2010 May | Mortgage Info Today Blog

How I Learned To Save 3 Hours A Day

Posted by Home Morgage | Personal Finance | Monday 10 May 2010 10:18 am

You probably dislike wasting time. Every minute counts. Right? I can’t stand wasting time, and I was wasting hours every day. I couldn’t quite put my finger on why, but I’d work frantically throughout the day only to see how little I really accomplished. That created lots of stress and anguish. I want to build my business, and get my finances in order…I don’t want to worry about creating income during retirement. I simply had to solve this problem.

Photo by Serdal via Flickr

I decided to do something about it.

Here’s a list of what I did:

1. Write down what I did.

I took a detailed inventory of what I did, when I did it and how I felt when I did it. Since I’m self employed, I pretty much make my own schedule. I found that I was doing the things I liked most first and leaving the other stuff “for later”.

I also noticed that I checked my e-mail many times throughout the day. I’d go back and forth for no reason between my calendar and my email. This may sound crazy and I may be the only one who did this, but let me tell you it was nuts and a huge time drain.

Once I took my “time inventory” I was able to take action.

2. Only check e-mail once per day

When I get an e-mail now, I either deal with it, delegate it or delete it. Sometimes delegating means asking someone else to take care of it. Sometimes delegating means putting it in a folder for later reference.

I don’t keep any e-mails in my inbox — my goal is to clean in out only once per day. In the past, I’d open an e-mail and tell myself I’d deal with it later. It sat in my inbox and cluttered it up. I figured that if I’m going to have to deal with an e-mail and spend the 2 minutes, I might as well get it over with now.

This was a great business idea and a huge time-saver.

3. Ask for help

I can’t do, know and understand everything. I need help. I used to spend way too much time on technical stuff for which I have neither the interest nor skill. Rather than plow my way through, now I ask for help. I ask mentors and colleagues.

Of course, I try to help others whenever I can. Sometimes, I can’t repay the people who help me most. I just help others when I can and hope that it’s cosmically fair.

So far…so good.

4. Accountability

One of the best personal and small business ideas I ever embraced was having an accountability partner. For me, having to go back to someone with a report on what I’ve done is crucial. It keeps me on track.

5. Embrace Weakness

Guess what…I’m not perfect and neither are you. I don’t get too worked up when I don’t live up to my own standards. I’m only human. I just try a bit harder next time. This saves the time I used to waste beating myself up.

6. Celebrate Success

To be frank, this has been the most difficult step. I see so much I want to do and deride myself for not accomplishing more. This is a mistake. I need to take the time to slow down and celebrate improvement. This is important because when I do, it helps me stay the course.

As a result of these steps, I learned to save about 2 hours every day. I don’t care if you want to become a financial planner, a teacher, or a barber. Saving time is critical no matter what you do.

Do you think these steps would help you? What have been the most effective steps you’ve taken to save time?

Economic Stimulus 2010: More Help for Your Finances

Posted by Home Morgage | Personal Finance | Friday 7 May 2010 10:18 am

Most people consider the economic stimulus as something that happened last year. However, some of the stimulus measures passed following the financial crisis of 2008, and during the recession that followed, are still in effect through the end of this year. If you are still looking for a little stimulus for your personal economy, you can still get it in 2010.

Here are some of the ways the economic stimulus can still benefit you:

Making Work Pay

Many people may not have noticed this tax credit, since it has been lurking in your paycheck. The IRS adjusted employer withholding tables in order to provide a regular increase in your take home pay. This increase was seen last year, in 2009, and is available this year, in 2010.

If you are self-employed, or if your employer hasn’t adjusted withholdings, you will be able to take this credit on your 2010 tax return. You can get up to $400 if single, and $800 if married. Phase out starts at $75,000 for singles and $150,000 for couples.

This is the closest thing to an actual stimulus check in 2010.

Energy Efficiency Tax Credit

Back in 2007, tax credits were passed to encourage energy efficient home improvements. The law was scheduled to expire, but the economic stimulus bill passed last year extended and expanded the credits through the end of 2010.

If you are planning on making green home improvements, this is a good time to do it. You can get a tax credit of 30% for making small improvements, up to $1,500. This includes replacing windows, adding insulation, changing your water heater, adding a high efficiency cooling system and even applying duct seals. For larger projects, like solar panels, wind turbines and geothermal systems, you can take a credit for 30% of the cost — with no cap on the amount.

It is also worth noting that many states and local governments are offering their own energy efficiency grants, tax credits and special loan programs that can save you even more on top of what is being offered by the federal government.

