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Although money may not always be in abundance for activities for the entire family, this does not mean your family needs to miss out on some well-needed time together. Enjoying each other company is an important aspect of everyones life. There are many different educational, economical and fun ways your family can have fun together.
We have come up with some ideas as to how you can still engage in some family-oriented activities for fun family activities, making memories together during these times where money is not always readily available for spending.
1. Rent a movie. Instead of taking the whole family to the movie theatre, rent a movie instead. You will not only save money on admission tickets to the movie, but you are free to choose different, healthier snacks to make as a family instead of buying concession stand junk food to munch on during the movie.
2. Make pizza. Instead of ordering in pizza for your family, make an afternoon of teaching your children how to make their own. Not only are you able to choose healthier products such as whole wheat flour for your crust, your children can have some fun experimenting with different toppings on their own personal sized pizzas. Keep in mind that you can make dessert pizzas as well. Instead of regular toppings, cover the dough with apple rings and cinnamon sugar made with low-calorie sweetener. Once itís cooked, simply drizzle a bit of your favorite icing for a yummy homemade treat.
3. Donate unnecessary items. Generosity is a virtue you may want to instill in your children at a young age. Plan a weekend to have everyone in the family go through their toys, books and clothing to see if there may be some items which can be donated to a community outreach program. Different charities are always looking for new or gently used items. This project will not only help get your house organized, but will be a fantastic lesson in giving for your children.
4. Learn a handicraft together. One particular idea that comes to mind is knitting. Hospitals and seniors residences are always in search of knitted or crocheted blankets or hats for newborn babies. Once you learn how to make these items, make a permanent date on your calendar to drop off a new batch of these high-demand articles on a regular basis.
5. Check your community calendar. Many cities and towns publish a seasonal calendar with different upcoming events or activities. Browse through what is being offered, and choose one or two (or more) which your family would enjoy participating in. Many of these events will turn into holiday rituals or seasonal traditions your children will grow up looking forward too.
6. If you are looking for an activity for the winter months, why not spend the day on a good old-fashioned toboggan hill? While you can still purchase toboggans made of wood in the style of yesteryear, there are many less expensive options. You can get each member of your family a magic carpet which is a simple piece of thicker plastic with holes to hold on to. Find a local hill and enjoy the outdoors. Following this activity with a nice cup of hot chocolate is sure to be a great day.
7. Skating. There are many local skating arenas or outdoor areas you can enjoy as a family. Grab those dusty skates from the attic, and go to sporting goods swap stores for skates for your children. These can normally be purchased used for around $5 a pair. Get them sharpened, strap them on and learn to skate again as you teach your children the basics of falling with grace perhaps?
Spending quality time with your family certainly does not have to cost a lot of money. With these few hints added to a list of your own, you are sure to find enough activities to keep everyone happy during those family moments where some of the best memories are made.
With few exceptions, we all look forward to summer. Kids love it because they get a break from school. Adults love it because it’s a great time for a vacation. And almost everyone has a favorite summer activity that they can’t wait to get involved in.
Summer can also be a very expensive time of year. There’s so much to do, and we want to cram it all in before cold weather strikes again. But by the time we visit the beach, go to an amusement park, make weekend trips to the pool and do all of the other stuff we want to do, it can put a major strain on the budget.
But summer fun doesn’t have to break the bank. There are lots of things families can do for cheap, and some are even free. In this report, you’ll find lots of summer activity ideas that will fit into virtually any budget.
Swimming for Less
On a hot summer day, one of the most popular destinations is the local pool. Admission isn’t terribly expensive, but if you go as a family several times over the course of the season, it can really add up. By the time fall arrives, you might wonder why you just didn’t save up a little more money and go to the beach!
If you love to swim, there are alternatives to the community pool. Here are some to think about:
* The lake – If there’s a state park with a lake nearby, you may be able to swim for cheap or free there. Some have beach-type areas with sand, so the kids can have a blast building castles and burying one another. It’s kind of like taking a trip to the coast, only without so many expenses.
* A friend’s pool – If you have a friend with a pool, perhaps you could take the kids over to swim from time to time. In return, you could take refreshments for both families or invite the friend’s family over to your house for other activities.
* The gym – If you have a gym membership, you may be able to bring guests to the pool for free or at a reduced rate. Check with your gym for details.
* Quick-set pools – Those inexpensive quick-set pools have become quite popular among families with kids. All you do is blow up the inflatable ring, fill the inside with water, and you have an instant pool! They come in many sizes, and some are priced under $50. Larger ones are only a few hundred dollars, and by the time you figure in gas and pool admission, they can pay for themselves in just a couple of years.
If you’re fortunate enough to live near a river, there are all sorts of summer activities you can participate in. Canoeing is lots of fun for adults, teens and older children. Innertubing is especially popular among the younger set. Or you can just jump in and play in low water areas.
Of course, you don’t have to get in the water to have fun with water. Here are some other wet and wild activity ideas that are fun for all ages:
* Water guns – Having a water gun fight is a classic summer activity for kids. But there’s no reason that the grown-ups can’t get involved too! You can find inexpensive water guns at the dollar store for next to nothing, and if properly cared for, they will last for many summers to come.
* Water slides – You don’t have to visit a water park to go down a water slide! You can buy slides that hook up to your water hose for $20 or less and use them right in your own back yard.
* Sprinklers – It’s not necessary to buy any toys at all when the kids want to cool off on a hot day. You can simply hook up the sprinkler and let them run through it. If you don’t have one, just get out the water hose and start spraying. It’s guaranteed fun, and you won’t have to pay a dime for it.
