Chill Maadi

In the times that we live in today, money matters are a big deal. The economy is dropping and good jobs are much more difficult to come by than they previously were. With so much concern about money and finances, this is an important time to know how much you are worth.

So what you can you do to determine how much you are worth? First, if you do not already have paper records of all of your debts and income and assets, you will need to spend some time collecting these items. There is a basic formula that will help you:

Net worth = financial assets – financial liabilities

When you learn this formula, all you need to do is plug in the numbers and you will get your net worth.

The first step however, is to learn how to calculate these numbers correctly. Many people make mistakes in their assets and they do not have the proper objectivity to determine what is what. Here are some things to consider when figuring your assets:

• How much cash do you have at hand? Add it all up- this will include checking accounts, savings accounts and yes, that piggy bank in the corner
• Do you have marketable securities? This will include stocks and bonds, option sand more. Check to find out their current values when adding up your assets.
• Do you own a business? Are you a partner or partial owner in a business or company? If so, then calculate this into your assets as well
• Do you have mutual funds? You will need to check the financial pages to find out their current worth to add into your assets
• Do you have real estate? How much? What is it worth? Check with current market values and do not rely on old, outdated appraisals
• Do you have a cash-value life insurance policy? Find out how much your life insurance is worth and add this to your assets calculations. Don’t forget to subtract any loans that have been taken out on the policy.
• Do you have a retirement fund? If you have IRAs, 401Ks or similar funds, factor the value of these in as well
• Look around your home. Do you have collectibles or antiques of significant value? You will need an appraisal on these to be able to factor in their worth.

Now you should be able to get a reasonable figure of what your financial assets are. Now it’s time to look at your liabilities. The golden rule says your debt should be less than 20% of your take home pay. Too many people break this 20% rule but to find out where you stand, you must factor all of your liabilities. Make a list of all your outstanding bills, auto loans, student loans, home loans, life insurance loans, income and real estate taxes, other taxes, taxes due on retirement accounts, child support and alimony and other liabilities.

Now remember that equation?

Net worth = financial assets – financial liabilities

Plug in the numbers and do the math and you will find out your current net worth.

All of these tips can help you determine your net worth. What do the results tell you about your financial affairs? Are you where you would like to be? Is there room for improvement? Are there some areas you would like to change? Make it your goal right now to make these changes.

In these unsettling times you have reason to be worried about your assets. The risks fall especially hard on older workers who are being offered early retirement or are being pushed out of the jobs they have held onto for years. Anyone trying to defend personal investments will be facing hard times.

If you have savings of $100,000 or less your money is safe in your banking account. It is insured by the Federal Deposit Insurance Corp. If you have more in one account be safe and move everything over $95,000 to another account. More than $100,000 can be insured in one bank if you have different types of accounts.

Money markets are not insured but in the 37 years they have existed, they have never lost any money for individuals. If you have a money market fund check its web site. It should have a statement disclosing whether exposed to any troubled companies. Vanguard and Schwab say they are all right. Two T.Rowe Price funds sold Lehman securities at a discount but didn’t break the bank. For an entirely safe money market, choose one that invests in Treasuries and other government debt.

Stay away from the new money-fund-insurances. If they win, their bonuses rise, if they lose the government pays. That’s the kind of shenanigans that brought on our present financial crisis. Your AIG insurance policies and annuities are safe. If you are holding an AIG policy don’t replace it. You will pay fees to leave and more fees to buy coverage elsewhere. If you are shopping for insurance, however, don’t buy AIG. Look for top rated companies with no recent downgrade on their records.

The Securities Investor Protection Corp. insures your brokerage accounts for up to $500,000 ($100,000) so they are safe. Your mutual fund is also safe. Investment Company Act of 1940 takes care of that.

Delay retirement if you can. In poor markets keep your job and your health insurance. If you are let go, look for a part time job. Retirees who are living on their savings should take out as little as possible. If you have debt you are living beyond your means. Why make your life harder by paying for things you bought five years ago?

Mortgage rated have dropped but banks won’t lend and the credit card limits are being cut back. Now is the time to pay off all your debts, stay within your means and get your finances in order for the long haul…

Very few people feel more out of their element than when they are shopping for car insurance. The problem is that the agents seem to hold of the cards in this game. Most car insurance shoppers do not know enough about the specific the legal requirements for the amount of coverage needed.

