The Finance Blogger

How many times have you been standing at the cashier paying for your products that you’ve just purchased, when the cashier attempts to sell you a low interest or zero interest credit card from the retail store. Every year many people sign up for these retail credit cards because the interest-rate is zero for six months and they offer points or other benefits from the retail store.

These can be great deals if you’re charging your products to your own credit card and will not be paying the credit card balance off on the statement due date. Zero interest credit card which gives you six months free interest is actually a benefit if you’re the type of consumer who would normally pay interest on your own credit card.

The danger is that many retail store credit cards charge much higher interest rates than the typical Bank credit card. A Bank credit card will charge approximately 19% on any unpaid balance on your credit card. Retail stores who offer credit cards typically will charge between 25% to almost 30% on any unpaid balances. This is a much higher interest rate and much more expensive for anyone who carries a balance on their credit card.

High Interest Rate Retail credit cards

Regardless of whether you have 18% credit card or a 25% or 30% credit card consider consolidating your debt into a personal loan at much lower interest rates. If you have good credit ratings you should be able to find a personal loan somewhere in the range of 5% at the current time. Even if you have a bad credit rating a 10% interest-rate personal loan is still much better when you have a balance on your credit card at the 19% or 30% range.

This is the danger of those retail stores that offer retail credit cards to consumers as they are passing through the checkout line. Consider carefully also the impact on your credit rating as you sign up for more and more credit cards. The debt or potential debt that you may have from credit cards and your name will lower your credit rating and make it more difficult to obtain personal loans at a competitive interest rates.

For more posts about credit cards and interest rates, click here.

Consolidation Debt Loan, secured and unsecured personal loans along with mortgages on homes are really the only types of loans. All the other names are just marketing names. Lenders use them to entice consumers to come to them and borrow money. For example car loans are secure loans for people buying cars. Personal loans are unsecured loans that can be used for just about anything as long as you can get approval. Payday loans are also unsecured high interest loans that unfortunately many people use. They pay a very high interest rate on these loans.!

Lower interest rates can be obtained by people with the best credit ratings and with something placed as security. For example cars and homes are used as security for mortgages and loans. Low credit ratings and no security carry the highest interest rates. That assumes you can find a lender willing to lend you the money! These typically are payday loan lenders and other unscrupulous lenders that charge very high rates of interest.

Consolidation Debt Loan

One payment is usually the main benefit of consolidating debt. If you happen to consolidate credit card debt into a low interest personal loan, then the monthly payment will also be lower. You will be paying a great deal less interest than you would to the credit cards. One payment a month is much easier to handle for many people. As well since it is less complex and less danger of missing a payment due to forgetfulness.

Refinance your mortgage. Use the proceeds to consolidate your debt on personal loans and credit cards. The result is usually much less interest payable. Also a lot lower monthly payment in total since your interest rate is lower. The amortization is a lot longer which gives a much lower monthly payment.

Lower Monthly Payments

Longer amortization usually means two things. First the monthly payment is lower since you are taking a longer time to repay the loan or mortgage and the amount of principle that you repay on each payment is lower. Secondly the interest rate is usually lower on a mortgage, but the total amount of interest you pay will be a lot more in total simply because you are taking longer to repay the loan or mortgage.

Lower monthly payments are great especially when you have a lot of bills to pay each month. However it will take you longer to repay the loan and it will mean that you pay more interest in total. Any time you can repay a loan in total and get out from paying a loan or mortgage, you will be saving money which can be used for other things.

Better cash flow can be attained with lower monthly payments as well and sometimes this is really what is important. When you have a lot of other bills to pay each month, anytime you can improve your cash flow most people are probably better off. If you do have extra cash from time to time, throw it on the loan and reduce your principle so that you pay less interest and you repay your loan more quickly.

Close credit card accounts to improve credit ratings and to also reduce the chances of using them and getting yourself into a debt consolidation situation. Most people should only carry one credit card for daily use and one for backup purposes. Any others should really be closed.

Credit card accounts are very easy to obtain these days. It seems like every other day I am receiving a new credit card application. I have been pre-approved and all I need to do is fill it in. Just send it to the company to receive a new credit card. The trouble with having many credit cards is that you have a lot of potential debt that could be charged to these credit cards. Credit rating agencies take a dim view of people with many credit cards. In fact they will lower their credit rating and this will impede them from being able to find low-interest personal loans, and low-interest mortgages. This is something that everyone should consider before they fill in all of these applications for low-interest credit cards.

Credit Card Low Interest – How Long

Low low interest credit card accounts do not stay at low interest rates for any length of time. Most low interest credit cards have a grace period, where the interest is in fact low for unpaid balances. Once this grace period is over, the interest rate reverts to the typical 21% range for most credit cards. If you still have unpaid balances at this time the interest will be much larger. Always try to pay your monthly balance in total on the due date each month.

Pay your monthly bill on the due date to avoid any interest charges at all. Even if you pay all of your accounts on the due date less even one dollar, this will trigger interest charges on the full amount that you hold on your credit card. Even a small mistake where you fail to pay the total amount will cause this interest-rate to be charged. It is very important to make sure that the due date is met as well.

Miss a Payment by One Day

For example if you missed the due date by even one day, interest will be charged. You will pay interest on the full unpaid balance from the date the amounts were charged to the card until you fully pay the remaining balance. Any new charges will also be charged to the credit card and will be charged interest as well. This is how they make their millions of dollars every month on unpaid balances from customers.

