How To Create Your Own Financial Bailout

This economy has many in financial ruin. Many individuals have lost their jobs, and the unemployment rate stands at well over 8%. For those that are lucky to still have a job, wages are stagnant. Because of this and the remnants of the mortgage crisis, many individuals are having a difficult time staying current with their bills. In addition, the ballooning costs of medical care and the astounding number of consumers without insurance only makes matters worse. If you find yourself getting behind in your payments and not seeing a way out, whether due to a loss of a job or emergency medical expenses, it’s easy to lose hope. This post addresses some approaches you might consider if you’ve found yourself in a situation where you are past due on your balances and need to find a way to dig yourself out.

There are a couple options for people that are in significant financial trouble.

1. Do Nothing: This is certainly an option but hope is not a strategy. By not engaging in the issue and remaining in denial of your financial insolvency, you are just waiting to be sued by impatient creditors. Add to that the legal costs if you do get sued and you can see why doing nothing is a poor option. Doing nothing will really only make matters worse.

2. Contact all creditors: With the mortgage crisis still being sorted out, there are many programs sponsored by the federal government to help modify loans that are underwater or that consumers are having trouble paying. For instance, the Making Home Affordable program will be in effect through the end of 2013. You can call 1-888-895-HOPE for more information on this program and to learn about other resources. Beyond the mortgage landscape, many creditors may be willing to work with you and lower your interest rate if you contact them. After one of my personal credit cards defaulted to 32% after a missed payment, I was able to contact the credit card company and negotiate a reduction. Negotiating reductions in interest rates and modifying the terms of loan agreements with creditors can really help balance your budget.

3. Consider debt consolidation: If you have a lot of debt and are getting contacted by many collection agencies, your debt may already have been sold. In this case, contacting a debt consolidation company may get you the help you need to stay afloat. These services offer free financial counseling and reduce the number of collection calls that you will receive. They will help you structure a payment plan that will work within your budget and allow you to pay your bills.

4. Bankruptcy: If all of these options fail, you can always consider bankruptcy. Bankruptcy protection has been a saving grace for millions of Americans that are in way over their heads. Bankruptcy can eliminate much of your debt and put you in a position to get a fresh start. While this process will reduce your credit score, it is not the credit bomb that many fear. Many are able to rebuild their credit within a few years.

Saving in the home

The desire to reduce spending is a common one. Some people want to free up extra cash in their budget to pay down other debts more quickly. Some want to use extra cash to boost savings and retirement account balances. Others simply want to enjoy the peace of mind that comes with having a little bit of extra cash left over at the end of each month. If you have been looking for ways to save, the good news is that you may be able to find savings right in your very own home.

Insurance Savings 
Many people today carry multiple insurance policies. If you are like others, you may have a homeowner’s or renter’s insurance policy, life insurance, auto insurance, and health insurance. Finding cheap life insurance as well as cheaper coverage for all of your insurance policies can help you to save a considerable amount of money. You can compare rates with a price comparison site to find savings. You can also consider other options for savings such as increasing your deductible or lowering coverage slightly.

Energy Savings 
There are numerous ways homeowners or renters alike can save money around the home. Simply adjusting the thermostat a few degrees cooler in the winter or warmer in the summer can provide you with considerable savings. Installing and programming a programmable thermostat to adjust the temperature daily when you are out of the house can also save you money. You can consider getting your heating and cooling system serviced annually, as this has been shown to improve how efficiently these systems operate. Further, consider getting a home energy audit to identify do-it-yourself projects that can yield savings. For instance, an energy audit may indicate you could save money by installing new weather stripping on doors and windows.

Grocery Savings 
Many people who have the desire to cut down on expenses have already made the decision to avoid pricey meals at restaurants. In the process of eating at home more frequently, the home grocery bills also increases. Through meal planning efforts and improved shopping strategies, you can save money on your grocery bill. For instance, consider not just the price of ingredients that are used to prepare a meal, but also consider if that meal will provide leftovers that can be eaten for lunch or dinner. Some meals are considerably more expensive to prepare, and these can be prepared on special occasions rather than on a regular basis. Also consider preparing meals based on seasonal ingredients as well as items that are on sale in your grocery store on a given week. This requires flexibility while in the grocery store. It is often best to shop for food during non-peak hours so you can have increased freedom to compare prices and find great deals on your food purchases.

Through the above steps, you may be able to further reduce your monthly expenses. These strategies and steps can help you to save money each and every month, and this money can be used to pay off debts, add to your savings, or provide you with added peace of mind each month.

How Is a Credit Score Calculated?

