Knowing the Limitations of Using Your Credit to Leverage Your Finances

It is a common custom for Americans to resort to credit when we are in need financially. However, we still are running out of money. This is because most people don’t understand all of the limitations associated with credit and the credit system.

Because the credit system allows most people to make purchases when they don’t have cash, people tend to spend more money than what they can afford. This results in a whole bunch of debt and very little money to pay for it. Even though most banks strictly enforce their credit limits, a lot of people seem to slip by them. And, with the over the credit limit fees, you can be sure that someone who is at or near the credit limit, when coupled with interest, be sure to incur extra fees on top of their purchases.

You need to be aware of all of your limitations when you use credit because using credit will affect not only your debt, but your credit score. And, a credit score is very vital in making sure that you are successful financially. Most people still remain ignorant to this fact.

There are many types of credit scores. But, the basis of them remained the same. Credit scores only show your credit worthiness as it relates to borrowing money and handling your finances. When coupled with your credit report, your credit score has just about all information on you about your past credit experiences: your payment histories, how long you’ve had each account, how many times you’ve been late on certain accounts, etc.

When lenders look at your credit score, they actually make determinations based upon comparing your credit history and payment experiences with other borrowers that have similarities. Each time you have certain factors that are above average your credit score is given points. When these factors are below average points are subtracted. At the end, these points are added up to give the lender a brief synopsis on how well your credit history is. Usually, your credit score is a three digit number ranging from 352 850.

In order to maintain a good credit score, it will take hard work. That is why it is very important to know your limitations upfront so that you can avoid any type of complications in the future. Also note that you are bound by the terms in your contracts, whether they be installment loans or credit cards. Look at the limitations and determined how accepting the terms of this credit will affect your overall credit score.

How a Woman Can Maintain Her Finances After a Divorce

Sometimes, we don’t even think far enough in the future or even consider things like a divorce affecting our livelihood. Now that we are faced with this situation, we feel alone and out of order. After all, you and your spouse were each responsible for specific responsibilities. Now you find yourself doing them all alone. How can a woman survive such a dramatic change in her life?

First of all, you’ll want to take control of your emotions. You must believe that you have the ability to make right choices and lead a happy life, because you do. Reality is that you control your emotions by what you think about.

You can view this situation as negative and positive. Of course, the negative part of the situation may be that your marriage has ended, but the positive part is that you may now take control of your finances.

The second thing you want to do is make a list of all of your current assets and liabilities. If you are planning to receive more money after the divorce proceeding, you can calculate that amount in later. At this point, you just need to have a clear view of what you have in your possession right now.

Once you’ve reviewed your assets. You’ll begin to create budget for yourself. It’s not as difficult as many would have you believe.

Just write down you total income for the month.

Next, write down separate amounts of all your monthly bills. For example, you would make a list which would include different headings such as rent, light bill, phone bill, etc. you should also include a topic to put into a savings account that you will contribute to once a month.

Once you’ve done this, subtract your total amount of monthly bills and savings from your monthly income.

The remaining amount you should subtract food, miscellaneous spending, which is money to spend on an unexpected event, like a birthday or craving for a specific food, or a spontaneous night on the town. Money should be used to supply your daily needs and to have some fun with every now and then.

Your Monthly Review may look like this:

Total income for the month – $1500.00

Rent – $750.00

Light bill $60.00

Phone Bill $75.00

Car payment $200.00

Savings $50.00

Total – $1135.00

Then subtract the total $1135.00 from the total income, $1500.00.

You have $365.00 left for groceries and your miscellaneous spending. You’ll want to put at least $100.00 a month in an envelope for emergencies that may come up unexpectedly.

If you find that you have a substantial amount left over after you completed your monthly review, you may want to put it in a Roth Ira or talk to a clerk at a bank to find out what other options you may have available to you.

Also, don’t be afraid to ask questions. Take charge of your situation. If you don’t feel comfortable about making a quick decision at a bank, ask to take some paperwork home to read it at your own pace and call them from home with your inquiries.

If you find that you are coming up short every month. You may want to get a job or use your skill or talent (everyone has one), which will allow you to earn more money every month. You could baby-sit for the neighborhood children, style hair or give manicures for a small fee. Whatever your talent, it can be used to get wealth. If you’re unsure what your talent is, feel free to ask a friend what they think you are good at, they’ve probably already noticed it.

Above all, don’t fret. You are not the first person that has faced this situation. Remember that many others exactly like you have faced this situation and have overcome.

