Financially we`ll guide you to get rich with finance, loan, tax, credit, insurance, etc

2007-07-02T15:29:00.001-07:00

House prices and HIPs - what lies in store for the housing market

The effects of the introduction of Home Information Packs (Hips) and a slew of contradictory data are confusing the market, so what does the future hold for homebuyers and sellers?

As an indication of the importance placed on Hips by the government, the latest figure of the implementation costs was £11 million, spent on legal fees, salaries, administration and trials of the scheme around the country.

Although this remains well under the allocated £16 million budget for the implementation, launch day will likely increase the cost somewhat. But as that day approaches, accusations and recriminations have been thrown back and forth between the pro and anti-Hips camps with no clear picture appearing. The only thing that remains certain is that Hips will come into effect on June 1st.

But even that has not filtered through to the housing market, as online property site Primemove reported in March that 40 per cent of its users believed the scheme had been scrapped.

Such a lack of knowledge in some sections of the market encouraged doom-mongers to predict a chaotic opening for the scheme - an opinion which was further boosted by Telegraph reports that claimed there would be a lack of inspectors to issue the much-heralded Energy Performance Certificates (EPCs) which form a major part of the Hips scheme.

Suggestions of this sort provoked a natural backlash from the pro-Hips lobby and the water was muddied with predicted figures of inspector levels rather than factual statistics.

But some groups are dug in with their views about Hips and have pledged to see them either rewritten or abolished. One such industry leader is the director of Legal & General, Stephen Smith, who predicted that buyers may see Hips as "incomplete" without Home Condition Reports (HCRs) and said that making items optional would create more levels of complexity in the system.

Mandatory HCRs were made an optional extra in July last year and Mr Smith expressed his misgivings about how effective the Hips will be in their new form.

"We are predicting that the take-up of 'optional' items within the packs will vary greatly across the country," he said. "This may lead to consumer confusion and will not have the desired effect of combating the common delays and failures in the home buying and selling process."

However, this was countered by the Law Society who said that the dropping of HCRs was positive as it would be unworkable as buyers "could not sensibly rely on a survey commissioned and paid for by the seller".

Another detractor from the scheme was Michael Coogan, head of the Council of Mortgage Lenders, who called for their abolition last year at an industry dinner, saying that there were not enough inspectors for EPCs and "if a significant number of packs will include home condition reports on a voluntary basis, the market impact of a shortfall in home inspector numbers will be severe."

But the deputy director of the Association of Home Information Pack Providers (AHIPP), Paul Broadhead branded such comments from the anti-Hips camp as "untrue, indefensible and a feeble attempt to misinform the public for private gain".

He focused on three "lies" – claims that there will be a shortage of energy assessors, suggestions that Hips would cost £1,000 each and that Hips would have a negative effect on the housing market.

Taking each point one at a time, Mr Broadhead said that "under no circumstances will we not have enough energy assessors", adding that "market forces will keep the cost of packs competitive" and explained that "Hips will reduce the number of transactions that fall through, saving customers time and money".

Perhaps the calmest head among all of these was that of Lesley Sorridimi of provider Hip Hip Hooray. Despite the entrenched camps on both sides, Ms Sorridimi advised that Hips are "legislation now" and argued that estate agents "are just going to have to get on with it".

Such has been the way of things during the build up to the launch of Hips so far, but what are analysts and experts expecting for the days after the launch?

Apart from predicting chaos due to a lack of preparation, pessimistic commentators suggest that the market will see house prices drop due to the double-whammy of Hips and rising interest rates. The Evening Standard reported that industry leaders were afraid that the added cost of a Hip would discourage sellers when coupled with higher interest rate costs.

This view was shared by Miles Shipside, commercial director of Rightmove, the UK's largest property website, who said that it could lead to many sellers trying to beat the Hips introduction by selling up earlier.

It is true that there has been a rise in sales in recent months, but this coincides with the traditional busy Easter period and house price rises have in fact sped up so far, aided by the shortage of housing. Whether this is a bubble leading to a collapse is unclear as it all depends on how well prepared all parts of the industry are to deal with Hips.

But there could be a relatively smooth transfer into Hips as membership of the AHIPP has surged in the last months. Thirty per cent more applications were received since the start of the year, suggesting that organisations are preparing for Hips by getting as much information as possible.

Mike Ockenden, AHIPP's director general, welcomed this new interest in getting ready for Hips, saying: "A growing number of organisations … are now looking to join the association to gain access to a widening pool of information and contacts, in addition to up-to-date information on any industry developments or requirements."

So if organisations are ready and if enough assessors are trained in time, it all seems to be plain sailing for Hips. That is until you look at predicted repercussions of the program in the future.

By imposing a ban on marketing a home for 14 days until a Hip can be put together at a cost of around £600, there are worries that the speed of transaction could actually slow, which would again discourage sellers.

If this were to happen, property that makes it to the market would likely see even larger rises in price, forcing first-time buyers further into a corner.

Other misgivings about the scheme focus on the database of all Hips produced which will be compiled by the government. As it is unknown what the government will put this vast amount of information to use for, it is described by the former president of the National Association of Estate Agents as "an ill wind".

Privacy issues aside, concrete market effects in the long-term are thought to be a housing price crash in 2008.

With the Bank of England raising interest rates twice in recent months and set to do so again in May due to spiralling inflation, the market is already under pressure and recently more and more industry insiders have predicted that Hips will push the market over the edge.

"We are now clearly at the end of the house price boom," said Diane Choyleva of Lombard Street Research last month. "We think there will be a correction next year, although it is unlikely to be as severe as the last crash."

Lombard Street conducted a survey showing that house prices were continuing to outpace rises in wages while mortgage bills were also charging higher rates. Both these factors could also contribute to a downturn in the market.

Analysts are understandably concerned that the UK could go the way of the American housing market which has seen a 'credit crunch' as lenders have restricted the money they pay out in mortgages - leading to rapidly falling prices as buyers can no longer afford as much. With the UK having a history of following the US market this is making some market commentators jumpy, especially when coupled with uncertainty over Hips.

"When the US catches a cold we tend to get one as well," said Jonathan Davis, a spokesman for the housepricecrash website.

"Certainly if the US economy goes into reverse and there are job losses, world economic growth and that of the UK could be affected," agreed Ray Boulger of mortgage broker Charcol. "This could, ultimately, have a dampening effect on the UK housing market."

But Mr Boulger also pointed out the differences between the market conditions of the US and UK, especially the short supply of housing and the relative prudence of UK mortgage lenders, as reasons why he believes the market will escape a crash.

Such underlying factors in the market bolster the strong growth which has been enjoyed over recent years. Hips may cause a period of uncertainty if they create chaos and prove useless to sellers and buyers alike, but it seems unlikely that they will cause such confusion that the market is turned upside down and plunged into a downturn.

The effects of the implantation of the scheme are far more likely to be small-scale and affect the purchasing process either adversely or positively on a deal by deal basis. While this will probably result in some horror stories and some triumphant tales, the larger picture of the housing market will probably see little impact - other factors such as interest rates have much more of a role to play.

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2007-07-02T15:27:00.001-07:00

Develop a disaster recovery plan for your business

While managers at businesses of all sizes would crave the prospect of having complete control over their firms, the reality is that the running of a firm is becoming an increasingly precarious business. The recent political climate has, realistically, not been conducive to the smooth working of businesses, particularly with the fallout from the 07/07 bombings in London still being fresh in the memory. Or what about the Buncefield disaster at an oil depot in Hertfordshire in December 2005? The blast, which was allegedly heard as far away as Holland, is still being borne by homes and business. And, perhaps most topically, recent inclement weather, causing high winds and even flooding in certain areas of the country, might alert businesses to the potential dangers. Indeed, the Association of British Insurers last week indicated that high winds and heavy rain were likely to increase the dangers to property owners and see insurance claims rising. Commenting on this seeming apathy among businesses, the managing director of communication solutions provider Mitel UK, Graham Bevington, has said: "Although business continuity has become a higher priority, it's clear that the vast proportion of UK firms are ill-prepared to maintain operations if employees are unable to get back to work."

But are businesses taking heed of the obvious measures? Research would suggest that they are not being as pre-emptive of a potential disaster as they should be. Figures released by Continuity Central this month show that approximately half of firms in the UK said they did not have sufficient plans in place to deal with events such as a flood, fire or act of terrorism. Sole traders appear to be even more apathetic to potential disasters, with over a third of respondents who participated in the survey saying they had a procedure in place to deal with an unforeseen event. Some appeared to be nonchalant about the potential effects, with 29 per cent saying it was unlikely to affect them, while 11 per cent said they had no time to deal with the problem. Mitel says that retailers are the most disinclined to plan for the unexpected, with almost two thirds taking more than 48 hours and 28 per cent taking over a week to get firms in working order again, a predicament likely to adversely affect many, especially smaller retailers.
Small firms with more than ten employees appeared to be more alive to the benefits of implementing a disaster recovery plan, with 57 per cent suggesting they did have sufficient measures in place. More generally, small businesses might have less time and resources to implement a disaster recovery plan, so the above statistic would seem to show that larger businesses may be apathetic. Despite appearing to be burdensome, efficient planning for the eventuality of a disaster does not need to be the Byzantine task that many might believe it to be.

One of the most important measures to undertake first in the construction of a suitable disaster recovery plan would be to assess the impact of likely events. This could involve specially designated members of the team working out the risk(s) likely to threaten a firm most significantly. While some of the most obvious threats include fire, storms and floods, firms should also take into account the potential threat of less obvious problems, such as the death of an employee or the emergence or failure of a new competitor. By identifying these problems, firms of all sizes will be able to decide which risk to protect themselves from with the greatest urgency.

Developing the plan may then become necessary to work out how the firm would most successfully tackle a threat – in the form of a business continuity plan. The manager of an organisation might like to consider issues such as how disruption can be minimised, how the normal functioning of a business can be maintained, and, if problems have been severe, how to return a business to normal operating procedures as quickly as possible. Once a continuity plan has been successfully formulated, testing the plan to see if it will work adequately will be a necessary procedure to undertake. Many commentators believe this to be the most important part of the process because it is by testing that the plan can gradually be evolved over time and planning can be undertaken to assess how a business will continue operating in the face of an interruption. While recent research conducted by Strohl Systems and CPM-Global Assurance has found that over half of organisations who took part in a poll have exercised their plans, the president of business continuity group Strohl, Brian Turley, stressed the importance of testing a plan. "It is encouraging to see businesses testing plans, but the number of businesses with an untested plan is still too high. Those organisations are needlessly risking their operations by blindly trusting an untested plan," he said.