Home Buyer Tax Credit

If you bought a home earlier this year, getting under contract by April 30, you might have a tax credit coming. The home buyer tax credit offers two options. For first time home buyers, there is a tax credit of up to $8,000, and for those who are “trading up” there is the possibility for up to $6,500. You can claim this on your 2010 return.

If you filed for a tax extension for your 2009 taxes, or don’t mind filing an amended return, you can get your money a little bit quicker by claiming it on your 2009 tax return, instead of waiting until 2011, when you file your 2010 return.

Create A Personal Economic Stimulus

You don’t have to wait for the government to offer you money in order to stimulate your finances. You can do it yourself, with a little creativity and planning. Here are some things that you can do to stimulate your own personal economy:

Consider cutting some expenses. Look at subscriptions, entertainment options and other spending, and see where you can cut back.
Cultivate new income streams: Think of ways you can earn a little extra cash regularly. This can come from setting up a web site, to turning your hobby into something that can provide a side income. It can also include investments in securities that pay dividends or provide regular interest payments.
Upgrade your skills: Consider going back to school, or earning a special certification that is prized in your field. This can help you increase your salary, or find a better paying job. You can actually receive a tax deduction for some of the expenses associated with a job hunt.

As the economy starts moving out of recession, it’s the perfect time to get your finances in order, and to take advantage of the stimulus opportunities available.

Foreclosure Is Not A Reason To Give Up Your Residence: Stay Home For Years Without Making Mortgage Payments

Posted by Home Morgage | Personal Finance | Thursday 6 May 2010 2:18 pm

Obama Mortgage Modification Plan, looking so good on paper, in fact may not be of benefit to many people who face foreclosure today. It simply excludes many homeowners to qualify due to excessive requirements. There are many ways to avoid foreclosure, however, by implementing a number of proven, effective strategies that many homeowners already have taken advantage of. They all come down to good knowledge …

Source: Real Estate, Business and Personal Finance Articles

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Fixed Annuities Pros and Cons

Posted by Home Morgage | Personal Finance | Thursday 6 May 2010 10:18 am

Fixed annuities have a lot of appeal to people who have a distaste for market fluctuations and like to play it safe. By purchasing a fixed annuity you invest a certain amount of money and in turn either receive checks periodically or take home a lump sum at the end of the term — e.g., income annuity vs. deferred annuity. Acting as a safety net against financial debacles, fixed annuities guarantee the return of the principal amount no matter what happens. However, before you decide to choose fixed annuities it will be wise to know some important details.

Why should you consider fixed annuities? (the pros)

The risk of losing your money is minimal. You will get back your money even if the insurance company becomes insolvent. The state covers policies up to a certain amount in case the insurance company goes bankrupt. However, if the investment amount is above the state determined limit and the company becomes insolvent then you will end up losing money.
The rate of interest is fixed. This means that you don’t have to get tensed whenever the market becomes unstable. You are assured of a fixed sum of money.
Deferred fixed annuities are tax deferred. So you will enjoy a tax-free growth. You will be taxed only when you start receiving payments.
There are short-term as well as long-term fixed annuities. You have the option to choose what is most convenient to you. If you choose immediate fixed annuity then you will start getting payments within a short period. It may be as soon as a month after purchasing the annuity. If fixed deferred annuity is your choice then you will be paid after a relatively long period of time. You can choose between a lump sum and monthly payments.
Most fixed annuities have lifetime income provision. This would mean that you will receive money periodically throughout your life. This makes fixed annuities a smart part of an overall retirement plan. You can reduce the risk of outliving your retirement income.
Some fixed annuities have an optional life insurance provision which offers death benefits to your loved ones. They also allow you to leave money to your loved ones probate free.

Fixed annuities are not a perfect solution either (the cons)

Annuities are financial products sold by insurance companies, as such, they could be expensive compared to other non-annuity options
You will be charged a 10% penalty by IRS for premature withdrawal. You can withdraw only when you are 59.5 years old.
Deferred fixed annuities are usually not suitable for young people because they cannot be withdrawn before a certain period of time.
Interest rates are not high compared to the potential returns of other investments such as mutual funds.
Extra money cannot be added to the same annuity contract. You have to purchase a separate annuity to increase your investment.
Tax-deferred growth in deferred fixed annuities is taxed as ordinary income, and not capital gains.
Fixed annuities can be very tricky to manage for maximum returns since the cost of insurance features can eat into the return that you get on your initial investment.
Fixed annuity contracts are complicated and people who do not understand them may end up paying a great deal of money for an investment that does not serve its intended purpose.