Enjoying Nature
Summer is a wonderful time of year for getting out and enjoying all that nature has to offer. It doesn’t have to cost anything, either. Many nature areas have hiking trails that you can access for free, and some don’t even charge for parking.
Some state parks offer nature programs that the whole family can enjoy. These programs have various themes, including plant identification, bird watching and more. Check your local paper for dates, times and locations. You may have to register to participate, but there is rarely any cost.
No matter where you live, there is some sort of natural wonder that’s not too far off. There are large rock formations, caverns, waterfalls and more throughout the country. Visiting these places is often free, and if there is any cost it’s usually quite affordable. If your are not familiar with the attractions in your area, pick up a travel guide from a nearby visitors center or search for information online.
Camping is the ultimate nature activity for families. RVs and pop-up campers offer all the amenities of home, but they aren’t necessary. All you need is a tent, some sleeping bags, food and drinks and a grill or camp stove. Most campgrounds offer tent space for a small fee, or you can simply set up camp in your back yard.
Fishing is another favorite activity for adults and children alike. You can find poles in all sizes at your favorite sporting goods or discount store. Fishing licenses are generally required for adults and teenagers, but not for kids under certain ages (which vary from state to state). If you only fish on occasion, you can save money by buying a short-term license in most states.
Gardening
Many adults enjoy gardening in the late spring and early summer. But did you know that it’s a great activity for kids, too? Even toddlers can get in on the act!
Planting a flower garden is a great starter project. You can buy trays of flowers at a discount store for next to nothing. Let the kids help pick out flowers in a variety of colors, and plant them together. They’ll be able to see the results right away, and they can be responsible for caring for them throughout the season.
Vegetable gardening is another great family activity. It provides an opportunity to teach children about good nutrition while having fun as a family. The results generally take longer to see than flower gardening, but the end result is well worth the wait. Even the pickiest eaters are usually eager to try foods that they have grown!
Festivals and Carnivals
Even the smallest of towns usually has some sort of festival during the summer months. These celebrations feature a wide variety of activities that adults and children of all ages can enjoy. It’s easy to spend a small fortune at such events, but if you watch your money you can have a good time without breaking the bank.
Many festivals offer free concerts as a means of drawing larger crowds. Street performers such as magicians, clowns and mimes are great free entertainment for the kids. Kiddie rides, face painting and other activities may be free or paid. If theyíre not free, set a budget and have your kids choose things to do that fit within that budget.
One of the most expensive aspects of festivals and carnivals is the food. To avoid overspending, pack a lunch or eat before you go to the event. Bring some snacks and drinks along if they are allowed on the premises, and if you must buy something during the festival, consider going to a nearby store instead of buying from overpriced food vendors.
The Zoo
One destination that kids of all ages tend to enjoy is the zoo. Wild animals aren’t something that most of us see every day, so watching them up close and personal can be a real treat. There are zoos to fit every budget. If traveling to a large zoo is out of your price range, there’s sure to be an alternative that’s within your budget.
A popular and inexpensive option among younger children is a petting zoo. These zoos may not feature large animals such as elephants and giraffes, but they make up for that by allowing physical contact with the animals. Kids enjoy petting and feeding the goats, pigs, ponies and ducks. Bring a camera along and capture some memories that are sure to be cherished for years to come!
Museums and Galleries
If you’re looking for a fun and educational activity for the entire family, you canít beat a trip to a museum or art gallery. You don’t have to live in a large city to visit one. Most smaller cities, and many small towns, have at least one museum or gallery of some sort.
Museums come in a wide variety of flavors. Art and historical museums are among the most common. But you can also find museums based on all sorts of interesting themes. Museums featuring oddities (such as Ripleyís Believe It or Not) are popular among children and adults alike. There are also museums geared toward children that make learning fun. If you’re not sure what types of museums can be found in your area, check with your local Chamber of Commerce.
Many museums offer free admission, so all you have to do is resist the urge to splurge in the gift shop. Some charge admission, but prices are usually reasonable. If you want the best possible deal, consider organizing a group trip. Call ahead to find out how large of a group you will need to qualify for a discount. You could invite members of your church or an organization to which you belong to meet the requirement.
Visiting Friends and Family
If you’re looking for a change of scenery on a budget, visiting friends and family who live out of town could be the answer. If you can stay with them instead of renting a hotel room, you could even make a vacation out of it with very little expense.
If you have family living in the Bahamas, that would make for a great summer vacation. But no matter where your friends or relatives live, there’s bound to be something fun to do together. A simple dinner out at a popular local restaurant and trip to the movies can be an adventure when you’re away from home. Or you could visit inexpensive local attractions such as nature areas, museums or petting zoos.
The Library
When it comes to summer activities, going to the library may not be on your kids list of favorites. But did you know that most libraries offer a variety of programs that appeal to children, teens and adults?
Most libraries sponsor a summer reading program for kids and teenagers. These programs usually feature prize drawings for children who read certain numbers of books while they’re out of school. This is a great way to keep your child’s reading skills up to par!
For young children, storytelling is a popular library activity. Some libraries also feature activities such as movie showings, craft classes and even concerts. Most of these activities are free, but they may require registration. Call your local library to find out the details.
Movies
Going to the movies is a wonderful family activity year-round. In the summer, it’s the perfect cure for boredom. And if you play your cards right, you can take the entire family without paying an arm and a leg.
