Personal Finance

Different Types of Refinancing

We’ve all heard the word “refinance”, but what typically comes to mind is mortgages. Yes, you are correct. It also can apply to other areas of your finances such as car loans, student loans and credit cards.

As with any borrowing, you want to pay off the debt as quickly as possible. But sometime you cannot afford to purchase a car with cash, so you take a car loan. You may want to look into refinancing your car loan if you can get better terms – lower interest rate.

For student loans lower interest rate is probably not the answer. You may have several loans and several payments. It might be easier for you to keep track of and have only one payment per month, if you consolidate. Check out your options to determine if this is right for you.

Credit cards are a good example. You may be payoff debt and it may seem like it takes forever. It could if you have high interest rates. Refinancing a credit card balance to a lower or zero percent interest rate will help you pay back what you owe quicker and pay less in finance charges.

As with any financial transaction, do your research and compare all terms and conditions to see if this is the right move for you and your finances at this point in your life.

Making Budget Choices

You know that I think everyone should track their income and expenses to really know where they stand. We personally do this a few months of the year. But when I discuss this with others, I sense a resistance – maybe it’s too complicate, a time issue – I don’t know. So I am going to discuss budgeting from a different angle.

These are the things that we have chosen to give up, don’t have or do it ourselves – it’s our choice.

· No data plan on our cell phones – just calling and texting

· Driving older cars – they are 1995 and 2006

· Home maintenance – we do our own yard work, snow removal, house cleaning, etc

· Trash – we take our trash and recycle to the dump ourselves

· Personal care – I cut my husband’s hair and I stretch the time between haircuts. I do my own pedicures, etc.

All these are the choices we have made for our lives. These choices let us travel. We have been to most of the Caribbean, a good part of Europe and more. We are able to take yearly vacations all because of the choices we make day in and day out to do with less in our daily budget.

Budgeting is about choices – where you chose to spend or not spend your money. Everyone is different and has different values / priorities and will make different choices about what they do with their money. I wanted you to see how the money works in our household. Now you can see what we don’t do that lets us do more of the things we want to do.

Paper or Plastic?

We are not talking about the grocery store. Paper or plastic is how you chose to pay for your purchases – paper (cash) or plastic (debit or credit). The choice may seem simple but there are benefits and drawbacks to each.

Here are some pretty common situations to think about:

· You have to make a large unexpected purchase now and don’t have to cash to pay it all off in one month

· You are purchasing an electronic item

· You are going out to dinner

· You are shopping for clothing

These are everyday situations that come up in our lives and this guide will give you some pros and cons to each method of payment. Yes, you want the least expensive way, but sometimes there are benefits to one choice versus the other.

You are probably going to use all three at certain times. Being aware of what the pros and cons are will help you make the choice that is best for you each and every time.

Here’s what I did after breaking my new tablet

For those of you that were not aware, this summer I purchase a new Microsoft Surface Pro – a 2-in-1 tablet that can be used as a laptop… only to have the screen damaged when we were hit by turbulence on an inter-island flight. 🙁

Since it was really new, I wanted to see if it was covered by someone other than me.

First, I filed a claim with the airline. I found out that carry-on luggage is not covered by the airline. Ugh!

Next, my homeowner’s insurance would probably cover it but we have a large deductible, so that wasn’t the answer for me.

Lastly, I filed a claim with the credit card company. I had used my MasterCard, so I was covered by an Extended Warranty which doubles the warranty period. But that didn’t work because this type of damage isn’t covered under warranty.

However, MasterCard does offer Purchase Assurance for 90 days from the date of purchase.

I wasn’t sure how close I was to the 90 days, so I initiated the claim from Hawaii to be safe and completed the paperwork when we returned home. Good thing, because it happened at 86 days. This is one of the many benefits of using a credit card to make a purchase.

So, I was safe right? Wrong. Unfortunately for me, I wasn’t covered because I purchase a refurbished item. It was a hard and expensive lesson to learn that refurbished items are not covered by the credit card protection from MasterCard. The financial industry is ever changing and you must always read the fine print.

