4.1 Million Use Credit Cards for Mortgage or Rent

There’s nothing wrong with debt in itself. Without debts such as mortgages and car loans, we wouldn’t be able to live our lives the way we want. But once we can’t afford our debt repayments, it’s time to ask for help, seeking expert debt advice or looking into professional debt solutions such as a debt management plan, debt consolidation loan / mortgage, IVA (Individual Voluntary Arrangement) or Trust Deed. The alternative could be doing something we’d normally never consider – like paying the mortgage (or other large debt) with a credit card.

According to housing and homelessness charity Shelter, about 85% of the UK’s £1.4 trillion personal debt is secured against property. The good thing with secured debts, of course, is that they normally come with a lower APR (Annual Percentage Rate) than unsecured debts. Nonetheless, a mortgage is by far the biggest debt most people will ever have. It’s a commitment to spend a long time paying a lot of money every month. If the mortgagor runs into any kind of financial trouble, it can be a huge burden.

Here’s the scary part. In October last year, Shelter revealed that over a million people had been forced to pay their mortgage or rent with a credit card in the previous 12 months. Just eight months later, that number had quadrupled – published in June 2008, Shelter’s ‘Breaking point’ report revealed that ‘4.1 million households (16%) used credit cards to help meet their housing costs in the last 12 months’.

Credit cards may seem like a good way to deal with a cash shortfall in the short term, but they’re no long-term debt solution. “When someone pays a month’s mortgage or rent with their credit card, they’re not solving their debt problems – they’re just putting them off,” says a spokesperson for financial solutions company Think Money. “They’ll have to repay that debt sooner or later, and the longer they leave it sitting on their credit card, the more they’ll end up paying in interest.”

What’s more, any inability to pay essential bills like rent or mortgage could mean there’s something seriously wrong with their financial situation in general. “Anyone in this situation should immediately review their financial situation and figure out where the problem lies. It could be that they can’t really afford the mortgage / rent payments, or it could be that their other debts and expenses are simply taking up too much of their income. Unless they’re certain that it’s a short-term problem (caused by a one-off expense, perhaps) it’s essential they take action to regain control of their finances.”

The important thing is to act swiftly, but not panic and grab the first debt ‘solution’ that comes to mind, like using a credit card for this kind of debt payment. “Financial solutions companies like Think Money can help people find a much better answer to their debt problems. A debt management plan, IVA or Trust Deed could be a good way to reduce their monthly payments and regain control of their finances, but everyone’s situation is different, so it’s vital to seek debt advice from a company that offers a wide range of debt solutions.”

How To Get A Raise

I have to start by saying that the first and best thing you can do to get a raise from your employer is to make sure you deserve one. Of course, this should go without saying. However, many employees think that simply being at their job a while is enough reason for more pay.

Most employers will disagree. Unless you are simply arguing for a cost-of-living increase, you really should provide more value to your employer if you expect more money.  If you're not doing a great job now then, start tomorrow, and do better for a while before you try to get a raise.

Okay, so you deserve a raise. But don't expect your boss to notice this or think of it on his own. Most likely, you will have to sell him or her on the idea, so you should be fully prepared to do that. Find out what others in your position make. See if you can discover how much of a raise some of them have received in the past. In the United States, you can use the U.S. Labor Department's Bureau Of Labor Statistics website at http://www.bls.gov/bls/blswage.htm to see what the average pay of various jobs is.

Ask for a realistic raise, based not just on national norms, but on what people in your particular company make. Always aim a little high. This lets the boss negotiate your raise down to what you really hope to get. Consider everything you want before you ask for a raise too. For example, are you also seeking benefits or a better position?

Okay, so you have decided how much you will be asking for. Now make a list of the things you have accomplished. Be ready to show how these are linked to some measurable increase in profits if possible. At least make a reasonable argument for how they should add to the company revenue. Try to be specific, and don't lie about anything. You want to show that you are clearly valuable to the company - and that you know you are.

The timing of your request for a raise matters. Don't ask for a raise when the boss is in a bad mood, for example. If you've got easy access to the supervisor who'll make the decision, wait for a noticeable good mood, then ask to speak with her, or him. On the other hand, if you have to make and appointment, schedule a time when the boss won't be too distracted, like late afternoon, when lunch is past and his work is caught up.

You should always know what your options are and what you are willing to do according to the response. In my working days, for example, I got what I wanted several times by threatening to quit. But perhaps this only worked because I meant what I said. You might lose a job you want to keep if you bluff. What you will say? What you will do if the boss says no? What if he offers less than you ask for? Can you wait and bring it up again later? Can you look for other employment? How about mentioning this job search to the boss?

Consider these things carefully, and be prepared if you want to get a raise.

Mortgage Upside Down? Hope for Homeowners can Help!

Upside down has become a new buzz word for many Americans that hold mortgages.  If you are upside down on your home you can find relief with the hope for homeowners program. The principal balance of your current mortgage can be reduced using the hope to homeowners program. Monthly mortgage payments will be lower.

