Learning from Your Financial Mistakes (entrepreneur listings)
No commentsBy Mervin Hester
In this day and age, there really shouldn’t be any reason to make certain financial mistakes. Do a search of the internet and you will find that there are thousands of articles out there that warn you of the pitfalls of certain choices. Advice for living a financially stable life is everywhere. What are you waiting for?
Here are the most common mistakes that I’ve seen people make. I’ve even made a few of them myself. These are the financial mistakes that you can learn from. You’ve probably made a few of them yourself, they are very common.
Mistake #1: Using that little plastic card to get what you want.
We’ll just start off with the number one mistake out there. This is probably the most common mistake in the country. Almost every person in the US today has a credit card. It is almost like a right of passage when you turn eighteen. There are even people out there that aren’t eighteen yet that have them.
Credit card debt is the fastest way to ruin your finances. It is easy to acquire and difficult to pay off. The minimum balance doesn’t pay off enough of your outstanding balance to help you very much. You will be paying on your balances for decades. Even a $500 balance can take you over a decade to pay off if you simply make the minimum payment.
Add in the interest rate, which rarely goes down. If you miss a payment, you will really be paying the bank. Thirty percent interest is common on a credit card once a payment has been missed. And you only have to miss that payment by a day — which can happen in the mail or processing if you don’t plan ahead well enough.
Mistake #2: Buying more home than you can afford.
With the real estate market in the state it is today, many people are regretting their housing decisions. Adjustable rate mortgages are acceptable loan products for some people. But only if they can afford the maximum rate that the loan can hit if interest rates go up. Too many people only consider that introductory rate. They stretch and purchase as much as they can afford. Then, when rates go up and their rate adjusts, they can’t afford the payment. Add that to a slowing housing market, and you may have a foreclosure on your hands.
If you are going to buy a home, make sure that you purchase what you can afford. Take out a fixed-rate mortgage so that you know what your payments will be. If rates go drastically down in the next couple of years, you can always refinance. If rates go up, you are protected. Try to aim for a 15-year mortgage over a 30-year. It will save you hundreds of thousands in interest. But if you can’t do it, a 30-year fixed-rate mortgage is an acceptable loan choice for the purchase of a home.
Mistake #3: Not controlling your money.
Too many people live paycheck to paycheck. They have no savings. They have no retirement plan. They have nothing to back them up in the case of an emergency. They have no control over their money.
You have to take control of your finances if you want to retire someday. You have to learn how to budget, save, invest and spend. All it takes is a little time. And once you get in the habit, you will notice that your life has more control. You should say where your money goes, not lenders or creditors or anyone else.
Mistake #4: Not saving for retirement.
There are more seniors in the work place now than there were twenty years ago. And even more than there were fifty years ago. If you want to retire with enough money to live comfortably, you have to start putting something back today. Start an IRA. Contribute to your employer’s 401(k) plan. Figure out how much you need to invest and find a way to do it. This is your future. You don’t want to reach sixty and realize that you can’t afford to stop working. There is no guarantee that you will be able to draw social security or other forms of assistance then. What if you become ill and have to retire? What if you get hurt? Prepare for the future. Start saving for retirement today.
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Tightening Your Belt 101
By Mervin Hester
If Americans were polled about their personal concerns, at the top of the list would be finances. Finances are important in our lives, from the national budget to the family budget, and when our finances are unbalanced, it can lead to serious trouble. Not only are bad finances linked to a significant number of failed marriages, but our personal financial history becomes public record when we apply for a job or credit.
Living month-to-month or buried in debt is hard, but many people don’t have to live that way. Simply reducing unnecessary spending will help to balance the budget at home and free up money for paying off debts.
Implement one or more of the following helpful suggestions to aid in balancing the home budget, and breath a little easier.
Limit eating out
If you’re like most Americans, you eat out at restaurants, fast-food or not, far too often. Setting a limit to the number of days or times we eat out per week will not only help our waistlines, but our wallets as well. The cost of one restaurant meal can feed an entire family of four for dinner at home, and simply eliminating that cup of coffee and donut in the morning can save up to $1,300 per year! Spend less than half that amount by making coffee at home and popping a bagel in the toaster.
Take stock of your utilities
Utilities are impractical to eliminate, but their cost can be greatly reduced. Many gas and electric companies provide discounts for upgraded appliances, or percentages off bills that show a decrease in power usage. Also, eliminate any unnecessary phone services, such as Caller ID or Call Waiting. Remember to check the monthly water bill for signs of a leak, which can cause a huge financial impact. Overall, review charges and statements each month to avoid paying for unused or undesired services.
Get a new quote
Many people go year to year not realizing they can make a change on their homeowner’s or vehicle insurance. Getting a new quote can be as easy as spending a few moments on the internet providing some key information. The savings can be drastic, especially if multiple insurance policies are purchased from the same company. As with the utilities, coverage should be reviewed periodically for changes that can be made.
