Transform Your Current Spending Habits

By: Ajeet Khurana

When I first got my credit card, it felt like I was a never-ending shopping spree and that I could buy the world. I thought that my salary could handle all the monthly minimum payments; after all I would be paying for the shoes, clothes, and make-up in installments. Was I ever wrong!

After barely a year, I experienced the humiliation of having a credit card payment declined; that too, in front of my family and friends. I really should have learnt the lesson then but I did not. I figured if I paid double the minimum payment, I would still be able to go my expensive hairstylist every week. As a result, my credit card bills just kept piling up.

Thank goodness, my friends intervened and helped me realize the mistakes I've made with my credit. You see, it is the thought of having so much money at your disposal, money that's not even yours, that makes spending it so much easier. I was offered a huge credit limit. I somehow felt that I had to use my card to the max.

In retrospect, I can see that I never really learnt about how I could make the best use of plastic money. In fact, not once did I hear my parents complain about finances while I was growing up. And I wish they had, because if they had given me a slight hint of trouble caused by credit cards I would have stopped myself from spending what I can.

Stories about other people filing for bankruptcy were just that for me -- tales that should arouse a little curiosity. Then there is also the fact that finance companies "forget" to tell you about finance charges, late payment charges and other kinds of fees you only thought possible in your nightmares.

Here is a little trick I learned from my mother -- after I was camped in my old bedroom, unable to pay for my rent. She advised me to spend only the amount that I could cover through cash or check.

- If you don't need it, don't buy it. This is especially useful when you go for a sale which offers fabulous discounts on stuff you don't need.

- Try not to charge everything on that piece of plastic. If you can, pay for your groceries, gas and other small utility bills in cash.

- Stay on the alert for the best bargains. Even if they're cutting off 25% from the price tag, the other store could have it at 50% off.

- Pay more than your minimum monthly payments. If you have extra cash, put it in your retirement fund or pay off some of your debts.

- You do not need dozens of credit cards. One is enough. It is never a good idea to have a number of unused cards lying around.

- Pay on time! This is the ultimate advice to being on top of credit card debt. Late payment charges will increase your debt and affect your credit rating.

- Banks offer automatic payments for credit card bills from your savings account, and it is best if you avail of this service. All you have to do is make sure that you have enough money saved up to make the payments.

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Set Yourself Free From Taxing Matters

By: Low Jeremy

The prospect of having to get down to tax filing preparations can get you down. The process of tax filing preparations is tedious and can be difficult to factor in to your busy schedule. Luckily, aside from hiring an expensive certified public accountant to do all the dirty work for you, you can take advantage of the latest in technological advancements by using income tax software online.

More and more solutions providers are offering such software online which you can download to use in your computer or work at it directly online. Of course you have the option to use free or paid software online. Although the idea of using a free version online is tempting, be sure that you use one from a reliable and trustworthy source. Check for certified software online to avoid scams.

Unscrupulous individuals and groups may lure you by offering free tax software online only to dupe you into identity fraud or at the very least, steal your private information and sell your contact details to other vendors.

This is why it is important to choose a certified tax software online. The process of tax filing preparation is tedious enough as it is without having to deal with possible tax liability because of unreliable income tax software online just because it was offered free.

For certified free software online though, you will still have to contend with the fact that because they are free, they will have some restrictions. Most of the time, you will have to first verify your eligibility to use certain free and certified oftware online.

If you do find a free income tax software online that you are eligible to use, you may find that there are programs that will constantly bombard you will notices and pop ups that urge you to upgrade into a paying scheme. This of course is expected from free software of any kind.

In cases such as these, you will have to weigh the pros of being able to use the service for free with the amount of interruptions it imposes on your tax filing preparations. Sometimes, you are better off paying for a legitimate income tax software online service to get your tax filing preparations out of the way.

If you do decide to just use a paid income tax software online service, don't forget to do your research and ask around whether the software you are considering is easy to use and well worth the extra cost.

It's that time of the year again and even at the prospect of getting a refund, tax filing preparations as well as the actual filing will get anyone tired just by thinking about the sheer amount of work and detail one will need to accomplish this task. It would be good if all tax scenarios were created equal. Unfortunately, this is not the case.

For instance, the tax filing preparation of an employee as opposed to one who is self employed is quite different. This means that different tax situations need different tax filing preparing solutions, which can be solved by hiring a solutions provider.

It is typical for one to hire a certified public accountant. That way, you are free to not worry about your taxes. You can pay someone else to do that. It would be pertinent to make sure you hire a reliable and trustworthy tax accountant to take care of your tax filing preparation and actual filing.

Don't give your trust to just anyone because tax preparation and filing is a sensitive and important duty. Making sure that you pick the right person or group to handle your tax affairs is important to be able to guard against tax liability risks.