In the end, I found out that Microsoft has a replacement policy so I was able to purchase a new tablet for substantially less than full retail price. The people at the Microsoft store were wonderful. Now I have my new laptop /tablet and am ready to go – this time with a new shatter proof case!

Forgive and Move On – The Wise Money Path

I caught up on my emails last week. Some were personal, some were business, and some were newsletters. I love reading email newsletters – I subscribe for much needed inspiration, and to receive free tips, recipes and deals.

As I was writing this newsletter, I had just read Cheryl Richardson’s newsletter on forgiveness. You may be wondering what forgiveness has to do with finances.

Many of us have struggled with our finances at some point in our lives. We made mistakes because we didn’t know how to manage our own money. Why is that? It’s partly because finances aren’t considered a polite topic of conversation. It’s unthinkable to ask questions about a topic you never hear anyone discuss freely and openly. We’ve had to learn about money as we go, and that means learning from our embarrassing mistakes. Those missteps may have cost you dearly – both financially and emotionally.

Forgive yourself and move on.

Now is the time to forgive ourselves, and others who have hurt us, for our financial missteps. You may need to forgive the person who never repaid the money you loaned them, or you may need to forgive the person who damaged your credit because they reneged on a loan you cosigned. You may have to forgive yourself for overspending in the past and now you wished you had saved that money instead. You cannot wave a magic wand and change the past. Somehow you have to find a way to move forward. You do that by forgiving yourself.

Forgiveness is not an easy process.

You can make the decision to forgive, but it takes some work to actually let go of the shame, guilt, anger or regret that is keeping you from moving forward. It’s a process. I would encourage you to read books or speak to an expert about the path to forgiveness so that you can get closure in your life, move on, and claim the wisdom earned from experience.

Resolve that today is your first day on the Wise Money Path and that you are going to forgive the mistakes you made while you were on the spend-thrift freeway. You are going to take expert advice when you need it and make informed choices that work best for you and your family from now on.

Remember that I support you in your journey.

A Facebook Group for Your Goals

Join me for the month of January for Taking Charge of Your Finances. Many people want to have more in savings, to spend less, to pay down their debt, save for their children’s education, save for retirement, buy a home, and more. This will be your chance to connect with other like minded people, and get your New Year’s resolution off to a solid start.

completely-free

We will run the private group through Facebook. You do need to have a Facebook account to join. Simply click here -> www.facebook.com/groups/takecharge2014/ then click the Join Group button, and we’ll approve your membership.

You can participate in this group from the privacy of your home, and on your own schedule. I’ll post questions and assignments for you, give you ideas and resources to use to help you succeed in your goals. In turn, you can share as much as you want about your goals and finances, so you can discuss your challenges and learn from one another. This is a closed group, which means your posts will only be visible to each other, and not to your Facebook friends.

Your first assignment

We’ll start out with you telling us what personal financial goals you want to achieve. The goals can be short term (something that you want to complete in 2014) or a long term goal that needs your attention in 2014 if it’s going to continue over the years.

We will limit the group size so make sure you sign up today!

https://www.jillrussofoster.com/4625/

Living Within Your Means

live-within-means-chalkboard

Whatever your goals are, you have to learn to live within your means. That means that you cannot spend more than you earn. For every dollar you bring in, you need to spend less than a dollar so that the remaining amount can be saved.

Go back to the numbers you did earlier this month. Are you including money for savings? If not, you need to figure a way to do that. In a perfect world, you need to have savings for emergencies, savings for retirement and savings for wants. Today, think about how you will get that money to save.

Make it rain! Spread the word about financial literacy

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April is Financial Literacy Month and I want to spread the word so that everyone can improve their finances.

For the month of April, we will be posting daily tips from my book Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day on Twitter, LinkedIn and my Facebook Fan Page. We need you to share and repost to your connections and friends so that these simple tips spread across the internet. My goal is to increase my exposure and increase the number of people who subscribe, so we can ease the financial confusion that holds so many people back.

As new people subscribe to my newsletter, we will be asking them to tell us who referred them. Remember to ask them to use your name. The top person who gives us the most new subscribers by April 30, will win a free 30-minute coach session with me. It’s that simple. So tell your friends, family, co-workers and everyone else you know so you can increase your chances to win.

