1. Credit Cards
2. Budgeting
3. To Rent or To Buy
4. Making Your Money Grow
5. Buying an Automobile

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1. Credit Cards

If you do not own credit cards, do not start now! If you are using credit cards, stop! The worst financial problem within a majority of households is credit card debt.

People use credit cards because they cannot afford to pay cash for so-called necessary items. They purchase merchandise, and when the bill comes in the mail they can only afford to make the minimum payment. By paying the minimum on the bill you are simply paying around 90% of that payment to the interest on your account and only around 10% goes toward the principle (merchandise bought).

When the second bill arrives in the mail you now owe more money due to compound interest, and more than the merchandise is worth. This process is a vicious cycle, and if you are living with credit card debt find ways to pay it off, then rip up the cards and throw them away.

A good habit to get into is only pay cash for unnecessary items. If you cannot afford to pay cash consider waiting to purchase the item until affordable. Never open a credit card account unless you are 100% sure you will be able to pay the maximum amount owed each month.

2. Budgeting

Many people cannot be bothered with a budget. In this struggling economy, living on a budget is one of the only ways to survive financial hardship. Many believe and hope that the economy will bounce back soon and figure they will worry about their bills when it does. The common thought is "isn't everyone in the same financial boat?" This attitude will get you in deep financial trouble.

Eliminate the risk of drowning in debt by taking action now. Formulate a budget and organize your finances prior to sinking financially. Budgeting is not as complicated as it sounds. In order to budget effectively you must become aware of your daily expenses. Many people think this sounds like commonsense, however most are surprised at the reality of spending habits.

It is recommended to take a week to write down every expense or purchase you incurred. These are not limited to large transactions. It could be something as little as a cup of coffee. At the end of that week sit down with a highlighter and note which expenses were unnecessary or could have been avoided.

As Americans we pay dearly for convenience. Nowadays everyone seems to be in a rush to get somewhere. Fast food restaurants, gas stations and convenience stores benefit financially from this. Make a conscious effort to change your ways. You will notice such an abundance of funds in your account by simply avoiding the "impulse" purchases.

Understandably in today's generation usually both people in the household work, therefore it creates a lack of time for preparing things, such as dinner. Countless families rely on quick prepared meals from local restaurants. Instead of paying the price for the lack of preparation invest in a crock-pot. The meal can be made the night before and cooks throughout the day. Not only is the savings great but also the quality of the food is usually better. This act alone will save the average family of 4 over $300 per month.

By formulating a budget and organizing your life you can avoid the financial hardship looming overhead. Create a budget according to how much you spend each week vs. your salary. This action can help you to avoid going broke or being in debt. Create a budget, make a list of your fixed expenses (expenses that remain the same monthly) such as rent, mortgage, car, etc… anticipate how much you will owe each month, add up all debts and subtract from your monthly take home pay. This will allow you to know exactly what extras you will be allowed with the remainder of the money.

3. To Rent or To Buy

If you are planning on moving and are torn between wanting to rent or buy property, you must do your homework. It has always been drilled in our heads that real estate is the best investment option. Yes, this can be true assuming that it is affordable.

Real estate can also turn out to be a financial nightmare for people who went in over their heads. Too many homeowners are facing foreclosure. Partly to blame are the lenders who gave mortgages to applicants who simply should not have qualified. On the other hand though, the prospective homebuyer should have reviewed a budget and not gotten into a payment plan which was unaffordable.

Nevertheless, as a responsible consumer decide which option is right for you based on your specific situation so that you are not faced with the consequence of foreclosure.

Prior to making a decision about buying a property take some time to really look at your finances. Is your job secure? If there is a slight possibility of a loss of income: refrain from purchasing a home to avoid defaulting on the mortgage. This action will not only affect your credit, but could eventually result in losing your home and investment.

Are you going to be in this area for a long period of time? The days of buying homes and selling within a couple years are gone. It is very unlikely you will make a profit or break even if you sell shortly after you purchase. A home should be something that is purchased with the intent to own it for a long period of time.

