The spendthrift ways of many players may weaken their union's position against team owners in the NFL labor dispute. Image: CC Keith Allison/Flickr

Many people may assume that players in the National Football League, with their high salaries, escape life’s personal finance challenges. But a large percentage of NFL players live paycheck to paycheck — like most people — and financial hardship is an issue in the NFL labor dispute.  NFL owners know that many players could go broke during a lockout and are prepared to wait until the union gives in.

NFL player salaries and the lockout

The NFL labor dispute blew up on March 12, and the team owners locked out the players’ union. If the dispute isn’t resolved quickly, the 2011 NFL season could be canceled and players won’t be paid. NFL players may have more money than most people on average, but that doesn’t mean they know how to manage their personal finances. For many NFL players, their everyday expenses include big bar tabs, fast cars and luxury homes. MSNBC reports that according to financial experts familiar with the NFL, about 380 of the league’s 1,700 players live paycheck to paycheck. This is despite the fact that the average NFL player salary for the 2010 season was $1.87 million. But considering that the NFL rookie minimum salary is $320,000, that average is skewed heavily because of a few superstars. Most rank-and-file NFL players, who earn in the low six figures after paying taxes and their agents, could be in serious financial trouble.

NFL players and bankruptcy

NFL players are notorious for neglecting their personal finances. Sports Illustrated estimated that nearly 80 percent of retired NFL players have declared bankruptcy. More than a few NFL players make more headlines with their financial problems than with their play on the field. Luther Elliss filed for bankruptcy in 2009 after making $11.6 million playing for the Detroit Lions from 2000 to 2004. Heisman Trophy winner Raghib “Rocket” Ismail went broke after earning about $18 million playing for 10 years. Current New York Jets backup quarterback Mark Brunell filed for bankruptcy last June despite earning more than $50 million during his career. A player for the Philadelphia Eagles told Philadelphia Sports Daily that broke teammates have asked him for personal loans of up to $100,000.

NFLPA financial advice too little too late?

NFL owners, flush with cash, may believe that players who can’t afford to miss any paychecks won’t be willing to hold out to get what they want. In an attempt to mitigate those circumstances, the NFLPA gave its members a personal finance handbook as the lockout approached. The NFLPA handbook advises players to save 25 percent of their annual salary. Other advice includes “socializing with a purpose,” refinancing mortgages and flying coach. The handbook also suggests public speaking engagements and autograph sessions to make ends meet while the union is locked out. But the advice may be too little too late for many NFL players. For players who haven’t already planned ahead for the NFL lockout, a handbook isn’t going to be a lot of help this late in the game.

Sources

MSNBC

Yahoo! Sports

Fox Business

Recent surveys show more Americans plan to get their personal finances in order, but fewer say they are acting on those plans. Image: CC bonnie-brown/Flickr

A pair of personal finance surveys show that Americans want to get their finances under control in 2011. Americans also want more knowledge about how to do that. But other data shows that when it comes to personal finance, concrete action has yet to catch up with good intentions.

Inside the personal finance numbers

An online poll commissioned by Northwestern Mutual showed that Americans are optimistic about their personal finances coming into the new year. The Harris Interactive poll found that about 70 percent of those surveyed rank getting their financial house in order a top priority for 2011. About the same percentage were confident they could get their personal finances under control. When it comes to making that happen, 39 percent ranked paying down debt as most important. About 30 percent said they would set aside money from their paycheck to save on a routine basis. Building an emergency fund was a priority for 28 percent, and 27 percent said they would create a budget and stick to it.

Most Americans could manage money better

A personal finance study conducted by the ING Retirement Research Institute found that 94 percent of American’s understood they could do a better job managing their money. This finding was supported by data found in the Northwestern Mutual survey. Just 16 percent said they would update their financial plan. Only 12 percent made arrangements to work with a financial professional, and just 13 percent planned to re-balance their portfolio. The ING study classified respondents as either excellent, good, basic or poor in certain categories. Data showed that happiness increased with financial literacy, a category in which 62 percent of Americans were ranked as basic.

Time to walk the walk

The two personal finance surveys also showed that talk is easier than action. The Northwestern Mutual poll showed that very few Americans plan to evaluate their risk when it comes to life insurance, long-term care or disability. In the ING study, only 53 percent of Americans were saving for retirement.

Sources

Financial Planning

BusinessWire

Before you pop the cork on the New Year, make some financial resolutions to make sure it's a good year. Image: CC geishaboy500/Flickr

Now is the time to get your personal finances in order. A new year is a good occasion for tying up loose ends on your financial checklist. Get off to a good start in 2011 by taking care of tax issues and re-evaluating your financial priorities.

