Iowa said, “When we can’t afford the public health plan we have already, does it make sense to add more?”

Currently, workers pay 6.2% payroll tax into Social Security on the first $106,800 of income. Their employers then match that payment. The way to increase the fund for Social Security is to increase the tax rate or the amount of earnings that will be taxed. Although currently workers can retire with benefits at 66, that age is moving up to 67 and predicted to continue to rise in efforts to hold off benefit payouts.

Senior Americans

Senior Americans are having to buckle down with the rest of America and use alternative methods of funding their expenses. Short term loans, family borrowing and combining households are all tactics people are using to make it through the recession.

Short term loans are becoming a quick answer to consumers in need. With the banking crisis still in full swing, people are in need of bill payment options that are outside of the norm. It used to be that when people needed funding, they went to the bank. That is not the case anymore because more and more banks are tightening up funding and even high-credit applicants are having a difficult time finding underwriters.

Another problem with the economy comes from auto companies. The auto giants are suffering and governmental bailouts helped, but did not stop their problems. Although they are still trying to find a way to recover, auto companies are under heavy pressure and strict deadlines. Their struggle is contributing a lot to the faltering economy.

Chrysler trying to swap debt

Chrysler had a government imposed deadline to restructure by April 30th. Banks and hedge funds are proposing forgiving Chrysler of $2.5 billion in debt for a 40% share of the Chrysler-Fiat company. The government is expecting the car company to restructure using a debt swap, cutting labor costs or negotiating some alliance with Fiat Group. Should they be unable to do so by the deadline, they almost positively face total liquidation.

Right now Chrysler is managing by relying on $4 billion in loans and is hoping to receive an additional $500 million in funding. They are set to receive the additional monies, but only if they are able to meet strict deadlines and requirements of restructure as set forth by the government. A series of offers and counter-offers have brought Chrysler to the state it is now: under pressure to get the restructure done. They risk losing the money that was apportioned for their salvation.

“Taking equity is a risky proposition,” stated spokesperson for Chrysler-Fiat. “The goal is close to 40 percent of the equity.” Fiat CEO Sergio Marchionne from Italy is in the U.S. and participating in the negotiations. It is their hope to find a reasonable way out of this dilemma, reap the benefits of the government bailout and avoid complete liquidation.

Short term loans

With the auto industry still up in the air, consumers are suffering also. All major business entities are going through the same recession and their unbalanced positions in the market are affecting the economy drastically. With normal options on hold, short term loans are one of the few options consumers have left to find money to pay bills. Loan supporter Carrie Gillis of Portland Ohio stated, “I never thought short term loans would be so important to my family. But when those bills come in, we have no option but to extend payment until our payday.” Gillis is not alone. Many consumers are finding the short term loan to be a stress-free option when looking for cash.

Balancing the economy

It’s going to take a lot for the economy to balance itself out and without a lot of proactivity by the government, citizens and businesses, it will not happen easily. Industry giants are under pressure to meet the government’s deadlines and need to find quick and reasonable solutions. Consumers are under their own pressures of having to find money to pay bills as the recession holds the economy in limbo. Many are looking for short term loans as a quick and reliable answer. Hopefully once the dust clears and all are returned back to normalcy, the economy too will see a much-needed improvement.

In today’s economy payday loans are a way to help people cover their bills. These types of loans are short term in nature and a quick payout to qualified customers. Normally the requirements are that you are 18 years of age, employed and have an active bank account. If you are accepted, the money you qualify for will be deposited into your account within a few days, sometimes sooner. On your next payday, the funds are automatically withdrawn from your account. It’s a simple way for qualified applicants to pay bills on time, when the funds aren’t readily available but soon will be.

A payday loan is predicated on employment and that’s a standard concern in society. “What do I want to do for a living?” is a question everyone has to ask themselves at a certain point of their life. Some ways to decide are to be aware of what personal likes and dislikes are, what certain proclivities are and what the market is projected to be like in the near, and distant future.

Top Paying Jobs

A recent study of the top paying jobs of America was released. As expected, the medical field is still one of the top earning industries to be in. According to the U.S. government’s Occupational Employment and Wage Estimates data, surgeons make on average $206,770 annually. Anesthesiologists are close behind with an average pay of $197,570, a 2.5% growth in salary since last year. Next in line are a slew of medical related workers such as orthodontists, obstetricians and gynecologists, with internists and oral surgeons next. It’s no wonder the medical field takes a huge part of the top paying American jobs. Remember that the training for the privilege is rigorous. The medical workers surveyed were established in their fields and had long track records of accomplishments in the health industry.

The next group of highest paid American jobs comes down to CEOs. Although CEOs have gotten a bad rap in the current economy, they still earn an average $160,440 annually for determining policies and directing companies under the board of director’s approval. That salary is up 6% from last year, proving that many CEOs are proving their value to the private and public sectors.