So, the threat to business continuity may be a greater possibility from any angle. This may be apparent in the field of IT, with businesses increasingly relying on IT systems to go about their daily tasks. However, despite the fact that recent research by AMI-Partners shows that IT expenditure will amount to £18 billion this year, firms must realise that they cannot be vigilant enough in their efforts to make continuity as smooth as possible. It should be a business' aim to recover from such incidents as quickly as possible and the implementation of a comprehensive disaster recovery plan may be the best way of mitigating against unexpected events.

2007-07-02T15:26:00.000-07:00

Industry Survey is Open to All Agents, Advisors, Brokers and BGAs – Survey Will Support Informative Study on Business Trends of Today’s Professional

Harrisburg, PA (June 18, 2007) – InsuranceNewsNet, the Web’s leading, single-source news portal for the insurance industry, announces a call for all insurance producers to participate the 2007 Agents and Brokers Insurance Sales and Distribution Study. This comprehensive study into current sales and marketing trends across the United States, will examine:

Types of advertising and marketing that is working today (and what isn’t)
How producers are using technology
Purchasing consumer leads
Selling systems
Carrier selection
Market perspectives from the field

To take part in this important industry study and to receive the comprehensive results at no charge, click here.

The survey is open to all active agents, advisors, brokers and BGA/MGAs only (not available home office personnel). All qualified participants will receive the comprehensive Sales & Distribution Report for no charge (which will only be available for purchase to non-participants for $99 once released).

According to Paul Feldman, President of InsuranceNewsNet, “The 2007 Agents and Brokers Insurance Sales and Distribution Survey will help today’s professional discover what is working today from their peers in an unbiased extensive report that will shed light on what is and isn’t working in today’s market. This important industry survey gives producers a chance to share, learn, and provide the opportunity to truly share their opinion in our unique survey.”

Agents and brokers are invited to take the survey by clicking here.

In order to receive a complimentary copy of the study, participation must be completed by July 7.

About InsuranceNewsNet

As the Internet's premier provider of insurance industry information, InsuranceNewsNet (INN) enables professionals to stay current on critical, need-to-know industry news. With more than 20,000 pages of content from more than 12,000 sources, INN offers essential value-added expertise in organizing, analyzing and filtering insurance news from worldwide sources to help industry professionals make better, faster and more informed decisions.

Up-to-the-minute insurance industry news, analysis and commentary
Reliable, focused information from more than 12,000 sources
More than 20,000 pages of content on a robust, interactive website
Custom industry e-newsletters read weekly by tens of thousands of industry decision makers

Contact:

Rob Billingham
InsuranceNewsNet
717-781-7818
rob@insurancenewsnet.com
www.insurancenewsnet.com

2007-07-02T15:23:00.000-07:00

What Will Your Home Insurance Policy Cover?

There is a lot of confusion about what types of water damage is covered under a home insurance policy. With so many home insurance mold claims being denied, home owners are left with a lot of questions when it comes to water damage to their home. Let's take a look at what types of water damage is covered under your home insurance policy and what to do if water damage happens to your home.

Examples of What Types of Water Damage Your Home Insurance Policy Would Cover

Homeowners policies do not cover damages due to a flood, but they do cover other kinds of water damage. For example, they would generally pay for damage from rain coming through a hole in the roof or a broken window if the hole was caused by strong storm winds. On the other hand, if you have a hidden pipe leaking in your house and over time water damage occurs, that would not be covered. It pretty much boils down to whether the water damage was caused by a covered peril such as a storm... if the water damage was due to you not keeping your house maintained and repaired then your insurance would not cover it. If you don't know what water damage is covered, review your home insurance policy or check with your home insurance company now, before any damage occurs.

Clean Up Your Water Damage to Avoid Mold

Regardless of how the water damage happened, it is important to take similar steps to remedy it. Never ignore indications of an obvious water problem in your home. You should immediately attempt to find and stop leaks at their source. When water leaks into your property, moisture can collect, allowing mold to develop. Mold can cause further damage to your property and can potentially cause health problems. The adverse health effects from mold exposure can range from runny noses, coughs, nosebleeds, congestion, and sinusitis to more serious upper respiratory ailments such as asthma or bronchitis. A lot of insurance companies are restricting mold damage, but some mold damage may be covered if it was caused by a covered peril. You should immediately report any water damage to your insurance agent.

When a Storm Causes Water Damage

If sudden water damage occurs to your property, such as with a storm, it is important to dry all wet areas and provide air circulation to aid in the drying process. Also, cover any areas with a tarp to prevent more water damage. Covering, drying, and dehumidifying wet areas can help minimize the possibility that mold will accompany water damage. Always contact your insurance agent immediately to start the home owners insurance claims process.

Gradual Water Damage

What do you do if you find water damage that indicates leakage over a period of time? Unfortunately, mold may have already developed and more than likely your claim would not be covered. In this case, attempting to clean up the mold may spread the mold spores, causing greater property damage or health problems. Mold can be dangerous to your health, therefore it is important that mold testing and cleanup be conducted by professionals as soon as mold is detected. Contact your insurance agent to see if any of your damage can be covered under your policy and contact a professional mold cleaning company.

2007-07-02T15:22:00.001-07:00

Payday Loans: How To Make Them Work For You

by: Joel Walsh

You need a small amount of financial help fast, but you heard payday loans can be expensive and dangerous. What do you do? Read on to find out how to get a good payday loan!

Payday loans may be right for you if you need some money for a short time. Car repairs, medical emergencies and other unexpected expenses can really strain your finances. Some weeks last longer than your wages do. So you simply borrow enough to tide you over until your next payday.

There are two kinds of payday loans: online payday loans and cash advances. Both are convenient, quick, private and easy.

Convenient: You can apply for an online payday loan using your computer. You don’t have to deal personally with a loan officer when you apply for or request an extension for your payday online loan.

Quick: The online payday loan takes only a short time to complete and usually doesn’t require any other documentation. Web payday loans are approved in minutes--virtually “guaranteed loan approval.” The cash could be in your bank account within a day.

Private: You apply for an online payday loan at home. No bumping into nosy neighbors while waiting in line at the bank!

Easy: There are few online payday loan application requirements. The loan amounts are smaller than conventional bank loans so the paperwork is less. Generally, you just need to be at least 18 years old, have a job (so you have a payday) and earn at least $1000 a month.

Note: a payday cash advance loan is a little different from the online loan. All you do is give the lender a post-dated check or some personal information like a credit card number and you get your cash advance on the spot. When you repay the loan on payday, you get your check back. Of course, it lacks the convenience and privacy of applying online.

Avoiding Payday Loan Dangers

So, what about your friends’ warnings? Yes, payday loans can be quite expensive. Interest rates are high—sometimes as high as 700% a year! You may also be charged other fees. But you can get around these by following the advice below. A little headwork can save a lot of headache.

Trust only payday loan lenders with good reputations. Remember, you’re giving them personal financial information like credit card or checking account numbers so you want to deal with honest people. On the lender’s website, look for the BBB (Better Business Bureau) logo.
Make sure you check the annual percent rate (legally, you must be told this) and shop for the best rate.

A few companies offer no interest loans to first-time borrowers. Find them. Be aware of the length of the loan and any other terms to help you choose the best payday loan lender. Be sure you know the total amount you’ll have to repay before you take the cash.
Always read the fine print.
Pay the web loan when it is due, on your next payday. The payday loan period may be extended, but you’ll have to pay additional (and large) interest and finance fees. Also, if you do not repay the loan with your next paycheck, the lender may even automatically renew the loan by withdrawing the fees from your checking account. This could cause you to be overdrawn and incur penalties from both the lender and your bank.

Meet Frank: A Real-World Payday Loan Story

Frank’s car broke down and he needed $300 fast. Panicking, he went online and chose the first web payday lender he found. He filled out the simple form and had his money in his checking account the next day to be repaid in a week. The fee was $30.

When payday came, Frank couldn’t afford to pay back the $330 so he asked for an extension, which he got for another $30. So the next payday Frank had to pay $360 for his $300 payday loan.

If Frank continued doing this for a year, he would end up paying $1560 in fees. Most likely, the lender wouldn’t let the loan ride for that long. But this shows how expensive the payday loan fees really are, when you compare them with the interest on bank loans or even credit cards.

What should Frank had done?

Frank should have looked at more than one web payday lender, checking for the best terms and lowest interest rate.

After choosing a lender, he should have checked it out with the Better Business Bureau to be sure it is reputable.
He should have had a plan for repaying the web loan before he got the money so that he could have paid the loan on payday and not needed an extension.

So, how can you do better than Frank?

Payday loans or cash advances are lifesavers for short-term, small cash problems. With thought and care, you can solve your temporary money problems quickly without making your long-term financial situation worse. Start your search for a great payday loan at the following websites.

2007-07-02T15:21:00.001-07:00

Which Business Credit Cards with Reward are the Best?

by: Jeff Lakie

Thinking of applying for a credit card with a reward program to help you and your business? Here is a brief guide to some of the best programs on the internet.

The Platinum Business Credit Card with rewards from American Express is a great offer. It has a introductory 0% APR, and has a low 4.99% fixed rate for balance transfers made within the first 45 days. Perfect for those with good credit, you can get a decision within 60 seconds, when you apply online.

Citibank also offers great business credit cards with rewards that could help you and your business. The CitiBusiness Card, like the Platinum Business Credit Card, offers qualified applicants a low introductory rate and no annual fee. This card is perfect if you are thinking of transferring your balance as it will give you a low interest rate. It also offers a great credit line, which will let you make purchases for your business.

If you are looking for a credit card to help you better manage your business expenses, the Advanta Platinum Business Card might be just what you are looking for. It has a credit line of up to $50,000.00, a low APR for up to twelve months, and gives you a customized credit card, with your business name on it. Likewise, the Advanta Platinum with Cash Back Rewards has the same great advantages of the Platinum Business Card, but with added rewards, like a choice of 5% cash back or travel related reward points. It also has a no-interest APR, but with this card, the introductory period lasts for fifteen months, giving you an extended opportunity to save even more money for your business.

There are many business credit cards with rewards on the market, which offer great rewards plans for both small businesses and large corporations. All you need to do is to decide which ones to apply for!

