About Financial Planning

Credit and Debt Basics

2009-11-24T18:38:52Z

When you hear people talk about debt, the general consensus is that debt is bad and must be avoided at all costs. Credit cards or any type of debt are really just a financial tool, and when used properly, can be very beneficial. For example, how many people could save up hundreds of thousands of dollars to buy a home with cash? It can be done, but it might take a few decades to reach that goal. Instead, by borrowing money you can use leverage to make the purchase now instead of waiting.

The problem with any tool is that they can be used improperly, which can ultimately do more harm than good. Using credit is no different. When used properly, you can leverage your buying power to make financial decisions that will benefit you in the long run. The basics to credit and debt cover:

How to establish credit.
The importance of your credit score.
How to improve your credit score.
Getting out of debt.
Borrowing money for college or a business.

Weather you're trying to establish credit for the first time, or you're already up to your eyeballs in debt, this credit and debt basics guide can help you begin to take control of your finances.

Credit and Debt Basics originally appeared on About.com Financial Planning on Tuesday, November 24th, 2009 at 18:38:52.

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6 Retirement Planning Mistakes to Avoid

2009-11-20T14:44:24Z

Are you planning and saving for retirement? That's good, but that may not be enough. While taking the initiative to plan for the future and begin saving money to fund your retirement goals is a great start, there are plenty of additional planning items to take note of. Here are six of the most common planning mistakes:

Not maximizing your employer match.
Borrowing from your retirement assets.
Failing to diversify.
Failing to rebalance your portfolio.
Taking an early distribution.
Becoming paralyzed by choices.

As you can see, saving for retirement is a great start, but there are many areas in which you can still make mistakes. Continue reading to learn more about these six retirement planning mistakes and how you can avoid them.

6 Retirement Planning Mistakes to Avoid originally appeared on About.com Financial Planning on Friday, November 20th, 2009 at 14:44:24.

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Budget Basics

2009-11-17T23:07:41Z

A budget is at the foundation of any financial plan, but unfortunately, most people don't take the time to create a budget, or have a difficult time following one. While it can be a bit daunting to sit down and go through all of your expenses and find out where you're money is going, that is the only way to completely understand your finances. Without knowing how much money you have coming in and how much is going out, and where it's going, it will be that much harder to get ahead.

Here is a basic introduction to budgeting. Once you learn the basics, you can head over to the step-by-step instructions for creating your own budget. It won't be long and you'll have a better understanding of where you're money goes, and how you can cut back so that you can fund your important financial goals.

Budget Basics originally appeared on About.com Financial Planning on Tuesday, November 17th, 2009 at 23:07:41.

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Be Careful When Borrowing From Your 401(k)

2009-11-15T19:31:04Z

Times are tough, and many people turn to their retirement savings in a time of need. If something comes up and you have an urgent need for money, your first option should be from your emergency savings. If you don't have an emergency fund, or the funds available aren't adequate, you're probably inclined to tap into that retirement account. Before you do, here are some things to consider when looking to borrow from your 401(k). Taking a loan against your retirement plan is better than making a taxable distribution with other assets, but it should still be used only after other options have been exhausted.

Be Careful When Borrowing From Your 401(k) originally appeared on About.com Financial Planning on Sunday, November 15th, 2009 at 19:31:04.

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First-Time Homebuyer Tax Credit Extended and Expanded

2009-11-12T19:03:06Z

You may have heard about the tax credit this year for first-time homebuyers, but that was slated to expire in less than a month. Well, here's some good news. Legislation was passed that extends the tax credit until next year. To make things even better, the tax credit has been expanded to include more homebuyers, not just first-time buyers. Now you may be able to qualify for a tax credit for buying a new home even if it isn't your first home. This can help a lot of people out and will hopefully stimulate the economy to help keep this recovery on track. Learn more about the details of this tax credit and see if you qualify.

First-Time Homebuyer Tax Credit Extended and Expanded originally appeared on About.com Financial Planning on Thursday, November 12th, 2009 at 19:03:06.

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Chronic Spending Problem? Debtors Anonymous Can Help

2009-11-10T20:40:24Z

Overspending and accumulating significant amounts of credit card debt isn't always easy to resolve. Over time, this problem can become an addiction that goes beyond simply affecting your finances. Just like any addiction, this behavior can negatively affect your performance at work, your relationships with friends and family, and even reduce your quality of life. If you or someone you know is in this situation, there is help available.