This guest post is written by Elizabeth Roque, an in-house writer for Franklin Debt Relief. She presents information about debt relief services, credit card debt reduction and getting out of debt on a variety of financial sites online.

Your credit score is an essential part of your financial life and can have a direct impact on many different areas of your finances. Your credit score can affect your insurance rates, low interest rates and deposits when entering into contracts. If you want to save money, it’s important to maximize your credit score as much as possible. In order to maximize your credit score, you need to know what goes into calculating it. Fair Isaacs is the company that created the FICO scoring model that the major credit bureaus used to calculate your score. There are five components that are evaluated when coming up with your credit score.

Payment History

The first factor that is considered is your payment history. This is the most important factor that credit bureaus look at when calculating your score as it comprises 35 percent of your credit score total. Your payment history tells the credit bureaus whether you make your payments on time or whether you regularly make them late. In this section, the credit bureaus will also look at information like judgments against you and how many accounts you have paid as agreed in the original terms.

Account Balances

Another factor that the credit bureaus will evaluate is your amounts owed. This makes up 30 percent of your credit score. The credit bureaus will look at every account that you have and see how much you owe. In addition to looking at the amounts owed, they will also look at the amount of available credit. If the amount that you owe is too close to the amount of available credit that you have, this will hurt your score. If your balance is more than 30 percent of the available credit limit, this will reflect negatively on your credit profile. This means that if you want to improve your credit score, paying down your balances should be a priority. Figuring out how to get out of debt can be tricky, but it is one of the best ways to boost your score.

Length of Credit History

The length of your credit history is another factor that is evaluated when coming up with your credit score. This is an important factor for credit bureaus to consider because it tells them whether you can handle credit over the long-term. If you are a new creditor, you are considered to be a bit of an unknown. Once you develop a track record, you are easier to predict. This aspect makes up approximately 15 percent of your credit score.

New Credit

The credit bureaus also look at the number of new credit inquiries that you have. If you are constantly trying to apply for new credit, it looks like you don’t know how to handle credit. This portion makes up 10 percent of your credit score.

Credit Mix

The type of credit that you have can also impact your credit score. If you have several different types of credit, this helps boost your score. For example, if you have an installment loan such as a mortgage along with some credit cards and student loans, this reflects positively on you. Having several different types of credit shows that you know how to handle multiple accounts without defaulting on any of them. This portion makes up another 10 percent of your credit score.

How to Afford College Tuition without Student Loans

A college degree is a must have for anyone wishing to succeed in today’s job market, but being able to afford one isn’t always easy. Today, many former college students have horror stories of graduating with tens of thousands of dollars in student loans and struggling to find entry level jobs that will allow them to afford repayment. However, going to get your degree, whether you are a non-traditional or traditional student, doesn’t mean you have to be prepared to leverage your financial future. It simply means that in order to make college tuition more affordable, you need to be prepared to do some of the following:

Go to Community College

A four year degree is required by many employers, but that doesn’t mean that you have to spend all four years at one university. By taking community college classes during your first two years, you can get all your basic requirements out of the way and will only pay a fraction of the cost to do so. If you have high grades, transferring to a four year school will be a breeze and you will be more likely to attain scholarships.

Fill Out the FAFSA

Many students, both traditional and non-traditional, don’t fill out the FAFSA because they believe that they or their parents make too much money for them to qualify for any federal assistance. Regardless of how much money you make, you should always fill out the FAFSA. Even if you are on the higher end of the national salary average, you may still be eligible for additional grants and scholarships that will make tuition more affordable.

Apply for Scholarships

You don’t have to be just out of high school, sporting a 4.0 GPA, or be an all-state sports star in order to obtain scholarships. Anymore there are thousands of scholarships available to all sorts of candidates, and sites like Fastweb and make it easy to locate them. For many, all you have to do is complete a 500 word essay or complete a quick survey to be eligible for scholarships that can be as high as $5,000.

While Discover law school loans may be a must if you get in to Harvard Law, knowing that you education will pay for itself upon graduation makes that investment worth it. However, if you are going to school simply to get a degree, taking on thousands of dollars in loans may cause future financial burdens that will keep you from attaining your professional goals.

What’s Your Audit Risk?

If history is relied on as an indicator of auditing frequency, then it is likely that less than 1% of eligible Americans will face being audited by the IRS this year. Some of these audits are done on a random basis and nothing can really be done to prevent them. Most audits, however, are actually instigated by the behavior of the taxpayer.

There are several red flags that can be raised by imprudent filing of income tax returns. Knowing what these red flags are can keep you out of serious trouble with the IRS. When filing income taxes, all current accounts, savings accounts and sources of income should be checked for accuracy to make sure no misleading claims are filed.