What to put on your year-end financial checklist

Take financial steps in the week between Christmas and New Year’s Day that will make 2011 a better year than 2010. There are a few days left to address some critical tax issues for 2010. Charitable donations are still good for a 2010 tax deduction until Dec. 31. For another 2010 tax deduction, now is also a good time to dump depreciated stock. You can sell it and write off a loss up to $3,000. Consider converting an IRA to a Roth-IRA. You will pay tax on your Roth-IRA conversion, but if you do it by Dec. 31 you can spread the tax out until 2012. This week is also your last chance to get a free credit report in 2010 to make sure it’s accurate.

Financial resolutions for the new year

Find new ways to be thrifty. Start with credit card debt. Getting rid of credit card debt should be an even higher priority than saving money. Why? because the return you get on savings doesn’t come close to the high interest rates you’re paying on credit card debt. Pay down the expensive credit card debt first, then start saving. You’ll be able to save more. To help pay down credit card debt faster, figure out how much a habit costs and give it up. Make your own coffee or ride your bike to work. Take the money you would spend on lattes and gas and increase your monthly credit card payments.

Work together on financial goals

A lot of personal finance advisers recommend writing down your financial goals for the coming year. However, most people who do that soon forget them. In addition to writing down your financial goals, tell a member of your family or a friend you trust what your priorities will be. Ask them to hold you accountable to your promises and offer to do the same for them. Together you can both be more successful than you would going it alone.

Sources

Sacramento Bee

Wall Street Journal

Most states are behind the times when it comes to promoting personal financial education in schools. Image: CC kevinmarsh/Flickr

Some people believe that a national financial crisis begins at home. Generations of Americans were raised to be financially illiterate and turned loose upon the world. As the country struggles to emerge from the worst economic downturn since the Great Depression, a movement is afoot to make financial literacy education part of growing up.

Personal finance and financial reform

Legislators drafting the financial reform bill that became law in 2010 believed that financial literacy education can be a powerful compliment to financial regulation. The financial reform law includes the establishment of an Office of Financial Literacy. Through online tools and educational programs, The Office of Financial Literacy will supposedly try to make it easier for teachers to educate students about personal finance and for consumers to educate themselves about money management.

Financial literacy education is good PR

The private sector is recognizing the glaring need for financial literacy education as a PR opportunity. For example, Genworth Financial announced a program this week to help personal finance education in more than 300 high schools across Virginia called “My Money, My Future.” Earlier this year Visa, Inc. introduced “Financial Football,” a free online game that teaches kids about money using personal financial decisions to influence the outcome of football action. American Express introduced a website this year called “Currency” that offers financial knowledge for young people about paying off student loans, renting an apartment, buying a house and surviving on unemployment.

Not tested, not taught

When it comes to financial literacy education in schools, teachers have their work cut out for them, according to Dan Kadlec at MoneyWatch. Kadlec attended a recent Financial Literacy National Educators Conference in Washington D.C. Teachers there told Kadlec that they have to focus on topics that are included in standardized tests. Right now financial literacy and personal finance are subjects that don’t show up on the tests many state governments give students in order to evaluate teachers and schools.

Sources

MoneyWatch

Sacramento Bee

PR Newswire

Financial Football is an online game that blends personal finance and the gridiron endorsed by Super Bowl MVP Drew Brees. Image: Ian Rainsley Design + Illustration/Flickr

Financial Football 2.0 is a video game developed by Visa Inc. and endorsed by New Orleans Saints quarterback Drew Brees. Financial Football is available online to play for free. Players control the action on offense and defense by answering multiple choice questions about personal finance. Brees said he learned about personal finance the hard way and wanted to help others avoid the same mistakes he made. Whether Financial Football 2.0 helps accomplish that is unknown, and people who have played the game were underwhelmed.

Drew Brees: personal finance the hard way

Financial Football, developed by Visa Inc. in cooperation with the NFL, uses Drew Brees’ name to promote financial education by teaching children and young adults how to manage their money through the context of the gridiron. The Washington Examiner reports that Brees, the reigning Super Bowl MVP, has been working with Visa to publicize the game for about five years. Brees told the Examiner about financial lessons he learned the hard way, including a delinquent cell phone bill that came back to bite him later. He went over his minutes, didn’t pay the bill and it was sent to collections. Even with NFL millions in his bank account, the blemish on his credit report boosted the interest rate he paid on his first mortgage.

How to play Financial Football

Financial Football can be played online for free at practicalmoneyskills.com. The game features three different levels: Rookies age 11-14, Pros age 14-18 and Hall of Famers age 18 and older. Players can match up against the computer or match up head-to-head. On offense, players move the football with correct answers to questions about personal finance, student loans, credit cards, credit scores, debt collection, economics, retirement and investments. On defense, correct answers generate tackles, quarterback sacks and negative yardage for the opposing team. Players choose real NFL teams, and Financial Football shows stats about wins and losses for each team.