Car owners understand that there are two basic types of car insurance. You can buy liability insurance, or you can buy collision insurance. Most policies combine these two along with comprehensive insurance in a complete coverage package. Like anything else that you buy, if you go armed with the right information, you will have better success buying the coverages that you need.

The government requires you to buy liability insurance. The reason for this is simple to understand. If you are going to run around at high rates of speed in a an object that weighs in excess of a half a ton, the government expects you to protect financial interests of those who you might run down or hit. It makes good sense.

The amount of liability required is generally the lowest level of coverage offered by insurance companies. Anything above this amount is sold to cover your assets in the event of a catastrophic law suit by the other side in an accident. Many states do not require you to buy anything for the medical needs of your passengers, but most agents and insurance customers will push for medical insurance for your passengers.

Collision coverage is always required by the lender on a car loan. This is the insurance that will fix your car if you have a wreck. Legally, you do not have to have collision. You can decline to purchase this insurance. If you do, the bank will either buy this insurance and charge you for it, or they will come and get your car. If you own the car without a loan, you can elect to live without this type of coverage.

You can opt to add comprehensive coverage to your collision policy. This insurance will pay if a rock breaks your windshield. It also contains protection for the contents of your car agains loss and theft. Comprehensive will pay off for hail damage or other damage from acts of God.

The amount of coverages that you buy with each type of insurance is your call. You can have high or low deductibles. You can increase the amount of liability coverages. How you pay for your policy can affect cost. You have the option to pay all at once, semi-annual, or sometimes monthly.

In today’s economy more and more people are going through financial struggles. Some people have late payments or have over extended credit. Still others are in default of loans and may have even filed for bankruptcy or been involved with a foreclosure. People who have had financial difficulties often feel they will never be able to get credit again which will make large purchases such as a home or vehicle a lot more difficult. Often, these people turn to credit repair agencies that will guarantee improved credit…but it will cost you.

For a fee, these agencies will help you repair your credit. Granted, some of these agencies are perfectly legitimate and they are providing a service, mostly their expertise in consulting with you, for a fee. Others though guarantee quick fixes, pure credit or an increased credit score in thirty days or less. Be wary of shelling out your money to these organizations as they are generally scams. There is simply no quick way to repair your credit. It takes time and effort. But it can be done. It can also be done entirely by you without having to hire someone else to do it for you or advise you on how to do it.

The first thing you will need to do when attempting credit repair is to get your credit report. You need to see where exactly you stand, what negatives are on your credit report and what positives. The basics for improving your credit are to cancel out the negatives and add to the positives. This may sound like common sense but it is easier said than done. It will take drive and discipline in order to do it and a particular commitment to reestablishing your credit. You should get credit reports from all of the major reporting agencies including Equifax, Experian and TransUnion. Then, you will need to focus on the past, present and future.

First, concentrate on the present. You want the latest of your credit history to be the best. Make sure you keep up with payments, do not overextend your credit and keep a sound financial picture at all times. Do not max out any credit cards you may have, in fact, keep as low a balance as possible to reduce your debt. Pay careful attention to your bank accounts and avoid any low balances or overdrafts.

Next, look to the past and take care of negative reports on your credit reports. Do you have charge offs? Are there late payments? If you have an uncollected debt, contact the agency and work out a payment arrangement to settle the account. Even if the debt shows it was significantly late in payment, showing it was eventually paid off will put you in a better credit position. It shows that you have the financial responsibility to take care of debt even if you were late in doing so. Are there erroneous reports on your credit? If so, write to the credit bureaus to have them removed from your credit. You can even add notes to your credit reports for specific financial hardships. For example, if you went through a divorce and were slow paying a debt, you can cite that so that someone looking at your report will know it was a temporary situation that has since been resolved.