These outsourced service providers though will cost you. If you, like every other average citizen think that you already pay too much tax and don't want to have to shoulder the added burden of having to pay an accountant to do your taxes for you, don't despair. There may be some avenues you can try to be able to do tax filing preparations without losing your mind, with low to no extra cost.

For one thing, you can try free tax software specifically for Canada tax filing preparation purposes. Just search online and you will be able to see a lot of solutions provider that offer their software for free. Be wary though of scams and make sure that you check with the Canadian Revenue Agency for certified software so that you can be assured that you can use the output of the software specifically for Canada and the CRA online filing system called NetFile.

You can also opt to not use the NetFile system if your software is specifically for Canada only produces printable forms. For instance, in the case of the "taxman" self proclaimed "poor man's accountant" his software specifically for Canada does not produce efiles.

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'Understanding' Is Key To Avoiding Financial Problems

By: Tom Dawson

Those concerned about their capacity to manage money should at first take steps to "do some groundwork", an industry expert has advised.

According to James Falla, managing director of Thomas Charles, Britons who are developing problems in meeting demands for payment on areas such as mortgages, loans and utility bills need to take the time to consider the various options available to them as they look to get out of the red. He stated that before making a decision on how get back on their financial feet - whether this is through applying for a loan to consolidate debts, bankruptcy, an individual voluntary arrangement or signing up for an informal debt management plan - consumers should attempt to find out where they stand in a monetary sense. Creating such a plan, he stated, will allow people to identify how much cash they have coming in and where certain areas of expenditure can be reduced. Mr Falla added that by understanding their own situation, many people will be able to recognise the best option for them and could actually avoid getting into money management problems in the first place.

He said: "A lot of people get into difficulty because they don't have a good knowledge of their financial situation and they're not very good at managing their money or understanding it. But that's the key - to try to understand where you are, which is not really a nice thing to have to do. When you have a problem, the last thing that you really want to do is to put it all down on paper. But it's very, very important."

The Thomas Charles director reported that getting to grips with their financial situation before seeking advice from professional bodies will aid consumers to "listen to what the options are and how they are going to help in that particular situation". In turn, he advised that this may help people in avoiding a "shock". However, people were warned that the "key thing" is not to enter any form of financial plan without first understanding what they are getting into and making sure that they will be able to afford payments, as otherwise they may find themselves experiencing more problems in paying back loans and plastic cards.

Mr Falla also advised that "there is plenty of information out there on the internet", which could see numerous people find help in getting a loan online. Further research from the debt consultancy, conducted in conjunction with YouGov, also showed that 15 per cent of Britons owe at least 15,000 pounds.

Such sentiments concerning financial planning were recently echoed by Chris Tapp. Speaking earlier this month, the director of Credit Action reported that more consumers are struggling to manage money as the impact of five base rate increases by the Bank of England since August 2006 has risen the interest attached to personal loans and other types of borrowing. As a result, he urged people to take steps to get their spending under control, especially as the yuletide season approaches, with drawing up a budget or applying for a loan for the purposes of consolidating debts two possible ways in which this can be achieved.

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How to Handle Money for College

By: Jimmy Cox

College as a freshman is a vital subject in any home. "What's the best way for Robert to handle his college allowance?" asked his mother as she gazed fondly at her son. "Should he get a fixed allowance or write home as he needs cash? Open a checking or savings account?"

There are fundamental rules to guide Robert and his parents, you and your youngsters - and these guides apply whether the student is a boy or girl, goes away to school or stays at home, has five dollars or fifty dollars. Here are the major Money ABC's for College which I've worked out over the years. I know they can help every student in our land.

(1) Decide in advance with your parents what your allowance is supposed to pay for. If your allowance is to pay for clothes and important supplies at school, have this clearly understood and allocate funds for these expenses.

(2) Plan the spending of your allowance as carefully as you plan your study courses - both with your parents and on your own. The vital secret to this is a seven-days-a-week plan under which you'll divide your available cash into a spending kitty for each day. If you don't do this, you'll be feasting on the first days, in a famine on the last days.

(3) Open a bank checking account as soon as you get to school. Do not use your desk drawer or pocket as a "bank." The chances of loss or a feast-famine pattern are overwhelming. Open an account, learn how to make deposits, draw checks, balance a checkbook, and keep any service charges to a minimum. It will be invaluable training for later life.

(4) If you and your parents can manage it, start with a rainy - day account in a sayings bank nearby, or try to build one through the term. There always will be extra expenses - a special event or a crisis - for which you'll need or want to spend money. This savings account should be earmarked for these extraordinary expenses only, not otherwise touched.

