Brought to you by: Breez DeGuzman

In order to get a handle on your budget, it’s absolutely essential to carefully track expenses. This includes bills, variable necessities such as groceries and transportation expenses, and discretionary spending. Here are some of the many reasons why we must do so.

When it comes to keeping family finances in order, one of the most common hurdles that we face is overspending. Sometimes someone is obviously blowing money on unnecessary things, but often it’s much more subtle. Everyone spends a few dollars here and a few dollars there, and when the month is over, a lot of dollars are gone.

* Keeping track of the money put toward bills will eliminate confusion. If you’re juggling bills, it’s important to know at a glance which ones you’ve paid and which ones you haven’t. Keeping receipts well organized will give you this information when you need it.

* Saving your grocery receipts can save you money. By comparing grocery expenses from week to week, you can easily see where you might have spent more than necessary. You can make a mental note of this so that you won’t make the same mistake again.

* Keeping receipts gives you the opportunity to take advantage of rebates. How many times have you learned about a rebate shortly after tossing a receipt for an eligible item? Holding on to your receipts in such cases could have made you money!

* You might need to return a purchase. Some stores will not accept returns without a receipt. Others will, but they may only allow exchanges. And if the item has gone on sale since you bought it, you’ll only get credit for the current price if you don’t have a valid receipt.

* If you buy something that comes with warranty, you’ll probably need the receipt to get repairs or an exchange. Read the fine print to find out whether you need to send the receipt in or keep it until service is needed.

* Keeping records of your debt payments can help hold you accountable. If you’ve set a goal of paying off your debt by a certain date and calculated how much you’ll need to pay each month to meet that goal, keeping track of how much you actually pay is crucial. There may be months when you can’t pay as much as you’d like, but if you have it in writing or keep the receipt, it will serve as a reminder to make it up as soon as possible.

Keeping records of your spending may not be the most fun and exciting task, but it isn’t difficult. Simply coming up with a system to organize your receipts will do the trick. And when you need to know how much you spent on something, or need the receipt itself, it can save you lots of time and trouble.

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When debt collectors start calling, we might consider throwing the phone out the window. But that’s not the best way to deal with collection efforts. If you ignore them, they will keep calling for months or even years on end. And no one wants to live in fear every time the phone rings.

Debt collectors are rarely as unreasonable as we imagine them to be. They want to collect the money they’re owed, but they realize that they are more likely to succeed if they work with us. And the law prohibits them from threatening or harassing us. Here are five tips for effectively dealing with collectors:

1. Know your rights. It pays to familiarize yourself with the Fair Debt Collection Practices Act, which protects consumers from unscrupulous collection practices. If at any time you feel that your rights have been violated, you can report the incident to the Federal Trade Commission or file a lawsuit to collect damages.

2. Know how much you can afford to pay each month, and don’t let them convince you to pay more than that. Even if they take all of your obligations into consideration and tell you that you should be able to pay a certain amount, you may not be able to pay that much realistically. If the collector insists on not accepting less than a certain amount, you may want to seek legal advice.

3. Be honest. Let the collector know if there are extenuating circumstances that have caused you to fall behind or stop making payments altogether. This won’t stop them from trying to collect the debt, but it could buy you some time and make it more likely that they will work with you to get things resolved in a way that is acceptable to both parties.

4. Take notes. Each time you speak to the collection agent, write down the highlights of the conversation along with the date and time of the call. Keep these notes for future reference, and if the collector contradicts himself, you’ll have your notes to refer to. These notes will also be helpful if you end up filing a complaint or lawsuit.

5. If you reach an agreement, stick to it. As long as you keep up your end of the bargain, the collection agency can make no further efforts. If you find that you won’t be able to make a payment on time, contact the debt collector immediately and let him know when you will be able to pay.

No one looks forward to dealing with a collection agency. But if you are honest and reasonable, it’s rarely as bad as you think it will be. In most cases, you can work out a mutually agreeable arrangement, get your debt paid off and get on with your life.

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If you fail to repay a debt in full, it doesn’t just disappear. It’s usually sold to a collection agency, who may hound you about it for years. If that agency doesn’t collect payment, they may pass it on to another, and that agency may pass it on to another. And you may still get calls and letters about the debt years later.