Always make sure you have sufficient money in your bank account to pay the monthly bill for your credit card account. Pay it in total to avoid interest charges. Pay it in total even if you have to take a personal loan from the bank at 5% or 6% range. This would be better than not paying the credit card balance at the end of the month.

For more ideas about what to do about credit card interest rates, click here.

Estate planning in Florida is just like anywhere else with one exception. Many people in Florida, vacationers or snowbirds, own an additional property in Florida. They only use these properties for part of the year. When it comes to estate planning, steps must be taken to ensure that the home in Florida is disposed of in the proper manner. The focus is to avoid triggering income tax. As well as estate tax charges by your home state as well as the Florida government.

This is in addition to any concern you may have regarding the length of time you spend in the state of Florida. Maintaining your health insurance in your home state is another consideration. Also maintaining your home state or province from a tax perspective. There are lots of issues to consider and stay current with. We suggest a full investigation prior to making the decision to purchase property in any state other than your home state, especially Florida. Contact an expert and follow their advice to ensure that you minimize your taxes. Go into the deal with your eyes open.

Canadians Owning Florida Property

Many Canadians own a vacation property in Florida. They will be charged a higher tax rate when they sell their home. As well as if the estate must sell the home for them. A good estate planner will help you plan the proper way to dispose of your property to minimize the income tax that will be paid. Even if you are planning to purchase a property in Florida as a vacation home this is something that you should take into consideration prior to purchasing the property. Work with an estate planning lawyer. Or at least get an opinion from one before you make your property purchase in Florida. this is really important if you are a snowbird.

A friend of ours has already purchased a Florida home as a vacation property. He has given no thought as to what the income tax impact will be when he sells the house. Or the need to dispose of it when he passes away. This is something that many people should plan for with regards to Florida estate planning.

In his opinion, he does not really care, since he feels that he will not be alive to worry about it. In some ways this is true. However, he may also want to make sure that his family is not unreasonably taxed. He may want to ensure they receive an inheritance that helps them in their time of need. Paying the maximum amount of tax to any government is not the way to do this. Planning ahead of time will help to ensure that your estate tax is minimized

Estate Planning Florida – Selling Your Property

Plans change all of the time. In my neighbor’s case now he has no plans to sell his property. However, in 5 years time or 10 years time, he may be tired of going to Florida all of the time. He may want to find something that is different. Even health issues may prevent him from traveling and he will be forced to sell it while he is still alive.

Planning is key to ensure that your taxes are kept to a minimum. Meet with your tax adviser and financial accountants to ensure that your estate is planned properly to avoid paying too much tax.

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The stock market of 2013 up to the middle of November has bloomed and is up almost 25%. This is contributed greatly to the value of 401(k)s and RRSPs which is the Canadian equivalent retirement system. The stock market bull or bear continues it’s upward trend into 2014 and possibly into 2015. there seems to be nothing serious on the horizon to  counter this continued wealth creation phase of the market. Anyone who got out of the market back in 2008 and 2009 and stayed out has lost thousands of dollars as a result and will never be able to recover this loss.

But the question increasingly remains is whether the stock market will continue its current level of increase. Or stay static towards the end of the year or whether there will be a correction of say 5%? Should investors begin selling off to collect profits? Or should they assume that the stock market is not finished with its run yet. Will it increase even further and provide them with more gains in their retirement plans. True there have been several corrections over the past year and there will likely be more in 2015. Some corrections have been as much as almost 10%, but they have failed to signal a switch to a bear market. So what is the Stock market – bull or bear prediction for 2015?

Stock market – bull or bear

For those investors Growth in their 401(k)s and retirement plans, this increase in the stock market this year represents a significant gain. It also puts them at risk should there be a correction in the gain to be wiped out or decreased. The question remains should they sell now to collect some profit or hold the course?

For those investors there is still a silver lining at the end of the investment horizon. They will continue to collect something in the order of 3% to 6% dividends depending on the stock
they purchase, the dividend that’s being paid and the value of the stock at the time they made the purchase.

Regardless of whether the stock value decreases or continues to increase, these investors will continue to receive their dividends. The bond market will continue to pay the bond interest that is been contracted on there certificates. Regardless of  the stock market direction over the next 18 months, dividends and bond interest will be paid into RRSPs and 401(k)s.

Investors should evaluate their 401(k) and RRSP investment plans relative to the type of stocks and bonds that they currently carry. The balance of risk management and income as well as growth should be considered. In view of which direction they feel that the stock market will go in 2013 and into 2017.

Debt and loan consolidation is extremely important for people who are trying to get their financial affairs back in control. If you have a loan for the car and a couple of credit cards max’d out. Or personal loan and a mortgage, then just maybe you are in need of some debt consolidation.

What is Debt consolidation?

Basically, a consumer who has a lot of debt such as credit cards and personal loans with relatively high-interest rates can consolidate the debt into one personal loan. With a term that lowers the monthly payment due to a longer-term and a lower interest rate. You want to be able to pay less interest than you were before to save you money and put more in your pocket for other things or to just reduce your debt even further. When you take out a personal loan, there are two types.

The first is a non-secured loan and the second is a secured loan. A secured loan usually means you can obtain a lower interest rate which will reduce the amount of interest you pay. You must provide something as collateral for the secured personal loan to secure it, such as your home. A non-secured personal loan is totally open and you must have an excellent credit rating for the lenders to lend money to consumers for a totally open unsecured loan.