It has always been beneficial for an individual to take control of their finances whether they are married or not. It affords them the ability to organize their money and their well-being.

Realize that you are a wonderful person with talents and abilities. If a person does not want to be with you or around you, it’s their loss. Never forget that.

Should Married Couples Share Their Finances or Keep Their Money Separate? Part 1

Whether you are just getting engaged, in the honey moon stage, or have spent a life time together; the question of combining money is extremely important for most to make and only a passing thought for others.

The tradition of automatically pooling funds can be hard to break. It works well for some couples but the discussion of whether to pool your funds, keep them separate or a combination of the two is often a very difficult subject to approach.

Money problems are often cited as the most common trigger for arguments and one of the top reasons that married couples get divorced. Before walking down the aisle couples should spend a great deal of time discussing their feelings about money and deciding how they will handle finances from paying the electric bill to vacations to retirement. At the same time they should decide whether or not they will share their money, in whole or in part or not at all.

While the ultimate decision varies from couple to couple – many financial advisers recommend that married people each have some separate finances (including bank accounts and credit cards) and have a joint account for certain shared expenses (such as mortgages, child care, groceries, investment goals, etc.).

Separate Not Secret – Please keep in mind that separate does not mean secret. Avoid financial secrets as any secrets can be devastating to a marriage.

Some of the Basic Reasons to separate accounts include:

From simple things like:

Avoiding the frustration when your spouse forgets to tell you about checks written, ATM withdrawals, charges on your credit cards, or an eBay addition.

Protection – Protects at least the separate portion of your money from these factors as well as when there are more difficult issues that can arise when a marriage goes sour.

To more complicated Financial Issues:

Examples include those that are brought into the marriage, such as:

Issues from previous marriages, child support, alimony,

When one spouse brings a ton of debt into the marriage,

If one spouse is a spendthrift, a gambler, impulse buyer,

If one spouse gets the “its my money” bug. or

If one spouse brings a great deal of money, property or an anticipated inheritance in. (This is a good time to ask “Do you need a pre-nup?”)

Be sure to look out for Part 2 of this article to learn more and to help you decide if sharing all of your money with your spouse is right for you.

If you have feelings as to whether or not couples should share finances or example of good or bad experiences related to sharing (or not) finances please feel free to share them below in the comment section. The more people know about the good and bad that can occur the more likely they will be able to make a comfortable decision as to how to handle their own situation.

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5 Ways to Organize and Stay on Top of Your Finances in 2011

If 2011 is going to be the year you get ahead financially, you need a plan to stay organized and on top of your bills and cash flow. Missing bill payments, spending without a budget and not monitoring your bank accounts can end up costing you in the long run, and will make it harder to keep your financial house in order. Getting your bills and cash flow organized is essential for staying on top of your finances in 2011m and these activities can also help you budget better all year long.

Use these five tips to stay organized and on top of your finances in 2011:

  1. Create a budget blueprint. You can use financial software to make a budget, or just create your own using your favorite spreadsheet software. The goal is to create a basic outline of your cash flow – a comprehensive list of your monthly fixed and variable expenses, all of your income sources, and any big purchases you expect to make within the next six to twelve months. Use this blueprint as a guide and reference it regularly (see #2) to keep your finances organized.
  2. Review and revise your budget at least twice per month. Keep a close eye on your expenses and make sure all of your bills are paid on time by reviewing your budget or cash flow statement at least twice per month. Make sure you write down confirmation numbers of bills you paid online so that you can correct any mistakes easily.
  3. Pay your bills on a schedule. If you can’t pay bills as soon as you receive them, at least have a plan to pay them on a specific date – well before the due date. One of the easiest ways to organize and stay on top of your finances in 2011 is by creating a bill payment schedule or calendar. Keep this calendar or schedule in a visible place so that you never miss a bill payment again.
  4. Create a monthly checklist of luxury or extra expenses. Are you planning on purchasing a big-ticket item this month? Are you looking to splurge on something for a special occasion? Create a list of these “upcoming” expenses so that you can add them to your budget and keep track of your expenditures. Forecasting your expense in this way can help you better organize your finances and may also prevent you from overspending.
  5. Open at least one checking account at a local bank. Even if you do most of your banking online, stay organized and don’t worry about check cashing by having an account at a local bank. Open a checking account at a local bank so that you can get an ATM fee-free debit card, and also cash your checks without having to pay a fee. Make sure you understand what your limitations are with this account and that you understand the minimum balance you have to maintain in order to avoid fees.