Surprisingly few consumers know that debts are subject to a statute of limitations. This means that creditors and debt collectors have a certain time limit to collect the debt or sue. If this time limit lapses, they no longer have a case against the debtor. They can attempt to collect or even file suit, but if you use the statute of limitations as a defense, they will not prevail.

How Long Is the Statute of Limitations?

The statute of limitations varies according to the type of debt and the state. It may be as short as two years or as long as fifteen. Most states have different statutes for oral agreements, written contracts, promissory notes and open accounts.

Auto and installment loans are considered written contracts. Credit card debt most often falls under the open accounts category. But in certain instances, such as when the credit card was secured with a written agreement, it is considered a written contract. This is often a matter for the court to decide if there is any doubt.

When Does the Statute of Limitations Begin?

When the statute of limitations begins is a matter of some debate. Some say that it begins on the date of your first delinquency. Others claim that it begins when the creditor sends a demand letter, when the last payment was made or when the debt was written off.

In general, the statute of limitations begins when the creditor has a cause of action. This means different things according to the credit agreement. In some instances, this occurs when the creditor demands payment in full. In others, it occurs when you become delinquent on a debt. If you’re unsure, a consumer rights attorney can help you determine when the statute of limitation starts.

It’s important to note that the statute of limitations can be restarted under certain circumstances. This may occur if you use the account again. It may also occur if you make a partial payment or agree to a payment arrangement. If a creditor contacts you, you can protect yourself by refusing to acknowledge that you owe the debt or make any kind of payment or agreement. Simply state that the statute of limitations has expired. They will probably either leave you alone or take you to court, where you can defend yourself in the same manner.

The fact that a debt still appears on your credit report doesn’t change the fact that the statute of limitations may be up. Knowing the law in your state could save you from paying a debt that cannot be collected. For more information, contact a consumer rights lawyer.

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Like the majority of people, you have probably often thought about how important it is to save some money. You have likely figured out by now how setting aside money (such as for children’s education, down payment on a home, or even for retirement) is a good idea. However, what you might not be aware of is how exactly to make that first step, so here are a few tips to help you get started.

Start Where You Are

To build good savings habits is really only a simple matter of actually doing something instead of doing nothing. So, start where you are. For example, at the end of each day, empty you wallet and pockets of any change you accumulated during the day, and put it in a jar. Deposit this money monthly into a savings account. Another option is to skip on one coffee a day, and put a dollar aside instead. At the end of the month, this will amount to roughly $30 to deposit into that savings account. After an entire year of doing this, you will have saved an approximated $360!

Keep Track of Habits

Many people typically spend approximately $5 eating out several times a week at the office cafeteria. If you were to reduce this to only once or twice a week, you could take the extra five dollars from the days you don’t spend it, and deposit it into your savings account. The same scenario can be used once you finish paying off your car or student loans. Once the actual loan has been paid in full, continue depositing the same amount in your savings account every month.

Set Goals for Success

In order to develop a discipline for saving, most successful savers have the need to experience a number of small successes in the beginning so one positive experience reinforces the other. Start out by picking short-term, easily attainable goals which will give you a sense of personal satisfaction from the start.

For example, your goal might be a new stereo or paying off a credit card balance. Determine what those goals will cost, and give yourself a deadline for achieving them. Then all you have to do is just do it – begin by setting aside the right amount of money as per your schedule, and stick to it. Before you know it, your goal will have been reached.

Needs or Wants?

At some point or another we all have the urge to splurge or pamper ourselves. Of course it’s nice to treat ourselves to something new every now and again. Before making any purchase, however, remember to take the time to consider these questions: “Do I need this?” and “Does this help me achieve my savings goal?” As a rule this will help you make the appropriate decision and stay focused on your goals before making a purchase.

Monitoring Your Expenses

You may want to sit down at the end of each month and review all of your expenses. There may have been areas you didn’t consider before, but by seeing them on paper you realize they are part of what needs to change for the next month.