Struggling offense all too realistic

Gamers used to the cutting edge graphics of Madden NFL 11 will be gravely disappointed in Financial Football. Connie Prater at creditcards.com said her biggest complaint was that the game doesn’t tell players why their answer is wrong or provide more details about the correct answer. The game clock is always on and players only have 40 seconds to call a play, read the question and pick from the selection of answers. Running out the play clock results in a five yard penalty for delay of game. Apparently some people play without moving the ball enough to score any points — a feature that may seem all too realistic for some current NFL teams.

The Treasury Department is seeking public comment about a proposed set of financial education guidelines that will help Americans avoid personal financial meltdowns. Thinkstock photo.

The Treasury Department wants to distill the basics of financial literacy into a “food pyramid” for personal finance that makes money management as easy to understand as eating right. Even though a little more than one-third of adult Americans are considered obese despite the food pyramid, the Treasury Department is forging ahead. Public comments are being requested on a set of “financial education core competencies” the Treasury Department is proposing for use in financial education programs across the country.

Personal finance meltdowns a national issue

If there’s a lesson to be learned from the Great Recession, it’s that when it comes to personal finance, too many Americans are financially illiterate. A fundamental lack of knowledge about budgeting, investing, credit, lending and saving was exposed by meltdowns in finance, housing and credit. Investment Advisor reports that the Treasury Department’s Financial Literacy and Education Commission is conducting an annual review of its national strategy to promote basic financial literacy and education as mandated by the Fair and Accurate Credit Transactions Act of 2003. Using the “food pyramid” as an example, the Commission is trying to define the basics of financial literacy education for the public in ways that can be readily understood.

Financial education basics

The Treasury Department is accepting comments on or before Sept. 12. According to a Federal Register notice released Aug. 26, the Commission has identified five proposed personal finance concepts – or “financial education core competencies” – that it says “every American should have command of.” They include:

Earning:  Understanding the difference between gross pay and net pay, employee benefits and taxes and the importance of education.

Spending: The difference between needs and wants, learning how to create a budget, tracking spending and living within one’s means.

Saving: Understanding how saved money grows, how to meet long-term goals and wealth building, learning about bank accounts, understanding financial assets, such as savings accounts and investments.

Borrowing: Understanding the cost of borrowing and the role of credit scores.

Protecting: Learning how to protect assets, choosing the right insurance coverage and knowing how to guard against identity theft.

Seeking consensus on financial education

The financial education field lacks common ground on what it aims to achieve, the Treasury Department said in the Federal Register. It wants to facilitate agreement on appropriate basic content for financial literacy and education. Ted Beck of the National Endowment for Financial Education, who helped develop the core competencies, told the Dallas Morning News that in schools “there’s a wide variance in different kinds of programs, the quality of programs,” he said. “The idea of having a very straightforward checklist about the basics is something we think is very important.” A Texas education official told the newspaper that the core competencies listed by Treasury are a “good start” but the list is incomplete. For example, students should be taught the pros and cons of credit cards, mortgages, payday loans and other forms of borrowing.

Simple, easy changes to everyday personal finance habits can get you started on the road to debt proof living. Think Stock photo.

The best way to deal with debt problems is to avoid getting into debt. Too many people end up owing tens of thousands of dollars on credit cards, student loans or car loans. If you haven’t yet joined the crowd, there’s still time to adjust your personal financial behavior for debt proof living. When it comes to personal finance, some key actions can produce the best results. Identify and focus on those things. Avoiding debt problems could be as simple as becoming more financially literate about credit card debt, saving money and buying wholesale.

How to start debt proof living

One of the most basic tenets of financial literacy will help you the most: understanding credit card debt. Practical Money Skills talks about the “power of 50.” If you have a credit card with a $3,000 balance at 18 percent APR and pay only the 2 percent minimum monthly payment of $60 per month, it will take you 8 years to pay off your card. What’s worse, you will pay $5,780, not the $3,000 you figured you were spending when. But if you can pay an additional $50 per month for a total payment of $110 you will pay it faster and leave less money for the credit card company to charge interest on. The result: the debt is gone in 3 years and more than $1,800 in interest payments has been saved.

Saving money: start small and watch it add up

Saving money is easier than you think. Saving money for an emergency fund avoids debt if you need something like car repairs. Saving money to buy something instead of using a credit card means you will enjoy that something more. Succeed by starting small, recommends ehow.com. Every time you get a paycheck, put $20 into your savings account. You’ll be surprised at how quickly it adds up. Simple things like refilling your water bottle or brewing your own coffee can make a big difference. Add up how much you spend on bottles of water and coffee in a week. It’s amazing how much thicker your wallet can be.