First, remember to connect with me through social media – Twitter, LinkedIn and Facebook Fan Page, or you can forward this blog post for them to sign up for the newsletter. Thank you for spreading the word.

If you want an additional way to win a free coaching session with me, tell us which tip has inspired you to make a change in your finances. What have you added to your routine, or what have you stopped doing? Maybe you read that you could keep the same routine if you just did things a little differently. Tell us your story in a few sentences that we can use as a testimonial. Don’t worry; we will only use your first name. We will select one quote randomly from all submitted and that person will also win a free 30-minute coaching session with me during the month of May.

We want everyone to have some extra cash this April, so let’s make it rain by sharing financial information that really works.

You’ll have to prove it. Make sure you have the paperwork.

Things that mean very little in a court of law:

Your memories
Your mother’s memories
Your friends opinions
Photos of you smiling with some of your stuff in the background.

What am I getting at? I want you to face the fact that paperwork is part of life.

You can have a lot of wonderful things without legal documents: love; a nice meal; a beautiful sunset. But, you can’t get legally married, register the birth of your child, or insure your home without them. So, if you’re basking in the glow of a beautiful sunset in your own backyard, enjoying a barbecue, and surrounded by family and friends – there was paperwork involved.

Don’t slack on it. Strive to keep it up-to-date on an annual basis. Neglecting your paperwork can be just as bad for your family life as neglecting a loved one’s birthday.

Go through your files and check up on your:

Life insurance
Long Term Care insurance that may combine with life insurance
Retirement accounts – IRA’s, 401K / 403B, Roth IRA’s
Savings bonds
Bank accounts that are payable on death
Investments (stocks, bonds etc)

Legal documents are too often overlooked and the results can be devastating. Who’s in charge of your stuff if you suddenly pass away. If you haven’t updated your paperwork, you may have left everything to an unreliable friend, or a deceased parent instead of your spouse or adult child. In this case, I suggest that you name a second beneficiary. For our wills, we even have a third beneficiary. My attorney suggested this and it’s terrific. When my father passed away, I didn’t have to update my will. My second choice was already in place. How easy was that?

I know you’re busy, but when you, or your family, are dealing with a major life crisis, you won’t want to spend time thinking about these things. Make a habit of reviewing your important documents on a regular basis so your loved ones will receive the things you labored to give them.

If you need more convincing, check out this ABC news story

Balance Debt Repayment with Savings

I get asked all the time for advice on credit card debt. We all know that credit card debt is the enemy of a monthly budget. Your money has better things to do than paying down finance charges and interest. But, if you are currently in debt, then you need to do something about it.

Most of my clients want to know the best way to pay off their credit card debt. Most people ask me if they should put all their resources into debt repayment. My answer to that is “no”. There is one thing that I believe everyone should do while paying off credit card debt – build an emergency savings fund.

You are probably saying that you have no money to save! I’m telling you that you need to find the funds. Your credit card debt may seem like your biggest priority, but if you take all your extra money to pay down debt, then you will find yourself running up credit card debt any time an unbudgeted expense pops up. These unexpected budget breakers are such regular events that we should learn to expect them. Your car breaks will need to be replaced, an appliance will need a new part, the roof will need new shingles. It’s inevitable. I could go on, but you get the idea.

You need to find a balance in your budget with savings on one side and debt repayment on the other.

The easiest way to build an emergency savings account

Each pay period you should have some money automatically transferred from your paycheck to a savings account. Start out with a small amount on a regular basis. That way you won’t feel the pinch and you will be setting aside money to use when something unexpected happens so you won’t have to use your credit cards.

A good way to pay off debt

To pay down your credit card debt:

Make a detailed list of each credit card, the amount owed, the credit limit, the interest rate(s) and minimum payment amounts
Look at your options – can you transfer the highest interest rate debt to a lower interest credit card (maybe you have room on a credit card you already have)?
If you are considering opening up another credit card, please think before doing so. There a number of factors that are involved here . Check my website www.JillRussoFoster.com for the five factors that make up your credit score.

On Monday, I will talk about paying down your debt.