2007-07-02T15:17:00.000-07:00

5 Steps to Preparing and Filing Your Homeowners Insurance Claim

1.Give immediate notice to your insurance company of your home insurance claim. Call your agent of any damages you feel you will need to file a claim for. Your agent will give you information on what steps to take next for your particular policy. It is best to keep your insurance agent's phone number and policy number in your wallet so you will have the information if it is not accessible in your home. Also, keep track of all communication by you and your home insurance agent regarding your home owners insurance claim.

2.Document and assess the damage to your property. Try to document damage by using a video camera and/or digital camera along with written documentation of all damage you immediately notice and keep those documentation items handy for any future damage you discover.

3.Make any temporary repairs you can. You are responsible for preventing future damage, so try to make any immediate repairs you can such as putting a tarp over a leaky roof. Also make sure you save the receipts from the supplies you use so you can be reimbursed for these expenses (make sure the expenses are reasonable to avoid a denial in reimbursement).

4.Compile a list of items you suspect are damaged or missing. Go one room at a time and have the whole family there to help remember everything that was previously in the room. If you have replacement cost coverage on your personal property items, many of your items should be replaced new, even if their current value is below that cost (ex: a new couch will replace an old couch that may have been only worth a few dollars) so it is important to remember everything that was damaged. This step is much easier if previously an inventory list of items was already compiled and kept in a safe place away from the home.

5.Wait patiently. If your area has just been through a severe disaster, people with more severe damage will most likely be handled first. Keep in touch with your home insurance agent during your waiting period to get updates on how your home owners insurance claim is coming along. If you feel you are not being treated fairly or your claim is being handled inappropriately you can contact your state insurance commissioner to file a complaint. Don’t forget your loss of use coverage usually available in your home owners insurance policy, which will cover reasonable living expenses if you cannot live in your home during repairs or have been denied access by a government order.

2007-07-02T15:16:00.002-07:00

Getting That Auto Loan

Getting approved for a loan is always the ultimate goal when you apply and it can be tough if you don't know the ropes. Several alternatives can make it easier for you though. You can always go the bank or credit union route for approval. This process of course will scrutinize your credit rating closely. It will greatly improve your chances of going through if you have steady income, a good job history, and a favorable credit report.

It's not secret that sometimes choosing how the car is going to paid for can be more difficult than choosing the car itself. What makes it so difficult is there are what seems like an endless array of financing options to choose from. Some options are going to be good, and others are not going to be as favorable. You can either end up with the car of your dreams, or you can walk out with a loan deal that will leave you upside down-thus affecting your financial peace of mind for years to come.

First Things First, Budget!

Before you go to the car lot, do an honest budget. Calculate your net income (what you actually bring home after taxes and other deductions) and deduct all your bills and see how much free cash you have per month. If paying for a car and insurance will leave you at zero available cash for an emergency, you need to budget a little harder and cut financial corners where you can.

So you think you qualify for that beautiful car on the showroom floor? Think again...very carefully. Even though you may be told that the numbers indicate that you qualify, you still may not be able to afford it. This is where honesty should take center stage. Your thoughts should be centered on what the monthly payment is going to be, and how you're going to make the payment each month. Be patient, go through as many offers possible before committing. The real prize will be to walk away with the car of your choice and a low-interest loan to pay back.

If you belong to a credit union, this should be a good place for you to start looking. Credit Unions can offer some great rates for members. Another option is to go online. The loans are about as diverse and numerous as the websites themselves. There are a lot of competitive deals to be found. Online shopping only takes a moment of your time, and based on your present credit, may be able to give you a better deal than a dealership can.

Then there is the dealership car loan. A lot of people will warn you about this route, and often with good cause. But, if you do your homework and walk in with options in hand, you will be negotiating from a position of power. Make sure you're up on any dealer rebates as well. In the end, dealerships know they have a great deal of competition, and will do what is necessary to make the loan go through.

There will of course be those of who don't want to commit to a lengthy car loan deal. For the chosen few, there is always the leasing option. You may find your payments to be a lot lower, because you actually wind up paying for depreciation, and not equity. Be careful on this one so that you don't end up with overpayment for overage fees, which can sneak up on you. Do the homework, and you'll come out the real winner.

2007-07-02T15:16:00.001-07:00

Things You Should Know When Applying for a Credit Card

When you apply for a credit card, the lender does a credit check to how risky the extension of credit is going to be. There has to be a standard of risk that the lender is going to be willing to accept. Among the things you can count on being checked are your credit history, income, job history, current debt, how long you've lived in your residence, whether you own your own home, how many times you've applied for credit, and possibly if you have tax liens or judgments filed against you. All of these factors can be listed on your personal credit report and along with your credit score (the numerical value of your credit worthiness) the lender will determine if and how much credit they want to extend to you.

In today's world, there is a credit card available for just about everybody. You are going to find yourself pummeled with credit card offers at some point or other. This is especially true for students. This is where patience, research, and common sense should come into play. Never choose the first credit card offer that comes across the table. Set a standard by what you're willing to allow yourself to be charged in interest. After all, this is money that will be coming out of your pocket. This means getting in the habit of reading the fine print of the offer. Some companies offer low to zero interest but this usually for a set period of time from one month to one year. Read the fine print so you don't wind up with a zero interest credit card that suddenly charges you 18% interest.

It's also very important to note that if you apply for too many cards at the same time, this can put a negative light on your credit report. Each lender that checks your credit generates a line on your credit report called an inquiry. You will end up getting rejections if you apply for card after card.

If you have no credit or a bad credit rating, the best card to apply for is the unsecured credit card. Getting this card and making your payments on time signals that you're a good money manager and responsible with your financial matters. This is a great way to establish credit or begin rebuilding your credit. More often than not, once you've established that you're a good credit risk, you might be given the option of an unsecured credit card with a much higher spending balance.

Knowledge is the key and understanding the credit game will save you a lot of time and money over the long period. Remember, that many people are in debt because they have a good number of credit cards with high balances. One personal financial disaster can leave you seriously in debt. Once you get your credit card, use it wisely and never use the credit card to pay for anything you can write a check for. Remember that legitimate credit card companies are not going to ask you for money up front. Never apply for credit cards you don't need.

Use these tips to understand the application process and use your credit wisely.

2007-07-02T15:09:00.001-07:00

Keep your debt ratio low

Another rule of thumb to remember is to keep your debt ratio under 50%. If your credit card has a $5,000 limit, don't carry a balance of more than $2,500.

"Keep credit purchases under 50% of the credit limit. (If you have a) $5,000 limit -- and you want to buy a $4,000 furniture set -- split the purchase onto two cards," says Williams. She says that creditors don't like to see a card almost maxed out; they look at you as a risk, someone who is using too much credit and has trouble paying off debt.

There is no one sure-fire way to have perfect credit. In fact, four credit experts were interviewed for this story and they offered contradicting advice. However, they all agreed on two major things:

Make your payments on time. One late fee or even two can really bring down your credit score and increase the rates on your other credit cards. You are the only person responsible for payment.

Do not run up your credit. Ideally, you should keep your balance low -- less than 30% of your credit limit on each card.

Some debt advisers also warn not to close too many cards at once. It will cause your debt-to-credit ratio to fall. For example, if you have $10,000 of potential credit and a $5,000 balance, you are using 50% of your potential. If you shut down a card with a $2,500 balance quickly thereafter, you will have $5,000 of debt and only $7,500 of potential, upping your ratio to 67%.

"It's a tricky business, but creditors don't care, because they know you need credit. If you are a good, money-conscious consumer who pays for everything in cash, basically you are dead to them. So establishing and using credit wisely is so important," says Rhode. "I'm a huge fan of credit cards -- used appropriately, a credit card is a safe way to buy goods -- the money is not taken out of your account before you get to dispute the charge. Other forms of payment have less protection."

Williams agrees.

"Credit cards are great because they offer you so much protection against fraud that checks and cash can't guarantee, especially when it comes to return policies or fraudulent purchases," she says.

2007-07-02T15:07:00.000-07:00

Credit card basics

If you have a credit card, you have a credit history. So, the first thing you should do is obtain a copy of your credit report, review it for inaccuracies, correct any problems and then slowly close unused accounts -- trying to close one per month.

Not having a lot of credit cards decreases your worry of late fees. It is easier to remember your payment dates. "Someone with 15 or more cards probably has a difficult time remembering when all of them are due," says Rhode.

Having more credit and more credit cards does not necessarily make a good rating. The key factors are job stability, paying as agreed and paying on time. Keeping up with payments will build a better credit rating than opening numerous credit-card accounts.

Be aware of the terms on your credit card, because those terms dictate your agreement with the creditor. You need to ask about the interest rate and what penalties are attached to the card.

Also, don't close your oldest accounts if you find a better card. "If you close a card you opened in college 10 years ago because you found a better card, creditors will penalize you, because they are looking for a lengthy and successful credit history," says Joyce Murray of Money Management Internal.

According to Experian, one of the three major credit reporting agencies, there's no right number of credit cards for everyone. It depends on how much you spend and how much you can pay off. However, what you can afford at present may change now that most credit cards are increasing their minimum payments.

Just remember that the street of credit fairness runs only one way, and it's in the favor of the creditors. Credit card companies can change interest rates at any time. The most important thing to remember is that you are responsible to keep up with your bills and stay on top of your credit.

2007-07-01T14:49:00.000-07:00

Term Life Insurance. What exactly is it?

"Lowest rates!" boasts one advertisement. "Protect your family's financial well-being!" advises another.

With all these catchy little lures, it can be difficult to evaluate whether term life insurance has a place in your personal insurance portfolio. It is more important to know exactly what you're buying before worrying about whose rates are the most competitive or their historical performance.

As with all life insurance policies, term life insurance pays a lump sum benefit to your designated beneficiary if you die before the policy ends.

The flexibility of term life insurance allows you to spend less for coverage at various stages in life, when the need for coverage may be higher. In these situations, term life insurance may be the most cost-effective, sensible option.

Young couples with large debt

A young adult starting a new career…newlyweds planning to purchase a new home…a couple thinking about having children….All are experiencing life stages in which money is tight, but life insurance becomes a necessity.

For example, Mike and Joni, both 29, were married recently and plan on having children within the next few years. The couple just purchased a home with a 30-year mortgage. Both work, but with a new home and children on the way, finding a life insurance policy that fits into their budget can be difficult.

After researching various life insurance plans available, Mike purchased a term life policy. This will protect Joni from incurring their mortgage debt or child's education expenses if he dies before the policy term ends.