Valuing Donations

One of the things that should be avoided is the overestimation of donated amounts. The government likes to see people donate items such as food and clothes and even automobiles to charities. Since these are used items, it is difficult for charities to put a value on them, so it is left up to the donator to make the estimate. Vastly over-inflating these amounts is going to draw the attention of the IRS and have them audit you before you know it. Place a fair value on your donations and there will be nothing to worry about.

File Your Return With Care

Many people file their own tax returns. As a result, math errors occur on a regular basis. While there may be nothing suspicious about the actual income tax return, a math error will get noticed and the return is much more likely to be audited. To avoid this, try to be very careful and go over your return several times. There are several very good tax software programs on the market that should help avoid this problem. Read all slips carefully and enter the data correctly.

Don’t Forget To Sign

People often forget to sign the return. This has serious consequences since this simple fact can almost guarantee you will be audited. Make sure to sign all areas that have to be signed. Even forgetting one signature will mean that the IRS will want to check your return.

Log All Sources Of Income Accurately

Another area where people run into trouble is under-reporting their income. Many people work independently or receive tips as part of their wages. There are no employers to automatically keep track of income. While it may be tempting to leave out some income, it is never a good idea and should be strictly avoided. The IRS is smart and will not be fooled for long.

Be Honest With Your Deductions

Having a home office is a great thing, but not if you grossly over-estimate home deductions. Some deductions are perfectly warranted, but if you try to claim large amounts of money for dubious items, this will raise flags. Those who earn $100,000 or more every year have a much higher incidence of being audited than people who earn less. There is nothing much that can be done about this, but keeping all current accounts scrupulous will avoid getting into trouble with the IRS.

This post was written by Louise Tillotson on behalf of

There’s Money to be Gained by Losing Weight

With January already half over with, many of us are second-guessing our New Year’s resolutions in favor of easier lifestyles. While it’s certainly not inspiring to give up on any resolution, those who made it their mission to live healthier lives ought not to give up now. Yes, your health is of the absolute importance and thus is the primary reason why a commitment to diet and exercise in the year 2012 should be maintained. But in addition to this fundamental incentive, there are immediate financial advantages to maintaining a healthy weight as well as long term reasons to do so as well. For those in need of a boost of motivation to continue on the path to diet and exercise, consider the following ways doing so will surely save you serious sums of money:

Less spent on food costs: Any dietitian will tell you that the primary cause of overeating is the acceptance of enormous portions at mealtimes. When you make an effort to eat less in order to lose weight, you’re certain to save money by not spending so much on food. In addition to smaller portions, you’ll also be avoiding expensive midday snacks, further increasing the amount of available income you have on a daily basis.

Less spent on travel costs: 30 to 50 lbs can make a big difference in a vehicle’s fuel economy over time. If you lose that much weight, you’re certain to spend less on gas in the long run. But fuel costs can also be curbed by preferring to walk and bike more often through a dedicated workout regimen. New Yorkers – walk instead of ride the subway. Midwesterners – dig that bike out of Kansas City self storage and ride it to work.

Less spent on insurance: The healthier life you lead, the less life and health insurance is going to cost. The simple way to guarantee a cheaper rate is by losing weight, as the body-mass index is one part of your health that insurance companies take very seriously. While quitting smoking and reducing drinking greatly will drive insurance costs down more, getting yourself to a healthy weight will reduce your costs.

Less spent in your free time: In addition to the savings accrued from eating less in your spare time, leading a more active lifestyle is sure to be cheaper than preferring pay-per-view and trips to the mall on the weekend. Forget about the gym, which is admittedly not very cost-effective; public parks varying from urban gardens to nature preserves provide you with the venues necessary to enjoy an active day without spending a dime.

If you’re thinking about giving up on those December 31st aspirations to get into shape, don’t quit just yet! The personal finance benefits of such dedication are simply too good to pass up, in addition to the improvement to your health.

Assessing Your Investments in the New Year

Assessing Your Investments in the New Year

The holidays have past, the calendar has turned, and the new year of 2012 is suddenly now upon us. For many people, this is a great time to turn the page on 2011’s misfortunes and look ahead to our goals and plans for 2012. These goals may include losing weight and spending more time with our families. These plans might encompass a move, a vacation, a new career, or a new child. No matter where you are in life, you likely have some idea of where you’d like to be in twelve months.