Buy wholesale: cut out the middle man

By developing a wholesale mentality, you can take out the middle man before he takes his cut. Tips on buying wholesale to save money can be found at essortment.com. It can be as easy as calling local wholesalers and asking if they allow the general public to shop. Sample sales are a great way to buy wholesale. If you have friends who are interior designers, contractors or beauticians who can buy wholesale, offer to buy their lunch if you can go with them next time they shop. And always shop around. Sometimes a torn box is the only reason an item is marked down. Prices lower than wholesale can always be found if you do your detective work.

Employee financial education increases productivity, reduces turnover and generates a substantial return on the investment required. ltdan/Flickr photo.

Employees with poor personal finance habits can affect a company’s profitability. Money problems at home can lead to lower productivity at work, health problems and excessive turnover. A company that promotes financial literacy among its employees can add hundreds of thousands of dollars a year to its bottom line. The weak U.S. economy has taken a toll on employee benefits like health insurance and matching retirement plans. But a company can still provide a safety net for its employees with education in personal finance.

Financial security through employee education

To help its workers achieve financial security, as well as its bottom line, a company can do more than provide a paycheck. The Durango Herald reports that Employees with serious financial problems can waste as many as 20 work hours a month worrying about their finances. The newspaper cites a survey of American workers by creditcards.com that found 57 percent don’t budget and 40 percent spend 110 percent of their household income. The survey also found a correlation between consumer debt and relationship problems. Fighting about financial security was a major reason 50 percent of the workers in the survey were divorced.

Financial literacy and the bottom line

Promoting employee financial education is the mission of the Personal Finance Employee Education Foundation. The PFEEF claims that financial literacy programs contribute hundreds of thousands of dollars each year to a company’s bottom line. Results of employee financial education include improvement in productivity, morale and company loyalty. Higher financial literacy can also reduce absenteeism, turnover and workplace distractions as well as operational risk across a company. The PFEEF provides a return on investment model and an ROI calculator online that a company can use to estimate the benefits of employee financial education. It said employee financial literacy generally has a return ratio of three to one.

Employee financial education in action

Financial literacy is part of the corporate culture at Weyerhaeuser, a Washington state timber company. Business Week reports that Weyerhaeuser is recognized as one of America’s leaders in providing financial education to nearly 14,000 employees. The company has an established a benefits education department that offered more than 40 retirement, benefits and wellness programs to its workers last year. Employees who attended Weyerhaeuser’s financial literacy seminars said that they were better informed about their retirement programs, 99 percent thought that they could now make better retirement choices, and 88 percent said they would change some of their retirement choices. Participants in the program thought the seminars were a valuable employee benefit that enhanced their positive feelings about Weyerhaeuser

Personal financial management will allow you to avoid mistakes that end up costing you a lot of money. Flickr photo.

A lot of people make financial mistakes by spending money without thinking. Living for today and forgetting about tomorrow can get you in trouble. Of course, nobody is perfect and it’s no fun being a tightwad. But personal financial management will help you avoid big mistakes that hold you back from where you really want to be.

Create a budget to avoid personal financial mistakes

Having no budget is the biggest mistake. Spending without knowing where your money is going will leave you broke. But a budget just isn’t a plan for how you would like to spend your money. Bankrate.com reports that to create a budget you have to start tracking your expenses first. Tracking your spending for a month takes discipline, but once you know where your money is going, you can start making better decisions about where to allocate your funds. But don’t be too conservative. A budget that cuts all the fun out of your life is doomed to fail.

A budget helps you start saving money

Creating a budget helps you start saving. Even if your budget looks like it has nothing left for saving you could be wrong. Ehow.com recommends starting small. You’ll be surprised by how quickly even $20 a paycheck adds up. Keep in mind nickles and dimes add up to dollars. Make your own coffee, pack a lunch and fill a water bottle for work. If you take a small side job, like coaching, tutoring or tending bar, use the cash for your spending money and put away the savings from your regular paycheck.

Avoiding late payments

Making late payments on bills and loans is a tremendous waste of money. About.com offers some good tips about avoiding late payments. The easiest way to avoid late payments is to set up automatic payment with your bank account. But if you’re not confident in your cash flow, there are more traditional ways — like not stashing unopened bills in a drawer. Set up your own due date a week before the actual payment is due, and write it on the calendar. Set up a free e-mail or cell phone reminder from creditors that offer them. Many companies will also let you rearrange the due dates better suited to your cash flow.