An important factor Mike considered in his decision-making process was that he could buy a policy with a large benefit for a more affordable price than he could purchase with any other type of life insurance.

Individuals with short-term needs

Young couples are only one example of those who may wish to consider term life insurance. There are also individuals with short-term coverage needs, generally those lasting ten years or less.

A child leaving home for college or a start-up business in need of key person coverage is an example of a short-term need. These are situations in which term life coverage may be financially more advantageous to you than other available life insurance plans.

Older couple, less debt

Couples nearing retirement may also benefit more from term life insurance. Let's consider Brad and Rachel's life situation. Married and in good health, both are in their late 40s and have two children, ages 16 and 17. Their mortgage will be paid off soon and both plan to retire by the time they reach 60. In this situation, a term life policy would cover their mortgage, as well as their children's college education expenses if one of them dies before the policy ends.

Ending your policy—what then?

If you cancel your policy, your coverage ends with no cash payback. At that point, circumstances may warrant a need for whole life insurance. For instance, if Mike cancels his policy later on in life, he could convert his coverage to a whole life policy. By that time, it is probable he and his wife will be earning more and will want coverage to help them with estate planning needs. Unlike term life, whole life policies develop cash values and insure you for as long as you live. Many term life plans include a conversion option at the end of the policy that does not require a medical examination. To be sure your policy contains a conversion option, check the conversion privileges of the term policy.

How much do you need?

The amount of term life insurance needed varies from family to family. Some financial experts recommend you have a policy equal to at least five times your annual income, while others recommend as much as 10 times your income.

A young couple with a mortgage and small children probably need higher benefits, whereas a retired couple with a pension and no dependent children need lower benefit amounts.

As in the above examples, taking on more responsibility and debt increases your life insurance needs. Determining these needs depends on your current family situation. If you're a young family just starting out or a middle-aged parent preparing to send your children to college, term life insurance is an economical option you should consider.

There are several resources available if you're interested in learning more about term life insurance, and whether it's right for you and your loved ones. The American Society for Public Administration endorses a term life plan that offers many coverage options. In addition, the plan is flexible and adaptable to your needs.

2007-07-01T14:47:00.000-07:00

How Much Car Insurance Do You Really Need?
By Erin Mahoney

Ah, car insurance - you can't stand paying for it every month; you can't get away with not having it. And really, it would be unwise (read: incredibly stupid) not to have insurance. Okay, we don't mean to be belligerent here; perhaps you have a perfectly valid reason for not having auto insurance coverage, although we personally can't think of any. But who are we to get all self-righteous on you?

Let's focus instead on remedying the situation. If you're like many people, your first priority is to get the bare minimum requirements down. We'll start with that, and work from there. Most states require that you have liability insurance. This covers your arse when you're at fault in an accident. (Remember all those near misses in parking lots and while changing lanes on the freeway when you were blabbing on the cell phone, trying to change the CD, or pushing the slobbering dog/significant other out of your face? Well, your luck won't hold out forever, honey.) If you live in New Hampshire, South Carolina, Tennessee or Wisconsin, you aren't required by law (yet) to have liability coverage. For the rest of us, the mandatory coverage varies according to state. In the chart below, minimum liability limits are read as follows (in thousands of dollars): bodily injury liability for one person in an accident/bodily injury liability for all people injured in an accident/property damage liability for one accident. So, for Alabama, the minimum requirements are $20,000 of bodily injury liability for one person, $40,000 bodily injury liability for all people and $10,000 property damage liability.

Personal Injury Protection (PIP), or Medical Payments (MedPay) in some states, pays for your own medical expenses, any lost wages and whatever other costs may arise when you're injured in an accident. It usually pays about 80 percent of your losses, and it also pays a death benefit. PIP is required in Colorado, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon and Utah.

Some states also require you to purchase car insurance that will cover your own medical expenses, pain and suffering losses and, in some states, car damage in the event that the other motorist is at fault and is either uninsured or underinsured. See the chart below to find out if this applies to you.

State	Liability limits (in thousands of dollars)	Uninsured/Underinsured motorist coverage required?
Alabama	20/40/10	No
Alaska	50/100/25	No
Arizona	15/30/10	No
Arkansas	25/50/15	No
California	15/30/5	No
Colorado	25/50/15	No
Connecticut	20/40/10	Yes
Delaware	15/30/5	No
D.C.	25/50/10	Yes
Florida	10/20/10	No
Georgia	25/50/25	No
Hawaii	20/40/10	No
Idaho	25/50/15	No
Illinois	20/40/15	Yes
Indiana	25/50/10	No
Iowa	20/40/15	No
Kansas	25/50/10	Yes
Kentucky	25/50/10	No
Louisiana	10/20/10	No
Maine	50/100/25	Yes
Maryland	20/40/15	Yes
Massachusetts	20/40/5	Yes
Michigan	20/40/10	No
Minnesota	30/60/10	Yes
Mississippi	10/20/5	No
Missouri	25/50/10	Yes
Montana	25/50/10	No
Nebraska	25/50/25	No
Nevada	15/30/10	No
New Hampshire	Not required 25/50/25	Yes
New Jersey	15/30/5	No
New Mexico	25/50/10	No
New York	25/50/10	Yes
North Carolina	30/60/25	No
North Dakota	25/50/25	Yes
Ohio	12.5/25/7.5	No
Oklahoma	10/20/10	No
Oregon	25/50/10	Yes
Pennsylvania	15/30/5	No
Rhode Island	25/50/25	Yes
South Carolina	Not required 15/30/10	Yes
South Dakota	25/50/25	Yes
Tennessee	Not required 25/50/10	No
Texas	20/40/15	No
Utah	25/50/15	No
Vermont	25/50/10	Yes
Virginia	25/50/20	Yes
Washington	25/50/10	No
West Virginia	20/40/10	Yes
Wisconsin	Not required 25/50/10	Yes
Wyoming	25/50/20	No

Even though each state has minimum (or no) requirements for bodily injury liability, it is probably in your best interest to purchase higher limits. If someone else is injured and you're at fault, the minimum liability coverage may not cover their medical expenses, in which case their attorney will most likely come after your assets. It is generally recommended (by insurance companies - who else?) that you purchase 100/300 limits of bodily injury liability. On the other hand, if your personal assets don't amount to much (you don't own a home, struggle from paycheck to paycheck, violins are wailing), you don't have a whole lot for them to bother about, so the minimum requirements might actually suit you, not to mention save you some much-needed cash.

Besides bodily injury liability, personal injury protection, property damage liability and uninsured/underinsured motorist coverage, you have collision and comprehensive auto insurance coverage to consider. Collision covers damage to the policyholder's car resulting from running into anything, be it another car, a fire hydrant, a light post, whatever. Comprehensive coverage takes care of your car in the case of theft, fire, falling objects, missiles, explosion, earthquake, flood, riot and civil commotion, among other things (like what? Alien invasion, we guess).

Comprehensive and collision coverage are required on most lease contracts, and are essential if you own an expensive car. If you're driving an old POS, on the other hand, and the cost of the sum of your premium and your deductible nearly or in fact exceed the worth of your vehicle, you might want to consider doing without this coverage.

Before you purchase any type of auto insurance coverage, be sure to study your other insurance policies so you don't end up paying for something you don't need. If you have a decent health insurance plan, you might get away with purchasing the bare minimum personal injury protection coverage, or none at all. However, you might end up paying a co-pay and deductible that wouldn't apply with PIP or MedPay. Uninsured or underinsured motorist coverage might also be a wise buy, even if you have full medical coverage, because they can pay for your pain and suffering damages. If you belong to an organization that offers roadside assistance, you don't need to purchase that through your insurer, natch. Same goes for mechanical breakdown insurance if you own a newly financed or leased vehicle which is still covered under warranty.

Hey, we're all resentful about having to shell out a bunch of cash every month for something we may never need, but what're ya gonna do? The fact is that car insurance will most likely come to your rescue at some point, so it's imperative to purchase a worthwhile policy. Know what you must have and know what you should have and just pay the man, alright?

2007-07-01T14:45:00.002-07:00

How to Buy Life Insurance

Buying life insurance is an easy way to protect your family after you're gone. If you know what to look for, you can get great coverage at a price you can afford.

Why buy life insurance?
Topping the list of reasons to buy life insurance is the financial protection life insurance offers. If you're single and just starting out, you may not need life insurance. But as you take on more responsibilities and your family grows, your need for life insurance increases. The proceeds from a life insurance policy can replace the income lost to your family upon your death. You might also want to buy life insurance to pay off debts and expenses, leave money to charity, and cover final and estate expenses.

Choose term or cash value
There are two basic types of life insurance: term life insurance, which provides life insurance coverage for a specified period of time (the term), and cash value (permanent) life insurance, which combines a death benefit with a cash value component. Cash value insurance offers lifetime protection, while term insurance may be the most affordable option if you're buying life insurance mainly for the financial protection it offers, and your need for life insurance is temporary (until your children leave the nest, for instance). Some term policies (called "convertible") will permit you to exchange the term life insurance policy for a permanent one at some point.

Decide how much coverage you'll need
The amount of life insurance protection you should buy depends on how much income your survivors will need, how much you own and owe, and the amount of other life insurance available to you. If you're married, both you and your spouse should consider buying life insurance. One of the easiest ways to estimate how much life insurance protection you should buy is to use a life insurance needs calculator.

Pick a number between 1 and 30
Term life insurance is usually offered for periods ranging from 1 to 30 years. Consider choosing a term that matches your need for life insurance protection. For instance, if your main reason for buying life insurance is to protect your 7-year-old twins until they're out of college, you'll want to buy a policy with a term of at least 15 years.

How much will it cost?
How much you pay for life insurance will depend on a number of risk factors, including your age, your health, whether you use tobacco, your family health history, and the type and amount of life insurance you're buying. Keep in mind that the premium you're quoted initially will increase later. For instance, when you buy term life insurance, rates are guaranteed only until the end of the term (annually for annual renewable term or at the end of a specified number of years for level term). While most life insurance policies can be renewed at the end of the term, you'll pay a higher premium for coverage.

Shop around
When comparing quotes for life insurance, make sure that the insurance coverage you're comparing is similar. And remember, any policy that you buy is only as good as the company that issues it. Find out what rating the company has received from major ratings services, such as A. M. Best or Standard & Poor's. These companies evaluate an insurer's financial condition and claims-paying ability. The company giving you a quote should provide you with this information. You can also contact your state's department of insurance to find out more about an insurer's record.