Finally, you will need to look toward the future and start to re establish a history of positive credit. If you no longer have credit anywhere, obtain it. Get a small secured loan and build from there so you can show a pattern of prompt payments. Get an unsecured credit card or loan. When you apply for one as a high risk, you will pay outrageous interest rates. This can be risky but if you use it wisely, you can take advantage of the credit available. Instead of using the card for major purchases, make a small purchase and pay for it in two installments. Do this over the course of a year and you will show a positive credit history for that card. You will have to actually use the card, though. Just be careful to use it wisely and pay for it on time.

Always check your credit report regularly to ensure the accuracy of the data. Once you have cleaned up your credit report as much as possible and show a positive current credit history you will find you are eligible for many more credit opportunities. As time goes on the interest rates offered to you will also decrease as you become less of a risk. Having good credit is essential. Rebuilding your credit is a time consuming process that takes a lot of discipline and determination. But it can, and should, be done.

Your credit says a lot about you. It can dictate the type of home you own, the type of car that you drive, and the type of life you live. With data reporting agencies existing hand in hand with credit bureaus and companies around the globe all synching up data about you and how often you pay your bills, it’s important that you know what your credit report says and how to read it.

Identity theft, according to the FTC is the fastest growing crime worldwide. On a daily basis there are hundreds of thousands of reported instances of identity theft and a mounting number of fraudulent charges to banks, credit card companies, and even utility bills. With all of this risk to face, it is imperative that you protect your credit, and your identity from these malicious attackers. If the worst should occur itÕs also equally important to know how to fix your credit report and not be bombarded with empty promises on credit report repair tips from unethical companies.

There exists a multitude of different websites and literature dedicated to credit report repair tips and offering a variety of different suggestions on how to fix your credit report. Most of these websites will charge a fee either on a one-time basis or a membership fee to access their materials. The truth is, most of the best credit report repair tips are free, and can be found on credit agency websites, on credit card company websites and even at the FTC website.

Ordering your credit report on a quarterly basis is the recommended solution to monitor the status of your credit, accounts, and ensure that inaccurate data doesn’t appear on your record. Oftentimes, the longer an item is allowed to remain on a credit report, the more difficult it becomes to have it removed, regardless of it’s validity. Most credit reporting agencies offer you an easy to read credit report, showing you the timeliness of your payments and the status of all accounts over the past 7 years. The majority of these can also provide you with your FICO score, and free tips on how to improve or raise it.

It has become significantly easier to obtain regular monitoring of your credit report through the “Big 3” agencies that handle collecting and reporting data. Many of the sites offer a subscription to automatically send your credit report to you every three months like clockwork. It takes a lot of the guesswork out of when and how often to review your credit report.

Credit report repair tips are quickly becoming a dime a dozen with the escalation of incidents of identity theft mounting, it’s proving extremely difficult to detect, prevent, and at times remove fraud. Credit repair can be costly and time consuming. The FTC reports, on average, it takes 100 hours per incident to achieve removal of negative items appearing on your report. Monitoring is the first step to reducing the time spent in disputes and knowing what your credit says about you.

Most of us have no idea how to select our auto insurance. When the topic drifts away from deductibles and rental re-imbursement the average person will drift away on a mental vacation, and hope that they have the right selections on their policies. Whether your selections come from a “do it yourself” auto insurance web shop or your own personal insurance agent, there are some things you can do to make sure you’re getting the best quote.

There are plenty of websites out there that offer an automated service advertising what they claim to be the best way to get a car insurance quote. Typically, this service will offer you a side-by-side comparison of 3 or 4 different agencies giving you a rate that is competitive enough to try and earn your business. It sounds like a great solution, however, the majority of these are offered on an insurers website, and the lowest quoted rate is typically from that same vendor. After all, they don’t want to loose business.

Going directly to an agent will offer you much of the same. The agent is, of course, going to pitch their services and coverage to be competitive in the market place. The biggest advantage of getting a quote directly from an agent is that they can explain the coverage to you in simple terms, so you aren’t bored to tears by legal terms and phrases that you will find in a do it yourself selection plan.

The best way to get a car insurance quote is to first off, know your limits. Know the amount of insurance you need to have, select a comfortable deductible and really weigh the cost effectiveness of rental reimbursement. Things that insurance companies build into their policies that seem convenient might not be a money saving option in the long run.