Debtors Anonymous is a nonprofit organization that provides free group meetings that are modeled after the Alcoholics Anonymous 12-step program. This type of group session and structure may be very well what is needed to finally break the spending habit. Learn more about Debtors Anonymous and how they can help.

Chronic Spending Problem? Debtors Anonymous Can Help originally appeared on About.com Financial Planning on Tuesday, November 10th, 2009 at 20:40:24.

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Credit and Debt Basics

2009-11-08T19:58:32Z

Borrowing money has become a part of life for most people. Unless you're sitting on a tremendous cash reserve, you'll need to borrow money to buy a home. If your car dies and you need a new replacement, you will probably finance some of the purchase. And with out of control college tuition costs a student loan might be the only option for getting an education. Taking on some debt isn't a bad thing as it's just a financial tool that helps you reach your goals. But like any tool, if it is misused you could find yourself doing more harm than good.

Understanding when borrowing money is appropriate, how your credit score is calculated, and where to go for help is important if you want to keep your money save. Here's a crash course that covers everything you need to know about credit and debt.

Credit and Debt Basics originally appeared on About.com Financial Planning on Sunday, November 8th, 2009 at 19:58:32.

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Is It Time to Refinance Your Mortgage?

2009-11-06T13:06:30Z

Mortgage rates have fallen quite a bit this year, so a common question is whether or not you should consider refinancing. The benefits are easy to understand. The lower the interest rate, the lower your monthly payment and total cost of buying a home. But before you rush into a refinance, there are some drawbacks to consider.

For starters, it costs money to refinance. In some cases, it can cost thousands of dollars. So, while you may be lowering your monthly payment, how long will it take to break even on the closing costs? Six months? A year? Three years or more? If you aren't sure whether you'll be in the house long enough to offset the cost, a refinance could end up costing you more.

Refinancing your mortgage can be a great way to save money, but make sure you consider all of the pros and cons before signing any papers. It is an important decision, and if you aren't careful, it could prove costly.

Is It Time to Refinance Your Mortgage? originally appeared on About.com Financial Planning on Friday, November 6th, 2009 at 13:06:30.

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Top 5 Money Mistakes College Students Make

2009-11-03T20:25:51Z

College is an exciting time for young adults, but with this comes a lot of financial responsibility. Between college tuition, room and board, spending money, and trying to have a good time, money can be pretty tight. Unfortunately, many college students fall into a few major money traps that can follow them around for more than a decade.

Just a few poor decisions in college can hurt your prospect of getting a car, finding a mortgage, or even landing that dream job. So, instead of getting caught off guard college students should be aware of some of the major money mistakes and make an effort to stay out of trouble. If you do, you'll be well ahead of your peers after graduation. Here are the top five money mistakes college students make.

Top 5 Money Mistakes College Students Make originally appeared on About.com Financial Planning on Tuesday, November 3rd, 2009 at 20:25:51.

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Tying the Financial Knot

2009-11-01T19:09:38Z

Combining finances can be very helpful for a new couple, but it can also be very stressful. Money is one of the top issues that create arguments in a relationship. Everyone has different priorities and values pertaining to money, so it is easy to see why money can be a hot button issue when couples don't see eye to eye.

Plan Ahead

The good news is that you can alleviate most of the problems with some planning. This means taking the time to talk about financial issues before getting married if possible. While you may currently maintain separate accounts, realize that it is important to think about what you're going to do in terms of bank accounts, saving money, paying off debt, and getting insurance before you're overwhelmed with all of these important decisions after you've tied the knot.

Communication is Important

While planning out your financial road map is important, maintaining an open and honest line of communication with your spouse is vital. One of the most damaging things you can do in a marriage is to hide and lie about money issues. Eventually, the truth will surface, and it will create an incredibly stressful and possibly harmful situation. If you are bringing debt into the relationship, be open about it. If you place importance on saving for retirement above all else, let that be known. The more open you are regarding your values and money situation, the less likely a problem will arise out of nowhere.

Additional reading:

Tying the Financial Knot originally appeared on About.com Financial Planning on Sunday, November 1st, 2009 at 19:09:38.

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