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| MONEY & FINANCE Deuteronomy 8:18(KJV) - But thou shalt remember the LORD thy God: for it is he that giveth thee power to get wealth. God must always be our first priority. God is not opposed to riches, he is the originator of finacial blesssings
A Buying self test Before committing to a major purchase, give yourself a test to determine if yur purchase is a wise one. 1. Do I really need this? 3. Can I get a better price ? 2. Do I need this now? 4. Is this item of good quality? 5. Will I still want this item next year? 6. What am I willing to give up for this item? If you have a question about any of these questions, think again before purchasing this item. Pray and ask God's quidance on every purchase. Usually by the time you think about it, there is may be other things you need more than this item. GETTING AQUAINTED WITH MONEY AND IT'S TERMS
Bartering - The trading of one good for another. This requires the double Coincidence of wants, a condition met when two individuals each have different goods that they other wants. Commodity Money - Money that has an intrinsic value, that is, value beyond any value given to it because it is money. An example of this would be a gold coin that has value because it is a precious metal. Compound Interest - Interest that is paid on a sum of money where the interest paid is added to the principal for the future calculation of interest. Click here to see the Formula. Consumption - The purchase and use of goods and services by consumers. Currency - The form of money used in a country. Defaulting on the Loan - When a borrower fails to repay a loan leaving the lender without the money loaned. Demand for Money - The amount of currency that consumers use for the purchase of goods and services. This varies depending mainly upon the price level. Equilibrium - The state in a market when supply equals demand. Fiat Money - Money that has no intrinsic value, that is, its only value comes from the fact that a governing body backs and regulates the currency. Fischer Effect - The point for point relationship between changes in the money supply and changes in the inflation rate. Inflation - The increase of the price level over time. Interest - Money paid by a borrower to a lender for the use of a sum of money. Interest Rates - The percent of the amount borrowed paid each year to the lender by the borrower in return for the use of the money. Liquidity - The ease with which something of value can be exchanged for the currency of an economy. Medium of Exchange - An item used commonly to trade for goods and services. Money Supply - The quantity of money in an economy. In the US this is controlled through policy by the Fed. Nominal GDP - The total value of all goods and services produced in a country valued at current prices. Nominal Interest - The percent of the amount borrowed paid each year to the lender by the borrower in return for the use of the money not taking inflation into account. Nominal Value - The value of something in current dollars without taking into account the effects of inflation. Output - The amount of goods and services produced within an economy. Price Level - The overall level of prices of goods and services in an economy. This is used in the calculation of inflation rates. Purchasing Power - The real value of a dollar. This describes the quantity of goods and services that can be purchased for a dollar, taking into account the effects of inflation. Quantity Theory of Money - The theory that says that the value of money is based on the amount of money in circulation, that is, the money supply. Real Interest - The percent of the amount borrowed paid each year to the lender by the borrower in return for the use of the money adjusted for inflation. Real Value - The value of something in taking into account the effects of inflation. Store of Value - A good that holds a value in such a way that its price is fairly insensitive inflation. Unit of Account - Something that is used universally in the description of money matters such as prices. The unit of account most commonly used in the US is the dollar. Value of Money - The purchasing power of the dollar. The amount of goods and services that can be purchased for a fixed amount of money. Velocity - The speed with which a dollar bill changes hands. The higher the velocity of money, the quicker that a given piece of currency will be traded for goods and services. Wage - The amount of money paid to workers by employers valued in current dollars.