What are Typical interest rates?

Credit cards will carry interest rates as high as 21 % for most cards and up to 29% for many other store-type cards when you carry a balance on your account past the end of the month. These high-interest rates can add a lot to your monthly payment.

Personal loans and mortgages are down around the 3 to 5% range which is very affordable at this time. There is a rumor that in 2014 interest rates will go up so be careful on how much debt you take out.`

Car title loans have recently been getting a lot of attention along with payday loans and other types of loans that people take advantage of when they have no credit rating or cannot get a loan through regular lenders. These types of loans are all over the map in terms of interest rates with the worst being upwards of 300% per year or 25% per month. This is atrocious and far too high. Anyone taking out a loan at these rates is being robbed and paying far too much in the way of interest. At these rates, a consumer will never repay their loans.

Can I consolidate my Debt on My mortgage?

The answer is yes, however, there are some requirements. You must have sufficient equity left in your home to accommodate the increased amount of the mortgage. You must have a good to the excellent credit rating and a source of income to support the increased payments for your new mortgage.

In addition, there will be legal costs, appraisal fees and there will be administration costs. It would not make sense to increase your mortgage for a thousand dollars for example and have to pay all of these costs. Increasing by ten thousand or more would be more reasonable.

Whenever you can consolidate your debt and obtain a lower interest rate as well as lower monthly payments, most people should try to take advantage of this approach.

Deals offered by credit card companies are available for all kinds of credit cards. They will offer low interest rates initially, zero interest rates initially for transfers, and they also offer many deals that go along with the amount that you charged to your credit card. For example you may acquire points to use on vacation or other expenses.  Some cards offer incentives such as thousands of loyatly points that can be used at hotels, travel companies and so on. If you cannot use these points or your situation changes, these incentives may not always be that useful to you. All of these will eventually catch up to you.

Lowest credit card rates we have seen include 0% for the initial 2 to 6 months when you transfer money from another credit card. In addition they may also give you an initial rate of something like 5 to 10%, for the first six months then the remaining balances will migrate to a normal credit card interest-rate which will be in the range of 21%.

They eventually catch up to you and even though they start with the lowest credit card rates available the interest-rate will migrate to the normal credit card rate of 21%. This is just a marketing gimmick to get you to transfer your money to a new credit card. One of the dangers of having many credit cards is that from a credit rating perspective this will lower your credit rating.

It will make it more difficult for you to find low interest personal loans, or mortgages or free refinancing mortgages for your home. Always maintain your credit rating at the highest possible to avoid penalties associated with finding personal loans at some future point.

Lowest Credit Card Rates – Summary

Remember to always pay your monthly bill on the balance due date. If you do not pay the total balance on your credit card by the due date, the interest-rate that the credit card charges will kick in and it will be charged from the date you initially charged items to your credit card for that billing period.

This can be a surprisingly large amount particularly if you have a high level of credit on your credit card. If you can not pay the balance on the due date try to use a personal loan or a powerline credit account to pay the balance. At least it will be at a lower interest rate. Never miss a payment, since this will directly impact your credit rating!

For more posts about dealing with credit card interest rates, click here.

Estate Planning Newsletter – As someone who’s in retirement mode I am always interested in information about retirement planning and lately about estate planning. Estate planning newsletters are something that I have not seen but am interested in. I am looking for information about how I can organize my estate to minimize the tax impact. How can I make a larger amount of money available for my heirs?

There are many issues to consider when planning your estate. For example, your focus may be on minimizing the amount of tax that is paid from your estate to the government. Another area could be providing for your family to ensure that they can live comfortably after your gone. Some people even want to provide for their pets while others are more focused on providing for charities that have helped them out during their lifetime. Whatever the reason, setting up an estate plan is something that everyone should give some thought to regardless of the value of your estate.

Manage Your Estate as a Hobby

Always looking for new information is one of the things that many people can do in retirement. I find that many seniors are bored and are looking for something to do. This is one of the things that everyone should be interested in and that is managing your estate and finances. Even if you do not have a large retirement plan or a lot of money to manage, or have someone who is managing your investments for you, you can at least ask intelligent questions when you meet with your financial planner for your estate plan.

Retirement planning and estate planning are something we all should be interested in. After all we all have the quality of life that we are looking for while in retirement. This is something that many people ignore until it is too late. By addressing this issue in early retirement or even before you retire it will ensure that you set up a proper retirement plan and live the quality of life that you’re looking for.

Estate Planning Newsletter – Head in the Sand?

Retirement planning and estate newsletters have a lot of information that people can be reading. One friend of ours avoids reading any kind of information about financial affairs and anything to do with estates. He would rather spend his time watching golf, reading about golf, and generally ignoring his financial affairs. As long as he has enough money to pay his bills he is satisfied. We think he has his head in the sand. Because he also likes to say that he is living on a fixed income. He is looking for support and maybe some camaraderie in his misery. But he will not talk about investment planning at all!

We happen to think that all consumers should take an interest in their retirement plan. Also, the investments that their retirement plan is involved with. Plan for your estate to minimize the tax to the government. Maximize the amount of money that will be available to support your heirs. Either way, you look at it, why should the government get more than its share of the money you worked so hard for?

Lately, this issue of minimizing the amount of money that the government will take from us or from our estate is something we are thinking more and more about. We really want to leave as much as we can to our children. While at the same time enjoying our lives. We are not saving for our children. We are enjoying our lives but want to make sure that we have an estate for our kids and grandkids.