Instead of going to the big chain theater, see if there is a dollar theater in your area. These theaters may not show the newest releases, but seats are cheap for every showing. Sometimes you can even go for as little as 50 cents per person!
If there’s no dollar theater in your hometown, check matinee prices at the regular theater. These daytime showings on the weekends are usually significantly cheaper than nightly shows. Some theaters also have cartoon showings for cheap on weekend mornings. And some offer special discount programs that could save you money if you go to the movies frequently.
Watching movies at home is even less expensive than going to the theater. Theresa no temptation to buy giant tubs of expensive popcorn, and everyone can watch a rented movie for one low price. If there’s a Redbox location near you, you can rent new releases there for $1 per night. Or you could join Netflix and borrow as many movies as you like each month with no late fees for one low price.
Better yet, you can borrow movies for free. If you have a friend with a large DVD collection, inquire about borrowing a movie to watch every now and then. Or go to your local library and borrow some movies. Pop some microwave popcorn and dim the lights for an authentic theater experience.
Picnics in the Park
The park is a wonderful destination for family fun in the summer. There’s something for everyone in the family to do. Youngsters can play on slides, swings and such. Older children, teens and adults can shoot hoops, play softball or go walking on trails. Or you could bring along a Frisbee, find an open space and toss it around.
With all of these fun things to do, why not pack a lunch and make a day out of it? For the price of some sandwiches, drinks and dessert, the whole family can have a blast and get some exercise. If you prefer a hot lunch, many parks have shelters with grills that you can use for free when they are not reserved.
Block Parties
If you want to have a good time and have the room, try having a block party! Kids love them because they get a chance to play with the other kids in the neighborhood, and adults love them because it gives them an opportunity to socialize.
If you bear all of the expense yourself, having a block party is very expensive. But if you make it a potluck, you won’t have to pay much at all. Just provide the main course, and ask each guest to bring a dish. You could even ask some to bring supplies such as paper plates, cups and napkins.
For cheap live entertainment, ask any neighbors that play an instrument to bring it along and have an impromptu jam session. Or have the kids that will attend prepare an act and have a talent show. You don’t have to shell out big bucks to hire a band.
Amusement Parks
Amusement parks aren’t known for being inexpensive. One ticket for one day can cost as much as a couple of weeks worth of other activities. But there are ways you can save on admission to your favorite park.
If you live fairly close to an amusement park, a season pass could be well worth the money spent. They usually cost about as much as 3 or 4 days admission. So if you think you’ll visit several times during the summer, a pass will pay for itself in no time.
Some employers offer discounts on admission to nearby amusement parks. They usually make announcements early in the summer. If you haven’t heard anything from your employer, ask if they offer any special deals. If they don’t, suggest that they check with the park in which you’re interested to see if they could.
You can often get discounts on amusement park admission from a variety of sources. Check packages of canned soda and other items from the grocery store. Some fast food restaurants also distribute coupons for a certain percentage or dollar amount off of admission to amusement parks, so be sure to look in the bag when you get takeout. The best discounts are usually found late in the season.
Other Frugal Summer Fun Ideas
The possibilities for frugal summer activities are endless. Here are some more ideas:
* Inquire about touring a local factory. Some offer interesting and educational programs, and you may even get some free samples afterward.
* Organize a family reunion. Rent a shelter at the park, and have a potluck dinner. You’ll get to see family members that you haven’t seen in ages, and the kids will have lots of fun playing together.
* Go on a family bike ride. Whether you load up and hit a bike trail or just ride around the neighborhood, everyone will get some exercise and an opportunity to bond.
* Volunteer. There are volunteer opportunities suitable for children as well as adults. Some organizations need lots of help, so the whole family may be able to get involved with the same project.
* Visit state, local or national government offices. Many offer tours that are very educational.
* Gaze at the stars. You can do this for free on a clear summer night, or you can visit the planetarium.
* Pick wild berries. They taste great right off the vine or bush, and you can also take them home to use in cobblers and other dishes that you can make with your kids.
* Get a jar and let the kids catch fireflies. You might even find yourself getting involved!
* Set up a scavenger hunt for the kids. Make a list of items found in nature, and let them loose in your back yard or at a nature park. Provide a special prize for the winner and consolation prizes for the runners up.
* Go to a minor league baseball game. Tickets are much cheaper than those for major league games, and the atmosphere is much more relaxed and family-friendly.
* Make a bird feeder by spreading peanut butter on a large pine cone and rolling it in birdseed. Hang it up in the front yard and watch as the birds flock to it.
* Create a family scrapbook. Have each child contribute a page or two, or assign each one a task such as creating page layouts, choosing photos and cropping.
* Check your local newspaper for event listings. You could find free concerts in the park, play groups and more.
Having fun in the summer isn’t only for the well-to-do. There are plenty of activities you can do in your own back yard that are free or very inexpensive. And with some research, you can find affordable activities in your hometown and neighboring areas. There’s no need to let summer boredom get the best of you and your family. Fun can be had on budgets of any size!
If you’ve ever been hit with an unexpected expense, you know that you need some source of funding to fall back on at all times. A savings account makes the most sense, because it gains interest. But many consumers use their credit cards as a safety net, even though they know it will cost them more in the long run.
Those who are saddled with credit card debt, either because of using them for emergencies or simply overusing them, are painfully aware of how interest and fees accumulate. They swear that when they get out of debt, they will start saving money to avoid having their finances fall back into ruin. And if they’re serious about it, they might put every spare dollar toward paying down that balance.