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| DEBT MANAGEMENT Rom 13:8, ¶, Owe no man any thing, but to love one another: for he that loveth another Debt is so very easy to get into. A credit card here, a credit card there. Unpaid or late payment, store credit cards can quickly lead to high interest rates and low credit rating. Credit is often considered negative; however, most of us need to use credit at some point in our lives–to purchase a home, finance a college education, or buy a car. Not all credit is created equal, and it’s important that you use credit, especially credit cards, wisely, to ensure that you won’t find yourself in debt beyond your means. Credit cards essentially offer a high-interest loan for you to purchase just about any item you want within your credit limit, and there are some steps you can follow to make sure you don’t get into credit card debt. Understand how credit cards work Credit cards offer consumers the ability to conveniently purchase items without paying for them immediately. This can definitely work in your benefit if you pay the card off monthly, because you are essentially using the bank’s money interest-fee for up to a month (depending on your grace period). You also get a variety of other benefits, which can include a record of all of your purchases, reward points, consumer protection, and convenience. But, fail to pay off your entire balance in one month, and you’ll quickly notice the benefits fade away. Generally, if you carry a balance, your grace period disappears and you’ll find yourself paying interest on your purchases starting on the day you make them. Interest compounds (i.e., you’ll pay interest on interest owed) on credit cards, so before you know it, you could owe more interest than principal. Using restraint in using credit cards If you want to use credit cards wisely, only make purchases that you know you can afford. You should have enough money in the bank to pay off the purchase when the bill becomes due. Tempting as it is to buy the things you want now hoping that you’ll have enough money in the future to pay them off, living on credit is an expensive, and uncertain, habit to get into. In fact, you may find that you’ve paid the bank more money in interest than the item actually cost! In addition, to avoid late fees or interest fees, make sure you pay off the card well before the due date. Using your bank’s Web site to pay your bill will help ensure your payment is received on time. If you find yourself unable to restrain from reckless spending or unable to make payments on time, consider using a debit card that’s linked to your checking account. By using a debit card, you’ll still have a record of your purchases but won’t pay interest or late fees. DON'T BE CHAINED TO DEBT SAY NO WHO'S IN COMPETITION FOR YOUR INTEREST RATE DOLLARS? IF IT SEEMS TO GOOD TO BE TRUE IT IS TO GOOD TO BE TRUE If you are creditworthy, the competition for your interest rate dollars is fierce. Each year, millions of credit card solicitations are mailed in the U.S.—advertising low introductory rates and bonuses for making purchases. If you are tired of all that mail or just plain confused by all of your options, you have the ability to greatly reduce the number of credit card and loan solicitations you receive. To “opt out” of many mail solicitations, visit the Direct Marketing Association’s (DMA) Web site. The DMA also has a service to help you reduce unsolicited commercial emails. Your online request will be effective for one year. For more information on how to stop unsolicited email spam, review your state’s laws at SpamLaws.com. In addition to the DMA, the three credit bureaus also sell lists to marketers. To opt out of their lists, send a letter to each of the three major credit bureaus: Equifax, Inc.
Options
PO Box 740123
Atlanta, GA 30374-0123 Experian
Consumer Opt-Out
701 Experian Parkway
Allen, TX 75013 TransUnion
Name Removal Option
P.O. Box 505
Woodlyn, PA 19094 To empower consumers to stop most unwanted telemarketing calls, the Federal Trade Commission adopted a series of amendments to the Telemarketing Sales Rule (TSR) including the development of a National "Do Not Call" Registry. Even if you contact all of the above organizations, it is likely you will still receive some unwanted solicitations. If a telemarketer calls, ask them to put you on their “do not call” list. Under federal law, they are required to comply. If they continue to call you can sue them in small claims court for $500. Don’t forget to destroy unwanted credit applications you receive by mail. Stolen mail could lead to the opening of a new account in your name; one of the more serious and most costly types of identity theft. HOW MANY EGGS ARE IN YOUR NEST ?  ARE YOUR NEST EGGS SECURED? Things You Need to Know1. "How should I track my personal spending?"
The simplest way to track your spending, especially your cash, is the low-tech way, with a notebook and a pen. By carrying around the notebook with you, you can actually track exactly where every dollar is going—from a small coffee on your way to work to a spending splurge at the mall. If you’d prefer, on a daily or weekly basis, you can transfer your handwritten notes to a computer spreadsheet. 2. "What financial reports should my family have?"
Each family should spend some time tracking their financial progress, and the best way to do that is to develop a few financial reports that you’ll update monthly or semi-annually. These reports include a family budget and a balance sheet. 3. "When do I create and update my personal budget?"
Individuals should start budgeting and tracking expenses as soon as they begin their first full time job. Revisit your budget every few months, and whenever significant life changes occur, such as raises, marriage, the birth of children, and divorce. 4. "What financial professionals should I consider working with to help manage my personal finances?"
If you find that you need help with your finances, professionals such as tax advisors, credit counselors, financial planners, and lawyers can help. Before working with any financial professional, be sure to check their credentials. You may choose to ask your friends and family if they have any trusted financial partners that they recommend. Ask specific questions about their history and areas of expertise. Finally, be sure that you are comfortable with the advisors you choose; ideally, you will be financial partners for life. 5. "Why is a personal balance sheet important?"
A balance sheet calculates your net worth by comparing your financial assets (what you own) with your financial liabilities (what you owe). The difference between the two is your personal net worth. Don’t be discouraged if your net worth is negative—keep in mind that this should be an accurate depiction of your financial situation. Setting goals is much easier once you know what your current net worth is.