Use cash advances wisely

Don’t take out debt for living expenses. A payday loan or online cash advance is a valuable service for emergencies like medical bills, car repairs and traffic tickets. But to finance lattes from Starbucks, the dress on sale you can’t live without or beers with the fellas after work, using personal loans and installment loans is a bad idea. When it’s a good idea to get a payday loan, only borrow exactly what you need to resolve the emergency — and by all means make sure you pay it back on time.

When it comes to marriage and finance, talking about money doesn't have to end up in an argument and it could improve the relationship. Picasa Web Albums photo.

Finances have always been a cause of stress in relationships. The financial stress of the Great Recession has turned up the volume. A recent study about finances and marriage proved the obvious by showing that the more a couple fights about money, the more likely they will split. Money destroys relationships. But here’s some relationship advice:  Financial strategy can enhance a marriage or partnership. The problem is that couples don’t want to talk about money, and that eventually gets them into trouble.

Couples avoid talking about money

Almost one in three couples say personal finance causes the most stress in their relationship, and 91 percent of Americans surveyed by a recent American Express Spending & Saving Tracker find reasons to avoid talking about money with their partner. Ruth Mantell at the Wall Street Journal reports that when it comes to finance and marriage, the survey said people are more likely to know their partner’s weight than their salary. However, in tough times, talking about money and financial strategy is important for couples to deal with financial stress, like losing a job.

Financial strategy improves a relationship

It’s no wonder couples avoid talking about money. The same American Express Survey found that 45 percent of the couples responding said talking about money resulted in arguments. Relationship advice from Emma Johnson at Forbes suggests turning the tables and using financial strategy to improve a relationship. The way a couple approaches personal finance, saving, spending, earning and investing can actually be points of bonding and affection.

Tempers flare during tough times

Bonding over personal finance during tough times is easier said than done, however. StrategyOne recently surveyed a representative sampling of more than 1,000 Americans and found that 77 percent said the Great Recession has significantly changed their outlook on life. More Americans are getting angry easier, getting depressed, and  screaming and yelling more often. The recession is causing people to delay getting married, having children or retiring.

Start talking about money

The StrategyOne survey also found that more people are also putting off getting a divorce for financial reasons. So perhaps that buys some time for couples to work on their personal finance situation. The relationship advice in Mantell’s article includes five money tips for couples in tough times. Number one is to start talking. That makes it easier to work together on adjusting to changes in income. Couples need to fess up to each other about their spending and their assets. If necessary, cancel vacation reservations, eat the cost, look for a job and look ahead.

Manage money as a team

Couples not facing sudden financial stress still bicker about money. Johnson’s Forbes article suggests that managing money as a team can lead to a stronger, more fulfilling relationship. When it comes to marriage and finance, understanding a partner’s spending habits helps a couple get to know one another better. Delegating money tasks is another way to build trust and improve communication. If both partners agree on goals about saving, spending and returns on investments, perhaps they will eventually be celebrating that golden anniversary when the Great Recession is a distant memory.

Personal financial literacy begins in the home, but a survey shows that most parents give their own financial skills failing grades. Flickr photo.

Who else do kids have but their parents for getting a personal financial education? And what are they learning? A recent survey showed that most people learned their personal finance skills at home, from their parents. But the same survey showed that a great portion of those people gave themselves failing financial grades. Some people say that personal financial literacy needs to be taught in school. Others say that it’s not hard for parents to get up to speed on personal financial literacy so they can pass the knowledge along.

Parents in dire need of financial education

In its 2010 Financial Literacy Survey, the National Foundation for Credit Counseling asked people where they learned the most about personal finance. Most said they learned their personal finance skills from their parents at home. But when people were asked to grade themselves for financial literacy, nearly 25 percent gave themselves a C, D or F. The NFCC concluded that those in charge of the financial education at home are in dire need of financial education themselves.

Reading, writing and personal finance?

In this tough U.S. economy, many parents are drowning in debt, not planning for retirement or saving for college or able to purchase a house. NJ.com reports that these people may have been able to avoid these troubles if they took basic financial literacy courses in school. The NJ article said only 14 percent of teens nationwide take personal finance classes in school. NJ proposed that if the rate of teens taking personal finance classes in school nationwide had been higher in the past, perhaps the U.S. economy would be stronger today.

Kids set up for financial failure?

Last year, Wells Fargo conducted a survey and found out that only 5 percent of people ages 18-21 are confident they will achieve their financial goals. The survey discovered that only 41 percent know what a credit score is; only 28 percent understand annual percentage rates; only 41 percent understand the concept of the 401(K); and only 31 percent understand compound interest.