If you feel it is the right time to purchase a home, contact a lender or mortgage broker to see if you qualify. Do not be discouraged if you are denied a loan. It is a buyers market right now, however due to the economy banks are not lending easily. In certain states the only loans you can obtain are through FHA. A lender should be able to advise potential homebuyers of the loans available, as well as the qualifications to obtain.

Once approved for a loan, take advantage of the numerous foreclosure properties on the market right now. Often times the bank or lender that owns the home will greatly reduce the price. You could get your dream home for a fraction of what it is worth.

Renting is the best option for a great deal of people. Renting gives someone the flexibility to relocate. Employees who may have to move for a job opportunity will have the freedom to do so very quickly.

A great benefit to renting is the leaser is responsible for any and all repairs. This is a huge benefit to the renter. Household items, such as A/C units, washing machines, roofs and other items are very costly.

As a renter you will not be held responsible for any assessments that the neighborhood may require. In addition to that, the owner of the home also covers taxes and homeowner insurance.

Renters have the piece of mind that the payment monthly is fixed and cannot increase for any reason

4. Making Your Money Grow

Regardless of your income level, saving and investing wisely and controlling your spending habits will only be beneficial to your future. Whether it is $5.00 or $500.00 a month that is put in savings or investments, in the future you will see a return on this money.

If you want to make the correct financial decision, you have to find what is right for you, your family, and your lifestyle to improve your financial wealth by making your money grow and work for you.

What types of investments to make is majorly important in all areas of your life and will impact your lifestyle and retirement years. Fortunately there are many options available to you. Depending on your preference and goals some investment avenues will suit you better.

Investments are a gamble. The more risk you are willing to take the more return you are able to receive. Keep in mind though bad savings and investment decisions can ruin your life.

When you are ready to start investing, make sure you sit down with a professional financial advisor to get the best advice on how to make your money work for you. Investments and savings will give you peace of mind for you future plans and goals.

5. Buying an Automobile

Questions always arise, should I buy a new or used car? This answer will vary greatly depending on different personal factors and opinions. There are pros and cons to both scenarios. There is no right or wrong answer.

In certain instances when buying a used car it seems like you are buying someone else's problems. You do run the risk of the car having underlying problems that will eventually cost you money. To avoid this scenario have a mechanic you trust look at the car to spot any potential problems that could arise. Also, try to find a car that still has time and mileage remaining on the warranty, therefore if a problem does occur you will not be responsible to pay to have it repaired.

It is highly recommended to purchase a certified used car. This certification will cost you more money, however it does mean that the dealership has looked at the car and made any repairs needed. Even though a used car that is certified is more expensive than a non-certified it could save you money down the road.

Purchasing a new car will alleviate the stress of something breaking, however it will hit your wallet a lot deeper than a used car. Cars are not investments in any way. The moment you drive a new car off the lot is has decreased in value by about 20%. A great plus to purchasing a new car is the warranty. Warranties on cars will save the owner a lot of money should something break. Plus the car has no or very little mileage therefore the chances of encountering a problem decrease greatly.

Prior to purchasing a new car look into all payment options. Assuming you are financing, contact your local bank and see what kind of interest rates they offer. Do not make the mistake of thinking you must finance through the lender. On the contrary car sales have dropped drastically and the dealerships are offering many incentives. Take advantage of any that are being offered you could end up saving thousands of dollars.

In conclusion, most people do not know they are in financial trouble until it is too late, and this is because they continue to make financial decisions that were not in their best interest at the time. Simply follow a financial course that you can live with. Consult a professional prior to making any life changing financial decisions. Their advice is invaluable and could prove to be priceless.

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Got a question? Then contact our Education Team on 561-883-2398 Ex.310 United conducts regular seminars on financial education, including "How to Budget", come along and join us - to reserve your seat contact our Education Team on 561-883-2398 Ex.310

Newsletter 06
Rev.1
June, 2010