Tag Archives: Personal Finance

Big savings on everyday purchases

CNN reports we may be in for a bumpy ride. Despite what the administration keeps peddling, according to the Bureau of Economic Analysis, the economy is down for the first quarter of 2014. In fact, “the gross domestic product, the broadest measure of economic growth, fell at a 1% annual pace.” Economists remain optimistic, however, claiming it’s likely to bounce back this spring and summer, but for those of us that feel like the country never really came out of the recession we may need a few more practical steps to increase our savings.

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Money 6 painless ways to save it

American 100 bill

Post Christmas credit card bills may be enough to stifle the New Year’s spirit, but financial experts claim that many of us can save hundreds of dollars a month by taking a few simple steps. Some are easy; others not so much, but if your income is stagnate and your expenses are growing, you might need to make some tough decisions next year to stay in the black and save money.

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How to Rebuild Credit Post Bankruptcy

 

Most of you might think that people who file for bankruptcy protection should not be concerned with rebuilding credit, but you would be making the wrong assumption if you think such. In our American society today, we use credit for many of our daily operations in life, and unless we are loaded with cash, credit is very important to every American. So, how do you rebuild credit post bankruptcy? Continue reading

Bankruptcy Not the End of the World

House M.D.

House M.D. (Photo credit: magyaatt)

Reminiscing about your prior life at home is the worse part of moving. It always happens before you actually move. Tears, memories, more tears, and oh, what memories!

You rock along for years living the American Dream. After all, you are homeowners, you have good jobs, your children go to great schools, and you live in a small safe town to raise your family. Then, something like the Great Recession comes along and knocks you down to reality.

Your husband suddenly loses his job after 10 great years of loyalty to a company that suddenly finds itself in just as deep financially into the American Dream as you are fixing to be. Hot water swirling everywhere they turn, and they are involuntarily thrust into bankruptcy. The company goes under just as quick as it was born.

For the first time ever, you find yourself late on a mortgage payment, then another and another. Then, another first time! You get your first collector’s call and a threat in the mail to foreclose. How much lower can you go?

Good jobs to replace your husband’s lost job are not coming, so he takes lesser paying jobs. He decides to work two full time jobs to compensate for his loss. You are lucky to keep your modest paying part time job.

With less pay and less time with your family, you struggle to make ends meet. You use your credit card to balance the budget and another first happens. You find yourself tempted to make minimum payments of your credit cards. You do this so you can recoup your mortgage payments and keep your home. The only good news is that it works for a while. You bought time.

For your sacrifices, you get to keep the same house for a little longer that was: your first house; the house where your oldest child at 18 months walked naked across the front lawn leaving his wares along the way; the house where all three of your children were brought home from the hospital in swaddling clothes; the house that was home to Fido, your child’s first dog and Felix, the cat your middle child drug to the house one day; and yes, the same house you all call home.

After a year of stress for working 80 plus hours a week, your husband finally brings home bad news. He lost his second job in an argument with the boss. He cannot handle the stress any longer because he is at the breaking point. Not long after, you are missing mortgage payments again. Credit cards are adding interest on top of interest. This time, you know there will be an eviction, and the tears begin to roll, and roll, and roll. You think it is the end of the world!

You don’t have to look far on the internet to find real stories similar to this fictional one. The good news is that there is life after facing bankruptcy. When you find yourself in similar circumstances, you can elect to stay in that condition while it gets worse, or you can elect to realize you must make a fresh financial start to overcome your problems.

Filing for bankruptcy protection can be a way for a fresh start, not the end of the world. Filing bankruptcy is simply a business decision for your family to make that can alleviate what bad financial situations are causing your problems and allow you to begin over, financially. Filing for bankruptcy protection may even save you from losing your home, but if your financial situation still calls for allowing you to go through foreclosure, it is still not the end of the world.

Home is where your family is, and just like having to “cut the umbilical chord” when one of your children grows up to leave home, you may have to cut the umbilical chord from your first house. You won’t be losing your home, the object of your love will just be changing space.

Contact a bankruptcy lawyer today, it may be a life changing experience worth considering.

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Advice from a Budget Expert

I consider myself a budget expert. I view myself that way because I have lived on a budget all my life, and I know how to. Some of you may be skeptical about this claim, and I can understand that, so, let me tell you how I have done it.

First of all, when I was young, I took seriously the religious training that taught me “to owe no man.” Since then, I have learned  it is almost impossible for the average citizen to function in our society without owing someone something. Most of us cannot get a house to live in without credit. Credit is only built when you borrow time against your income. If you even rent, you have to have good credit to be allowed to enter into a lease or rental agreement. In this case, you are borrowing against future income and time. Most people do not pay a full year’s rent, and in some cases, if you cannot meet your rental agreement, the rental agent can hurt your credit. So, when I say “owe no man anything,” I mean you must try to live within your means the best you can so that you may not owe anyone anything. Today, at 63 years old, I will have my house paid off in five years, we own both late model cars out right, and we never pay interest or fees on our credit cards. Even though I have a mortgage payment and pay a hospital bill from a past operation, I would say that I “owe no man anything.”

Secondly, understand completely what it means to live within your means. Living within your means can be defined as never having more living expenses than your income can pay off in a month and be sustained for five years. In other words, your budget needs to be a five year plan. Why five years? Because, not being able to pay down your liabilities within five years with the sum total of your assets is the definition for bankruptcy. Therefore, how can being bankrupt mean that you are living within  your means?

Thirdly, stay completely away from usury. Usury is defined as exorbitant interest rates. In our society, exorbitant is a relative term and usury has been almost cast out of our legal system by deregulation. So, here is a good general rule of thumb. Never get involved in borrowing any kind of money that are simple interest loans of rates more than 5% above the prime rate. Never borrow money with compound interest. The prime rate is defined here as the interest rate currently used by the Wall Street Journal which is based on the Federal Reserve rate. That means you will need to completely stay away from credit card debt, many corporation credit cards, and most store financing because their financing usually comes with interest that is the maximum rates allowed by law. On top of that, they encourage you to go into debt by making minimum payments. In most of these scenarios, you can never pay off a loan by paying the minimum, so NEVER take on credit when there is the remotest possibility you will have to make minimum payments.

Fourthly, maintain a cash reserve equal to one year’s family salary. Combine all your total income made in the family, and you should have a savings account equal to one year’s salary. If your family makes $40,000 a year, you can put aside $8,000 for five years and accomplish your savings goal. When you reach your goal, it allows you to weather most financial storms like loss of a job, temporary health problems, and retraining for a new career. If you have to spend all or part of the money for an emergency, always replenish the reserve.

This article is not a complete assessment of budgeting, but for those of you who are skeptical about its potential, please consider this. We have lived for over thirty five years making less than $50,000 per year, raising two children to adulthood that we paid both their ways through expensive colleges, vacationed two weeks a year at some of the finest resorts in America, never missed a meal, never slept outside unless we wanted to, lived a middle-income type existence, and remain healthy individuals today. Both our children practice our budgeting methods, both are gainfully employed, and both make six figure incomes.

For some of you, it may be too late to make your budget because you have already reached the bankruptcy stage. It takes discipline and determination to live on a budget. It takes the same to start over. Filing a Bankruptcy enables you to start over here in America. Do you want a fresh start and the opportunity to try budgeting? Here at Bankruptcy Home will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.