This sort of planning and foresight should not be purely limited to your personal life. Rather, it should also extend to your financial one, as well. If you want to be responsible about finances in 2012, there is no better time than the present to consider budgets, cost-cutting measures, and upcoming expenses. Similarly, the present is also a great time to assess your investment situation for the coming year. Are you happy with your investments? Are you investing enough? Do you have a solid retirement plan? These are all good questions to ask yourself. Here are a few more:

What Are My Spending Needs?

Every year is going to be similar when it comes to basic spending needs. We always need to spend money on food, clothing, rent, transportation, and utilities, and these costs usually don’t change much from year to year. But large, big-ticket purchases can impact your budget in a given year and require that you take money out of your investments. So now is the time to decide if you’re going to buy a new home, get a new car, take a lavish trip, or start paying for college. It is also a good idea to start estimating these expenses so that you can determine the impact they will have on investments. If you’re buying a car, for example, getting some free insurance quotes in the next couple weeks would likely be beneficial.

Where Will I Put New Savings?

You hopefully are in the habit of setting aside savings every year for the purpose of investments. So you should ask yourself: where will I be putting those savings this year? You can invest in the same stocks or funds you’ve invested in in the past, you can explore new businesses or markets, or you can consider different investment vehicles altogether, such as real estate. Your decision should hinge upon your comfort level with your current investments as well as your willingness to search out something new.

Do I Have An Appropriate Long-Term Focus?

New Year’s isn’t just a great time to plan for the year ahead. It’s also an opportune occasion for thinking long-term and considering more distant years down the road. When it comes to investments, it’s also important to insure that your portfolio has an appropriate long-term focus. This is even more crucial with today’s stagnant economy. If you’ve been investing in riskier stocks or in short-term, low-yield bonds and CDs, now is a good time to pursue options like ETFs and index funds that focus more on the long run.

These are only a few of the investment-related questions you should be asking yourself as you look ahead to the new year. We all have resolutions and plans for 2012. Let’s make sure that an informed investment approach is prominent among them.

5 Biblical Financial Principles for the Holiday Season

5 Biblical Financial Principles for the Holiday Season

It’s easy this time of year to spend way too much money and lose track of your financial principles. Whether it’s travel costs or expensive, important gifts like engagement rings or first cars, as we prepare to herald in the New Year it’s good to remember that there is a core discipline underlying your bank account and your bottom line. The Bible confers several very sound pieces of advice in regards to spending and saving. There’s no better season to embrace them. Here are some biblical financial principles for your holiday season:

Live Simply

This rule resonates throughout the Bible and could not be more relevant to the modern world, in which we’re constantly tempted by expensive new gadgets and lifestyles. You don’t need more stuff, you need happiness, love, and discipline in your life. Simple joys, like spending time with family, are better than wallet-gouging gifts.

Giving to the needy

This principle is also prevalent throughout the teachings of the Bible. It speaks to a spirit of generosity, love, and care for your fellow man. There is no better time than the holiday season to donate to a charity, volunteer at a soup kitchen, or just buy coffee and donuts for the homeless. We’ve been blessed with the natural bounty of the Earth, which was donated to us with the expectation that we would spread the wealth.


Don’t spend money like a wastrel. It’s bad for your family, your bank account, and your soul. Stay out of debt. Even if you’re being selfless and buying your kid a gift, in the long run he or she will be much happier if you save for a college education than if you flush money down the toilet on the latest consumer drivel.

Avoid Cosigning if possible

If a lender doesn’t feel comfortable giving you the money for a home or car, cosigning is just passing the buck. This is how our economy has gotten to the point we now see it—people not being realistic about their financial situation and looking for a shortcut. Build your credit and make big purchases when you actually have the money.

Devote yourself to hard work

If you work hard everyday and do the best you can in this world, the rest will follow. Be positive, be prudent, and do great work.

These are five financial principles found in the Bible that have a tremendous relevance to the modern world and the holiday season. This is the most logical time of year to look inward and alter the way you look at money and consumption.

How Even a Small Extra Payment Can Save a Lot of Interest

Minimum credit card payments are easy, convenient, and give your wallet some much-needed breathing room. But, there’s a major drawback to paying the minimum – not only does it takes the longest time to pay off your credit card balance, you’ll also pay the maximum amount of interest. In fact, you’ll pay more interest making minimum only payments than on any other type of repayment plan.

Example of Paying Minimum vs. Paying a Little More

Consider a $5,000 credit card balance at 18% interest rate and 3% minimum payment. It would take 14 years and 7 months to pay off that balance if you pay just the minimum each month. In that time, you’ll pay $4,325.61 in interest. That’s nearly 100% of the original balance. In other words, by the time that credit card balance reaches $0 you’ll have paid a total of $9,325.61 to get rid of that balance.