The final top earners according to the Occupational Employment and Wage Estimate survey are lawyers, natural science managers, airline pilots, petroleum engineers and computer/IT managers.

Payday loans for the top paid?

You may ask why top paid workers would need payday loans. The reality is that people in all incomes can make the mistake of living beyond their means or experience an emergency bill. Couple that with today’s recession and there is no real discernment anymore between low-income and high-income earners when it comes to budgeting finances.

Getting through tough times

The simple truth is that getting a top paying job should be something everyone thinks about when planning for their future. In times of wealth, they can afford a comfortable life, but more importantly in times of recession, they can help Americans stay afloat. Sure they still may need additional funding forcing them to liquidate assets or apply for payday loans, but the high-earning job just may be what gets them through a recession unscathed.

It’s a universally accepted fact that payday loans have come to represent easy and fast cash, whenever you need it. At the same time, it’s also true that the human psyche is such that anything which is easily available tends to lose its importance, which at times leads to misuse and abuse of such products.

Something on a similar note happens with payday loans; their relative abundance sometimes results in their abuse and when the effects of this abuse raises their head, some end up blaming the payday loans and lenders for the misuse. Hence, what follows is a brief set of guidelines/precautions to keep in mind while using the payday loan cash.

Assess and monetize your needs

• Once you are sure that you need a payday loan, the next step is to sit down with a pen and paper and carefully list your special/urgent needs for which you need the loan. Be careful, the emphasis here is on ‘needs’ and not ‘wants’. So anything which is not necessary and can be put off should not be included in this list.
• Next, make an estimate of how much you will need to spend on each of these needs. Again, be as conservative as possible, even though you are getting fast cash with no credit checks, still you have to be able to pay it back at the end of the month.

Dynamic Budgeting

• In this recessionary environment, you never know when you might have to face another unforeseen expense, after you have already obtained the payday loan. The key is not to panic and make suitable changes to your budget.
• Look carefully and trim your ‘avoidable’ expenses even more, keeping in mind the goal is to be able to pay back the payday loan at the month end. Tough times call for tough measures.

Stick to the original estimates

Once you get a whole load of cash in your hands, it is quite possible that you are tempted to deviate from the original plan of action. Think twice before going on any spending spree, it’s like digging the ground around you and setting up your own grave. The key is self discipline. So if you took the payday loan to pay off your gas bill, then do it as soon as you get the cash, rather than falling into the temptation to spend it on something else.

Save and pay on time

• If you find out that you overestimated your needs and you have a surplus of cash from your payday loan, that’s great. But save that money and use it to pay back the loan, instead of splurging on things you don’t really need. It might save you from applying for a payday loan again next month.
• As far as possible, pay your payday loan on time, however, if you feel that you will be unable to pay back the amount, then contact your payday loan company and request an extension.

Following a few simple guidelines, can help you make the most of your short term loan. As with all other good things in life, payday loans are a double edged sword. They are a great tool for your well being, but only if you use them responsibly.

Payday loans could be of great help during the current phase of the economic recession. When recession hits the economy, chances are that your source of income may start shrinking, making it difficult for you to manage your monthly expenses. During these bad times, you have reasons to feel worried because sources of financing from most avenues also dry up and you may land up in an acute financial crisis. But don’t panic – history tells us that any economic downturn in the United States lasts for a limited period due to the cyclical nature of economy. To handle the crisis during this brief period, you can go for a payday loan.

Take what you can pay back

It is easy to get this loan, but this is a loan that you have to pay back on your next payment day. You would certainly like to use this option to your advantage, not to get into a debt trap, wherein you cannot pay back what you have borrowed on the next pay day. The bottom line is – you have to be careful if you decide to go ahead with this option. You need to assess your repayment capacity and limit yourself within this boundary. You have to carefully evaluate how many times you are likely to renew it, before you think you can manage without this loan.

How about cutting expenses?

The bad times are certainly not going to be permanent, but you do not know when things are going to turn around. In such uncertain times, it’s not a bad idea to cut on your expenses, even if temporarily. Think before you buy – things that are not very essential at present had better wait, rather than being financed by a payday loan. If you carefully look at your monthly expenses, there will be many items that you can cut down during these tough times.

Turn it to your advantage!

In bad times, you don’t necessarily have to feel let down because of the financial crisis you are going through. There could be many ways you can actually take advantage of the situation and come out better equipped to face it in the future. How about spending a part of your payday loan to acquire skills that can improve your chances of staying unaffected during the next round of economic slowdown? You can think of diversifying into areas that have always fascinated you, but you never had the time to pursue.

Can you start something of your own?

You may even think of starting something of your own, if you can see an opportunity around you. Don’t keep your eyes and ears closed – the opportunities may be knocking at your door for a number of years, but probably you had been so busy in your life that you could not hear or see, if anything of that kind was possible in your own life. You will certainly survive this tough phase, but try to take advantage of these challenging and trying times by getting into some small venture using a part of the payday loan.