A financial tune-up for parents

It may be awhile before your school district decides to follow the lead of New Jersey, which is running a pilot project requiring financial literacy classes for high school students. But until then you can set a good example for the kids by getting your financial house in order with a mid-year financial tune-up. Boston.com offers five good places to start:

1. Budget and Spending — Take a look at your spending plan from the beginning of the year and compare your cash flow for the first six months. Did you allocate enough to cover expenses, or are you falling behind in certain areas? Start tracking every penny you spend, put a plan in place and stick to it.

2. Savings — Set aside cash for emergencies and short-term goals. Even a small amount can play an important role. The Consumer Federation of America found that with just $500 in the bank, you’ll sleep better and will be more likely to avoid high-cost borrowing and nasty fees for overdrafts.

3. Debt — Carrying high debt loads can have a big effect on your credit score, make monthly budgeting more difficult and leave you more vulnerable in emergencies. The first step toward solving these problems is to stop using plastic and chart a plan for paying off your cards.

4. Taxes —There’s a lot of uncertainty for people who try to plan for taxes this year, because Congress has not yet addressed a number of expired tax laws. But tax rates are expected to go up for all but the lowest income brackets in 2011,so be prepared.

5. Retirement — A retirement plan review starts with your 401(k), but it doesn’t end there. It includes Social Security and company pensions, as well. Figure out how much money you need to provide for yourself, and then to put a plan together.

Knowledge about personal finance among Americans is increasing, but high credit card debt shows some hard lessons learned during the recession are being ignored. Flickr photo.

Americans are more educated about credit than they were before the recession, however, their knowledge about personal finance isn’t resulting in better decisions about credit and lending. A survey indicates that most Americans know the interest rates they are paying on their credit card and they know their credit rating. Even so, they continue to carry high interest credit card debt and many don’t know how to improve their credit scores.

Personal finance know-how no good

A survey of personal financial knowledge by Harris Interactive on behalf of Lending Club shows that Americans still aren’t making the most of hard-learned instant cash credit lessons learned during the recession. Adults unaware of their credit score came in at 31 percent, compared to 45 percent who didn’t have a clue in 2007 according to a Bankrate, Inc. survey. Fewer adults (22 percent) who use a credit card don’t know the interest rate on the credit card they use most often (compared to 29 percent who reported not knowing in 2007, according to a National Foundation for Credit Counseling survey).

Credit card debt prevails

Credit card companies will be glad to know that of those adults who do know the interest rates on their cards, the survey shows 31 percent have an interest rate of 20 percent or more and 64 percent pay 14 percent or more. Although 93 percent of credit card users know it’s possible to negotiate for a better rate, only 29 percent have ever tried to. Although closing a credit card account negatively impacts credit score, 18 percent erroneously believe it increases your credit score; 27 percent believed it has no impact. For those with debt other than a home mortgage, credit card debt is the most common type of debt overall (67 percent) and often the most expensive type of debt to carry.

Personal finance advice

To gain more knowledge about personal finance, AOL Money Coach Jennifer Openshaw has advice for consumers who want to be smarter when it comes to credit. If you aren’t aware of your card rates, find out. And once you do, take the initiative to ask for a lower rate. About 68 percent of those who ask for a lower rate are successful and build confidence in their financial savvy as well. Start with a target rate in mind, be assertive and ask for the supervisor if necessary.

Know what affects your credit score

Openshaw also suggests learning about what affects your credit score. Know that closing older accounts reduces your balance-to-credit card limit ratio, which may actually lower your score. If you have trouble controlling your credit card spending, it may be better to take the temporary hit to your score so you have fewer sources of temptation. Finally, cut your costs on current debt, consider paying off all your debts with one lower interest rate bank loan, but don’t do it on a credit card.

As January approaches, you begin to see all of the advertisements for tax services. You see the adverts on television, billboards, and on the internet. You are cruising in your vehicle to your favorite song and the first advertisement you hear is a tax service such as Jackson Hewitt. These advertisements will continue until the tax season is dead and gone. If you are a late bloomer and like to do your taxes in July, you will hear them until October. Nothing has really changed when it comes to filing tax returns except that many people prefer to file their tax returns online.

Online tax preparation has been going on for almost two decades and it is nothing new. The experts that you hire to do your taxes often use online tax preparation, but now everyone can file their tax returns online now. The internet has made it possible for all individuals to file their tax returns how they want and when they want. Filing income tax returns online has evolved and it has become more popular over the last several years. Many people are taking advantage of online filing because of all of the benefits that are associated with online income tax filing.
What are the benefits of filing an income tax return online?

1. You save time and money

We all want to save money right? Imagine paying $9.99 to do your own tax returns online and imagine paying a professional around $200.00 or more to do the exact same task. It is like night and day. There are many options available for taxpayers such as tax software that is extremely affordable. Many companies that provide tax services and software also offer their services for free.