(5) Don't try to figure your spending down to the penny. No plan ever should be that precise. You must have a margin of safety over your regular spending to cover "regular emergencies."

(6) Maintain some simple records on where your money is going. Your check stubs will help, but also keep a notebook in a spot where you easily can jot down every day how you're spending your allowance. Don't be too detailed in these records, but don't neglect them either.

(7) Look for ways you can stretch your allowance by free entertainment and by using your leisure time to save on expenses. You may be able to pool basic items or divide up chores among your college friends and save. You can save a lot with a needle and thread.

(8) Learn sensible buying methods and apply them to yourself. If you're handling your own wardrobe at school, take advantage of neighbor hood store sales and off-season clearances.

(9) During your first reunion with your parents, show your record books, discuss what's right and wrong with your allowance setup. If you're running short despite all your efforts and have records to prove your responsible management, you'll have a good case for a raise. You'll also be able to decide intelligently what you should do if your parents can't afford to give you that raise.

(10) Once you ye learned these rules, stick with them. Actually, these are money guides for life, not just for college. No matter what your age, you can apply most or all of them to yourself.

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What You Don't Know About Your Monthly Payment Table Can Hurt You!

By: Ed Lathrop

In the world of finance, having all expenses accounted for means everything. Hidden expenses are constantly sneaking up behind the investor, businessperson and homeowner and biting him in the backside.

Knowing where every cent goes and having every expense accounted for is one of the keys to gaining wealth. One tool any real estate investor or homeowner can use to find out where his money is going is the monthly payment table, which is also known as an amortization table, schedule or spreadsheet.

What a monthly payment table says

In a monthly payment table, the mortgage payment is shown as two parts, or separate payments. One part is the principal paid. This amount of money goes directly toward the amount borrowed.

For instance, if a person borrows $100,000 and pays $1,000 toward principal, he will need to make 99 more principal payments of an equal amount to pay off the mortgage.

The other part of the payment the table shows the interest paid on that payment. In the early stages of a mortgage, this amount is usually far higher than the principal part of the payment. When a person pays interest, it is money he has lost.

Interest is time value of money

By looking at a monthly payment table, you can look ahead to the next payment after the one just paid. Here, you can see what the principal and interest parts on the next payment are and pay just the principal part of this payment.

By doing so, you'll avoid having to ever pay the interest part, which would be due if you waited until the payment's due date. This is one way where monthly payment tables can be very helpful to anyone who is looking to save, or even make money.

The interest part of the payment shows the time value of money. So, by not using the allotted time to make a payment, the borrower will avoid paying the time value of the amount due on the loan, which is the interest. This is very beneficial because sometimes the interest payments in the first year of a mortgage are 10 times what the principal payments are.

Pay a little, save a lot

Saving the interest part of a payment by paying the 1/10 as big principal part is an example of leverage. This is an important point because leverage is the key to wealth building.

Leverage is used when a property owner uses the rent he has received from a tenant to pay the mortgage on that property. In this case, if the price of the property being rented increases in value, it is the person paying the mortgage, not the person paying the rent who is the beneficiary.

Until someone looks at his mortgage payment, or amortization table, he has no idea where the money is going or how he can use the leverage small principal payments give him.

It is amazing to see the looks on people's faces when they see their monthly payment table for the first time. People who, in many cases, are very smart and well versed in math are shocked when they see how much money goes toward interest in the early stages of their mortgages.

Knowledge is king

Being familiar with monthly payment tables can help borrowers save thousands, and sometimes even hundreds of thousands of dollars, because they will know how much leverage they will have when they make relatively small principal payments upfront.

For this reason, it is very important any potential borrower has a monthly payment table printed out for him right at the beginning of that mortgage's term. This way, the borrower is awakened to the fact most of the mortgage payments will go toward interest.

They say ignorance is bliss. Because of this so many people, who don't know where their mortgage payment money is going, pay without giving it a second thought. Those to do know however, usually work very hard to make upfront small principal payments and avoid paying larger amounts of money toward interest; which is simply wasted money.

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Tips In Choosing The Best Bad Credit Card

By: Liz Roberts

Having bad credit does not mean one can never apply for good credit cards. Because of so many people having problem with their credit, credit card companies saw the potential in providing service for this people. Thus, credit card companies came up with bad credit credit cards. As the name suggest, these credit cards are especially created to cater people with less than perfect credit history.

Bad credit credit cards or secured credit cards do come with higher interest rates and fees to make up for the risk from customers who have a poor credit history. When compared with standard credit cards, these cards also impose lower credit limit for its card holders since they were not able to present impressive credit.