Payday loans may help consumers solve temporary money problems in a volatile market. The current recession is quickly being assessed as a long-term situation that consumers and businesses will have to maneuver through carefully. A quick-fix is not realistic. Though there are a lot of options available, it’s estimated that until mid-2010 consumers won’t see a true stabilization of the market or experience any relief. Americans’ buying patterns and businesses’ income statements are giving a clear picture of the dilemma the economy is in.

What are buying patterns telling America?

According to the Federal Reserve, consumers’ spending makes up two-thirds of the U.S. economic activity. Unfortunately for the country’s financial situation, those consumers are being more frugal than they have in years. Three giants of consumerism, Wal-Mart, Burger King and Capital One Financial, all reported a declining profit in March. While they don’t make up the entire American business world, they are a good cross-section of the economy and their income statements can give an accurate picture of the market.

Burger King reported an 18% drop in shares in March and has noted a great lull in business, according to analysts. Americans are opting to buy in bulk at discount grocery stores and cook at home, rather than splurge on fast-food. They realize that cutting corners means stretching budgets and fast-food is no longer a viable option.

In March, retailers reported a 1.1% decline in sales. Wal-Mart CEO Mike Duke confirms that after payday, most Americans are left with very little discretionary money. The store’s sales will be up at the beginning of the week but when Friday comes, buyers are looking for payday loans and cash advances to make ends meet. A few more tell-tale signs of the economy can be seen with consistent buying patterns. Vitamins and diapers for example, are purchased in bulk at the beginning of the month and trickle down to smaller sales at the end. This is an indication of how people are portioning finances in the recession.

What does credit card activity tell Americans?

According to Capital One, their charge-off rate, which is made up of accounts that the company categorizes as non-recoupable, is steadily increasing for U.S. credit card holders. The same thing is happening with American Express. Their charge off rates have grown from 8.6% in February to 8.8% in March. It’s estimated that the soaring unemployment rate is making it next to impossible for consumers to maintain themselves, much less pay off debt. Economists speculate that mid-2010 is the anticipated timeframe when the economy will begin to recover and consumers will be able to manage their finances again. Until that time, Americans have to be frugal and budget-conscious every time they go to the store and leave only with the necessities.

How can you save yourself?

Payday loans can help to level income throughout the month. Consumers are spending more at the beginning of the month and trying to stretch what is left over at the end. This isn’t always possible when emergencies happen, i.e. cars break down, children get sick and water heaters break. Any number of things can happen to a household and put them in need of extra money until the next payday. One good option to have is the payday loan where the application process is simple. If you are approved, the funds are in your pocket within 48 hours and the money is deducted from your account on the next payday. You can save yourself the worry of how to pay bills by looking into cash advance options.

When President Barack Obama signed his mega stimulus package in February, it was nothing less than a big cash advance for ‘keeping the American dream alive in our time.’ Since then, Mr. President has left no stones unturned to bring the economy back on track. Plan after plan has flooded from his desk to push the economy out of the mess.

The latest, of course, is the plan for toxic assets. The plan, which involves private-public participation, aims at creating some liquidity for about $1 trillion worth of toxic assets. These assets have not only burdened the banks for quite some time now, but are also hindering the confidence of the global financial system. But the million dollar question remains, are these plans really working?

A confident President

Well, Mr. President certainly believes so, though he also admits the fact that it definitely needs more time and patience. In a recent news conference, President Obama said, “It’s important to remember that this crisis didn’t happen overnight and it didn’t result from any one action or decision. It took many years and many failures to lead us here. And it will take many months and many different solutions to lead us out.” Yes Sir! That’s true for sure.

However, it is possible only when your cash advance flows in the market enriching its liquidity, and not when it just enters the deep pockets of top executives as bonuses. But then, considering it as just one of its own kind, one must set it aside and evaluate all other aspects of the stimulus package before passing any opinion.

Some success

Meanwhile, Obama’s mega bailout package launched last month seems to be doing well at few fronts like saving the jobs of teachers, and police officers. And going by Obama’s words, “it’s creating construction jobs to rebuild roads and bridges.”

Definitely, this will help in adding stability to the financial health of a small portion of the mass. This success, immaterial of its size, must have added some positive energy in Obama’s heart in his battle against the economic turmoil. But it’s just the beginning; he has a long way to go.

The final bolt

The second stage of the ambitious plan is definitely going to be a real challenge as it aims at achieving the dual goal of stabilizing the housing market and cleaning up the mess from the banking system. In the meantime, as Obama confirms that up to 40 percent of all mortgages are now eligible for refinancing and the house prices are now stabilizing after a long time, it definitely boosts the confidence levels of those who believe in the stimulus package.

But all eyes are now set on the new plan for toxic assets because if it comes out good, it can really bring a great turn around in the current gloomy conditions. However, its success depends a lot on private investors’ interest in buying those toxic assets. Which means recovery of the banking system now actually depends on cash advances from the private investors to the banks.