BUDGETING YOUR WAY BACK TO A HEALTHY PLACE IN YOUR FINANCES
 Some household expenses come every year—whether you’re ready or not. For example, both holiday and tax debts are periodic, meaning they are not part of regular monthly expenditures. In that regard, they join the ranks of other expenses such as auto registrations and vacations. Often, we know when these events will occur, but still fail to plan for them. Unfortunately, when these expenses arise, many people rely upon credit to extend their monthly incomes; using credit this way is one sign of pending financial trouble. To avoid this scenario, follow these tips when planning for periodic expenses: Determine what you spent last year for periodic expenses
Assume that you will spend close to the same amount this year. Don’t hide expenses
Just because you don’t list an expense doesn’t mean you won’t have to spend money on it. Don’t forget things like back-to-school expenses, auto repairs, routine maintenance, and birthday gifts. Remember that some items, like auto insurance premiums, may occur more than once a year. Expect the unexpected
Cushioning your savings account for those “unplanned” expenses can make the difference between a minor financial setback and a major financial disaster. When you have a realistic idea of what you will need to spend on periodic expenses during the year, divide the total amount by 12 and save that amount each month. Designating a savings account for this purpose may help to organize this process. Check with your financial institution, you may be able to have the amount automatically transferred to save you the hassle. Accelerate your savings schedule by including all of your "windfall" money. This “free money” includes increased income from a pay increase, birthday gifts, insurance settlements, escrow overages, and inheritances. Since this is extra money that you don’t normally rely on, you won’t miss it if you deposit it directly into your savings account. Finally, don’t forget to revisit your overall spending plan several times throughout the year to make sure you are on track. Common sense and flexibility are important keys to financial success | | Use the financial dictionary (ABOVE)to find the definitions to most financial terms today. The best way to start on the right path to financial wellness is to learn more about personal finances. Here are some of the most common terms you’ll encounter as you learn more about managing your personal finances. Asset
A personal financial asset is something you own, and includes cash, savings accounts, and personal property. In a balance sheet, assets such as the value of your home are offset by liabilities, such as your current mortgage. Balance sheet
A balance sheet is a financial statement that shows your financial assets (such as your savings account and home equity) against your financial liabilities (such as your mortgage, credit card debt). Budget
A budget is a document that shows your spending goals for the month or year. Compound interest
Compound interest is interest that is earned on interest that was earned in prior periods. For credit cards or other loans, compound interest is interest charged on interest that was charged in prior periods. Financial planner
A personal financial planner can help you with your personal financial situation, including investments and savings goals. Fee-only financial planners are paid for the appointment, and do not receive a commission for your purchases. Gross income
Gross income is the total amount of money that you make, before subtracting expenses and taxes. Liability
A personal liability is the amount that you owe. For example, many households have their home loan, car loans, credit card bills, and student loans as their liabilities. Net income
Net income is your earnings after subtracting out expenses (for self-employed individuals) and taxes. Net worth
You net worth is the difference between your financial assets and your financial liabilities. If you are in debt, your net worth is likely to be negative. Tax advisor
A tax advisor is a tax professional who can help you in planning a tax strategy, and can prepare your tax returns for you. Teaser rate
A teaser rate is an introductory interest rate offered by credit card companies. When the introductory period is over, the rate typically increases dramatically. LOAN TERMS YOU SHOULD KNOW If you have multiple loan options, shopping for the best and cheapest loan can be complicated, and there are many different factors you’ll have to consider. With different loan terms, time limits and monthly payments, finding the best deal can take some work. There are some basic things to consider and analyze before choosing the perfect loan for you. Loan term in years Compare the different loan terms, and when possible, choose the shortest loan term available to you. While a shorter loan term will likely increase your monthly payments, you will find yourself paying a lower amount of overall interest. If for some reason, the shorter loan term comes with a higher percentage rate, then you may consider taking the longer-term loan but making larger payments, as long as there isn’t a prepayment penalty. Interest rate/Annual percentage rate (APR) The interest rate and/or annual percentage rate (APR) is one of the most important factors to consider when determining which loan is best. For some loan types, comparing interest rates is appropriate, but the APR is a better number to review. The APR factors in fees, including points and origination fees, while the interest rate is just the basic interest charged. For mortgages, lenders are required to tell you the APR, and comparing the APRs is a better way to accurately determine which loan will cost you more in the long run. However, for variable rate loans, there’s no easy way to compare interest rates. In most cases, the comparison comes down to whether you are comfortable with the variability in interest over the loan term, as well as the current monthly payment. Balloon payments Some loans have a loan term that is shorter than the amortization term. Those loans generally