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The amount of debt or loans that you are carrying at any time may affect your credit rating particularly if you have other loans, mortgage, or a number of credit cards that you have. You have to take into account all of the debt and loans that you currently have. Include the monthly payments associated with these loans to calculate whether you can afford the new debt or  loan. It may sound complicated. However it is pretty straight forward as we will explain later in this post.

Debt Loan – Manage Your Credit Rating

If you have an excellent credit rating, most banks and lenders will approve a new loan. Provided that the monthly payments are no more than 35% of your cash flow. The number used to calculate this 35% includes your mortgage payment. It also includes all of your credit card payments, and all of your current loans. They will also include the new debt or loan that you may be considering. If you only have a mortgage, perhaps a car loan and a couple of credit cards the calculation is pretty straight forward.

Consumers can calculate their debt ratio by adding up all of the monthly payments associated with all of the debt that they have. Include the mortgage payment and the taxes on the property. Lenders will also look at your credit cards. They will assume a full balance on the credit cards along with the corresponding monthly payment to obtain your total monthly payment.  This total monthly payment is then divided by the amount of money you and your spouse earn each month. If the ration is higher or close to 35% you may not be eligible for the loan. Lenders at banks are not risk-takers. This is a clear sign to them that you are a poor risk and they will turn down the loan as a result.

What If I Rent, Does the Rent Payment Count

If you rent you should add your rent payment. Once you have this total divide the total payments by the income you make on a monthly basis. This would be the gross amount of your paycheck for the month. Lenders want to make sure that you are able to pay for all of your regular living expenses which includes rent if you happen to rent a place instead of paying monthly mortgage payments along with property taxes.  The ratio should be 35% or less for an excellent credit rating.

Many people will suddenly find themselves over the 35% level and they wonder how they got there. The debt level kind of sneaks up on them. Suddenly they realize they cannot get approved for a personal loan or even a mortgage on a home. By the time they pay the rent, the car loan, the payments on their credit cards, they are suddenly over the limit. In terms of being able to borrow additional money they are stuck. This is a difficult situation for many people who want to buy a house, buy a car or even consolidate all of their debt into one loan.

The advantage of consolidating a lot of debt into one low-interest loan is that the consumers generally pay less interest. The payments are sometimes spread out over a longer period which improves their overall cash flow. It allows them to get well under the 35% we discussed earlier. There is more money to pay for other monthly bills such as groceries and utilities etc which makes life a lot more comfortable. Avoid charging up the credit cards again. You will be able to pay these loans off and improve your life even more.

Some credit cards will charge at low annual fee for the privilege of carrying their card. This fee that the charge is typically $100 per year. These credits cards also provide a number of services that you will not find on another cards. For example car insurance, travel insurance, points that you can use when they accumulate to pay for trips and other goods that you purchase.

These cards can be quite valuable based on the services that they provide. However if you do not use the services and are still paying the annual fee charged by these cards then this is an additional cost that many people should try not to pay for.

Evaluate Your Credit Card Benefits

If you travel a great deal and avoid having to purchase travel insurance, additional car insurance, and other types of services that are provided on this card then the annual fee can be quite valuable. If on the other hand you do not use these services then the annual fee is just another fee and that you are not getting any value from.

No Annual Fee Credit Card

Some of these credit cards that charge an annual fee, also provide low interest-rate loans based on the unpaid balance. Again one has to check to make sure that the Interest rate is competitive with a personal loan to make it worthwhile.

If the credit card that you have is charging you $100 a year just to use it as an annual fee, some people might feel that it is worthwhile just to have that card with you in case you need it. They think of it as an insurance policy in case they have a large purchase that they need to place on it. While this can be a worthwhile reason, it still comes down to the question, Are you receiving your money’s worth from this credit card.

One way to look at it is whether you will receive $100 in benefits of some kind each year. If you are at least using these benefits in whatever form the are, then it is probably a good idea to keep the card, other wise it is time to get rid of it and save yourself $100 a year. Another benefit of getting rid of the credit card and by getting rid of it we mean close the account is that your credit rating will also improve. This is one less potential debt that is not listed against your name and will improve your overall credit rating.

Something to think about. For more information about the use of credit cards, click here.

Hiring an estate planning attorney in California should be done with care. Make sure that there’s a total alignment between your objectives and those of the attorney. Most attorneys will help set up the basic estate and trust for your grandchildren and your children. As well if you’re asking an attorney to manage your estate after you’re gone then further analysis and consideration should be taken.

Setting up an estate must also have objectives. Usually, this means that a dependent will be looking after the estate according to guidelines that are specified in the estate. The estate will include all investments, property, and any other instructions.  Often there are two people involved in planning the estate. A spouse and husband for example. As a result agreement to the estate and the manner in which it will be managed and set up is required. Subsequently, all legal issues must be dealt with satisfactorily.

Assess Objectives

Before you ever contact a lawyer to set up an estate, take the time to assess your objectives. Ensure that all parties who have something to do with the estate are in full agreement. Remember that one spouse may survive the other. Provisions for the comfort and care of the surviving spouse must be included. Sometimes it can be difficult to resolve differences in how each party feels the estate should be managed.  Talking it through and working through the issues may take some time and some compromise. You may also want to arrange for oversite of the estate. This is to ensure that the estate manager is doing his or her job as per the original instructions of the person who set it up in the first place.