A few important things to remember

The right time to purchase a fixed annuity is when the interest rates are high.
Long-term fixed annuities have higher interest rate but less flexibility. On the other hand short-term fixed annuities have more flexibility but lower interest rate.
A smart person will opt for multiple investment plans. Fixed annuities are a good option but apart from them you should also consider mutual funds, bonds, treasuries etc.

Fixed annuities can help preserve your capital and is another way to help you reduce your overall risk; especially, longevity risk. Depending your your needs, their advantages could outweigh their disadvantages. As always, it is wise to analyze your situation — your needs and your age — and choose your options accordingly.

Important Considerations For Those Who Want To Retire Early

Posted by Home Morgage | Personal Finance | Wednesday 5 May 2010 10:18 am

When Do You Plan To Retire? That was the question our financial advisor asked the very first time we met together. Since my wife and I were both in our early 20’s, we said 50. We figured 50 is really old and if we waited much longer we would probably need to do all of our traveling in wheel chairs. Now that I’m in my 30’s, 50 doesn’t seem quite so old.

Retirement planning for young people is difficult because there are so many variables. Who really knows when they want to retire and how much is enough for retirement? If you want to retire early you will need to determine your retirement needs.

Photo by the the_tahoe_guy via Flickr.

Still…within a week or two, we had a few investments set up including a Roth IRA. Interestingly, if you withdraw funds from your IRA before you are 59 1/2, you’ll pay a 10% penalty. I didn’t realize it at the time, but how can I say I want to retire at 50 and be set up for a retirement savings plan that penalizes me if I get the money before 59 1/2?

Obviously, our financial advisor either didn’t think that was possible, or just didn’t pay attention.

So what if I do want to retire early?

Then I should not be investing exclusively in a Roth IRA — and neither should you.

Honestly, I’ve never even considered using something other than a retirement vehicle (like a Roth) to save for retirement. But, what I’ve done unintentionally is I’ve let the government dictate when I should retire.

Do I want them to penalize me for my money if I get it before I’m 59 1/2?

Should You Use A Retirement Plan If You Want To Retire Early?

Since the Roth and Traditional IRA have different tax consequences, the answer depends on the investment vehicle you are using and the combination of retirement plans you use.

Traditional IRA

If you are using a Traditional IRA, then you should remember you are going to pay your taxes to the government when you withdraw your money. Personally, I prefer Roth IRA, because you pay the taxes now and all of your savings and investments will be accessible to you when reach the eligible retire age — without any rules are restrictions.

The only exception would be if the deduction from your IRA decreased your income tax bracket.

Roth IRA

The Roth IRA is a difficult choice. The reason is that your gains grow tax free so it does provide a significant advantage for you to have funds in the Roth. Well, if you are considering the possibility of retiring early, then you should keep at least a portion of your income outside of a government retirement vehicle — enough to get you from your early retirement until you are 59 1/2.

401(k)

A 401(k) is similar to a Traditional IRA in term of tax characteristics. However, if you are getting a match on a 401(k) or similar, then go ahead and max out these funds. It might take longer to save up for an early retirement, but you’ll only need enough savings to get you to retirement age when you know there will be a 401(k) nest egg waiting for you.

Early Retirement Conclusion

I’m not advocating that anyone stop saving for retirement in a retirement vehicle unless those plans conflict with your personal financial goals.

In my case, I don’t really think I’m going to retire in 5 years. In fact, I’m not sure I’m retirement material. Some folks think early retirement is a bad idea. Either way, the sooner I plan to retire, the more money I need to save outside a retirement vehicle.

What investing tips do you have for those who might wish to retire early? Would you stop using a traditional retirement savings vehicle if you were considering early retirement?

When to Use a Credit Card Instead of a Debit Card

Posted by Home Morgage | Personal Finance | Tuesday 4 May 2010 10:18 am

There are a lot of strong feelings out there against credit cards. Plenty of folks insist that if you use credit cards, EVER, you are on the road to financial ruin. No matter how disciplined you are. It is true that credit cards have long been connected to the idea of “easy money” and instant gratification. However, when used with discipline it is possible to use credit cards to your advantage. And, in some situations, it is better to use a credit card than to use a debit card.

Photo via Wikimedia Commons

Credit Card vs. Debit Card

First of all, it is important to understand the difference between a credit card and a debit card. A credit card represents a loan. You are borrowing money. There is no guarantee that you have the entire amount you are charging on your credit card in a bank account right at this moment. If you pay off a credit card balance each month, though, it is an interest free loan. It’s when you start spending money you don’t have, and carrying a balance, that fees and interest start to add up, putting you into financial trouble.

