Refinance Tips



Refinancing

To get a low cost refinance, you need to show your assets and income. Arrange all the related details carefully. Refinance for your high interest rate mortgage first. Search the newspapers, TV and the internet for the best option. Select the best type of refinance that suits you. There are number of options like fixed rate, adjustable rate etc.

Get all the details from the lender before refinancing like other fees, flexible options, terms and conditions etc. Apply for preapproval to make sure that you are getting the lowest rate. Make sure that your original mortgage does not have any penalty for early payment. Many people don’t know about the pre payment penalties even when they pay it as it is paid with the mortgage. The prepayment penalties can be your six months interest.

Student Loan Tips for recent graduates

Graduate

The cost of education is getting more expensive every year and to afford it many of you might have taken loan for your studies or are about to take loan. If you are recent graduates (congrats for your graduation), you may be thinking about how to pay your education loan. Many of you may be started paying for your student loan. It’s important for you to keep your students loan debt under your control to avoid all the extra costs and have an affordable payment. Here are some points to consider for your loan repayment.

The very first thing to think about is the grace period. Different loans have different grace period. Some provide six months of grace period and some provide nine months.  Check your grace period for your students loan with the lender.

Consolidate your loans. It’s good to consolidate all your loans with single monthly payment and single interest rate. Find the best consolidation loan. Take your own to find the best one. Never consolidate your federal loan with the private loan. You don’t have much options in the private loan compared to federal loans. shop around for the best deal available. Consolidation can save a lot of your money.

Inform your lender with all the information up to date. Tell them all the information if you change your address or phone number. if you are unavailable when they need you then it can cost you a lot. Stay out of trouble. if you have any problem with the lender then talk to them and resolve it.

Personal Budget

Budget

Personal budget is a finance plan that allocates future personal income towards expenses, savings and debts. Personal budget is an important tool for everyone. You don’t get rich by earning more; you get rich by using it wisely. You might have heard about many people who earned more but got poor because of their spending habit. If you plan well, you can satisfy all your needs and save some of your earnings. It also helps you in finding out all your extra spending.

There are several tools available for planning your personal budget. Many websites provide software for budgeting and help in managing personal finance. If you have any doubt in preparing your personal budget or want to know the percentage of allocation, you are free to contact me in Ask Moran section. I will help you in preparing your budget. Find out the percent of income to allocate for different categories like house, savings, medical etc. Many people have suggested different percentage of income for different categories. It’s always suggested to allocate a minimum of 20% of your monthly earnings towards savings.

Set a goal for every budget. Your budget should be flexible and easy to understand. Analyze the ways the money is going out and try to block them.  Your debt should not be more than your previous month’s debt. If it is exceeding then try to cut down your expenses but don’t reduce your savings. Track all the expenses and make sure that no money is spent on the extra cost.

Tips for investing in stock market

Investing in stock market is not a simple thing. Many people lost everything in the stock market. It involves huge risk. You are trading at your own risk. No one is responsible for your loss in stock market. If you are looking for investment without risk then check my post on riskless investment.  It’s always suggested to get the information from some people who deal with shares. There are some small common mistakes to be avoided. Analyzing the stock market before investing is the most important part in it.

Warren Buffett has suggested that every investor should be able to understand basic accountancy principles, an annual report and stock market history. Without this basic knowledge you can’t manage your investment.  

To begin your investment, you should select a stock broker first or wait for a company’s IPO. The stock broker acts like an agent for you in the stock market. You don’t need to go anywhere to get the stock broker. You can do all these things online.

Nowadays people use some software which helps them in trading in the stock market. This software helps them managing time, risk, investment etc. It helps you in many cases such as stock charting and technical analysis. If you want you can buy them. Each software has its own advantages.

Invest in the best place. Before investing go through the particular company’s profile, current BOD, CEO and other management people’s profile. Never invest in any company only because it’s earning huge profit.  Don’t invest all your money. There is no guarantee that the company or the stock market will be same as it is today. Its dynamic in nature and anything can happen at any time.

Retirement Fund

Retirement accounts are the excellent way to save your money for your future. It is important for you to know about the how your retirement fund works.

It is important for you to think about the day when you will retire. You may get another job or not but it’s good for you to have a safety for retirement. For most of the people retirement fund can be the only source of income after retirement. You will be forced to work even after your retirement if your retirement fund is not enough for. There are many reasons which can affect your future even if you have a luxurious life now. Inflations, taxes, rising in cost of living etc can cause your future. It is always advised to prepare your retirement plan. Another fact is that contributing towards your retirement account is eligible for tax deduction. Which means you can save some tax money by contributing for your future. Even part time employees are eligible for retirement funds if they work for a minimum of 1000 hours a year.