Submit an application
Once you're ready to purchase a life insurance policy, you'll fill out a life insurance application that contains questions about your current and past health history and lifestyle. You'll generally be required to take a medical exam, arranged and paid for by the insurance company. The answers you give on your application, along with the results from the medical exam and your past health history, will help the insurance company determine whether to offer you a policy, and if so, at what price.

Learn the lingo
Maybe a life insurance contract isn't as exciting as a best-selling novel, but read it anyway. Policy provisions, the amount of benefits, the premium, and other charges you'll pay will be listed along with other important information such as the beneficiaries you've named and the premium guarantee period. Make sure you understand everything in the policy. Under the laws of your state, you may have a "free look" period (typically at least 10 days) during which time you can cancel the policy without penalty.

2007-07-01T14:45:00.001-07:00

All You Need to Know About Health Insurance

Let's face it--in today's world, health insurance is a necessity. With medical expenses soaring higher than a hang glider, paying for them could have you digging deep into the pockets of your jeans.

What types of health insurance are available?
Health insurance plans generally fall into one of two categories: indemnity plans (also known as reimbursement plans) and managed care plans such as health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point of service (POS) plans.

An indemnity plan allows you to choose your own doctors and pays for your medical expenses--totally, in part, or up to a specified amount per day for a specified number of days.
Managed care plans generally provide broader coverage, but they all involve an arrangement between the insurer and a selected network of health-care providers (doctors, hospitals, etc.). For example, an HMO will require that a primary care physician in the network coordinate all of your care and refer you to specialists in the network.

No matter which type of health insurance you buy, you'll need to make sure it offers the right kinds of coverage.

What should be covered?
A good health insurance policy contains several types of coverage.

Hospital expense insurance pays your room, board, and incidental services costs if you're hospitalized.

Surgical expense insurance covers surgeons' fees and related costs associated with surgery.

Physicians' expense insurance pays for visits to a doctor's office or for a doctor's hospital visits.

Major medical insurance offers extremely broad coverage with a very high maximum benefit that's designed to protect you against losses from catastrophic illness or injury.

What might be covered?
When comparing health insurance plans, check to see if they provide additional benefits that you may need, including:

Prescription drugs
Preventive care
Mental health benefits
Maternity care
Vision care

What will it cost?
In addition to the monthly premium expense, you may have other out-of-pocket costs. These costs can really add up, especially if you have children or other family members who visit the doctor frequently. Check to see if the health insurance plan you're considering requires you to pay any or all of the following:

Co-payment: The amount you'll have to pay each time you visit a health insurance provider (generally required by HMOs).
Deductible: The amount you'll have to pay toward your medical expenses (usually annually) before the insurance company begins to pay claims (generally required by indemnity plans).
Coinsurance: The percentage of your medical costs you'll have to pay after you reach any deductibles that apply.

Where can I get health insurance?
You may get health insurance through a group plan at work or through another group affiliation (a school, a club, etc.) or by purchasing an individual plan on your own. By purchasing an individual plan on your own, you may even be able to customize the health plan. Shop online to compare rates from several companies to find the best plan and rate to meet your needs.

How do I decide which plan is best?
The best health insurance plan for you is the one that gives you the greatest flexibility and the most benefits for the lowest cost. Unfortunately, there's no such thing as a standard health insurance plan. As you would when making any major purchase, you'll need to shop around and get several quotes before choosing a plan. Here are a few points to consider:

What co-pays, deductibles, and coinsurance requirements apply?
How much freedom do you have to choose your own health-care providers?
Does the plan cover the health services that you need?
Does the plan cover the health-care providers you're currently using?
Does the plan offer family, as well as individual, coverage?
Does the plan cover pre-existing conditions? If so, is there a waiting period? (The average waiting period is three months to one year.)
Does the insurance company have a good reputation in the industry and a positive rating from a major ratings organization? (Contact your state's department of insurance for more information.)

2007-07-01T14:44:00.000-07:00

Top 10 Ways to Cut Your Medical Bills

With health-care costs on the rise, you may be looking for ways to lower your medical expenses. Here are 10 ideas:

1. Practice prevention
2. Shop around for health insurance
3. Cut the cost of prescription drugs
4. Check your medical bills
5. Join your spouse's health plan
6. Keep track of your medical expenses
7. Negotiate a discount with your health-care provider
8. Contribute to a flexible spending account
9. Take advantage of free health screenings
10. Get to know your health insurance

Practice prevention
As basic as it sounds, one of the most effective ways to lower your medical expenses over time is to maintain a healthy lifestyle. For example, you can:

Take advantage of wellness programs
Maintain a healthy weight
Exercise regularly
Kick unhealthy habits (e.g. smoking)
Have regular checkups

Shop around for health insurance
If you don't have employer-sponsored health insurance, you may be looking to obtain coverage on your own. To get good coverage at an affordable price, shop around. Because premiums vary widely, you'll probably save money if you get quotes from several companies. Evaluate each plan's coverage and features, taking into account exclusions, limitations, and the freedom to choose health-care providers, among other things. Also find out how much you'll end up paying out of pocket in the form of co-payments, coinsurance, and deductibles, because even relatively small amounts of money can really add up if you make frequent visits to your doctor.

Cut the cost of prescription drugs
Prescription costs can eat up a large portion of your budget if you take prescription drugs regularly. Fortunately, it's not hard to find ways to save money. For example, try ordering your prescriptions through the mail, using a traditional or online pharmacy. If you belong to a prescription drug plan (e.g. through your health insurance), you may be able to get a three-month supply of your prescription drug through the mail for the same price you would pay for a one-month supply at your neighborhood pharmacy. You can also ask your pharmacist or doctor to recommend a less-expensive generic drug whenever possible.

Check your medical bills
Medical bills are often confusing to read. However, taking a few minutes to go over the charges may save you money in the long run. Check to make sure that the bill accurately reflects the procedures you have undergone and takes into account any applicable insurance coverage you may have. Some errors, such as wrong computer codes, are common, and you may be billed for health care you never received. Contact the appropriate billing office if you think you've found a mistake. If you've received an explanation of benefits from your insurance company that you believe is wrong, ask the company to review your claim.

Join your spouse's health plan
Many married couples maintain separate health insurance coverage even though it may not be cost effective to do so. Examine both your coverage and your spouse's coverage to see if it makes sense for either of you to join the other's plan. Keep in mind that most plans allow you to add a spouse to your plan within a certain time period after you get married (e.g. 30 days). Otherwise, you may have to wait for the plans' annual open enrollment period.

Keep track of your medical expenses
Come tax time, you may be able to deduct certain medical expenses if you itemize, and your total medical expenses exceed 7.5 percent of your adjusted gross income. Allowable medical expenses include everything from health-care services to medical aids (e.g. eyeglasses, hearing aids). Keep track of these expenses if there's a chance you'll be able to deduct them on your income tax return.

Negotiate a discount with your health-care provider
Many people don't realize that you can sometimes negotiate to lower your medical bills. While it may not always work, it doesn't hurt to ask your doctor, hospital, or pharmacy if they're willing to come down in price. Before you begin to negotiate, do a little research to find out what other health-care providers in your area are charging. You can also ask your health-care provider if they'll lower their price if you pay in cash up front.

Contribute to a flexible spending account
Your employer may offer a flexible spending plan that allows you to put pretax dollars in an account. You are then reimbursed for your out-of-pocket medical expenses, such as prescription drugs, dental care, and co-payments. Because flexible spending contributions are taken out of your pay before federal and state taxes are calculated, you get to use pretax dollars to pay your medical bills.

Take advantage of free health screenings
If your health insurance doesn't provide adequate coverage in some areas, or if you don't have any health insurance coverage at all, you may want to look into free health screenings. Local clinics and hospitals often provide a variety of screenings, such as blood pressure, cholesterol, and mammograms.

Get to know your health insurance
Your health insurance may cover more than you think. Nowadays, insurance companies often provide benefits designed to help you stay safe and healthy. For example, you may receive discounts on vitamins, alternative medicines, health club memberships, or bike helmets. You may also be surprised at the range of coverage your health plan offers. For instance, it may cover dental care for young children, chiropractic care, and acupuncture. Read your plan membership materials to find out what products and services are available through your health plan before you pay for them on your own.

2007-07-01T14:42:00.001-07:00

Get the Home Insurance Facts

Buying a home is one of the single largest investments that most people ever make. If you need to protect that investment, your main line of defense is homeowners insurance.

Just the basics

Most standard homeowners insurance policies will provide coverage for damage to your home (and many of the items in your home) caused by:

Theft
Fire and lightning
Smoke
Frozen pipes
Ice and snow

Homeowners insurance also provides coverage for liability claims, medical payments to third parties, and legal costs if a lawsuit is brought against you. The most common amount of liability coverage included in a homeowners policy is $100,000, but you may need much more, depending on your circumstances.

What's not covered?

Read your homeowners insurance policy to find out exactly what is and is not covered. Do this before you suffer a loss, so you won't be surprised. Most insurers exclude damages caused by an act of war, nuclear accident, flood, earthquake, and terrorism, although you may be able to purchase special policies or endorsements that will cover these events.

A diamond is forever. Or is it?

Most homeowners insurance policies limit coverage for certain high-priced or hard-to-replace items. Additional endorsements or floaters will be necessary to protect items like engagement rings, watches, furs, antiques, and other valuables. You'll need to have each item appraised.

How much is enough?

Mortgage lenders require that borrowers purchase a minimum amount of homeowners insurance (typically equal to the appraised value or the purchase price of the home). But this is often not the amount of coverage you truly need. Instead, find out how much it would cost to rebuild your home, and consider insuring it for that amount.

You get what you pay for

Are you willing to pay more to have damaged personal property replaced? If so, consider purchasing replacement cost coverage with your homeowners insurance. When it comes to valuing property, insurers generally use one of two methods. The first, actual cash value, pays you an amount equal to the replacement value of the property, minus depreciation for the years you owned the item. The second, replacement cost, is more expensive, but it pays you the full value of the item today, so that you can replace the old item with a new one.

How deep are your pockets?

To save money, consider choosing a deductible of $250, $500, or even $1,000. In the event of a loss (e.g., water damage from a leaky roof), you'll be required to pay this amount out of your own pocket before your homeowners insurance takes over, but in the meantime, you'll save on premium charges.