Paying off high-interest debts has definite advantages. Most importantly, it can save you lots of money over paying just the minimum payment each month. It also frees up your credit line so that you can use it if you have to. But is paying down credit card debt more important than building up savings?
There is some disagreement among financial experts. All agree that your bottom line is positively affected by paying as little in interest as possible. And some find that to be reason enough to put money toward paying down your balance before you try to save up. But others feel that the importance of having an emergency fund trumps the money saved in interest charges.
One argument against paying off credit cards before starting to save is that it leaves no resources to use in case of emergency except for the credit card. If you’ve paid down your balance sufficiently, you may be able to use the card if something comes up. But you’ll also experience a setback in paying it off. That means you’ll pay more in interest, and it will be longer before you can start that savings account.
By the same token, using a credit card for emergencies is one of the habits that those with debt issues need to break. Putting yourself in a position in which you have no choice but to do so is a step in the wrong direction. By saving up an emergency fund, you can avoid using credit until you’ve eliminated the debt you already had.
Choosing between paying off credit card debt and building up a financial cushion can be difficult. But if unemployment or some other major financial problem is a possibility, building up your savings is usually the best option. Putting away at least a months salary before you start paying off your debt will allow you to breathe easier.
The sub-prime mortgage crisis that began in 2008 was the catalyst that left many homeowners in foreclosure. It caused the stock market downturn, which decreased or wiped out retirees savings; led to the insolvency of banks; and caused the Treasury Department to institute emergency bailouts of banks, major corporations and one very large insurance company in particular which, if it had filed bankruptcy, would have caused a ripple effect that would have devastated the financial markets here and abroad.
Homeowners and individuals who have been caught in this credit trap have had to make major changes in their lives. While recent legislation has allowed for the revamping of home mortgages for those who are in foreclosure, the recession has caused a major effect across the nation and the world.
With unemployment currently at 8.5%, small businesses as well as large corporations have had to make drastic changes in order to survive this recession. As a result, every facet of our worsening economy has had a direct affect on individuals across the spectrum.
We now know that the sub-prime mortgage crisis was a credit trap. It allowed future homeowners to purchase mortgages with no money down and eventually spiraled into a high-interest rate debt that could no longer be managed.
In addition, banks stopped lending and consumers with credit cards faced a sudden increase of higher interest rates even though they had good credit and paid their bills on time. Moreover, student loans and car loans became more difficult to obtain.
Banks raised the standard of lending to consumers and unless an individual had a FICO score of 720 or higher, the chances of obtaining a loan were nil.
Today, this financial crisis has left many individuals struggling to meet their debt obligations. It is no wonder, then, that many are turning to debt consolidation, credit counseling and repair and, in some cases, bankruptcy.
While the events that unfolded over the last year are unprecedented and were a direct result of the sub-prime mortgage crisis, this report will address one aspect of this crisis: credit traps.
We will explore and offer suggestions on how to avoid such traps as: credit cards, mortgages, and loans that affect everyone from homeowners to teens. In addition, we will offer recommendations on how to pay off credit card debt; what to look for when applying for credit, mortgages, or loans; and the resources that are now available due to the government’s intervention.
The good news is that the recession will not last forever. Economists assess that we may see some positive results by the end of this year. In the mean time, we all need to begin the task of paying down the debt we have and avoid incurring new debt, with all its trappings.
Credit Cards
Universal Default Clause
One of the most insidious credit card traps has to do with banksí Universal Default clause. This clause allows banks to increase interest rates on credit cards if you make late payments to other accounts unrelated to your credit card such as utility companies, for example. Currently, there is legislation that will prohibit these excessive fees incurred by banks.
0% APR
Perhaps you have received dozens of credit card offers in the mail that invite you to apply for a credit card with a 0% APR. It is important that you read the fine print as this low rate usually expires within six months.
Interest Rate Increases
Many banks have been sending out notices to credit card holders stating that interest rates will be increased. While you may be paying your bills on time, they have nonetheless changed the terms and you can either agree or close your account. The rate increase, in some cases, has been as much as 13% and the bank has the ability to apply the increase to the entire balance, and not merely to the new charges
Late Fees, Annual Fees, and Payment Fees
Making a late payment on your credit card can increase the interest rate as much as 23%. Some banks charge an annual fee for their credit cards. They can cost up to $50.00 a year. If you make credit card payments online, there may also be a fee of up to $10 per month.
Cash Advances on Credit Cards
Banks usually send out notices with blank checks to allow for the consolidation of other debts. This is considered a cash advance and has a higher interest rate. Furthermore, since you now have the cash advance interest rate and the regular credit card interest rate, most banks will only apply payments to the cash advance or lower interest rate before it is applied to the remaining balance. Thus, the remaining balance on your card will continue to multiply.
It is important, therefore, to read the terms and agreement section of the credit card before you apply. While it has been said that the language can only be understood by lawyers, you can still ascertain what penalties, fees, and other charges will be incurred using this card.
Look for these particular sections:
* Annual Percentage Rate (APR) for Purchases
* Other APRs
* Variable Rate Information ñ See Important Notice Regarding Change in Terms
* Annual Fee
* Grace Period for Repayment of Purchases
* Minimum Finance Charge
* Transaction Fee for Purchases
* The Default Clause listed under Summary of Terms
* Late Payment Fees
* Cash Advance Fees
* Fees for Issuance or Availability
* Method of Computing the Balance for Purchases
* Non-Usage Fees
* Fees for Purchases Made Outside the US
It is widely agreed that most credit card terms are ambiguous at best. But it is still important to learn as much as you can by reading the terms and agreement section so that you will be able to avoid any traps in the future.