What if you could save time as well? Well, you are typing in the information manually and if you make a mistake, you can easily correct it yourself instead of wasting more paper. It will take you about thirty minutes or even less to type in all of your information online. You are at H&R Block and you are waiting ten hours for your forms to be done. You could have been at home listening to music, singing out of tune, and typing in all of your tax information yourself and be done just in time for your favorite television show.

You want another time saver? You’ll get your refund more quickly. You can file your tax return today and you will get your refund within a week. Another way to get your refund is by using direct deposit. This saves you and the IRS valuable time. There is little to no paperwork or other expenses involved in the filing process and both parties are victorious.

2. It’s fast and convenient

Don’t you just hate carrying your tax forms to your tax preparer or to your mailbox? You do not have to physically carry your documents anymore since they are done online. As long as you have a stable Internet connection you can file your income tax return anytime, anyplace, and anywhere.

3. It reduces the chance of errors

Since your tax return is in electronic form, the risk of errors will decrease. These tax software programs have built-in error correction features that will automatically verify the accuracy of your information. The IRS does not need to enter anything in their database because all of the information has been done electronically.

4. It helps insure that you get the maximum refund

The tax software is continuously updated with the latest tax laws. All of your deductions and tax credits will be calculated automatically by the sophisticated deduction tool most tax software programs have. You will get a higher refund.

Online tax preparation is the best solution

You will get your taxes done more quickly, you will receive your refund faster, and you will save a lot of time and money in the process. You will get more money for spending less. Preparing tax returns online has become popular for a reason, the benefits.

Getting out of debt is very challenging for many people. Many people are conflicted with getting out of debt as quickly as possible, but they do not know which options are right for them at the moment. There are many companies advertising their services claiming that they offer the perfect solutions for handling your debt, but how do you know if this is factual if you have not tried their services? It is very important that you find the most effective method that works with your current financial situation. Here are some tips that might help you in your financial situation to get you out of debt faster.

Build a financial portfolio of your current balances.

If you want to reduce your debts quickly, you must find a way to lower all of our current balances in a short period of time. You will need to build a portfolio of all of your current balances to formulate a plan of action. Once you have all of your bills current and organized, you can then reduce your debts in an orderly manner.

Reduce your current balances quickly.

Many people do not know that their credit cards’ balances are charged interest daily, but the total amount of interest that is on your account is not shown until the end of the month. What does this all mean? This means that you can take out small amounts of cash from each paycheck to pay off your debts during the month and this will reduce your current balances quicker. This method of clearing your debt will decrease the interest rates you are charged with monthly. Divide your monthly payments by four and pay the same amount you have on the same day every single week. Your current balances will quickly decrease when you apply this method.

Less is more.

Would you agree to put $1.00 down weekly out of your current paychecks towards your new goal to get out of debt faster? Dollars are chump change, but think about this; that one dollar can have a major effect on reducing your debts. You are already making payments weekly, so all you have to do now is add the dollar amount to your new total. For instance, you might have a monthly payment of $250.00. Divide this amount by four and you will pay the new amount weekly. You are adding the dollar to your weekly payments and you have to round the amount to the nearest number e.g. $50.00. Using this technique will decrease your interest rate you are paying overall, and you are reducing your debts consistently.

Think about the “domino effect” when it comes to resolve your debts.

You have just paid off one of your credit card accounts; you will add the exact amount you were paying your first debt with to the other debt payment that you have next. This will increase the amount you are currently paying and the next balance will be paid off in less time than your first debt payments.

Patience is a virtue.

Your debts will not go away overnight; you must have patience to achieve your goals. If you are really serious about getting out of debt faster, you have to remember a few things. It took you a considerable amount of time to get yourself into debt and it will take time to get out of debt also.

Many major banks have been making the news more recently; this is due to their bad gambling predictions regarding mortgages and their overall poor mismanagement. It would be a very bad generalization and inaccurate to blame all banks for their wrongdoing. The larger banks have been predators preying on innocent consumers for a very long time, while constantly advertising that they care about their consumers. Banks are very vague about mentioning certain things to consumers that might hurt their reputation as a financial institution.

Four things your bank will forget to discuss with you.

#1. Debt Cancellation

While debt cancellation is not regulated as credit insurance, this product is extremely overpriced, but it usually serves the same exact purpose of insurance. When you are unemployed, debt cancellation will pay off your balance. This product is sold and advertised as a “point of sale”. Getting this type of insurance is risky and debt cancellation should always be cheap for the consumer.

#2. Monthly Fees

Banks have made it easier to identify the types of consumers they want by how much they charge for their monthly fees. Many consumers live from paycheck to paycheck and cannot afford to pay a bank’s transaction fees, ATM fees, and the minimum balance out of pocket. There are reputable banks in the market that do charge lower fees for their banking services.