Estate Planning – Set up Trusts

Just like every other job, estate planning attorneys in California will specialize in setting up trusts and estates or managing the estates for the departed. In fact, you may want to have one of your children or grandchildren co-manage the estate with the attorney.

Interview Estate Planning attorneys

Start by interviewing several estate planning attorneys gathering information about what services they provide and how much they charge. Once you have this basic information, then write your personal objectives and plans for the estate. In the second interview with the shortlisted estate planning attorneys, you can ask more detailed questions and narrow down the field to the one that you select to manage your estate.

Setting up an estate is not easy. There are lots to learn and to consider. This process may take several months or even longer as you consider all of the alternatives and options. Take your time and make the right decisions as best you can with the aid of professional people in the business.

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Many credit cards advertise themselves as being the lowest rate credit cards available. The sad reality is that after the grace period of sometimes three months or longer six months. Most credit cards end up charging the 21.9% rate that is the average of the industry. This is very expensive for many people particularly if they carry a balance on the credit card. Store-based credit cards charge even more than 21%, with some as high as 29%! Carrying a balance past your statement due date will cost you. The interest charges begin immediately from the day you charged items to your card. Be careful always pay on time to avoid interest and a poor credit rating.

Lowest Rate Credit Card – Credit Card Marketing

Credit cards have a great number of marketing advertising opportunities that they provide to the customers. One of them is low interest-rates for the initial., Particularly when you transfer balances from other credit cards or other loans. This amount will be charged a small or low interest-rate for a short period of time.

Once this grace period is over, the credit card reverts to the normal high interest-rate for unpaid balances at the end of the month. Many consumers find to their surprise that when they make a monthly payment, the majority of the payment is going towards paying the interest particularly if they pay the minimum amount that it’s included or offered on the statement.

Advice for Low Interest Credit Cards

The best advice for when you sign up for a low-interest credit card is to get in the habit of paying the full balance at the end of the month. This avoids all interest charges that may accumulate on an unpaid balance. If you can follow this particular strategy your costs for borrowing money will be a great deal lower. The cost of your goods that you purchase will also be much lower as well.

Credit cards are convenient, however, they can also get us all in trouble when we use them too much and then cannot repay the balance at the end of the month or on your statement due date. Another excellent approach to take is to limit yourself to a maximum of three credit cards. This generally will make it easier to pay off the balance when there are three cards or less to deal with. Also artificially keep the limit on the cards to a minimum to avoid any temptation to charge them up to a high level.

If you can follow these rules, many consumers can keep the debt level at reasonable levels. For more details about using credit cards, click here.

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Loan consolidation is one way to reduce the overall amount of interest that you pay and make more money available for you to pay down debt. Consolidate your loans and credit card balances into one payment. Your total payment will be lower. The amount of interest that you pay on your debt will also be lower. This is really fantastic when you save money. Most people however are just not facing up to their debt issues. They are not taking action about the problem when they know they should be doing something about it.

Credit card Debt and Loan Consolidation

Most credit cards are at a 20% interest rate or close to it. While store credit cards can be as high as 29%. Car title loans and payday loans can be as much as 300%. Although some groups are trying to pass laws to bring them down to a maximum of 36% which is still very high. Either way, these are prime candidates for loan consolidation. Significantly reducing the amount of interest you pay if you find the correct low-interest loan consolidation product.

Loans are much lower. Depending on your credit rating and whether you use your home as security you can get interest rates for consolidating your debt as low as two or 3% today. Interest rates are forecasted to rise. However, even if they go to 5%, they will still be significantly lower than the high rates for credit cards, etc.

Lower Monthly Payments

Another advantage of consolidating your debt is that you will also have a lower monthly payment. With a high-interest rate credit card, the interest component of your monthly payment is a significant amount compared to the value of the monthly payment. A personal loan at two or 3% has a much lower monthly payment relieving some of the stress and pressure on your cash flow.

The extra money can be used for any number of things. Financial advisers will recommend that you take this extra money and use it to pay down your loans even further. This will reduce your overall cost of borrowing money. If you can repay the loan quickly you will end up with a much better cash flow. Since you now have a loan payment that is no longer needed.

Other consumers will use the money saved to pay for things they have been delaying for some time simply because their money was so short. This is definitely ok. However we strongly urge consumers not to drive up the balances on their credit cards once again. If you do, now you have the loan consolidation payment as well as the credit card payments to make. This can get pretty difficult. Consolidate your high-interest loans with a low-interest loan. Then cut up those credit cards or put them somewhere you cannot easily get them. You really want to remove the tendency to utilize them.

Try to focus on repaying all of your loans to avoid paying too much interest and consolidate your loans to reduce your overall interest cost and monthly payments.

Estate planning in San Diego or really anywhere in the country is incredibly important. If you’re planning or hoping to reduce the amount of tax that your estate will pay when you pass away. A good estate planner will help you and your family set up the estate or a trust. They will make sure that there is money for your family to carry on after you’re gone. Also to minimize the amount of taxes that are owed to the government.

Minimize Estate Tax

They will also make sure that whatever tax you have to pay is minimized to the state. This is so important if you’re going to maximize the amount of money that will be available for your family. Protect your estate from the taxman. You will help to ensure that your family and heirs will end up with enough money to live more comfortably. They should enjoy life better than they might otherwise be able to.

US taxpayers can save thousands or millions of dollars depending on the size of their estate. Avoid the tax penalties that come with your estate. Early transfer of money to your family may be one way that estate planners recommend. They may be able to avoid or reduce paying tax to the US government and the California government.