have a balloon payment due that is essentially the remaining money owed at the end of the loan term. If you are analyzing a loan with a balloon payment versus one that doesn’t, keep in mind that you will need to have that money available to pay when it becomes due, or you’ll need to refinance. Total amount owed The total amount owned includes the original amount borrowed plus interest and fees. Try to choose the loan with the least amount of money owed over the entire term, if you can afford the monthly payments. Monthly payment Finally, look at the monthly payments to see the amount you’ll need to pay each month. While some loans with variable interest rates or balloon payments may provide a lower monthly payment than other loans, make sure you are not getting in over your head. If you are stretching yourself financially with an interest-only payment or other type of low monthly payment loan, re-evaluate exactly what you can afford. In general, take the loan with the lowest interest rate/APR and loan term as long as you can afford the monthly payment. 1. “How should I choose a credit card and credit card company?” There are many different credit card options out there from affinity cards to rewards cards. When choosing a credit card, the most important thing is to know exactly how you’ll plan to use it. The perfect credit card for someone who maintains a balance is probably the wrong card for someone who pays his or her balance off every single month. Once you know how you’ll use your card, you should compare some of the features of various credit cards to see which one will suit your financial needs. Remember, when you agree to the terms of a credit card, you are entering into a legally binding document. 2. “How can I review my credit history?” When you are getting ready to apply for a loan, the first step you should take is to request your free annual credit report and make sure that all of the information contained on the credit reports is accurate. While requesting a credit score does cost extra money, knowing your score may be worth the price when making a major purchase because you’ll know exactly where you stand from the lenders point of view. Borrowers with a higher credit score are more likely to obtain a favorable interest rate and borrowing terms. If your score and credit report aren’t perfect, you may consider waiting to improve your credit before proceeding with your loan applications. There are some things you can do to improve your credit rating and following those steps may help you get a better interest rate. 3. "Is consumer debt always bad or can debt be used responsibly?” Credit is often considered negative; however, most of us need to use credit at some point in our lives–to purchase a home, finance a college education, or buy a car. Not all credit is created equal, and it’s important that you use credit, especially credit cards, wisely, to ensure that you won’t find yourself in debt beyond your means. Credit cards essentially offer a high-interest loan for you to purchase just about any item you want within your credit limit, and there are some steps you can follow to make sure you don’t get into credit card debt. 4. “Why should I be concerned with mortgage or credit card loan terms?” When obtaining a loan or a credit card, understanding the terms will help you evaluate your options so you can choose the best loan for you. Differences in credit terms, including interest rates, grace periods, and fees, can dramatically change the total amount of money you’ll owe over the life of the loan. 5. “Which credit laws will help me correct billing errors?” The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) can help. The Fair Credit Billing Act (FCBA) covers credit card accounts, but not installment loans, and requires that credit agencies and lenders investigate and fix any billing errors that have occurred on your account. To be protected by the FCBA, you must write to the creditor directly explaining the issue. Send it to the address they’ve provided for billing disputes, and make sure you send it within 60 days of the mailing date of the billing statement with the error. The Electronic Fund Transfer Act (EFTA) covers electronic fund transfers, such as authorized fund transfers, debit card transactions, and ATM transactions. The process to correct any of these issues is similar to that under the FCBA. If you notice an error on your statement, you must write a letter to the bank within 60 days of the mailing date of the statement containing the error. Provide your name, address, and account number, and explain the issue in detail, including the date, vendor, and dollar amount. The financial institution is required to investigate the issue, and must send the results of their investigation to you in a letter. CREDIT LAWS THAT PROTECT WOMEN The Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, and age, does seek to protect women. Every company that either extends credit or makes credit decisions must comply with the ECOA. The ECOA does not allow potential creditors to consider gender in credit-making decisions. In addition, under the ECOA, creditors cannot discount a woman’s income, or consider that a woman of child-bearing age may at some point leave her job. Under the ECOA, reports to credit bureaus must be made in the names of both husband and wife if both use an account or are responsible for repaying the debt. Some women who are divorced or widowed may not have separate credit histories because their credit accounts were listed only in their husbands' names. But divorced and widowed women can still benefit from such a record. Under the ECOA, creditors must consider the credit history of accounts women have held jointly with their husbands. Creditors must also look at the record of any account held only in the husband's name if a woman can show that it also reflects her own creditworthiness. If the record is unfavorable—for example, if an ex-husband is a bad credit risk—she can try to show that the record does not reflect her own creditworthiness. | |
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