Start out by talking with an experienced insurance agent. Get referrals from friends or family on someone that they have worked with and trust. Sit down with them and ask them to explain the coverage limits, and have them put together a quote. Once you have a complete understanding of what you’re buying, it will make the selection process much easier.

It’s advisable to compare the insurance quote you just received with at least 4 different providers. Use the knowledge you gleaned from the professional that you have spoken with to comprise a list of questions to ask any other agent you receive a quote from. Knowing their jargon will help you decipher what changes they are making to their quote in making it competitive with others you might have looked at.

Once you know your products, and have obtained a few quotes directly from agents, it never hurts to look at the online do it yourself shops either. There are a few out there that are known for providing stellar service in the event of an accident while saving money by cutting out the middle man. If you have a good understanding of the legal terms and comfortable financial figures it’s easy to get a quote and adjust it online based on your needs.

Knowing the product when shopping for car insurance is the most fool proof and the best way to get a car insurance quote that is to your liking. Since not knowing the product well is the largest mistake people make there are many people paying far too much for their coverage. With a solid education on the coverage limits, you will find yourself in the driver’s seat when you get your next car insurance quote.

We all know that gas prices are crazy expensive. Personally, I need to buy gas in the evening, not in the morning because spending $77 before 8:00 in the morning simply puts me in a bad mood. Here are some quick and easy suggestions that might help you in saving money on gas. I won’t mention carpooling or moving closer to work because those are life changes. They are great ways to save money on gas, but you can’t implement them tomorrow. Here are 8 strategies that you can use to help save you money on gas tomorrow!

Bunch up your errands

This is a great way to save gas money and time. For example, if you need to go to the bank, the post office, the dry cleaners, and the spatula repair shop, try to do all of these tasks on one trip. Consider changing dry cleaners or grocers to a stores that might be closer to your house or work. Less driving means less gas money spent.

Jog

Many people have gym memberships. That is great. I think exercise is really important. I especially like the way that members might drive to the gym parking lot and drive around for 10 minutes to find a parking space closer to the entrance. If you like driving to the gym, great, but realize that there is exercise that you can do that doesn’t require you to drive to a gym. This could save you money on gas and a gym membership.

Team grocery shopping

This is especially valuable for large families. Instead of driving to the huge-o-mungo-buy-everything-here-mart, you could coordinate with a couple of other families. Go in one car. This could be more fun too. Have one person drive every month. You’ll only need to drive once every 3 months. Just make sure these people are reliable and there is enough storage space for all of the pop-tarts you’ll buy.

Use grocery store gas stations

Several stores provide discounts on each gallon of gas when you use their loyalty card at the pump. I’ve seen some discount promotions as high as 10 cents a gallon.

Empty out your car

The heavier your car is the more gas it requires to move it. Empty out the back seat and the truck. If you have tons of sport equipment, baby stuff, clothes, gold bars, or just random junk, realize that this is added weight in the car. Without the added weight you’ll get better gas mileage.

Inflate your tires

This is a strategy to keep you safe and save gas. Your tires should be properly inflated. The recommend tire pressure is generally on the side of your tire. A tire gauge is used to determine the pressure and some mechanics will check this for you for free. You can also check this yourself. A tire gauge might cost $1.99 at a basic auto parts store, and determining your tire pressure takes just a few seconds. Under inflated tires will cause you to waste up 10% of your gas, while over inflated tires will provide less traction, a danger for proper braking.

Get an oil change

A well maintained engine will use gas more efficiently. If you are driving a clunker, you might not be able to afford an engine overhaul, but an oil change might cost you $40 every three months. It will help preserve your engine AND help save you gas.

Don’t drive

Just don’t drive. Create a commitment to yourself that you will simply drive less. Now, this might not be immediately feasible for all aspects of your life. For example, you might need to drive to work. But, do you need to drive every place? If the park is four blocks away do you need to drive your dog there for a walk? Can’t you walk to the park?

Enjoy these quick and easy tips to help you save money at the gas pump.

Americans are facing an ever increasing pile of debt however not all debt is bad. Debt is a financial tool and like all tools it can make our lives easier if used correctly but can be dangerous if used incorrectly. It’s important to be able to tell good debt from bad debt.