Many people simply can’t afford to pay much more than the minimum. However, there’s the potential to save thousands of dollars on interest if you can put even a little bit extra toward your balance each month. For example, let’s say you can add an extra $25 to your minimum and pay $175.00 toward your balance every month. With that payment, your debt will be repaid in 3 years and 1 month and you’ll pay $1,448.30 in interest over that time period. That’s 67% less than you’d have paid just making the minimum.

What About Your Debt?

You don’t have to be a mathematician to do these calculations on your own. In fact, all you need to know is your credit card balance, interest rate, current minimum payment, and the amount you could afford to pay over the minimum. CNN Money’s online credit card reduction calculator does the rest of the work for you. Enter your basic information into the calculator and choose the minimum payment option to see how much interest you’ll end up paying on your credit card balance if you continue making just the minimum. Write down the result so you can compare it to your next calculation.

To see how much interest you’d save by adding extra to your minimum payment, choose the “Fixed payments” option in the calculator and enter the minimum payment plus the additional amount you can afford to pay. Calculate the result and compare it to what you’d pay making the minimum. The savings should be significant.

Why Does the Minimum Cost So Much?

You might wonder why it’s so easy to save money just by adding so little to your payment. The minimum payment actually decreases each month since it’s calculated as a percentage of your balance. Because of that, your balance only goes down by a small amount each month. But, keeping your payments the same throughout the debt repayment time means your balance drops at a faster rate. When your balance drops faster, so do your interest payments. So keep up with your fixed monthly payment, even when your minimum payment drops and you’ll see significant savings.

This guest post was written by Eliza Collins, a seasoned personal finance writer with professional experience in the debt relief industry. Eliza writes at the debt settlement blog where you can read more about hands-on debt relief strategies, debt relief services or credit repair.


Chimney Sweep Scams Sweeping The Country

This year like many others I’ve found an early winter and cold autumn nights. In an attempt to boycott the cold weather I refused to turn the heat on in my house until absolutely necessary. I was determined to make it through the month of October without doing so, yet, on the 30th it became so cold here in North Carolina that I cracked.

One alternative I wished that I had at my frost bitten fingertips was a fireplace. A real fireplace (not the fake, smelly, gas powered crap I have).

It’s that time of year when those lucky enough to posses such amazing fireplaces are getting them ready for the cold winter nights. Unpacking fleece blankets, chopping or buying fire wood, cleaning chimneys: the usual winter preparations.

However, this winter the Better Business Bureau (BBB) is warning consumers to be extra careful when choosing a chimney cleaner as they have received more than 380 complaints this year alone already compared to the 342 complaints received in all of 2010.

The BBB states in a recent press release about this matter:

In some cases, consumers have reported calls stating the town fire department recommends the resident’s chimney be cleaned. The calls go on to recommend a particular chimney sweep and endorse their services on behalf of the fire department. Though town fire departments do recommend having chimneys cleaned on an annual basis, they do not endorse any particular company or inspect chimneys. Many scam artists are targeting the elderly, making vague, unclear phone calls claiming they have done business in the past and it is time for their annual sweep.

Scam artists are also advertising at a much lower price than legitimate businesses. Typically, a professional chimney sweep will charge between $150 and $200 for the cleaning of one chimney shaft, whereas scam artists are charging as little as $50. BBB advises that if a price sounds too good to be true, it usually is.

Many scam artists use a low price tactic to get in your door, at which point they recommend additional work be done immediately, bullying the consumer into a much more expensive bill. If the price you are quoted is significantly lower than that of other businesses, it should be viewed as a red flag.

BBB suggests consumers do their homework before hiring a chimney sweep and inviting them into the home. Additionally, check with your local fire department and with the Chimney Safety Institute of America (

BBB recommends using these helpful tips when hiring a chimney sweep:

Check out a chimney sweeping business at Always check with BBB for a trusted chimney sweeping business in your area. Are they an Accredited Business? Do they have any outstanding complaints?

Find out how long they have been in business. How long have they operated in your area? Find out if they offer current references, or if you know anyone who has used their services in the past.

Ask if they have a valid business liability insurance policy. In the event of an accident, this policy keeps your home and belongings safe.

Find out if any employees are certified through CSIA. Though this is not law, it is recommended by the fire department, and speaks to the qualifications of the individual or business you hire. CSIA is a national nonprofit agency with a certification program for chimney sweeps and certification is required of members of the National Chimney Sweeping Guild”

Author: This article was contributed by, a site that helps people find good credit card relief solutions to deal with tough money troubles.

Source: Chimney Sweep Scams Sweeping The Country