For example, your estate planning practitioner might recommend that you transfer some of your nonessential assets to your family while you are still alive. There are many advantages to this approach. First of all, you reduce your taxes that the estate will need to pay. You will also get to enjoy the happiness of transferring the investments or assets to your family while still alive.

Some Risk Areas About this Approach

Many seniors have transferred their assets only to have their families squander the asset which can bring a lot of grief and sadness. Secondly, if you transferred an essential asset such as a home for example. Some family members have sold the home leaving nowhere for the senior to live. In addition, they have no money to purchase another place or to pay to rent an apartment or a place in a senior home.

Money, unfortunately, causes many people to do not so very nice things and your family is really no different from anyone else’s. We suggest that you transfer nonessential assets to family members. By this, we mean that the asset you transfer is not something that is needed to maintain your quality of life now or in the future. This approach affords some protection from a variety of issues and allows the person to live out their years in security and maintain an excellent quality of life.

Other Benefits of Estate Planning

Estate planning will also help to ensure that your assets are well invested and working for you in an efficient manner. Many seniors will have a large chunk of cash set aside for a rainy day to deal with emergencies that may occur. It is an excellent idea to have an emergency fund set up and ready for something that may occur. But this does not mean that you must have the money sitting in a bank account earning very low interest.

One senior had over $40,000 sitting in a checking account earning no interest at all. This was just so that she had access to funds that might be needed in the future for some emergency. This is a rather large sum of money. She was convinced by a financial adviser to place this money in a laddered GIC. Which still does not earn a great deal of interest income, but at least it earned some.

The funds were invested in GIC’s with monthly renewals. As a result, there was always a GIC maturing every month. It was re-invested if she did not need the money for anything. This approach gave her access to her money if she needed it. It also allowed her to earn extra income which she was able to use to live on. While technically this is not estate planning, this is an example of how to invest wisely. The GIC’s also had beneficiaries indicated in case something were to occur to her while they were invested, which is part of estate planning.

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Dawn and Chris Harrison said their debt problems got worse after Dawn fell ill three years ago. They are facing bankruptcy. Job insecurity, unexpected costs, and mounting debt are leading thousands of families in the Ottawa area to consider bankruptcy as an option to their financial issues.

Chris and Dawn Harrison felt that it is an option that should be considered very seriously and thought through before taking this significant step in their lives. Chris Harrison earns around $80,000 as an IT analyst a year but has had trouble keeping his family above water financially due to unforeseen circumstances.

Various Causes for Facing Bankruptcy

They were losing $1,000, $1,200 a month just in daily expenses that were needed to keep the family afloat. Now you might think that they made some bad financial choices or lost a bundle on the stock market. It is far from this case.

Three years ago Dawn Harrison was diagnosed with Fibromyalgia. The former ICU nurse had pain so severe she said she had to crawl up the stairs. This sickness has been draining their savings and taking all of their income.

There were 2,621 bankruptcies in Ottawa-Gatineau for the 12-month period from July 2011 to June 2012, but also 1,556 proposals, many consumer proposals. Consumer proposals are when an individual with debt puts together an offer through a trustee in bankruptcy to pay creditors a percentage of what they are owed over a fixed period of time. Consumer proposals allow debtors to avoid some of the worst conditions of bankruptcy, including the requirement to surrender all credit cards and disclose all assets.

Health can be a Big Financial Drain

In hopes of getting her better faster, the family paid for drugs and physiotherapy that went beyond their health coverage. In Ontario, OHIP has limitations on what they will cover and will not cover from a medical perspective. This was the catalyst to the downward spiral we’re experiencing now,” said Dawn Harrison.

Compounding their problems, the Harrisons purchased an SUV and a new trailer, just before Dawn got sick. They’ve had the items on the market for sale for two years, but there have been no takers. The couple is now $35,000 in debt, not including their mortgage and vehicles.

The Harrison’s do not want to risk their kids’ future. They are doing everything they can to avoid bankruptcy and make ends meet. The Harrisons said they are borrowing from family and trying to cut costs. They believe there is light at the end of what could be a long tunnel.

This is truly a sad situation and illustrates why we all must have an emergency fund available. Sometimes you will have to deal with issues of sickness and layoffs that prevent us from earning our income.

For more posts about what to do about debt, facing bankruptcy and what to do about it, click here.

Phoenix estate planners provide invaluable services to people who are trying to pass their estates to their children while trying to minimize the tax they will owe on their estates. There are many methods and approaches to this problem. Readers are encouraged to speak with an estate planner. They will assess your situation and the solutions that your personal situation offers as far as tax planning and estate planning are concerned.

Estate Planner – Transfer of the Family Business

For example, selling the family farm to the kids, taking back the mortgage, and then living off the income is one way to transfer the farm and minimize the tax at the same time. Of course, someone in the family must be willing to take over the family farm. They must operate it generating sufficient income to pay the mortgage and expenses even if it is interest-free or at a very low amount. If there is more than one child involved, some discussion will be needed. Discuss how the child that is not taking the farm over will be treated. Most people want all parties to be treated fairly.

Both parties, the farm owner and the son must have their own accountants. They must have a plan that is best for both of them! If one is not well looked after in this situation there may be some resentment. There also could be future tax issues that need to be resolved.