The first thing you need to do is to understand the retirement plan by your employer. There are many types of plans and your employer may have one or more types of plans. You should verify the types and the requirements. You should determine your financial position after your retirement and also determine your needs after your retirement. Then prepare your retirement plan with the information. If you don’t know to plan or got any problem in planning then provide your information in Ask Moran section. I will help you in preparing your retirement plan.

There are plenty of retirement plans. There are two major types of plans and all the other falls in these two categories, defined benefit plan and defined contribution.

 In the defined benefit plan you are assured by the employer for specific monthly benefit after retirement. It is calculated on some basis. For example it may be 5% of your average salary of for last 3 years of employment.

In the defined contribution plan you and your employer contribute some percent of your salary to your account. Generally those contributions are invested. The best example for defined contribution plan is 401(k).

Top Debts

 Debts are increasing in everybody's life around the world due to the financial shortages. Debt may seem to help people but sometimes it creates more problems.Many people are relying on debts for their everyday life. This may help them at that time but it may lead to many problems in the future. People borrow many types of loans. People should try to avoid debts and pay their currents debts as quick as possible. Let's talk about different types of debts.

Credit card debts: A debt used by many people everyday. Its a small plastic which helps people in buying without having money. Credit card helps you to afford something which you can't afford. Everyone likes t get more than what he\she should get and it may look good for sometime but it will show its cause in the future. To know more about problems in credit card debts check out here.
Students loan: This is loan for education purpose. You may think that students loan is good for your future. But it not as good as you think. This is the place where all your debt cycle starts from. You invest a huge amount in your studies. But at the end of the graduation all you get is a huge debt and a small job. You spend 10 to 20 years of your life in paying it. Those 10 to 20 years are the most important part of your life. In those years you pay the loan installment first and then take the balance amount of your salary to home. Your balance salary will not be enough for other expenses. Then you will have only one option left and that will be getting other types of debt.
Home Loan: I can never consider it to be a bad form of debt as I have a home loan. Fankly speaking I dont think it as a debt. I consider it as an investment. I purchased a home a year ago and now its value is double of my loan amount. Home loan will be considered to be bad only when people buy without thinking. Before applying for a home loan one should think of many things like whether they can manage their life with the balance amount and any other expense they have in the future which can affect their life. Even though its like an investment, you should never get a situation where you sell your home to pay off the debts.
Auto loan: When I was in college, I used to walk 4 miles to go to college from home. Many of my friends suggested me to buy a car, but the only thing I said was that "I don't wanna spend thousands of dollars for a car on which I have I to spend few dollars for gas every week". I prefer walking over riding a car( another truth is that I am a lazy guy and I can't maintain it. I prefer sleeping instead of  washing and cleaning it in the weekends). Even now I prefer in using the public transport. I dont wanna spent huge portion of my earnings in paying for the auto loan. I have many things to buy.
Retirement loan: A retirement fund your investment. Its investing in your future. I dont prefer you to get retirement loan .i.e 401k loans as it will restrict you from moving away from your employer and getting a new job. You should consider many things before taking a retirement loan like cost of loan, its effect and the purpose. It depends but try not to use it untl you its the only option for you.
Personal loan: Personal loans are the borrowings from family and friends. Many prefer it as its easy to get it. I never prefer personal loans as it may cause the relation.
Did you ever calculated the extra money you paid(or will pay) in all the debts. Its easy to calculate it. Think on how much you can save and how you can use them

Problems with Credit Card

Image via Wikipedia

Credit card is just a small plastic which helps people to buy goods and services . It helps in buying without having the money. But do we really know about how it causes our life. We will spend more if we use the credit card. We feel the money going out of our pocket when we use cash but we don't feel the same when we use the credit card. A study shows that people spend 47% more while using the credit card. Just think what you can do with that much money. 

I don't prefer using a card and if you want to use a card then use debit card.You may think that you can beat the system by paying the money in time (the fact is  many people don't pay in time) but you can't beat the system.

With the increase in purchasing power the spending tendency of the people also increases. The useless thing also may look important to us. If you want, you can check it by yourself. Use credit card for 1 month and note down all the spending in a paper. In the next month use cash for all purpose and note down the spending in a paper. Then compare both the papers and you will realize the truth. If you still want to use the credit card then think whether the stuff you are going to buy is useful to you or not each and every time before you use your credit card. Pay your debts in time. For money saving tips read my post on save money. You can have your life with credit card but you will have better life without a credit card.