Sound the alarm

Don't forget to tell your insurer if you have a home security system (e.g., fire, burglar, emergency). Most insurers offer discounts for such safety features. You may also qualify for a lower insurance premium if you live near a fire department or hydrant, own a newer home, own a home built out of fire-resistant materials, or get your auto insurance from the same company.

Shop around

Get quotes from several insurance companies when shopping for homeowners insurance. But remember, the lowest price does not always equal the best deal. Compare the coverage each policy offers, and check with your state's department of insurance to make sure that each company you're evaluating has a good reputation in the industry.

SUV Owners Pay More for Insurance

2007-07-01T14:40:00.000-07:00

Hortencia Privett is like thousands of other owners of Sports Utility Vehicles (SUVs). Privett admits that she loves what she drives, a silver 2002 Jeep Liberty, but insurance experts caution that she and other SUV owners have to pay considerably more for insurance than those tooling around town in smaller cars.

The cost to insure an SUV is generally 10 to 20 percent more than a car, depending of course on a driver's location, claims experience, credit history and other factors, confirms Loretta L. Worters, vice president of communications for the Insurance Information Institute, in New York. "Yes auto rates for SUVs are generally higher than for automobiles," says Worters. "Rates of course correlate to risk -- and there are a lot of risk factors with SUVs. Not so much what affects them, but what they do to other vehicles."

Cutting to specifics, Worters pointed out that an SUV's "potential for liability and medical payments coverage losses is a real concern to the industry. Pedestrians hit by SUVs have a 300 percent higher risk of serious injury than if they were struck by a passenger car. There's also greater injury in cars that are hit by SUVs than it would be with another car."

Privett acknowledges that she has to pay more for coverage, but that's okay with her under the circumstances. "I feel safer in my SUV," explains Privett, an office secretary in Illinois. "I've had an SUV for three years, and I wouldn't go back. Even though I have to pay more for insurance, it's worth the added cost to me."

Privett's SUV sentiments are hardly unique. It's been reported that SUVs accounted for upwards of 24 percent of all new-vehicle sales in the United States for 2003 and, with well over 20 million on the road today, SUVs represent almost 12 percent of all registered vehicles in the U.S.

The safety reputation of an SUV or other vehicle type certainly has a bearing on insurance costs. On the subject of SUV safety, a spokesman for the Insurance Institute for Highway Safety (IIHS) brings up what he considers to be a misconception about SUVs.

"The misconception is that many people think that SUVs are safer than cars, and they're not," says IIHS's Russ Rader. "Vehicle crash statistics that we compile each year show that pound for pound, if you're comparing vehicles of a similar weight, SUVs tend to be less safe than cars."

Rader says that cost of repair is a big issue from an insurance standpoint. "SUVs can be costly to repair in minor crashes, because they don't have to meet the federal government's standards set for bumpers on cars in terms of withstanding crashes in commuter traffic or parking lots," explains Rader.

Says Rader: "Most SUVs aren't built like cars and don't drive like them. Yes, they're higher and you can see the road ahead better, but that height also gives them a higher center of gravity, which makes them less balanced than sedans -- and more likely to flip."

Insurance trade organization officer Dan Kummer focuses on high liability claims costs involving large SUVs in vehicular accidents. "If you have a large SUV and you hit a mid-sized or smaller vehicle, you are likely to pay higher liability costs when your policy comes up for renewal," says Kummer, director of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Ill.

2007-07-01T14:38:00.000-07:00

Insurance.com's Deadliest Days to Drive: 2007 Update

Safe driving is no accident. As incentive for motorists to think safety-first, consider this sobering data on drivers' deadliest days, dates and times, published by the National Highway Traffic Safety Administration (NHTSA).

Deadliest Days of the Week To Drive

Saturday
Sunday
Friday
Thursday
Monday
Wednesday
Tuesday

Deadliest Times of the Day to Drive

3 p.m.-6 p.m.
6 p.m.-9 p.m.
9 p.m.-midnight
noon-3 p.m.
midnight-3 a.m.
6 a.m.-9 a.m.
9 a.m.-noon
3 a.m.-6 a.m.

Four Deadliest Days on Roadways

July 4
July 3
December 23
December 24

Three Deadliest Days for Pedestrians

December 23
January 1
October 31

Data Source: The National Highway Traffic Safety Administration

The safe-driving theme and NHTSA data resonate with insurance industry insiders Brent Gregory, senior vice president of the American Safety Council, in Orlando, Fla.; Mike Barry, director of media relations for the Insurance Information Institute in New York; Dave Snyder and Jim Whittle, both assistant general counsels with the American Insurance Association in Washington, D.C.; and Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Illinois. Drivers should be especially alert during major holiday periods, asserts Brent Gregory, senior vice president, the American Safety Council, in Orlando, Fla. Says Gregory: "Motorists should take extra precautions, particularly during the holiday periods ... Memorial Day, Labor Day, July 4, Thanksgiving, Christmas, and New Year's. Those seem to be among the deadliest days to drive according to data that we've looked at. Be that as it may, motorists should always practice safe driving no matter what the traffic conditions, 24-7. Doing so can be a life saver, maybe your own." (For safe-driving tips, log on to www.insurance.com).

"If you want to enjoy the benefits of reduced auto insurance costs," reports Mike Barry, director of media relations for the Insurance Information Institute, "it would behoove you to exercise caution and safe driving habits at all times, and to shop around for the best auto insurance rates you can because it's a very competitive marketplace. But we also caution drivers to be particularly alert on what the NHTSA has found to be the deadliest dates, days of the week, and times to be on America's roadways."

Knowing what the deadliest times of the day to drive is helpful, but nothing replaces using common sense behind the wheel, according to Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America, of Des Plaines, Illinois. By common sense, Knauf was alluding to ideas such as taking steps "to minimize your chances of either causing an accident or being hit by another vehicle."

For starters, Knauf urges motorists to avoid driving during the most dangerous times of the day and avoid unnecessary distractions. "Circumstances often dictate when you get behind the wheel such as your work commute," Knauf continues, "so it's easier said than done selecting the time of day to drive. Be that as it may, when driving," she says, "focus on the road and don't talk on the cell phone, eat or drink, read or send e-mails on your BlackBerry, or fiddle with the radio. If you pay attention to your driving, you'll have a better chance to avoid accidents, and if you avoid accidents, your auto insurance rates should reflect that when your policy comes up for renewal."

AIA Assistant General Counsel Jim Whittle focused on the issue of alcohol consumption. "The higher the alcohol consumption, the greater chance of erratic driving and accidents. The bottom line is motorists always need to be cautious when driving regardless of time of day. NHTSA statistics on highway injuries and death underscore the continuing need for law enforcement manpower and resources to be directed at these problems. Auto insurers are acutely interested in making the roads safer for all of us. And safer roads are better for drivers and auto insurance consumers."

AIA's Vice President and Assistant General Counsel Dave Snyder warned that motorists "…are never safe. Defensive driving must be practiced every hour of every day. Defensive driving would lead to fewer accidents, and considering that driving safety record is one of the primary rating factors in auto insurance it'll pay you to drive sober, exercise caution and use your car's safety equipment such as seatbelts."

Always remember that auto insurance is an essential part of driving, and if the worst happens, you'll need coverage. Log on to Insurance.com's auto insurance comparison application. Here, you will be able to evaluate multiple rates from best-in-class insurance providers - helping you find the cheapest auto insurance coverage for your area and state.

Drive safely, everyone.

8 Things You Should Know About Auto Insurance

2007-07-01T14:35:00.000-07:00

Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated points of auto insurance.

1) Determine appropriate coverage.
Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For example, Snyder notes that half of your auto insurance bill covers liability and "that has to do with how you are going to use the vehicle, such as for commuting to work and your driving record. If you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a speeding ticket on your record. You can control the other half of your premium which covers damage or loss to your vehicle, comprehensive and collision coverage."

2) Shop around for insurance.
"In most states," Snyder reports, "there are hundreds of insurers competing for business, so it`s possible to save hundreds of dollars by obtaining quotes from different auto insurance providers." Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your insurance provider to get more than one quote. "It pays you to shop around, especially if you feel you`ve been paying too much."

3) Look for insurance discounts.
"Many insurers will give you a discount if you buy two or more types of insurance from them, for example auto and home insurance," confirms John Marchioni, senior vice president of Personal Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni: "Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices."

4) Consider taking a higher deductible.
"You could lower your insurance bill by increasing your deductible," Mahrt says. "But just make sure you can pay the higher deductible if you file a claim."

5) Look into "stacking" coverages if you file an insurance claim.
Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured motorist coverages means "you can collect from more than one of your auto insurance policies. Most states prohibit this practice, but there are about 19 states that either allow stacking or don't address the issue either through legislation or litigation," according to Kummer, director of personal insurance for the Property Casualty Insurers Association of America. "Be sure to check your auto insurance contract to see if it's allowed. "Be advised that you`ll likely pay a higher insurance premium if you have stacked coverage. "It could be 10% to 30% more depending on the litigious nature of the state in which you reside," says Kummer.

6) Check with your insurance provider BEFORE buying a car.
"Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and the likelihood of theft," answers Selective`s John Marchioni. Remember to avoid shopping by price alone. "You want an agent and a company that answer your questions and handle claims fairly and efficiently," emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.

7) Notify your auto insurance company as soon as you change companies.
"Be sure to cancel your old policy," suggests PCI`s Dan Kummer. "Do it the same day, but don`t cancel your old policy until you`ve lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without insurance." One last thought from Kummer on the subject: "Most auto insurers specify in your contract that you can terminate your policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that over the phone.

8) Pick the insurance payment option that best fits your budget.
"Generally, most companies will give you the ability to pay over time, but that comes at a price," says Kummer. "Your payment could increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up."

Loans Guide

2007-06-27T10:01:00.000-07:00

by: John Mussi

Many people are confused by the different types of loans available.Here is a helpful summary of the most common loans available today.

Bad Credit Personal Loan

A Bad Credit Personal Loan is a loan designed for the many people with a bad credit rating. However created, your past record of County Court Judgements, mortgage or other loan arrears can live on to deny you access to finance that other people regard as normal. If you are a home owner with equity in your property, a Bad Credit Personal Loan can bring that normality back to your life. Secured on your home, a Bad Credit Personal Loan can give you the freedom, for example, to do the home improvements or buy the new car you really wanted. With a Bad Credit Personal Loan you can borrow from 'Â£5,000 to 'Â£75,000 and up to 125% of your property value in some cases.