#3. Overdraft Fee Protection/Lines of Credit

Do not be so quick to fall for the double talk that banks use very frequently about overdraft fee protection. You have to read your contract thoroughly. The larger banks are becoming more liberal in regards to their check payments, authorization of debit transactions, and overdraft policies. These large banks did this so you would not have enough available funds in your bank account to cover the expenses.

These banks are getting away with robbing their consumers and they have profited from these practices. The consumers are receiving higher overdraft fees that were illegally authorized and the banks will offer consumers a line of credit to finance the overdrafts. This is a very clever strategy created by many financial institutions across the country. The consumer is stuck with insanely high interest rates that range from 16% to as high as 29%. You have to monitor your account balances because the bank is not going to monitor it for you.

#4. The Teller Fees

Almost all banks have this philosophy; if you do not have a minimum of five figures in your bank account, you are useless to them. Banks have created this type of fee structure for the consumers that they want. If you desperately need or want to use a teller, do not pay for the privilege to use one. The bank does not care; some of these banks will charge you $3.00 or more per transaction for using a teller.

You must read all of the brochures your bank has given to you about their services. You need to pay close attention to the overdraft fees, fee per check, fee per teller transaction, and the requirements for the minimum balance for your account. Many consumers do not take the time to read all of the fine print in their contract, but you do not want to be charged ridiculous fees or be sucked by the bank to take out a loan you did not have take out at all. The customer is always right and you are the bank’s customer. The banks are supposed to serve you, not the other way around.

Credit Unions are an alternative for your financial needs.

If you want to avoid all of these fees completely, you have to go to a financial institution that is more about the customers and not about profiting from the customers. Credit unions are the perfect solution. Credit unions have lower fees and better rates than banks. Credit unions were designed to focus on the customer aspect of banking and not on the profitability aspect that many banks obsess over today. Credit unions generally have the same financial services that most banks have.

The majority of Americans can qualify to become a member of a credit union and, depending on the union, the membership is free. Some credit unions require a very small deposit of $25.00, but it is definitely worth it. Many Americans have not heard or seen anything about credit unions and that is why many of them are not aware of what they offer. Credit unions do not advertise and spend money to make profit from the mass media outlets like most banks do.

Photo from Picasa

Poor Debt Management Can Affect Generations

Most who struggle with personal finance, debt and credit issues do so because they never learned how to properly budget money. It is likely that these same people have more than one parent, siblings and other close relatives who also have personal finance debt issues. Most never learned to differentiate between needs and wants or are not very disciplined in spending accordingly. Left unchecked, such behavior has caused individuals to fall deeply into debt. Just as in situations of physical abuse and substance abuse, the dysfunctional handling of debt and credit is often passed down to future generations. Poor financial decision making, however, is much easier to rectify than the aforementioned dysfunctions.

Everyone Has Control Over Their Own Financial Future

In looking at personal finance, debt and credit, it is important to understand that an individual has ultimate control over their destiny in any of these arenas. While many feel as though their spending is out of control, the exact opposite is true. Even if there are psychological reasons as to why a person’s personal finance, debt and credit are spiraling out of control, as is the case with shopaholics or excessive gamblers, the truth is that, with help, it is still possible to maintain control over one’s personal portfolio. Simply, a person must recognize that they have a problem, that this problem is a threat to their future and that correcting the problem is fully within their control.

Debt Education is the Answer

Once a problem is realized, a person can then begin to take steps to repair their personal finance debt by becoming educated on financial topics. More than ever before, access to financial education topics are readily available to everyone. From personal finance budget software, to local community classes, to library books written by respected authors, a full financial education is within everyone’s grasp and most resources are free of charge. Keeping this in mind, a great place to start one’s financial education is with the basics of understanding how to create a personal finance debt budget and to understand how credit works. This can be learned by combing the Internet and reading various articles written on the subject or books can be checked out from the library to gain a basic understanding.

Low-Cost Debt Counseling is Also Available

Also, several non-profit organizations offer low-cost debt counseling services. Contacting one’s local Chamber of Commerce or related public agency can help locate such services. In doing so, a debt counselor can help with creating a budget, consolidating outstanding bills and offer further resources helpful to one who is determined to regain control over their personal finance debt.

No More Excuses

No matter how a person learned to mismanage personal finance, debt or credit, there is no excuse for this type of behavior to continue. Nor is there any reason for such economic woes to be passed on to future generations. Instead, a person who is truly interested in correcting bad habits and living a stress-free financial life, will take this advice to heart and begin, immediately, to learn all there is to learn about handling their finances more responsibly.