Think Big

Big-time savers use an “I can” attitude while thinking long term. By exercising discipline now you can see rewarding paybacks later on. Saving can make the world of difference not only for yourself, but for your children as well. Starting to save today means less to worry about tomorrow.

Stick With It

The most important point in any savings plan is to stick with it. Some people find it helpful to keep their goals in writing. Writing down the amount you need as well as the date you expect to achieve your goal gives you something concrete to focus on. With long-term goals, such as saving for retirement, you may find it helpful to establish milestones you can celebrate along the way.

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Money isn’t always readily available for such things as expensive outings and activities for you and your family. With the uncertainty of the economy these days, more and more families are searching for free, frugal and money-saving ideas in order to keep the family having fun together without breaking the bank. How about trying some of these options to keep your family activities happening without the costly aspect some choices may have.

1)  Plan regular family visits to your local library. With a little bit of planning ahead of time, each visit can be focused on a particular subject such as traditions from around the world, new crafts you can learn as a family or any other topic which can be learned about as a family. Check out books related to your choices to bring home so you can experience different cultures together. Most libraries also have DVDs or videos you can borrow for free or a very small fee. They may have some which can assist you with this family project.

2) Your local community may have a “Parks and Recreation” website or booklet available to residents. These usually include a variety of activities in different price ranges, from free to inexpensive as well as those with a higher fee. There are quite often long lists of activities which fall into the free or inexpensive range, such as community walks through area parks and trails, family cycling days or even free family days at the local indoor pool.

3) Occasionally your community may provide a fundraising concert or performance in a park or community center. Frequently the entry fee will be a low price for an entire family, or possibly even a donation of canned goods for the local food bank. For this small donation your family could enjoy an evening of music from local talent, or benefit from the amusement of a community fair. Pack your own refreshments to bring along and you have a full day of fun for the price of a few cans of imperishable goods.

4) Hold family read-aloud days when the weather isn’t being cooperative. Rainy days, a good book and being snuggled together under a warm blanket with popcorn for a snack is a great way to bond as a family while waiting for nicer weather when you can do something else outdoors.

5) Visit a museum or zoo on family days or half-price days. What can be more fun than learning new things together while visiting a new museum exhibit, or trying to imitate the faces the monkeys at the zoo are making? Many libraries now allow you to borrow or rent passes to these locations for a very minimal price. They include admission for the whole family, and are normally valid for more than one museum or activity in your area.

If family funds are limited, it doesn’t necessarily mean fun and activities need to be limited as well. All it takes is a little bit of planning, and there is a wealth of activities you and your family can partake in while sticking to a frugal or free rule. The most important aspect of it all is spending time together, not how much or how little you spend while you do it.

By: Jon Ochs August 3rd, 2008

If you find yourself in financial difficulty and are falling late on some of your bills, you may have some contact with collectors via mail or telephone. On several occasions, you may encounter some terms or business practices that were new to you. Here are some straight answers to some common questions about the debt collection industry. I hope you find this information helpful in dealing with the issues that may arise as a result of your financial hardship.

I received a letter from a collection agency regarding a credit card bill. How did they receive my information? Why isn’t the credit card company contacting me directly?

The company or organization that you initially signed a contract with is referred to as the original creditor. For example, let’s say you obtained a credit card account with MBNA. If your account becomes past due, MBNA, your original creditor, will send reminders and call you in an attempt to get you to pay the amount due. When your account becomes more delinquent, approximately 180 days, MBNA may have an outside collection agency, ABC Acquisitions, attempt to collect payment. This company is a third-party collector. Keep in mind that your accounts may be assigned to or bought and sold by several collection agencies during the course of the collection process. You may find it helpful to keep paperwork organized and to track the process as each account changes hands.

A collector recently contacted me about an unpaid account that I incurred more than 6 years ago. Do I still owe really old debts?

On way to determine if you still owe the debt is to check the statute of limitations for your state. The statute of limitations varies depending on the state and the type of debt. As an example, a collection agency may still be allowed to attempt to collect the debt, but may not be allowed to file a lawsuit against you because too much time has passed. If a collector tries to persuade you to make a payment on an old debt, be sure you understand the consequences you could bring upon yourself by making a payment. If you do make a payment, you may be causing more harm than good since even the smallest payment can reset the statute of limitations for that account. This would inevitably lead to more aggressive collections and possibly lawsuits. In some jurisdictions, even an acknowledgment that the debt is yours is enough to reset the clock on the statute of limitations.