Bridging Loan

A bridging loan as the name implies is a loan used to "bridge" the financial gap between monies required for your new property completion prior to your existing property having been sold. Bridging loans are short term loans arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, such as there is a delay in selling your existing property. The beauty of bridging loans is that a bridging loan can be used to cover the financial gap when buying one property before the existing one is sold A bridging loan can also be used to raise capital pending the sale of a property. Bridging loans can be arranged for any sum between 'Â£25000 to a few million pounds and can be borrowed for periods from a week to up to six months. A bridging loan is similar to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be very high.

Business Loan

A business loan is designed for a wide range of small, medium and startup business needs including the purchase, refinance, expansion of a business, development loans or any type of commercial investment. Business loans are generally available from 'Â£50,000 to 'Â£1,000,000 at highly competitive interest rates from leading commercial loan lenders. A business loan can be secured by all types of UK business property, commercial and residential properties. Business Loans can offer up to 79% LTV (Loan to Valuation) with variable rates, depending on status and length of term. Business loans are normally offered on Freehold and long Leasehold properties with Bricks and Mortar valuations required. Legal and valuation fees are payable by the client.

Car Loans

The main types of car loans available are Hire Purchase and Manufacturer'â€™s schemes. Hire purchase car finance is arranged by car dealerships, and effectively means that you are hiring the car from the dealer until the final payment on the loan has been paid, when ownership of the vehicle is transferred to you. A Manufacturers' scheme is a type of loan that is put together and advertised by the car manufacturer and can be arranged directly with them or through a local car dealership. You will not be the owner of the vehicle until you have repaid the loan in full, and the car will be repossessed if you default on repayments.

Cash Loans

Cash Loans also known as Payday Loans are arranged for people in employment who find themselves in a situation where they are short of immediate funds. A Cash Loan can assist you in this situation with short term loans of between 'Â£80 and 'Â£400. Loans are repayable on your next payday, although it is possible to renew your loan until subsequent paydays. To apply for a Cash Loan you must be in employment and have a bank account with a cheque book. A poor credit rating or debt history is initially not a problem.

Debt Consolidation Loan

Debt consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest. Secured on your home debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment 'â€“ one calculated to be well within your means. With a Debt Consolidation Loan you can borrow from 'Â£5,000 to 'Â£75,000 and up to 125% of your property value in some cases. It can reduce BOTH your interest costs AND your monthly repayments, putting you back in control of your life.

Home Loan

A Home Loan is a loan secured on your home. You can unlock the value tied up in your property with a secured Home loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home loans can be used for any purpose such as, home improvements, new car, luxury holiday, pay of store card or credit card debt and debt consolidation. With a Home Loan you can borrow from 'Â£5,000 to 'Â£75,000.

Home Improvement Loan

A Home Improvement Loan is a low interest loan secured on your property. With a Home Improvement Loan you can borrow from 'Â£5,000 to 'Â£75,000 with low monthly repayments. The loan can be repaid over any term between 5 and 25 years, depending on your available income and the amount of equity in the property that is to provide the security for the loan. A Home Improvement Loan can help you with a new kitchen, bathroom, extension, loft conversion, conservatory, landscaping your garden or new furniture. You can even use it on non-house expenditure like a new car or repaying credit card or other debts.

Home Owner Loan

A Home Owner Loan is a loan secured on your home. You can unlock the value tied up in your property with a secured Home Owner loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home owner loans can be used for any purpose such as, home improvements, new car, luxury holiday, pay of store card or credit card debt and debt consolidation. With a Home Owner Loan you can borrow from 'Â£5,000 to 'Â£75,000.

Payday Loans

Payday Loans also known as Cash Loans are arranged for people in employment who find themselves in a situation where they are short of immediate funds. A Payday Loan can assist you in this situation with short term loans of between 'Â£80 and 'Â£400. Loans are repayable on your next payday, although it is possible to renew your loan until subsequent paydays. To apply for a loan you must be in employment and have a bank account with a cheque book. A poor credit rating or debt history is initially not a problem.

Personal Loan

There are two categories of personal loans: secured personal loans and unsecured personal loans 'â€“ See individual titles below. Homeowners can apply for a Secured personal loan (using their property as security), whereas tenants only have the option of an unsecured personal loan.

Remortgage Loan

A remortgage is changing your mortgage without moving your home. Remortgaging is the process of switching your mortgage to another lender that is offering a better deal than your current lender thereby saving money. A remortgage can also be used to raise additional finances by releasing equity in your property. You can borrow from 'Â£25,000 up to 'Â£500,000. Rates are variable, depending on status.

Secured Loan

A secured loan is simply a loan that uses your home as security against the loan. Secured loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured loan; or, have a poor credit history. Lenders can be more flexible when it comes to secured loans, making a secured loan possible when you may have been turned down for an unsecured loan. Secured loans are also worth considering if you need a new car, or need to make home improvements, or take that luxury holiday of a lifetime. You can borrow any amount from 'Â£5,000 to 'Â£75,000 and repay it over any period from 5 to 25 years. You simply select a monthly payment that fits in your current circumstances.

Secured Personal Loan

A Secured Personal Loan is simply a loan that is secured against property. Secured personal loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured personal loan; or, have a poor credit history. Lenders can be more flexible when it comes to Secured personal loans, making a Secured personal loan possible when you may have been turned down for an unsecured personal loan. Secured personal loans are also worth considering if you need a new car, or need to make home improvements, or take that luxury holiday of a lifetime. You can borrow any amount from 'Â£5,000 to 'Â£75,000 and repay it over any period from 5 to 25 years.

Unsecured Loan

An unsecured loan is a personal loan where the lender has no claim on a homeowner's property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments. The amount you are able to borrow can start from as little as 'Â£500 and go up to 'Â£25,000. Because you not securing the money you are borrowing, lenders tend to limit the value of unsecured loans to 'Â£25,000. The repayment period will range from anywhere between six months and ten years. Unsecured loans are offered by traditional financial institutions like building societies and banks but also recently by the larger supermarkets chains. An unsecured loan can be used for almost anything - a luxury holiday, a new car, a wedding, or home improvements. An unsecured loan is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation.

Unsecured Personal Loan

An Unsecured personal loan is a personal loan where the lender has no claim on a homeowner's property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments. The amount you are able to borrow can start from as little as 'Â£500 and go up to 'Â£25,000. The repayment period will range from anywhere between six months and ten years. An Unsecured personal loan can be used for almost anything - a luxury holiday, a new car, a wedding, or home improvements. An Unsecured personal loan is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation.

You may freely reprint this information on your website provided the following caption remains intact.

"This information courtesy of http://www.directonlineloans.co.uk Click here to see full range of loans."

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available online secured loan via the http://www.directonlineloans.co.uk website. To find a loan that best suits your needs visit http://www.directonlineloans.co.uk.

info@directonlineloans.co.uk

How to Find the Best Loan Deals Online

2007-06-27T09:58:00.000-07:00

So you’re looking for a good deal on a loan and are not certain where to start. First, take heart, most online user are finding they have the same challenge. But you’ve probably made the best discovery in your financial research to date. You’ve stumbled upon, not a lender or lending marketplace. But a lending resource offering a no tricks no hitch objective approach to finding bargain loan deals online.

Tips Toward Finding Your Best Loan Deals
What’s the difference between a lending marketplace and lending resource. We provide you with information lenders usually avoid bringing up. We provide you with do’s and don’ts, pros and cons, tips and alerts to finding the most reasonable loan offers available in the financial industry. For example, how to shop low rates? How to find a good lender? Is this a good time to refinance? What will the rates look like in the immediate future? What’s a reasonable fee charge? How do credit scores impact my loan? If rates are cut or go up, how will this affect my loan payments? How do I calculate what my payments will be at a given rate? These insightful financial tips will fortify you with enough know how to make competent financial decisions to get the loan that’s right for you.

Loan Shoppers Save Time And Money
But that’s not all. One of the biggest dilemmas facing a low rate loan shopper is where to go to actually shop loan rates. Lending marketplaces is the answer. Why? In two words, Time and money - you save a lot more of it. You fill out one application. Your application is matched to several lenders seeking to win your business in a highly competitive lending auction house. These will try to match or beat other lender offers you’ve received from the lending marketplaces listed below and leave you with the better deal. You’ll save time making phone calls one bank, credit union and lending office at a time as most of these lending marketplaces offer online reports of lenders seeking your business. You select the best loan offer. You get the best deal.

Consumer Rated Lending Marketplace
We’ve reviewed hundreds of lending marketplaces online and have created a list of the best loan shopping centers based on our own customer service satisfaction criteria, consumer response using our user friendly shopping console, intuitive and comprehensive tools and rate watch program. Each lending marketplace is listed according to how it is rated.

To get started read selected tips and guides you have questions about. Then select any or all of the lending marketplaces below. Fill out each marketplaces loan request application indicating desired rate where appropriate.

Financial Advice for Newlyweds

2007-06-27T09:41:00.000-07:00

If you don't know where you're going, you'll probably end up somewhere else

by Peter Bohush

They say money can't buy happiness -- but it can sure mess it up. Especially when it becomes the topic of disagreement between a husband and wife.

Harmony and understanding probably won't happen by themselves. So couples should set aside some time to discuss their philosophies and goals about money -- how much you want, how you want to use it and how to make it part of your happy marriage.

While many of us would love to have the problem of too much money, most of us, particularly newlyweds, will feel that there's never enough money. That's why it's so important to manage it well.

Discussing your finances before and during marriage boils down to two questions: "How much do we have?" and "What are we going to do with it?"

Before you say your wedding vows, while the two of you are still thinking about important wedding-planning choices such as chicken or beef, band or DJ, garden or banquet reception, take time out for this little quiz. You can call it, "Our Little Discussion About Money That Will Keep Us Happy When We're Married."

We guarantee it will at least be more fun than listening in on a Federal Reserve Board meeting, and may actually get you talking openly and honestly about money. And that's a good thing.

Where is each of you on the fiscal policy scale?

This can also be thought of as, which of us likes to spend money and which likes to save it? Often in a couple, one has a more liberal approach to money (the Spender) and one a more conservative approach (the Saver).

Studies have shown that denying the Spender the ability to spend may result in temporary crankiness. But denying the Saver the means to save will result in a really angry Saver, and could lead to the Spender spending a lonely night on the couch.