You can obtain a much better mortgage that will be based on the value of your home today.  Any additional balance left on your mortgage will go away.  Your new mortgage will be based on 90% of the current value of your home.

The end result will be much lower payments on your mortgage each month.  Mortgage payments may be reduced by as much as half of what you are currently paying. Houses will be saved for many homeowners.

Your new mortgage will be an FHA mortgage.  This means it is insured by the Federal Housing Administration.

Hope for homeowners will provide some much needed help for many Americans that own homes.  If you need help with an upside down loan, take the time to research this program.

You will need to provide income documentation in order to qualify for this loan.  Most of the standard mortgage guidelines will apply.  The big advantage is that you can drastically reduce your mortgage balance and your payment.

The government passed the hope for homeowners program on 07/30/08.  You must be living in your home to qualify for this program.  The program will expire on September 30, 2011.

This program does have guidelines.  The loan amount has also been capped by the FHA.

This is a great program for home owners that have been having trouble with their mortgage. The situation that you are in can be improved dramatically.

There is an equity sharing element to the hope to homeowners program.  Your old mortgage company will share in the equity of your home moving forward.  When you sell your home some of the proceeds will be given back to the original lender. It will depend on how much time has gone by since you started the program.  The FHA will also share in your home's equity moving forward.

Find out more on hope for homeowners.

 

Easy Ways to Save Money

Saving Money

The economic downturn is unfortunately and unavoidably affecting us all. Wouldn't it be great if we could lessen our regular outgoings? Well we  can.

If you think about it there are lots of ways to save money in these cash strapped times. Here are just a few suggestions:

Shop around for a new home loan. If you have a mortgage and you are not tied in to your finance company you may find that shopping around can get you a better deal. There are some fantastically low interest rates around at the moment so it makes sense to take advantage and ensure you have the best deal available.

Minimise credit card bills. One way to lower your monthly outgoings is to pay off those credit card bills. If you can't scrape together the funds to pay your bill look at moving to a new credit card that is offering 0% interest for as long as possible then set yourself the goal of paying off your bill before the 0% period expires.

Reduce your utility bills. It is likely that you are paying more for your gas and electricity than is necessary. Like your mortgage, it is worth shopping around for the best deal. While it can take a little effort you will find that there are some very useful websites and the result will be lower monthly bills.

Reduce transport costs. For many of us running a car is a necessity. but everyone can all make some savings in this area. Rather than buy your next car why not consider car leasing. Personal car leasing is becoming increasingly popular as people wake up to the benefits and savings that can be made. Car pooling is another way to share the cost of your work transportation. At the very least you could save on fuel by offering to give a lift to someone who must do the same daily journey.

Buy your groceries from a cheaper supermarket. The very same basket of groceries can be priced quite differently at various supermarkets. Make sure you are not paying too much by getting all your regular groceries from the cheapest source in town.

Do it yourself. Where possible do as much as you can for yourself. For example, rather than visit the car wash why not do the car wash yourself. Rather than take your car to the garage for a service why not do it yourself. Rather than employ a window cleaner, get out your bucket and sponge and do it yourself.

Cut out expensive habits. If you smoke then do whatever you need to do in order to stop. This is a no-brainer. Smoking is bad for your health, bad for your pocket and it can make you smell like an old ashtray? If you enjoy a tipple then try cutting down. Maybe limit yourself to drinking only on special occasions.

Holiday at home. You may be able to consider alternatives to your annual expensive holiday abroad. Staying at home doesn't have to be dull or boring. Take a week off work and pack your week with visits to museums, art galleries and free exhibitions. Wrap up in some good outdoor clothing and get out into the countryside or down on the beach for some nice long walks. While you may not be getting a Caribbean tan you will be saving a fortune while having a great time.

I hope that these simple suggestions provide some food for thought. While they may seem a little penny-pinching making savings in this way could make all the difference between hanging onto your home and foreclosure or repossession.

Learn How to Improve Your Finances

With the stock market the way it is and the job market not doing so well, it's time to take stock of your finances and see where you can do better.  Many people are deep in credit card debt and it puts a burden each month on the monthly budget.  In this article, you will get some tips you can use to help you get better control of your finances.

How did you finance your last car?  Do you know how to finance a car the right way?  The right way to finance a car is to not finance a car at all and try to pay cash.  This will save you money each month that you can use to pay off debt and save on interest charges.  This is not avoidable for most people as they have to have a new car every few years.  If you have to finance a car, get the shortest loan term possible and shop around with credit unions to get the lowest interest rates. 

The next major financial issue is how to finance college.College costs a lot and is not going down.  Millions of parents and graduates are stuck with thousands of dollars in student loans when they graduate.It then becomes difficult for a graduate to afford to live on their own and that's why they live at home.  So how do you finance college better? Spend weeks and months looking for scholarships and grants.  We spend more time watching American Idol or the latest Lost season than we do trying to pay for college.  A lot of the work can be done online.  Spending more time getting it right now will pay huge dividends when you are not stuck with your son or daughter living at home after college stuck with student loan debt.