Good Debt

Good debt is debt that is of more use to you than it costs.

I think everyone could agree that if we could borrow money at 7% and invest it at 10% then we should be borrowing as much money as possible. In a similar train of thought it sometimes makes sense for us to borrow money to invest. Many people get a student loan to attend collage. They repay the debt from their salary after school. Generally people the more education you have the more you earn so paying for education is a form of investment.

Many people also borrow to buy a house. Traditionally house prices have risen over long periods of time in many countries. If the interest rate on your mortgage is less than the percentage increase in the price of your house then borrowing the money to buy you house was a good decision. Of course the trick is you never really know what your house will be worth in the future.

Another type of good debt is debt that makes purchasing some types of goods easier. Imagine trying to purchase a $50,000 car in cash. Most of us would have to wait a very long time before we could drive such a car. It might be worth paying the interest rate to lease the car and enjoy it today. It doesn’t make sense for use to spend all the money for a car in one day but enjoy it’s use for the next 3 to 5 years. Debt helps us spread the cost of expensive, long-lasting purchases over the life of the good which makes purchasing these goods easier.

Just be sure to compare rates to find the best deal and be careful not to borrow so much that the monthly payments are difficult to make.

Bad Debt

Bad debt is debt that costs you more than it’s worth. It’s like borrowing money to invest and paying 10% to borrow the money but only getting 7% return on your investment. Clearly you’re loosing money.

If you’re borrowing money to pay for inexpensive items you consume regularly then you’ll find yourself in trouble quickly. Don’t buy meals or vacations on credit if you can’t afford to pay it off immediately.

Final Word

The next time you consider using debt remember to ask yourself if it’s good debt or bad debt.

If you are laden with a lot of consumer debt, traditional wisdom says that you should pay off your higher interest rate debt first. But, an alternative method incorporates a psychological element which may keep you motivated.

Here’s how it works…

First, make a list of all of your consumer debt: credit cards, car payments, loan payments – even your house payment.

Now, here’s where you deviate from the traditional school of thought about debt reduction: arrange your list according to THE DEBT WITH THE SMALLEST OUTSTANDING BALANCE.

Begin paying minimum payments on all outstanding debt EXCEPT the debt with the SMALLEST balance. Scrape up as much extra income as possible and begin paying as much as you possibly can towards paying off THIS debt.

Wait a minute? Aren’t we supposed to pay off the higher interest debt first? Some would say so – and if you are looking at it from a purely monetary viewpoint – yes. Paying off higher interest debt first will result in the lowest total amount paid after all is paid off.

However, it may take several years to pay off your higher interest rate debt and many people will lose motivation. The beauty of paying off your LOWEST BALANCE instead of your highest rate first is that you get to see 1 or 2 debts disappear very fast. And then, of course, you begin taking those payments and applying them to the next debt with the smallest balance.

Seeing your debts drop off quickly like this may help motivate you to stick with your debt-reduction plan as opposed to waiting for years to see your first debt drop off.

Here’s an example:

• Debt A: balance of $4000, and a minimum payment of $75.00.
• Debt B: balance of $2000, and a minimum payment of $50.00.
• Debt C: balance of $6000, and a minimum payment of $100.00

Okay, let’s say you have $300.00 of extra income you can put towards debt reduction each month.

Start with Debt A and apply all $300.00 toward that debt. Note that the minimum payment is only $75.00 so this debt is going to pay off very quickly.

Once you have paid off Debt A, take the $300.00 AND the $75.00 you were paying on Debt A AND the $50.00 (minimum payment for Debt B) and apply all to Debt B for a total of $425.00. Paying $425.00 towards Debt B as opposed to $50.00 is going to result in this load getting paid off very fast.

Once Debt B is paid off, you are going to pay all ($300 extra income + $75.00 form Debt A + $50.00 from Debt B + $100.00 for Debt C) towards Debt C for a total payment of $525.00!

By “snowballing” your debt payments according to PAY-OFF TIME as opposed to interest rate, you are going to have the satisfaction of seeing some early debt pay off quickly which will motivate you to keep going.

Whichever method you choose, get on the road to financial independence now.

Remember, “…the borrower is slave to the lender.” (Proverbs 22:7)