The previous example was for someone who owned a farm. They wanted to transfer the farm to their children in the most tax-efficient way possible. The process also applies to businesses as well. Although not all children want to take over the family business. Sometimes the business may need to be sold and the funds invested to generate sufficient income for the owners. Either way estate planning is extremely important to ensure that the amount of taxes are minimized and the money is there it passes along to the heirs of the person the estate is for.

Complex or Simple

Obviously the simpler the better. A simple straightforward estate plan costs less to set up and administer. However, not everyone’s investments are that simple and family situations are also not that simple.

There can be many children, spouses, brothers, and sisters to look after and so on. What if you have a disabled child or a brother or sister who needs to be looked after. They may not be able to generate income on their own. An estate in the form of a trust fund might be needed to provide for the person with disabilities for as long as they live. This is just one small example of what parents may want to think about and may need to consider when they are setting up their estate plan.

Setting up trust funds and estate plans may need the services of a legal team and certainly an accountant. If you have a large estate, this may not be onerous for the estate. If your estate is relatively small, then it may not be appropriate or necessary to have an estate plan drawn up. A simple Will will be sufficient that divides the proceeds of the estate to the family members that you designate.

The executor of your will should be carefully chosen. Someone you trust, someone who has the time, and someone who has the knowledge to make the correct decisions for your estate and for your family. While a family member might be the logical choice, you will want to have all of the issues considered. They must have the ability to look after the estate. Also, the knowledge to make informed decisions. As well as the political know-how to navigate through family politics is also a great asset to have.

Many people are complaining that student loan interest rates are too high. How can these poor students who have just graduated pay so much interest when they are just starting out and are looking for a job? While it is true they may have a difficult time to repay these loans and the interest rate appears high, but let’s step back a moment and look at this situation from another perspective.

Student Loan Interest Rates – Welcome to the Real World

For many students, it is the first time they will enter into the real world and begin to support themselves. They may have relied on dad and mom, student loans, even a part-time job, but now they are entering the real world where they are expected to pay for their expenses and everything that they do. For some, it may come as a rude shock, while for others it is just a matter of course and they will need just adjust to the norms of society.

The reality is that if you have a non secured personal loan, with a bad credit rating or a nil credit rating the reality is that you will pay a rate that is comparable to anyone in that category. Students are all of these things. They may have a limited credit rating, these are now in reality personal loans and there is no security. This is what you have to pay when you borrow money under these conditions.

The Rate is Actually Competitive Considering

When you compare rates for mortgages for someone with the best credit rating, sure these student loans at 6% seem very expensive. But these kids do not have a credit rating that really means anything. They do not have a home to offer as collateral. Frankly they are a bad credit risk until proven otherwise. When you consider these factors a 6% interest rate on a student loan is actually not that bad. Anyone else borrowing money under these circumstances might have to borrow at rates even more than this.

Sure it will take a little longer to repay and it will cost a bit more than a 5% loan for example, but the faster you get on with repaying your loan, the quicker you can establish your credit rating and apply for loans for cars and mortgages for homes. If you establish a good credit rating, you will also be able to get the best interest rates available for these loans and mortgages.

Did They Need to Borrow this Much

We sometimes wonder if they really needed to borrow as much as they did. Did they go to too many parties for example? Did they have a part-time job? Were they living at home? Did they scrimp and save or did they have a good time at college?

When you are just starting out, many students may not realize the consequences of what can happen when they do not follow a budget. They do not realize that someday they are going to actually have to repay this loan and they are going to ruin their credit rating if they do not repay their loans.

Every time you can reduce your loan by a thousand dollars, you can trim a lot off your budget and your monthly payments when the loan repayment plan begins.

Get to Work and Pay Off Your Loans

Paying off the student loans is a chore, but then again the quicker you repay the loan, the less interest in total you will pay. As soon as the loan is repaid, your cash flow will improve and you will be able to focus on other things in your life. Repaying the loan quickly and on time, improves your credit rating and makes you eligible for other types of loans at some of the best interest rates.

You may think that rates are too high; however you have to repay these loans so why just not get on with it. If the government does lower the rate, then it is a bonus for you. But whatever you do, do not delay paying the loans thinking that the interest rate is coming down. You will always pay more actual interest when you slow pay your student loans.

It is so important to have an estate planner, whether you are on Orange County or somewhere else in the country. Estate planners can help individuals and investors make sure that their estates are set up the way they want them to be. They can help to ensure that the estate goes to the family in the manner that they desire. Planners can make sure that it is done in a tax efficient manner. They can help to manage the estate while it is being wound up. Regardless of the size of the estate, it is important that someone plans for the estate dispersion in a tax free manner as much as possible. These steps apply to Estate Planning Orange County and anywhere else in the country.

Estate Planning While You are Still Alive

I just got off the phone with my brother who is talking about selling the family farm to his son. He intends to live off the interest income.

In fact his son would pay only the interest on the mortgage to my brother who would hold the mortgage. He would have income and his son would have a deductible amount for his income tax . Another major advantage of this approach is that my brother continues to hold the mortgage. If for some reason his son is unable to meet the terms of the mortgage, the farm would move back to my brother.

This approach allows my brother to have some income during his own retirement. He will be able to live a comfortable life without needing to sell the farm.A 3^rd party in not involved and he does not need to move some place else. It also means that the farm will stay within the family. This is important for us since the farm has been in the family for close to 150 years. Finally my nephew can get on with developing the farm in a manner that he wants to without being controlled by my brother. After all he owns the farm and it is his to do with what he wants to.