Credit Cards for College Students
There has been and still is an on-going campaign by companies to aggressively market credit cards on college campuses. The methods used to entice students to apply for credit cards may include free items and other coercive tactics.
Studies show that over 50% of 18-year-old college students obtain a credit card for the first time and that more than 70% actually own one credit card with a balance of more than $2000.
This is a credit card trap that requires a student to ask some very hard questions before signing on the dotted line.
* Do I need a credit card?
* Can I afford a credit card?
* How will I use the credit card?
* Will I be able to make the payments each month?
For most college students, the answers may determine whether or not they are willing and able to take on this added responsibility.
In order to avoid this trap, college students should investigate different credit card companies and consider the following:
* What is the APR rate?
* Does the card carry an annual fee?
* What is the default interest rate?
* What are the policies as it relates to Change in Terms?
* Does the card carry a Universal Default clause?
After they have researched the terms and conditions thoroughly, then and only then should they make the decision whether or not it is worth it to apply. Once the card is received, it is important to use the card wisely. This requires that the student:
* Pay off the balance each month
* Do not exceed the credit card limit
* Avoid cash advances
* Keep track of purchases and payments
Credit Cards for Teens
Debt not only affects adults, but it has trickled down to teens as well. For those teens that have not been taught how to handle money in a responsible way, they become trapped too early and incur debt too young.
From an early age, children have no concept of money or how much things cost. Therefore, educating children is the first step in learning fiscal responsibility. Beginning with the simple task of putting money in a piggy bank to opening up their first savings account to eventually having their own checking account is the basis of what will be their introduction to understanding the process.
One of the many recommendations offered to help teens become more financially responsible is to set up a prepaid credit card. Since the amount on the card will be limited, the teen will be able to make reasonable purchases. It will help them to assess the difference between what they want and what they can afford.
If they exhibit responsibility using the prepaid credit card, perhaps then they will be ready to apply for a regular credit card. But in the interim they will fully be prepared for, and become more knowledgeable about, the utilization of a credit card and know how to use it in an effective and responsible manner.
Getting Out of Credit Card Debt
Before the recession, consumer credit card debt was the highest in the nation. Today, it has become the bane of every consumer who owns a card. With banks raising interest rates, late payments and defaults have become the norm rather than the exception.
If you have credit card debt, here are some suggestions to help you pay down the debt.
1. Make a list of all credit card debt with the highest interest rate card at the top.
2. If your budget allows, double up on payments towards the first card on the list.
3. Once the top card has been paid off, use that same amount to pay off the next card.
4. Follow the same method to pay off the remaining cards.
If you cannot afford to pay off the credit cards, call each credit card company and explain your situation. They may either lower the interest rate or reduce the minimum payment.
Recent reports have suggested that seeking out debt consolidators is not a good idea. They charge a fee and utilize the same process mentioned above. Moreover, this practice will lower your FICO score which, in turn, can hurt your overall credit standing.
Bankruptcy should be the last resort. If you need assistance, talk to family members to ascertain if they can loan you the money to pay off the debt. If you own a home, you may wish to look into a refinance loan. Filing bankruptcy will be listed on your credit report and remain there for ten years.
Finally, under no circumstances should you withdraw money from any retirement fund such as a 401K or IRA. Doing so would incur a hefty penalty.
For information on consumer debt, credit reports, and other resources, check out:
http://www.myfico.com/Default.aspx
https://www.annualcreditreport.com/cra/index.jsp
http://www.ftc.gov/bcp/consumer.shtm and http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm.
Mortgages
The sub-prime mortgage crisis is a perfect example of a mortgage trap. Unscrupulous lenders would offer mortgages to clients with no money down. While the initial interest rate was acceptable to the client, eventually the mortgage was sold to a third party and the interest rate skyrocketed, leaving the new homeowner facing foreclosure.
Here are some suggestions for new homebuyers.
1. Choose a lender that is well-known, such as a bank or private institution.
2. Acquire a list of the fees that will be incurred.
3. Ask if there are any pre-payment penalties (these usually occur with ARMs)
4. Obtain the lowest interest rate possible by comparing several banks and lendersí rates.
5. Be prepared to place a minimum of 20% down.
6. Compare the adjustable rate mortgage against a fixed rate mortgage.
7. Watch out for mortgage discounts as they may include a hefty fee.
8. Research a reverse mortgage thoroughly before you consider it.
9. Inquire about insurance fees.
10. Have the home appraised by a qualified and approved appraiser.
With so many homes in foreclosure, there is another scam that has become pervasive especially among homeowners that are close to losing their home. It works like this:
Letís assume the bank has notified you that your home is being foreclosed upon. An individual offers you a deal to keep your home. He sells the home to another party and asks the owner to sign a paper which turns out to be a lease agreement for a specified period of time. When the homeowner is in a position to buy the home back, the amount is so high the original owner cannot afford to purchase the home. Meanwhile, the scam artist has made a hefty sum.
The moral of this story is to make sure the lender you are dealing with is a well-known institution with a solid record, and avoid the pressures by real estate agents.
One can make the same analogy when purchasing an auto. Dealerships have an in-house finance unit in which they pressure you into utilizing an insurance company of their choice. You may already have a very good insurance company, but if faced with a choice of saving a few hundred dollars using another car insurance company, the trap may be unavoidable.