I received a collection letter from a law firm concerning a debt. Does this mean that I am being sued?

No. In recent years it has been shown that often a law firm or attorney can be more effective at collecting a debt than just a regular debt collection company. This is basically due to the fact that people are generally intimidated by attorneys and law firms. Keep in mind that in this case, the law firm or attorney is simply acting as a debt collector, and is subject to all the same rules as any debt collector as outlined in the Fair Debt Collection Practices Act (FDCPA). If you are in fact being sued, you will, in most cases, be served with a summons to appear in court.

One of my creditors called me and said that my account will be “Charged Off”. What does that mean exactly, and will I still owe the debt after it has been “Charged Off”?

Charge-off is a term that is used to classify delinquent accounts for tax purposes. The word “charge-off” is used to report the delinquent account as a loss for the creditor. A debt is usually charged-off after there has been no payment made for more than 180 days. Although an account has been charged-off, you do still owe the debt. A creditor will typically either assign, or sell the debt to a collector after charge-off. Another important thing to be aware of with a charge-off is that if the account is sold to a third party collector, that collector may also report the delinquent account on your credit. This may result in an additional negative trade line on your credit reports.

If you are in a financial position where you can no longer make the minimum payments on your credit cards, medical bills, or other unsecured accounts, there are programs available that can help you to resolve those accounts quickly and allow you to avoid bankrupcty. Here is a debt relief program we recommend.

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Financial stress has many causes. For some, job loss or illness has made it difficult to make ends meet. For others, rising prices or unexpected expenses cause money worries. But whatever the reason may be, financial stress can take a serious toll on one’s health.

Financial stress is a frequent trigger of mental health issues such as depression. Worrying about how you’re going to pay the bills and put food on the table can take over your thoughts, and it becomes difficult to enjoy the good things in life. Another common issue is anxiety, which may be accompanied by scary panic attacks.

Depression and anxiety can lead to physical health problems. These may include stomach ulcers, high blood pressure and insomnia. Left untreated, stomach ulcers can cause dangerous internal bleeding, and high blood pressure and insomnia increase one’s risk for a heart attack and other serious problems.

As you can see, financial stress can be the precursor to a nasty chain reaction. Here are five ways you can fight financial stress and avoid these grave health concerns.

1. Be proactive. It’s easy to fall into the trap of feeling sorry for yourself when it comes to money woes. While that may be warranted at first, the only way you’re going to get through it is to work at it. Sit down and think about ways to cut expenses and/or increase your income, then act on them. Even if you just make a small amount of progress, you’ll feel some relief and an increase in confidence.

2. Take time to enjoy the good things in life. When you can’t see past your financial troubles, you may forget those things that once put a smile on your face. Force yourself to forget about your troubles and do something that makes you happy, such as reading a good book, playing with your children or participating in your favorite sport or hobby.

3. Find a shoulder to cry on. Being upbeat is best, but sometimes a dire financial situation is going to get you down. When this happens, talk to a trusted friend or family member. She may be able to give you some good advice. Even if you don’t want advice, having someone to use as a sounding board will take some of the weight off of your shoulders.

4. Use stress relief techniques. A simple bubble bath can work wonders for your state of mind. If you want to try something more sophisticated, meditation has been proven effective against stress. Other things you might try include aromatherapy and massage.

5. Think about the things you’re thankful for. When you’re obsessing over your finances, take a break and think about the things that you do have. Better yet, write them down. This will help you see that financial security is only a small part of the big picture.

Stress is normal when we experience financial issues. But if you let it take over your life, your health will suffer. Fighting back will make you feel better, both mentally and physically.

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Budgeting is important for every household. It’s not just for those who are barely scraping by and must make sure there’s enough money to pay the bills each month. Even if you don’t have to watch every penny, it’s important to know where your money is going and make sure you’re putting enough in savings for retirement, emergencies and other needs.