A debit card is connected to your bank account. When you use this type of plastic, it takes the money directly from your account. In theory, if you don’t have money in your account, the transaction won’t go through. What you can spend is based on what you currently have, rather than a loan. While you can overdraw your funds, some measure of overdraft protection is required in order for that scenario to take place. Without overdraft protection, when you don’t have the money in your bank account, the transaction is rejected. Once you go over your funds using a debit card, even with overdraft protection, a hefty fee is charged.

When Using a Credit Card is Better

A debit card is a convenient way to access cash you already have, and for that reason, many prefer to use the debit card. However, there are some situations in which you might consider putting the debit card away and using a credit card instead:

Online purchases: If you use a debit card or some sort of cash alternative with online purchases, you are taking a risk, since it may be more difficult to get your money back if the product isn’t what you thought it would be. With credit cards, disputing with merchants is easier. On top of that, the fraud protection that comes built in with credit cards can provide security that is better than that offered by most debit cards.
Purchases that require large holds or deposits: When you travel, getting a hotel, buying gas and renting a car, the company will place a hold on your account. This is because there is no way of knowing ahead of time what the final bill will be. Hotels don’t know if you will order extra services when you check in, so they block off a large amount to cover it. The same is true at gas stations and at car rental places. A large hold can mean that your bank account is close to empty, and using a debit card for these transactions can mean the appearance of overdrawing your account and bouncing checks, resulting in fees. Use a credit card for these transactions, and save your debit card for other items.
Expensive items: Many credit cards offer warranty protection automatically with your purchase of some items. Additionally, you can dispute with merchants more easily. When you use a debit card or straight out cash, the money is gone from your account. Then you have to try and get it back from the merchant. When you use a credit card, though, that money isn’t gone from your account, and you have time to dispute.
You want better rewards: It is true that some debit cards now offer reward programs. However, the rewards offered by many credit cards are still better. If you want to rack up better rewards, you will have to use your credit card. Just make sure you pay the balance off each month, or your interest charges will destroy any value you get from the rewards.
You want to rebuild your credit: Debit card transactions aren’t reported to the major bureaus, and so can’t be used to build credit. If you want to build or rebuild your credit rating, a credit card works better. You can even get a secured credit card to help matters if you are concerned about things getting out of hand again.

Like most financial tools, the effectiveness of credit cards depends on how you use them. If you use them with planning and discipline, they can be useful. If you aren’t sure about them, though, you can use debit cards or cash, and you can use cash alternatives online.

Personal Loan Mistakes And How To Avoid Them

Posted by Home Morgage | Personal Finance | Tuesday 4 May 2010 10:18 am

If you are thinking about taking out a personal loan, then there are a number of things you should be aware of before signing anything. Although personal loans can be extremely useful for paying off debts or improving your cash flow, if you make mistakes then you can end up in financial trouble. If you know about these common personal loan mistakes and how to avoid them then you will find the right loan for your needs.

Getting too many quotes

Although shopping around for your loan is important, you should also remember not to get too many detailed quotes from lenders. Every time you apply for a loan or get a detailed quote, the lender in question has to pull up your credit report. If you credit report is continuously being looked at or loan applications turned down, then your credit rating will suffer. This will affect your chances of getting the loan that you want. Shop around as much as you want to compare prices and interest rates, but do not make applications until you are sure the lender is the right one for you.

Hiding financial problems

It may be tempting when applying for a loan to hide your past financial problems, or to stretch the truth when it comes to your earnings. If you do this it is likely to end up with you being refused for a loan, or even being in trouble for giving false information. If you have had credit problems in the past and have recovered from them, this is often seen as a positive sign because lenders can see that you honour your commitments and are able to get yourself out of problems. If you are honest then you will get more competitive terms and will not get yourself into legal trouble.

Borrowing more than you can repay

One of the most common mistakes people make is to borrow more than they can repay. This is especially true if you get a secured loan, because the lender is less concerned if you pay or not as they have some collateral in place. You need to be honest with yourself and work out a strict budget. Only agree to a loan that you know you can pay back not only now but when times are hard. If you do this then your loan will help you improve your financial status rather than to make your problems worse.

Believing in promotional advertising

When taking out loans, too many people focus on the promotional interest rates that companies offer. Although these interest rates seem like an amazing deal, you rarely end up being eligible for such a low rate. Even if you can get a very low rate, there are often hidden charges to consider that are not mentioned. Instead of looking at APR, look at how much you have to repay in total, as this is the more important figure. If you go to a responsible lender then their fees and charges should be transparent and clear, and you will get a deal that will suit your needs and not leave you paying more than you should be.