Lastly, you need to learn how to finance a home.  A home is the biggest financial decision you will have.  If you do it wrong, you can lose your home getting in a mortgage you cannot afford.  Do not buy a bigger home than you can afford.  This will only lead to a ton of problems if a financial emergency comes along and they usually do when you do not expect them.  And then the standard advice follows - shoot for a 15 year term or pay more than the minimum to pay off the loan fast.

There are tons of resources to help you manage your finances better.  It is not the most exciting subject in the world but if you take the small amount of time it takes you will enjoy less stress and a better financial picture overall.

Why Social Security Is Still Important

Social Security has been with us for sixty plus years - it's hard to believe. The first Social Security check went out in the mail in 1940 even though President Roosevelt had signed the Social Security Act into law, five years earlier. Since that time, quite a few American seniors have been thankful to receive that monthly financial safety net as they enter their retirement years.

Originally, in the first version of the bill, Social Security benefits were to be paid solely to the principal worker. But, prior to the bill going live, additional benefits for the spouse and child dependents were included..

Quite a few folks erroneously think that the Social Security system is equivalent to an investment annuity, in which you send money to the government. They will then invest it and give you the resulting income in monthly payments for the rest of your life. In fact, however, the system is closer to a government welfare program. The collection of payroll taxes , which finances the Social Security program, is managed under the authorization of the Federal Insurance Contributions Act, better known as FICA. FICA is like the enforcement arm of the system. It ensures that every worker "contributes" his or her fair share to the government pool.

Each new generation of workers is responsible for taking care of the previous generation's retirees. The amount of money you eventually get back from the government has only a tenuous relationship to the amount of money that was deducted from your check over the years. Since it's inception, the system has collected from contributors and paid out over nine trillion dollars to recipients.

But the 1940 law did not simply stop with providing benefits to retirees. It also contained the first incarnations of the welfare and unemployment systems which are still very much in evidence today.

Today, with millions of people losing their jobs every month, relaxing retirement travel is only a dream. With our financial systems going into the toilet, and the housing crisis exploding around us - these safety nets are becoming more important than ever. Many retired women, especially, are just barely able to make ends meet with the help of Social Security. This is because, although gradually changing, women today are less likely than men to have additional sources of income. Partly due to working less years in the workforce because of child raising responsibilities. And partly because, even while in the work force, women typically are paid less than men.

But even families that don't necessarily need Social Security to survive are helped by it. In fact, according to independent studies, if the government were suddenly to get rid of Social Security, many retired families would experience a drop in their living standards of 70% or more.

Many people fear that the system cannot sustain itself. In fact, there have been times in the past when the amount of money paid to recipients exceeded the amount of money collected via FICA. In these cases, Trust bonds were sold to make up the shortfall. Because of circumstances like these, Congress has occasionally upped the percentage of gross income that FICA can collect from salaries. Even these modifications, however, as the population ages and simultaneously live longer, may not be enough to sustain the system without drastic changes to the system.

The Social Security program is the mosts vast government program in the country - comprising over one fifth of the federal budget. As some politicians look at cutting the size and expenses of government, this program has an inviting target on its back. To many people, however, the cost of losing this critical system could ultimately be a great deal more than the cost of running budget deficits.

How To Navigate Your Way Out Of Debt

Transforming Debt Into Wealth Review

Successful debt management is based upon truth, reality, and keeping your priorities straight. You cannot dig yourself out of debt if you plan to win the lottery to do so, it takes a little more work than picking a few numbers. Now spending on too many lottery tickets without having the assurance of winning is not a very wise debt management plan.

Know your priorities when it comes to managing your debt. You need to learn how to determine which are needs and which are wants that you can do without. If you are still unaware of what they actually are, necessities include your home, clothing, transportation, food and things like that. After the total cost of these necessities is subtracted from your bring home pay, what's left is your disposable income.  Do yourself a favor and buy some get out of debt books to educate yourself about how to get out of debt fast.

What you spend on what you call "necessities" will determine your monthly budget for necessities but it could probably use a little trimming. When you cut the cost of any of the necessities, you will have more disposable income and when you add to the cost of the necessities, you will have less disposable income.

You have to make your own choices, of course, but here are just a few ideas that might help you get out of debt quickly :

1. Food: Eat at home rather than dine out.

2. Shelter: Maintain a home whose size is just right for you and your family.

3. Utilities: Know the basics, turn of the appliances that aren’t in use, don’t waste electricity. If it’s cold, cut down on using your air-con or fan and things like that.

4. Transportation: A five-year-old car will take you to the same places that a new car will take you.

5. Clothing: Go for discounted ensembles that are less expensive but stylish nonetheless.

Debt management and getting out of that debt is about getting the right mindset and right priorities. What you spend on your priorites can change because you can always go cheaper and be more frugal or you can go more expensive if you want to be extravagant.