No matter whom you deal with, research the company before you set up a meeting with them and take a few days to make your final decision.
Loans
Whether you are seeking a loan to buy a car, a college loan, or a home equity loan; there are just as many traps in this area as well.
To avoid these traps, you will need to begin research different banks and lenders to compare the following:
1. What is the APR?
2. Are there any fees if you pay off your loan early?
3. What is the insurance rate on the loan?
4. What is the interest rate and how is it derived?
5. What is the default fee?
Just as with credit cards, applying for a loan can have its disadvantages and traps. For example, a consolidation loans either through credit card companies or home equity loans prolongs long-term debt.
In addition, if you make a late payment or default, your credit rating suffers and your FICO score is reduced to the point that any future loan may be impossible.
Now that the Federal Government is taking over student and consolidation loans, go to: http://www.govloans.gov/govloans_en.portal?_nfpb=true&browseLoans_1_actionOverride=%2FBrowseAllLoansFlow%2Freport&_windowLabel=browseLoans_1&browseLoans_1currentSubType=5&browseLoans_1bid=602&_pageLabel=gbcc_page_browse_loans.
In addition, you will find information on all types of student and business loans at:
http://www.govloans.gov/govloans_en.portal?_nfpb=true&_pageLabel=gbcc_page_browse_loans&_nfls=false.
Let discuss consolidation loans for a second. Assuming you need a loan to pay off your credit card bills or other debts, it is important that in doing so cut up all credit cards and keep one just for emergencies.
Keep in mind, however, that the interest rate of the loan may be higher even though you are reducing the amount you pay each month.
Furthermore, since most banks are hesitant towards lending, your FICO score will have to be in the high 700s for the bank to even consider giving you a loan.
How do you increase your FICO score?
1. Obtain a copy of your credit report. Clear up any errors on the report. Then go the website address given in this report and obtain your FICO score. Once you have this information, you will be able to make adjustments to increase your score.
2. Call the credit card companies and ask to have the interest rate lowered. Make more than the minimum payments on credit cards each month.
3. Cut up all credit cards except one. Pay for items with cash. If you cannot afford the item, you can’t buy it.
4. Save as much as you can by re-examining the family budget. Make appropriate adjustments to it so that you can put away a specified amount each month.
5. Begin to pay down credit card debt using the example given under credit cards.
6. Avoid late payments.
7. Don’t borrow from Peter to pay Paul. In other words, don’t apply for a 0% APR credit card to pay off a high-interest rate credit card.
8. Ensure the credit card debt is less than 20% of your take-home pay.
9. Put aside at least three to seven monthís savings for emergencies.
10. Read the terms and conditions for each of your credit cards so that you know exactly what charges can be incurred based on specific conditions.
Know your rights as a consumer. Go to the Federal Trade Commissionís website at: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm. Here you will find information on debt collection agencies and their practices.
Credit traps have become more prevalent during this recession. Scammers and schemers have invaded the lives of many homeowners and seniors. Even today, the predatory mortgage lenders are out in force once again.
As the Federal Government continues to devise new methods to counteract these problems with legislation and information made available to the consumer, there will always be a scam that falls through the cracks.
To help you in this endeavor, you can find a list of free publications from the FTC at:
http://www.ftc.gov/ftc/contact.shtm#publications.
Finally, it should also be noted that identity theft has increased significantly. To this end:
* Ensure that you change your online passwords monthly;
* Never give out any personal information online or via telephone;
* Make copies of all credit cards (front and back), passports, social security cards, and keep them safe at home;
* Keep telephone numbers of all credit card companies accessible in case of theft;
* Be mindful of people behind you when using an ATM machine;
* If you purchase items online, make sure the website has the gold lock in the lower right hand corner and has encryption services;
* Use the ìFraud Alertî service available for most credit cards;
* Use only those accredited online sites such as Pay Pal and others that have the URL beginning with ìhttps.î
Thus, becoming more aware of what is going on through internet news, government websites, and the latest scams also posted on websites will give you the knowledge you need to circumvent these credit traps before they occur.
There are several factors that will determine whether or not you need life insurance. Here are some tips on how to choose a policy that is right for you.
* Who should buy life insurance? Life insurance is recommended to those who have dependents, those who are self-employed or own a business, and those who want to ensure that their surviving spouse will have enough funds to cover funeral and burial expenses as well as any outstanding debts or taxes incurred.
* How much insurance do you need? This is also dependent on several factors. In addition to the expenses already mentioned, you may want to cover education costs for the children. You may also require a supplemental safety net in case a situation arises such as illness or if you need to borrow money.
While some experts agree that most people who buy life insurance do not buy enough, others will say that most people buy too much. How much is enough is determined by how much debt has been incurred including mortgage, credit cards debt, tuition and expenses, and the needs of the surviving spouse as well as the children. Once that calculation is made, one can then ascertain the amount of coverage needed.
* What type of insurance should you obtain? There are two types: term life and whole life. Term life is insurance that is only good for a specific period of time, whereas whole life insurance has no expiration and allows you to borrow from the policy or cash it in.
Term life insurance varies in cost. Depending upon your age, whether or not you smoke, your current health, and income may inflate the cost of this type of policy. But, in general terms, term life insurance is usually affordable.
* Understanding the types of life insurance available is critical. It is recommended, therefore, that you research each type as well as the insurance companies who provide the policies. Then set up an appointment with at least five agents to obtain proposals that you can compare and contrast.