Non Estate Planning Issues to Consider

Another advantage for my brother is that he can continue to help his son on the farm when he is able and feels like it. This is also part of an estate plan. Knowing what you will do during retirement is something that is important for you own personal well being. An estate planner may not help too much in this area since this is not his forte. However it is important for all retirees to have something that they enjoy doing. Something that challenges then and keeps them busy when they have a great deal of time to themselves during retirement.

The down side in this case is that my brother may have a difficult time moving from owner to advisor and helper. This will be a transition for him and it may take a year or two before he completely makes the transition. Transition of ownership and decision making must be managed properly. They want to avoid relationship issues and problems that could get between him, his son and his family. I am sure they will work it all out. But readers should take this into account when they are thinking about transitioning the business to close relatives.

Estate Planning Orange County – Multiple Children

This brings up another issue which many people must face. In many cases there is more than one child. In my brother’s case he is planning to transition the estate to his son. When he retires he will purchase a home in a small town nearby and move into this home. When he passes on his daughter will receive the house as her part of the estate. The issue of making sure that all children are treated fairly in an estate plan is something that estate planners can also help with. Not everyone will treat all children the same which is unfortunate in the writer’s opinion, but this does occur a great deal.

It is steps like these that an estate planner can really help people plan their financial affairs. They can enable income and minimize tax and transition the estate, whether it is a family farm or a business to your next of kin!

The collection of debt is something that most people really do not ever want to have to deal with. Debt collectors specialize in collecting debt from people who have been unable to repay their debts. Once a loan has gone for several months without the monthly payment being received it can be quickly turned over for debt collection and next thing you know you are getting these obnoxious phone calls from debt collectors asking for money.

Debt Collectors

Debt collectors can also come after people who have a payment that they should have paid and for whatever reason have missed the due date. For example, failure to pay your hospital bills, x-ray charges, etc can also trigger these kinds of calls and nasty letters in the mail.

Depending on the size of the debt, whether it is secured or unsecured, debt collection will take various forms and may be quite troubling to many people. For example, let’s assume you purchased a car and took out a loan when you bought the car. The loan would have been secured by the car that was purchased. If you decide to miss payments on the car loan, debt collection may start with phone calls. Then they gradually proceed to more drastic action. At the worst point, after all, negotiations have finished, the debt collection process will move to a point where they move to repossession of the car.

Debt Collection – a Last Resort

Basically this is the last resort. The lender needs to repossess the car in order to sell it. They will use the proceeds to recover the loan and all fees associated with the cost of the loan and repossession. Don’t ever allow your debt situation to get to this point. Take action and pay your monthly payments. Also, talk to the lender to negotiate or renegotiate the loan.

If you are beginning to receive those automated phone calls about a debt that you have and are just ignoring them, it may be time to just step up and deal with the situation. The automated calls are just the first step. They will progress to even more annoying steps from the debt collectors. They could even begin calling at work or talking to your boss and colleagues. Deal with the situation before it really gets out of hand.

Going to post-secondary school is expensive and many grads are finding out just how expensive it is when they graduate and begin adding up all of their debt from student loans, family members, personal loans, and even credit card debt. The average student debt in 2013 apparently is more than $35,000. When they graduate many of them have little prospect of repaying their loans anytime soon.

The economy is improving and many more people are working. However, the pay rates for many grads is at the minimum wage level. Or just above that since few companies are hiring and willing to pay larger salaries. As a result, these grads are having a difficult time repaying loans. Let alone deal with buying cars and paying rent for a place to live. Buying a home is totally out of the question for these people due to their student debt.

If they have credit card debt these same grads are faced with daunting interest rates. If you thought that the loan rates of 6% were high for student loans, try 19%. Some rates are even higher for credit card balances that are not paid at the end of the month. It can be very difficult to repay these kinds of debts.  Interest is piling on at the rate of 19% let alone the student loan rate of 6%.

New Grads Have to Deal With Student Debt

New grads have no choice. They must deal with the student debt they have and focus on meeting the monthly payments as a minimum. Failure to meet all monthly payment commitments can lead to bad credit ratings. Which will affect them later in life when they apply for a personal loan or a mortgage. They could be faced with an outright refusal by lenders to loan them any money at all. Or if they do the interest rates could be very high making it too expensive to borrow money.

Family debt can be paid last since most parents and family are not going to report nonpayment to the credit bureau. But make sure that the family knows that you plan to repay them. Otherwise, the student can jeopardize family relationships. This can cause severe disruptions in family relations.

Focus on meeting all monthly payments first, then take any extra money you may have and pay extra payments on the highest interest-bearing debt that you have. This may be credit cards or another personal loan that has a high-interest rate. Once this high-interest debt is repaid, use the monthly payment that is now available to repay your other debts even more quickly.

Grads Planning for School – Student Debt

If you are just beginning your education, this is the time to plan your financing situation. Get a part-time job, minimize your expenses, live at home, and do whatever you can to minimize your expenses while attending post-secondary schools. You may still have some debt when you graduate, but you will owe a lot less as a result and will have an easier time repaying all of your student debt.

Focus on getting a job when you graduate and if possible turn your part-time job into a full-time job when you graduate even if this means that you are not working in your field. It is far easier to find a job when you are working than it is when you are not employed. With a job, you will also be able to bridge the time from when you graduate until you find a job related to your education. With a job, you can begin paying your student loans off and reducing your debts while looking for a permanent job.