Riskless Investments

Investment is putting money into something with the expectation of gain, that on thorough analysis, has a high degree of security of principle, as well as security of return, within an expected period of time. Everyone invest his\her money somewhere. Investment also involves risk. The risk level of the investment depends on how much money is involved and how much return does we expect from it.
But many of us are either afraid to invest or dont know much about investments. For those people  their are some risk free investments.

1. Bank deposits:   The easiest way to invest your money. Even though its doesn't give much returns like other investments, its still a better option. You can use the CD i.e Certificate of deposit ( or term deposit). It offers a higher interest rate and is virtually risk free.
2.Retirement plan(401k): Investing in your retirement plan is a best place to invest. Its very useful if we utilize it well. Many of us realize its important very lately, when we have few years for retirement.
3. Real estate: Investing in the real estate is never considered to be a waste. Every year the value increases. Even though it is risky while buying it, but if you own it, its never considered to be a loss.
4. Gold:  It is been used as an investment from years. Of all the precious metals, gold is the most popular as an investment.^[1] Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest.) Its known to everyone that whenever their is a crisis like war or stock market crashes, gold value increases. As per my analysis gold value is increasing at the rate of 30% p.a.
Their are plenty of ways to invest your money but these are simplest risk free investments for people who either are not ready to take risk or don't know much about investing.

Top 4 ways to save money

Savings is considered to be a major problem for everyone. Many times we dont know about how we spent the money but at the end of the day we see an empty wallet. In the previous post I said the importance of savings.  We are not secure in the future unless we save some amount of our earnings, no matter how much we earn. Here are the top 4 ways to save the money.It also includes about my life and how I live to save more money.


1. Cook your own food: It may be hard to do it, but it will save a lot of money.  Its also good for your health. When I started my college life after my high school, I had to live alone as I was new to that city. I was living with my parents and that was the first time I moved away from them. For the first month I ate out, but soon I realized that it is causing my health as well as finance.  Then I searched around the internet for best cooking websites and started cooking( and my mom did the best in advising about cooking everyday in the phone). The day I started cooking I stopped going out food( even though I puked the first day I cook) Amazingly I saved around 40% of the money. From that day onwards I never went to any restaurant except during any friends special event parties.
2. Avoid unnecessary entertainments: Sometimes we feel some movie, concert or sports events important than anything. In that time we don't care about other things. But if you think about your position and the importance of such entertainment, you will know that such entertainment is not important to you. I dont say that people should stop all those things, but at least try to minimize such expense. Look around yourself, you will get a lot of free entertainments. I had never been to any such events. I don't see movies in theater not buy any DVD. I see movies only in the cable. I dont spend money for entertainment. I entertain myself. We got a lot of options to entertain our self. I dont get time to spend time for all those free entertainments. I read a lot of books and also has written 6 books. I create my own movie using the audio, video and animation software. I am not a technically qualified person. I learned by myself in the internet.
3. Stop smoking and drinking: It may be hard for some guys to quit it who are addicted, but its not important. But those habits are wasting your health with your money. Sometime one can use them for pleasure but addicted to these habits is not for good. People spend money to spoil their own health. Addicted to these habits is like committing suicide.  Its like we buy poison and drink a drop everyday.
4. Use public transportation: It is a boring and prestige problem for many guys to use the public transportation. But believe me its the best way. It has several advantages. It saves your money. You dont have to waste your time in traffic waiting for the signal and looking at the traffic lights. You can sit in the public transport and do some other stuffs.
It may hard to follow these steps for many.

Saving Money

The recession which the entire world entered in December 2007 has shown the importance of savings to us. Even though it is said that we are recovering from the recession but still in many families we can see its effect.

Empty Wallet

Our future will be in great trouble if we still didn't get the importance of savings.
Every year many of us make new year resolutions to save more money but never followed it. But now it's time to do it.
In general people should save at least 25% of their income but many of us save less than 1% of our income. That's not good for us and our family. One shouldn't expect it to be made by the employer or the government.
Twice as many Americans are saving more money today than they did before the recession, according to a survey conducted by America's Research Group for CNBC.com. That's good news. But thats not enough.  It should be done by each and every individual. There are many ways for savings. We should think and use them. Our future is in our hands.