Once you have decided on the type of insurance and the insurance company, think about it before signing on the dotted line. Ensure that this policy meets all your needs.
We are all looking to find ways to increase savings during this economic recession. Reducing the cost of your home insurance policy can help in this regard. Here are six ways you can lower the costs.
1. Stay with the same insurer. You can take advantage of discounts offered by your insurer if you purchase all insurance policies with one carrier. For example, having a homeowners and automobile insurance with the same company can yield up to 15% discount on your premium.
Moreover, the longer you remain with the same insurer, the better chance you have of obtaining additional discounts. For example, homeowners who have been with a company for five years or more may qualify for a special discount.
2. Increase the deductible. While you may currently have a $500 deductible, by raising it to $1000 you can save up to 25% on your premium.
3. Add security features. By installing smoke alarms, burglar alarms, and special locks, you can save as much as 20% on your premium. To find out if your insurance company offers these types of discounts, give them a call and determine how much you may be able to save in this regard.
4. Age-related discounts. Some insurance companies offer discounts to individuals who are 55 or older and retired. Check with your company and ask if they offer such discounts.
5. Annual review of your policy. This is another way you can cut costs on your policy. If you have expensive items in your home that are covered under a floater attached to your homeowner’s plan, these items will depreciate each year and may no longer have to be covered.
6. Good credit. One of the components used in determining how much you will pay for insurance is based on your credit rating. Therefore, to keep costs down it is a good idea to ensure that you check your credit report and FICO score annually and correct any errors you detect on the credit report. Do not skip any monthly payments on credit card bills or loans, and maintain a good credit history.
In tough financial times, saving money is easier said than done. For many of us, once we’ve paid the bills and bought the essentials, there is just not much, if anything, left to save. Wouldn’t it be wonderful if we could save up at least a little money each month without even missing it? Actually, most of us can.
Some people make the effort to dig out exact change when they buy something. But the overwhelming majority of us just fork over the closest thing we have in paper money. When we get change back, we stuff it in our pockets and forget about it. Once we go home, it often ends up on the dresser. We may forget about it for weeks or months, or the kids might get it and spend it on candy or toys. Just imagine how all that change that we toss aside could add up over time.
Instead of leaving change lying about where it will get lost or pilfered, try putting it into a jar, piggy bank or some other container. Avoid spending it, and use only bills to pay for everything. If you faithfully put all your change in there, you will be surprised at how quickly it fills up. You might even find that you need a larger container if you want to save for any length of time!
Try saving your change in this manner for a year. If you have an extra dollar bill or two, feel free to throw that in as well. Just resist the urge to borrow from your fund, and let it keep growing. At the end of the year, you could have enough money to buy something nice or do your Christmas shopping. And if the entire family pitches in, you might even end up with enough money to take a vacation!
Saving change is also a good way to start an emergency fund. It will take some time, but saving up slowly is better than not having any money put away at all. Once you have built up some change, you could roll it up and put it into an interest-bearing savings account or a short-term investment vehicle to add a little more to it.
Other Ways to Save Change
If you do not usually spend cash, it is still possible to save up your change. Some consumers who keep most of their money in a checking account round their checks up to the next dollar when subtracting them in their registers. This leaves them showing less money than they actually have in their bank accounts. It takes some getting used to when balancing your checkbook, but once you get the hang of it, it is a great way to save change without actually handling it.
Some banks have also begun to offer programs that help account holders save change when using their debit cards. They round each purchase up to the nearest dollar, and transfer the difference into a savings account. Check with your bank to see if they offer such a program.
Even the most careful budgeter can waste change without even realizing it. By making a conscious effort to save your change, you can accumulate lots of extra money in a year’s time. And best of all, you will probably never miss a few cents here and there!
Credit card debt is one of the most wide spread financial problems throughout many countries of the world. The convenience of using credit cards, combined with the special offers, discounts and reward systems offered by the credit card companies make this method of paying for goods the number one favorite for hundreds of millions of people. However, irrational spending or simply gradual uncontrolled spending habits can lead to a lot of accumulated debt. Preventing this is essential, as it is much easier to avoid credit card debt problems before they grow strong, instead of battling them when they are already at maximum intensity.
The temptation to use credit cards repeatedly a fact that is also supported by the reward systems and lower monthly payments – will often lead to debt problems. Here are a few tips that will help you use your credit cards more wisely and enable you to prevent the unpleasant situations of having to pay off credit card debts: Set your budget create a framework for a monthly budget, as this will enable you to get a better sense of what your earning and spending balance is. Much notice that they simply can’t stick with the planned budget in this case you should leave your credit card at home when going shopping, and use cash instead. Try to pay as much of the balance for each month. Don’t settle for the minimum payment, as that will gradually develop into credit card debt as you are loosing quite a lot of money to interest rates.
Always remember that your credit card is a cash substitute, nothing more. You can either carry a balance, which comes with a high interest loan or you can make the minimum payments. Although the amount of the minimum payment seems insignificant (it is usually around 3% of the entire balance), this approach will gradually put you in debt. The credit card company accepts such low payments because they get their money back from keeping you in debt for an unlimited period by using high interest rates.
Many studies have been carried out on the psychology of the credit card owner. We tend to spend more than we can afford, own things that are above our financial reality levels and gratify an immediate need with a debt that might take years to pay off. Try to adapt your spending habits to your life style and earnings. If you can’t pay off the balance on a monthly basis, then you are going into a vicious circle of overspending and credit card debt. Don’t use the credit card anymore, until you pay off the outstanding balance. You should also make sure to pay it off on time, as there might be late fees and different other financial penalties that will further complicate your debt problem. Your credit record will also get damaged if your payments are inconsistent and you are often late with them.