Source: Personal loan Information : Auto loan, Home loan, Internet bank, Mortgage

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Three Simple Worry-Free Steps To Wells Fargo Loan Modification

Posted by Home Morgage | Personal Finance | Tuesday 4 May 2010 10:18 am

Should you want to take advantage of new legislative changes regarding mortgage modification with Wells Fargo, there are three departments you will have to deal with: 1. Customer Service Department 2. Collections Department 3. Loss Mitigation Department Customer Service Customer service reps are the first ones you hear when calling Wells Fargo, unless you are behind on your loan. While they are able …

Source: Real Estate, Business and Personal Finance Articles

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Government Grants For Everyday Needs: Single Parents Welcome!

Posted by Home Morgage | Personal Finance | Tuesday 4 May 2010 10:18 am

Many people are starting to drown in debt. Credit card debt levels progress each year and have reached $8,000 per individual, according to some statistics. You definitely want to get out of debt; otherwise you would not have been reading this article. Or, probably, you are seeking ways to earn more and spend less with better education or job? If you are a single parent and are raising kids on your …

Source: Real Estate, Business and Personal Finance Articles

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How To Fix Bad Credit Score

Posted by Home Morgage | Personal Finance | Monday 3 May 2010 10:18 am

If your credit score is below 620, you know how tough it is to get a loan or a credit card with reasonable terms — that is…if you can even get them in the first place. It’s a well known fact that lenders will give people with good credit scores lower interest rates on mortgages, car loans and credit cards. Even if you swear you’ll never get a loan or use a credit card, a bad credit score could affect your life in many ways — for example, your ability to rent an apartment, get a good insurance policy with low premium, get certain jobs, and more.

Photo by BookMama via Flickr

There are millions of people in the United States that have bad credit scores, and if you’re one of them, you’re probably wondering what you can do to raise yours. Improving your credit rating is not as hard as you think. You can start your journey toward a better credit score by following these steps:

Review Your Credit Report and Fix Problems

First, request a copy of your credit reports from the three bureaus via AnnualCreditReport.com — this is absolutely free once per year per bureau.

If you find any error, write to the bureau and ask them to fix the problem. You might also want to contact the lender who reported the error. Some lenders will help you correct the problem on your behalf.

Pay Down Your Debt

If you owe a lot of money, it could negatively affect your credit score — not to mention the negative impact on your finances because of all the finance charges you’re paying.

To pay down your debt, first prioritize them base on the interest rate — also consider whether or not it is tax deductible. Your goal is to pay them off as quickly as possible, starting with the highest interest rate debt that is not tax deductible and work your way down from there.

Take a look at the Debt Snowball method for more information.

Do Not Close Your Accounts

One of the common myths is that you should close your credit card accounts once you pay them off. Unfortunately, one credit scoring factor is the length of your credit history. If you close your credit card accounts, especially ones that you have for a long time, you could hurt your credit score. A better solution is to put these credit cards away and keep the accounts open — assuming you’re not paying any fee to keep them around.

Do Not Apply for a Credit Card or a Loan

If you know your credit score is so bad that it’s unlikely your loan or credit card application will be approved, then don’t do it! When you apply for a credit card or a loan, the credit card issuer or lender will do a hard credit pull. Too many pulls and denials will hurt your score.

Just hold off on credit card and loan applications until your score gets better.

Build Good Financial Habits

As you work on your debt, make sure you pay all your obligations on time. This includes your rent and other bills. Although many service providers do not report the late payment to credit bureaus, paying on time is a good habit to get into.

Moreover, work on other good habits such as improving your career, building an emergency fund, starting and maintaining a budget, and so on. All of these things will help you improve your overall financial health.

Be Patient

Some problems are easier to fix than others. If your bad credit problem is severe — e.g., you declared bankruptcy or had a tax lien — it will take a long time for your credit rating to recover…sometimes, a decade or longer. The best you can do is practice sound financial habits and let the bad mark runs its course. In the mean time, just do your best to improve your finances and things will eventually come together.

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1. Write down what I did.

2. Only check e-mail once per day

3. Ask for help

4. Accountability

5. Embrace Weakness

6. Celebrate Success

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Recommended articles

Energy Efficiency Tax Credit

Home Buyer Tax Credit

Create A Personal Economic Stimulus

Read more about

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Why should you consider fixed annuities? (the pros)

Fixed annuities are not a perfect solution either (the cons)

A few important things to remember

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So what if I do want to retire early?

Should You Use A Retirement Plan If You Want To Retire Early?

Roth IRA

401(k)

Early Retirement Conclusion

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Credit Card vs. Debit Card

When Using a Credit Card is Better

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Review Your Credit Report and Fix Problems

Pay Down Your Debt

Do Not Close Your Accounts

Do Not Apply for a Credit Card or a Loan

Build Good Financial Habits

Be Patient

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