Reduce unnecessary travel
Most people have multiple errands to run each week. Running all errands in one weekly trip will save gas money, as well as costly wear-and-tear on the vehicle. Also, limit vacations and out-of-town travel to the most necessary of events, such as weddings and funerals. Forgoing unnecessary travel will tremendously help the budget.
Give up a little entertainment
Eliminating a few channels on the cable or satellite television service can save substantial money each month. Are the movie channels really necessary, and are they watched that often? Magazine and other entertainment subscriptions should also be looked at as a possible area in which to save money. Do you really need 14 magazines every month? Anything that isn’t used or read should be eliminated.
Keep a budget and stick to it
Finally, the most important aspect of balancing a budget is to know what the budget calls for. Make a list of all necessary items and their cost each month, and on that same paper write down the expected monthly income. Remember to budget a little extra for emergencies or savings. Cut down wherever possible to keep expenses below earnings. As the amount of money left over increases, more money to pay off debts or enjoy a splurge here and there becomes available. Remember to make a new list each month, crossing off bills as they are paid, in order to avoid late fees - which will only add to next month’s bills.
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Practical Advice on Moving
By Dillon Norris
You’ve landed that new job in another city, you’re retiring out-of-state, your family’s growing and it’s time to upgrade. All these are great signs that life is going well. Keep it going well by choosing the right mover to get you where you’re going.
Tips on choosing a mover
– Choose the kind of mover you need, such as a relocation service, interstate moving company, local mover, pack-and-stack service, household shipper or trucking service.
– Ask your friends or neighbors who have moved recently for recommendations. A word-of-mouth referral is the best way to be assured the movers will do a good job.
– Ask prospective movers for references, and call them to see how satisfied their customers are.
– Get written estimates from at least three movers before deciding.
– To minimize the hourly charges for a short move, try to do as much of the work yourself as possible.
– Consider whether or not you would like the mover to pack and what other additional services you may require.
– Know the difference between binding and non-binding estimates. With a binding estimate you know in advance what your move will cost. However, it also means you can’t add anything extra that you might have left off during the estimate. With a more open-ended non-binding estimate, there is no limit on what you can ship. Final charges could be higher or lower than the estimated cost, depending on the actual weight of the shipment.
– Inform the mover of any possible unusual situations, such as access or parking problems, on either end so your estimate can be more accurate. If the mover does not know about possible problems in advance, additional charges will likely apply.
– Verify that the mover is licensed and regulated. You can inquire from state agencies that regulate transportation services, or look in the phone book under a Public Utility Commission (PUC) or Department of Transportation (DOT).
– Spend some time talking with each moving company. If they take the time to understand your moving needs, it’s a good sign that they will provide excellent service. If the company representatives aren’t friendly and helpful, call someone else.
Things to avoid in choosing a mover
– Do not accept estimates over the phone. Moving is a complicated business with many variables, and it’s impossible to give an accurate quote without seeing the property and the items to move.
– Do not take everything with you to get rid of at the other end. This will add costs to your move that are avoidable. It’s recommended to dispose of unwanted items before you move so you don’t have to find room for them later.
– If you are looking for movers on the Internet, make sure you do not use a broker. Once a broker has your business, he sells the job to the highest bidder and is no longer responsible to you. With a broker, you’ll never know who is going to show up on moving day and they will usually charge you more than the broker led you to expect.
– Don’t let a moving company bait you with low hourly rates. You’re paying for your belongings to be shipped professionally, not for the cheapest option. Remember-you get what you pay for.
Questions to ask potential movers
Be sure you get the answers to these questions before you choose your mover.
Are there extra charges if the movers have to go up an extra flight of stairs even if I did not know about it when booking?
What is the estimated delivery time and how will the driver notify me?
If I pack myself what type of packing material is acceptable?
How and when do I pay? Cash, credit card, check personal or certified?
Will the movers disassemble everything and will they reassemble all items at the destination?
Following the initial weigh in, will there be an additional weigh in to determine actual cost?
If I have purchased liability insurance and I need to make a claim, what is the process?
How long has your company been in business? How much experience do your packers and drivers have? Do you offer storage and, if necessary, are you licensed for interstate transport?
Be assertive when asking questions. You have the right to be confident about your choice in movers.
Important documents for your move
Be sure these documents are provided by the mover before your move.
– A certificate of insurance showing all required insurance liabilities.
– A written estimate.
– Proof of workers compensation coverage, which will protect you from liability in the event someone is hurt.
– A bill of lading-the legal contract between you and the mover that defines the services the carrier agrees to provide.
– An inventory of your items. The driver will present the inventory to you for your signature after the van is loaded and again when the shipment reaches your new home.
Moving can be a stressful time, but remember, many millions of people have moved before you. Take advantage of the wisdom gained by following these steps to have the smoothest move possible.
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