Prevent credit card debt by making sure to keep your finances simple. Use only one or two credit cards, if possible. The more cards you have the higher are the chances that you will not be able to pay them off in time. Never pay off one credit card balance with another credit card. If this happens, you need to drastically change your spending habits and come up with a good credit card management plan. Cash advances might sound attractive, but the truth is that they come with higher interest rates and you don’t get a grace period. There are also transaction fees to worry about.
The credit industry is extremely dynamic, and credit card issuers are always trying new ways to convince more people to sign up with their services. Different forms of rewards, life insurances, protection plans or point systems were created to make the credit card plans more attractive. Make sure you don’t let your emotional side dictate when you make a credit card related decision. Getting free gifts or free air miles sounds amazing, but is it really worth it? Try to base your choice on hard facts and a realistic financial plan, not on an advertising created fantasy.
Filing for unemployment can leave you feeling like you’ve been raked over the coals. But when you are approved for benefits, it is all worthwhile. Its not always over when you get approved, though. Your former employer has the right to contest your claim, and if he exercises that right, you’ll have to attend a hearing to prove that you are eligible to receive benefits.
The very thought of an unemployment hearing is intimidating. What chance does a former employee have against a company that has been through all of this before? Actually, if he was honest when filing for unemployment and was not terminated for cause, there is a good chance that he will win.
The key to winning an unemployment hearing is being prepared. Here are five things you can do to make sure you are ready for such an important event.
1. Consider working with a lawyer. If you can not afford one, your state is Legal Aid office may be able to set you up with one. Having an attorney who is knowledgeable about employment law will give you a better chance of keeping your benefits.
2. Write to the company and request a copy of your personnel records. Send your request by certified mail, with a return receipt requested. If the company sends the documentation, it may be used in your defense. If they refuse to send it or do not do so in a timely manner, that is a strike against them in the eyes of the judge.
3. Write down a statement of the facts of your case as you understand them. The judge may wish to see this statement. Even if he does not, bringing it to court can help you remember key arguments and prevent misstatements.
4. Ask witnesses who can legitimately back up your story to testify. Getting former co-workers to testify can be difficult, because they may fear losing their own jobs. But if you can convince them to do so, it could add credibility to your case.
5. Prepare questions to ask your former employer, or help your attorney prepare them. Asking the right questions will put your ex-boss on the defensive, forcing him to admit to errors or wrongdoing.
Unemployment hearings may be held in person or over the phone. Either way, it is important to be punctual and act in a professional manner. If the hearing is in person, be sure to dress appropriately.
Some individuals assume that a hearing will be the end of their unemployment benefits. But that is not always the case. Even if you fear that you will lose, it is important to attend the hearing and present your case. If you do not, you will not only lose your benefits now, you could be barred from receiving them for several years.
There was a time when road trips were among the best vacation options for those on a budget. But with rising gas prices, they have become much more expensive. Even so, many vacationers still enjoy hitting the road and seeing the sights along the way. When planning a road trip, it is crucial to estimate gas costs as accurately as possible. If you just guess, you could find yourself halfway to your destination and out of money! Here is how to determine approximately how much you will have to spend on gas.
1. For at least a couple of weeks, keep track of your gas mileage. The easiest way to do this is to fill up and reset your trip odometer. The next time you get gas, fill up again and write down how much gas it took to fill up and how many miles you drove.
2. Divide the miles driven by the amount of gas used. For example, if you drove 200 miles and it took 10 gallons to fill up, you would divide 200 by 10 to get 20 miles per gallon.
3. Remember to fill up each time you get gas and figure your gas mileage. Once you have done this a few times, add up the results and divide the total by the number of times you filled up to get your average gas mileage.
4. Figure out how many miles you will be driving during your vacation. This is easy to do with online tools such as Google Maps. Just put in your starting point, add your destinations in order, and you will see a map with the best route and the total mileage.
5. Divide the total number of miles you will travel by the miles per gallon figure you came up with. Multiply that number by the price of gas per gallon, and you will have a good idea of how much you can expect to spend on gas.
Keep in mind that gas prices fluctuate. By the time you take your road trip, gas prices could have gone up or down. They will also vary from city to city. So it is smart to budget a little bit extra, just to be sure.
Saving Money on Gas
There are some things you can do to keep your fuel costs as low as possible. Here are a few:
* Seek out the cheapest gas prices along the way. Check prices in the towns and cities you will be passing through on a site such as GasBuddy.com, and try to fill up at the least expensive stations.
* Use cruise control when practical. This will keep you at a constant speed, which can seriously improve your gas mileage.
* Avoid speeding. Not only can this get you an expensive ticket, it is also bad for gas mileage. The optimal speed for fuel efficiency is 55 mph, and when you go faster than that you are using more gas than you should.
* Avoid abrupt stops and starts as much as possible. Try to coast to red lights so that they will have time to turn green before you reach them. When you have to stop, accelerate slowly and steadily when the light turns green.
* Get a tune-up before you leave. Things like replacing air and fuel filters and making sure your tires are inflated properly can help boost your gas mileage.
Creating a gas budget for your road trip can help avoid unpleasant surprises along the way. And if you drive with fuel efficiency in mind, you might even use less gas than you had planned.