However, this doesn't mean that credit cards are inferior since these cards can be a tool for people with bad credit to regain their credit reputation. Just how is this possible? By submitting regular payments on your account, secured credit cards report to the major credit bureaus to ensure that your credit report is updated.

Understandably, not all bad credit cards are offered in the market are great and it is up to you to do your choosing carefully. One of the first things you should look for with a credit card is whether it reports to the major credit bureaus. There are some secured credit card providers that do not have this important provision. This is crucial in helping you rebuild your bad credit history.

Of course, just because you don't have an excellent credit doesn't mean you have to settle for unreasonably high rates that credit cards impose on their clients. It is possible to find secured credit cards with interest and fees that do not take advantage of your poor credit.

Another important factor to check about secured credit cards is the minimum amount of deposit required to get an approval. This security deposit is held in your account in case you default on your debts, thus giving the bank a guarantee that they can use this money to pay for the debts your defaulted. Take note also that some banks place this security deposit in an account that bears interest. Make sure that you'll be able to claim this security deposit along with its interest after building your credit.

The use of your security deposit may also differ depending on your bank. Some creditors will take your deposit if you miss a single payment in your account while some banks allow at least 5 to 6 months before deciding that the card holder has completely defaulted his debts.

Most importantly, choose a secured credit card that allows you to convert your account to an unsecured one after a certain period if you can prove that you are submitting all your payments dutifully and timely. This way, you can enjoy the privileges that unsecured credit card holders enjoy such as lower APR, higher credit limit, and less restrictions.

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Credit Report Myths - Get the Facts!

Author: Jay Neel

Credit Reports, what are they? Do you know that whenever you apply for any loan, your credit report is pulled up from the Credit Bureau?

Well, credit bureaus maintain your credit report. They have almost all the agencies or vendors or suppliers or traders as their subscribers. Are you asking what does this mean? Well whenever you apply for a credit card, your application becomes the part of your credit record. All the basic information supplied by you e.g. your name, date of birth, address, Social Security Number etc, become the foundation of your credit score card.

Can I get access to my credit history? Can I check what these agencies have been reporting to credit bureaus?

Yes, you have all the rights to get a copy of your credit history from any credit agency. Also keep in mind that we all are entitled to one free report per year if we are not in hurry and can wait for the report through mail. I think everyone should get one report every year.

While writing about these type of articles, I have often received few emails asking variety of questions on issues related to their credit. Most of the time, I noticed that I can group these questions in five groups. I hope that by sharing answers to these five questions, I can help my readers in USA and Canada better.

Myth#1: The Credit Bureaus are required to keep derogatory remarks on my credit history for 7 to 10 years as per the law.

Fact: Is it true? The big answer is NO. Let me repeat for the benefit of the readers from USA and Canada that there is no such law. In fact the credit bureaus are required to automatically remove any such remarks from your credit report every few years as per the law. Normally for each province or state, these number of years when record is removed, is different.

Myth#2: My friend said that it is illegal to remove any credit history information or alter any credit report information in the file.

Fact: The purpose of the law is to protect consumers from any type of intrusions from any credit bureau. You should also keep in mind that it is our right that we interact with these agencies and get any misinformation or misleading record fixed.

Myth#3: If I pay my past due debt, then my credit history will be fixed immediately.

Fact: First of all it is always good to pay back to any creditor in time. If you are late, then you should communicate back to creditors sharing with them why you need more time. In majority of the cases, if you are honest and reasonable, your creditors will help you because their objective is to get the money back even if you are late. By paying your past debt, you reduce your number of days of the 'debt in delinquency' record. This means that your record can be improved early if you paid early.

Myth#4: Any type of inquiries are not harmful to my credit score so I can keep shopping around for credit cards or any other such credit products.

Fact: If there is a normal frequency of the credit inquiry, it is not harmful. But if you shopping aggressively for mortgage or any other such product, then it can impact your credit standing. So be very careful for any such inquiries and you should go to mortgage consultants who do shopping for you based on only one inquiry. If you go to different service providers, then each mortgage service provider will request for an inquiry which will hit your credit records.

Myth#5: Bankruptcy can not never be taken out from the credit records.

Fact: Bankruptcies are similar to any other derogatory items e.g. bad credit, poor credit, non-payment of a debt, etc. on your credit reports. You should always consult a lawyer or a consultant before you consider announcing bankruptcy. That consultant will guide you by sharing all the pros and cons of taking that action.

You should keep in mind that credit bureaus are there for a very specific reason. Their main job is to provide a credit rating to the bank about you so that the bank will know whether you are a safe customer or not. And last but not the least, credit bureau provides you a similar coverage if you are a business man.

So in summary, you should consider your credit report as your life score card and keep a close eye so that you keep winning all the matches in your life.