Some couples get along just fine when both have the ability to spend and save. Some divide up the bill-paying duties. Some put one person in charge and the other happily lives off an allowance. Since this is a lot like the old days of living with Mom and Dad, it may encourage one of you to do more chores around the house, like mowing the lawn, cleaning the bathroom or doing the dishes to get an increase in your allowance.

Actually, finances in marriage should be like doing the dishes: both should participate. So decide early on who will wash your money, and who will dry it. And try not to leave your dirty money in the sink overnight.

The point here is to decide -- as a couple -- how you will control your finances.

What do you want in life?

This is not about sociopolitical goals, such as international peace and harmony, world domination or making assistant manager someday. Career goals are important, and you should both believe in and support each other's dreams. But you also should determine, on a regular basis, what you want to save money for.

You may want to someday buy a house or condo or double-wide trailer. A new Mazda Miata may be your big goal. Unless you're expecting to win it on Wheel of Fortune, you'll have to set aside money for the monthly payments.

If you are planning on having a family, remember that children are like monetary black holes, sucking up every dollar you make for food and clothing, ear infection antibiotics, Disney videos, Teletubbies lunch bags, Pokeman cards, college tuition, weddings, cars and bail money.

And whatever your age now, you should be thinking about retiring with enough money to take the exciting trips you'd like to, even though by that time you may not be able to make it to Mount Rushmore without stopping ten times to use the rest room.

At the very least, plan to save enough money for retirement needs such as housing, heat and dropping by the buffeteria once a week or so for the Swedish meatball senior special. Believe me, if you end up in your old age having to empty your penny jars to buy your Viagra, you'll wish you had planned your finances better instead of blithely spending it all on Goo Goo Dolls memorabilia at eBay.

Buget, budget, who's got the budget?

Once you agree on what you want to save your money for, you'll need a budget to tell you how much money to set aside every month, and where to put it.

An old saying tells us that rich people save their money and spend what's left, while poor people spend their money and save what's left. If saving becomes your first priority, you'll be more successful at achieving your long-term financial goals.

So agree on how much you'll put aside with every paycheck, and don't touch it except for emergencies or to use it for its purpose, such as a house down payment.

Write this budget down. Make a spreadsheet or a PowerPoint presentation and call a meeting. Make your cases, take a vote and record this in the minutes. Draft some bylaws. You'll stick to it better if it's been documented somewhere. Make a penalty for early withdrawal, something really painful such as no ER for a year, or giving up those season tickets for the World Wrestling Federation super grudge matches.

Only you can determine what your investment deposits will be. Conventional wisdom states that couples in their 20's or 30's should set aside at least 10 percent of their earnings for investment; while those in their 40's or 50's need to set aside up to 20 percent to achieve sufficient results.

Where should we put our money?

Actually setting your money aside, like next to the La-Z-Boy recliner, is not good enough. You must invest your money if you want it to grow. Leaving it in your bank savings account, at two percent interest, won't result in enough growth to buy a cheap leisure suit for your retirement party. You've got to make your money work for you, and that takes work on your part.

There is no shortage of places to invest your money. The stock market has been on its largest and longest rise in history. No one knows how long this will last. Maybe it will go on upwards forever. Maybe not.

You can invest in companies in the U.S. and in practically every other country in the world. The farther you stray from home, the more volatile the markets can be. They often don't play by the same rules as in the U.S., and are more likely to be impacted by government policies and shifts in power.

You can invest in things you think will increase in value over time. If you know what you're doing, this can pay off. But you'd better like what you're collecting, because you could end up with a lot of it.

Interest in collectibles tends to wax and wane. While Beanie Babies had an initial run up in value, they soon fell faster than a tall guy on an icy sidewalk. Pokemans may seem like a sure bet, but keep in mind that there are a lot of people with boxes full of Pogs and Franklin Mint Gone With The Wind collector's plates wondering when their ship is going to come in.

Some rare coins can be worth thousands of dollars, others end up only good enough to drop into a soda machine. Same thing with stamps. Maybe a couple of them achieve superstardom in the world of numismatists, but an awful lot of people will end up sticking that supposedly valuable Elvis Presley stamp onto their electric bill envelope.

Stocks, bonds or Internet IPOs?

Financial planning experts haven't wavered from their age-old advice: the best way to build wealth is to invest some amount of money regularly in a balance of stocks and bonds, and just keep at it. Over time you will weather the ups and downs of the markets and individual stocks, and will end up with steady growth ready to be harvested at retirement time.

Then, of course, you might be able to do this harvesting all in one day by investing in the initial public offering (IPO) of an eBay, Netscape, Amazon.com or another amazing success story, right? Over the past two or three years, stocks of new companies have launched at $10 to $15 per share and shot up many times that on their first day of trading.

You may have wondered, how can I cash in on this? The answer is, you probably can't. Those who were able to buy these hot stocks at their opening, cheap prices were, for the most part, large investment houses or institutional fund managers. By the time average Joes and Marys were able to buy, the prices had often peaked. So while Gargantuan Capital counted their bazillions from buying low and selling high, Joe and Mary were left to cry about the difference between what they paid for the stock and what it was worth after it slid back down to reality. Little guys usually finish last in the game of big-time IPOs.

Online investing websites have made it easier for millions of people to try out the stock market. It's helped people become more educated in the process of investing, and created more interest in actively investing. Some people have been rewarded, and some have made poor choices and suffered from it.

Rule of thumb: slow and steady wins the race. It's wise to talk to a professional financial planner before you open that eTrade account. He or she can point out other investment issues you should deal with, such as life insurance and taxes.

Are you diverse?

Diversification is important, too. This means investing in different things, spreading the risk, so if one investment tanks you don't lose all your money. It's a lot like laundry, where some of your clothes are in your dresser, some in the closet, some in the laundry basket and some in the washer.

It's bad enough to lose a few socks in the dryer. But what if you washed all your clothes at once and the guy locked up the laundromat while you went next door to buy a soda? You'd have no clean clothes to wear to work the next day. How would your boss react if you showed up to work in your torn jeans and that old college sweatshirt with the sleeves cut out? Not a good feeling, and simple to avoid.

Don't put all your eggs in one basket. Don't put all your clothes in one Maytag. And don't put all your money in one investment, no matter what your friend Morty tells you about that hot new biotech company with a cure for hairy knuckles. Give a little, spread out the rest.

Do you believe in magic?

Long-distance runners often talk about the "high" of near-ecstasy they feel during a marathon jog. Big-league baseball players speak of the "zone" they get into when time seems to stand still at the moment their bat connects with the ball and they just know that baby's going out of the park.

Financial planners reach their own rapture, too, when they stand up before a crowd and describe the "magic of compound interest." It's practically nirvana for them to show how a 21-year-old who invests $2,000 per year for eight years at 10 percent interest sees it become $707,028 in 36 years through the magic of compound interest.

Pausing only long enough to disclaim that these are hypothetical examples and your success cannot be guaranteed, the advisors will amaze you with transparencies on the overhead projector showing nearly every conceivable investment plan and how they can magically compound to near riches.

The strange thing about all this is, it's true. Investments really can and do compound, building upon themselves and growing like the Blob until you're left with that wonderful dilemma called, "what do we do with all this money?"

"Aha!" you'll exclaim. We know what to do with it. We'll use it for the things we planned for at our first shareholders meeting! Hakuna matata! The great circle of life has come back around.

A little planning can go a long way. Far enough to get you all the way to where you want to go.

- 30 -

Peter Bohush
WriterDirector.com
P.O. Box 689
Northboro, MA 01532

2007-06-20T08:52:00.000-07:00

How to Make Tax Time Less Taxing

By Douglas Charney

Since 1913, when income taxes were first imposed, April 15has probably become the most dreaded day of the year for most adults. This is not just because it’s the day when federal (and state) income tax returns are due. It’s also because getting ready to file your return – whether you do your own return or hire someone to do them for you – can be a time-consuming and often aggravating chore. So here are some things you can do to help make tax time less taxing in the future.

I believe you can work to reduce the burden of tax time from two different directions. First, you can form good recordkeeping habits to make tax preparation easier. And second, you can select investment strategies that may potentially reduce your tax bill. In this article, we’ll discuss ways to make tax preparation easier.

Accountants and other professionals involved in tax preparation will generally tell you that the best way to reduce time, aggravation and expense of actual tax preparation is to keep good records. If you haven’t kept good records in the past, resolve to start today for your next return.

As January rolls around each year, various institutions begin to send you reports they have to give you and the IRS (W-2, 1099-Dividends, 1099-Interest, and so on). Establish a file folder for your tax data and put all of these items into the folder as they come in. Doing so can help you avoid misplacing something that the IRS will definitely receive and will look for in your return.

You’ll need additional information for preparing your taxes, and keeping good records along the way can make tax time easier and less frustrating. It can also make your return more accurate and help you back it up in case of an audit.

Start a file system where you can keep statements, transaction receipts for purchase and sales of securities, and other paperwork about your investments. If you keep them up to date, these files will contain much of the key information you’ll need at tax time. However, for convenient reference, you may also want to use a notebook to record purchases and sales of securities (dates, prices and costs/proceeds), CDs on deposits at banks (with account numbers) and other investment data.

Various institutions will report income and what are known as “gross proceeds” from sales and redemptions, but they don’t report information such as what you paid for an investment – it’s up to you to provide the IRS with that information.

Whenever you sell an investment, whether it’s real estate, stocks or bonds, the IRS wants you to report your profit or loss on the transaction. To calculate this, you will need your records showing when you bought the item, what you paid for it (this is called your “cost basis” or “basis”), what you sold it for and your net gain or loss.

If you use a dividend-reinvestment program for some of your securities, it is especially important to keep good records. Be sure to save the final year-end statements, which show all investments for each year. All the reinvested dividends, which you are taxed on each year, are added to your basis. They affect the capital gain or loss calculation, and thus the taxes you may owe, at the time you sell the security.

For example, say you originally paid $5,000 for a utility stock, and over the years you reinvested a total of $7,000 in dividends. If you sell the stock for $15,000, you owe capital-gains taxes on only $3,000 not $10,000. This is because your basis (the total amount you paid for what you eventually sold) is $12,000 ($5,000 plus $7,000) – not $5,000.

If you form some good “housekeeping” habits, early in the year, and you start to assemble the information to do your taxes, you’ll find it all in one place. And when you arrive at your accountant’s office with this information ready for entry onto the tax forms, you’ll be an appreciated client.

This article is provided by courtesy of Douglas Charney with Wachovia Securities in Harrisburg, PA. He welcomes your comments, and you can reach him at 888-529-2973.