In theory, budgeting is pretty simple. But in practice, it can get complicated. Here are ten tips that can help you gain control of your money and pay off your debts.

1. For the first month of your budgeting, come up with your best estimate of spending. Breaking it down into categories such as entertainment, transportation, groceries and such will help. These expenses are more difficult to predict than fixed expenses such as mortgage and insurance payments, so use any receipts you have and estimate the rest.

2. Keep close track of expenses. The most accurate way to do so is to keep all of your receipts. But if you use a debit card for most of your spending, your bank records may suffice.

3. When the month is over, add up your expenses and see how close your estimates were. This will help you get a more realistic idea of your spending habits. Revise your budget with the new numbers, and see where you can cut back.

4. Don’t overlook the little things. Small amounts of money add up quickly if you spend them every day or several times a week. And these small expenses are often the easiest to live without, so eliminating a few of them can make a big difference in your budget without leaving you feeling deprived.

5. Give everyone an allowance. Each family member should get a reasonable amount of money to spend on everyday needs each week. For younger children, a parent can manage the money. By allocating a certain amount to each person, you can encourage frugality while keeping expenses manageable.

6. Set aside a certain amount for savings each time you get paid, and make sure it goes into savings before any discretionary spending takes place. This way you won’t have to worry about coming up short of your savings goal at the end of the month.

7. Use your raises wisely. Resist the urge to increase your spending just because you have more money coming in each month. Instead, consider putting the amount of the raise into savings or use it to increase your debt payments. You won’t miss it, and this will help you improve your financial future.

8. Avoid overspending when you get a bonus or tax refund. Indulge a little if you feel the need, but try to put most of the extra money toward more noble causes (such as paying off your credit card debt).

9. Become a frugal shopper. Clip coupons and check flyers for sales at your local stores. You can save a great deal on groceries, clothing, hardware and other items this way.

10. When possible, do things yourself instead of paying someone else to do them. We all have unique talents, and putting them to use can save us money. Maybe you can do your own repairs around the house, change the oil in your car, or sew clothes for the family instead of buying them off the rack. All of these things can save you money and leave more in the budget for other expenses and savings.

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While the value of real estate may drop in times of economic downturn, over time they usually increase. That means that if you’ve had your home for a few years and gained some equity, you should turn a profit when you sell. You may even be able to turn a profit in a short period of time if you get a good deal on a home and fix it up. But it’s important to remember that there are a number of costs that you will incur when selling.

While the costs to the seller are usually far less than the costs to the buyer, they are nothing to sneeze at. Here are some of the things that the seller usually pays for.

* Improvements – It may seem illogical to make improvements on a property you plan to sell, but in some cases it makes sense. Certain improvements can increase the selling price of a home beyond what the improvement cost. And some make the seller eligible for tax deductions that make them worthwhile.

* Repairs – If you want to sell your home at market value, it needs to be in good repair. People will sometimes buy homes that need work, but they expect to pay much less for them than they would otherwise. It’s usually far more cost-effective to make the repairs yourself than it is to accept a reduced offer in consideration for the buyer making them.

* Commission – If you’re working with a real estate agent, you’ll have to pay his or her commission. The amount varies, but it averages around 6% of the selling price. If the buyer has his own agent, the commission is usually split between the two agents.

* Appraisal – You’re not required to get an appraisal as the seller, but it can be beneficial to you. By having your home appraised, you can get the basis for setting a reasonable asking price.

* Cleaning – If you clean your own home for open houses and showings, you’ll only have to pay for cleaning supplies, although it will take up some of your time. If you hire someone to clean your home for you, it will cost a bit more.

* Penalties – Upon selling your home, you will have to pay off your mortgage. Some lenders instate a prepayment penalty if you pay it off early. Check your mortgage agreement or ask your lender to find out.

* Moving costs – If you’re living in the home you’re selling, you’ll have to move out prior to closing. Costs you may incur include packing supplies, storage fees, a van rental, gas, and/or hiring a professional moving service.

Selling a house isn’t cheap. But in most cases, you’ll make enough profit to cover all of your expenses and have some left over. And in the case of repairs, improvements and appraisals, the amount they add to the selling price makes up for the cost.