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Figure Out How to Save Money

Figure Out How to Save Money

Figuring out How to Save Money


No matter what financial situation a person is in, it is always a good idea to try to save money. However, it is often difficult to figure out how to save money. Whether it is saving money for a retirement fund, or just trying to keep a few extra dollars, having extra money and being a careful spender is important in order to obtain financial success. 
Here are some helpful tips to help you figure out how to save money.

How to Save Money on Transportation
• New cars
o Choose a model that has a low purchase price and a low depreciation, insurance, gas, maintenance, and financing cost. New car guides can often provide this information.
o After choosing a model, go comparison shopping with several dealers both over the phone and online.
• Used cars
o Use a car guide, such as a “bluebook” to help compare the average retail price of the car with what the seller is asking.
o Have a mechanic check the car to find any potentially expensive problems.
• Car leases
o When leasing a car, consider the price, trade-in allowance, monthly payments, down payments, and any other fees that will be involved.
• Airline fares
o Look at internet travel sites and airline sites online to find special deals.
o Compare major carriers and low-cost carriers.

How to Save Money on Insurance
• Car Insurance
o Make sure a new policy is already in effect before cancelling an old one.
o Purchase insurance from a licensed, low price insurance. Call at least four of these agencies to find the best deal.
• Life Insurance
o Buy a term life insurance policy for just the protection without investments and savings services.
o When buying a universal life, whole life, or other case value policy, anticipate holding the plan for at least 15 years. Cancelling these plans early on can double the life insurance cost
• Homeowner/Renter Insurance
How to Save Money on Banking/Credit


• Debit Cards and Checking Accounts
o Use a free checking account that does not have a minimum balance requirement.
o Some banks provide lower checking costs through either direct depot or ATM use only.
• Credit Cards
o Send payments 7-10 days in advance to avoid late fees and increases in interest rates.
o If the entire bill cannot be paid off, switch the balance to a credit card with a lower APR.
• Savings Product
o Use a bank that is insured by the Federal government.
o Compare fees and rates of different banks and financial institutions.
o Consider U.S. Savings Bonds or Certificates of Deposit to earn the highest return.
How to Save Money on Housing Needs


• Buying a Home
o Try negotiating a lower sale price through a buyer broker working for you and not the seller.
o Have a home inspected before purchasing it.
• Renting a Home
o Find buildings and inquire about the availability.
o Do not sign a lease until you are sure you can be responsible for the monthly payments as agreed upon.
• Home Improvement
o Look at established licensed contracted who give fixed-price bids for jobs.
o Do not sign contracts that require a full payment before finishing the work.
How to Save Money at the Store


• Food
o Shop at lower-priced food stores. Smaller convenience store are more likely to have higher prices.
o Compare the unit price of similar products and choose those with the lower one.
o Take advantages of sale items.
o Buy basic ingredients instead of pre-packaged or ready-made food items.
• Prescriptions
o Use generic equivalents of drugs when possible.
o Call a pharmacy in advance to ask for a price of a medicine.
• Clothing stores
o Check online for any coupons or promotions the store may have.
How to Save Money for Retirement
• Keep putting away money regularly and stick to a plan.
• Understand your retirement needs.
• Put money towards an employer’s retirement savings plan
• Do not touch retirement savings.
• Learn about an employer’s pension plan.

Frugal Living

Frugal Living

Helpful Tips for Frugal Living


Frugal living may sometimes seem like a pain, but getting into the habit of saving money can add up quickly. The saved money can be invested, help pay off debt, or just be saved. To start off a new life of frugal living, here are some helpful hints to get into the swing of it.
Frugal Living and Transportation
• Buy a used car instead of new.
• Just use one car.
• Buy a used car with a low price, low depreciation, and low expenses.
• Carpool or take public transportation.
• Try to walk or bike when possible.
• Consider train travel instead of air travel.
• Shop around when renting a car.
• Find cheaper accommodations when traveling.
• Find positions that will allow you to telecommute.
Frugal Living and Houses
• Buy a smaller home and live within your means.
• Rent instead of owning a home if the cost of buying is too much. Money can be saved while renting which can be invested later.
• Find good contractors who provide fixed-price bids for house repairs.
• Make sure to understand all fees and payment involved in a home before agreeing to them.

Frugal Living and Food
• Purchase sale items at the store.
• Buy basic ingredients rather than ready-made or pre-packaged items.
• Compare unit prices of similar products.
• Eat out less. Packing lunch and snacks is a good alternative.
• Join a food co-op.
• If eating out, look for discounts or specials in advance.
• Eat sweets or drink alcohol in moderation.
• Instead of drinking juices, teas, or sodas, drink water instead.
• Cook food ahead.
• Eat less meat.
Frugal Living and Clothes


• Try to have a more minimalist wardrobe with pieces that go match well.
• Avoid being in situations where window browsing can happen.
• Stop impulse shopping.
• Only purchase bargain clothing, and only do it when it is necessary.
• Look for any online coupons or promotions that may be available.
Frugal Living and Entertainment
• Get rid of cable.
• Use a library card and borrow books and movies.
• Look up free entertainment, for example, days of free admission to a museum.
• Use coupon sites to take advantage of special deals for various activities.

Other Tips for Frugal Living
• Cut off a cell phone line.
• Save energy and gas to have lower monthly bills.
• Learn to trim or cut your own hair.
• Wash clothes less frequently and let them air dry.
• Make an attempt to stay healthy as a preventative measure.
• Purchase generic prescriptions whenever possible.

Compound Interest

Compound Interest

What Is Compound Interest?


Simply put, compound interest is the interest that is earned on interest. When interest is put on a principal, it adds to the total sum of the principal. The next time interest is put on the value, it is including the principal as well as the previously earned interest, which becomes compound interest.  This is different from simple interest, where the interest is cannot compound since it is not included in the principal.
A compound interest rate relies not only on the rate percentage, but also the frequency of compounding. When calculated, it can give the yearly rate of compound interest, also known as the annual percentage rate or effective interest rate. Not only does compound interest applies to certain savings, such as the balance in a bank account, but it can also be used on a loan.
In legal contracts involving compound interest, the compounding frequency must be disclosed. The rate can be annually, semiannually, quarterly, monthly, or even daily. The periodic rate is one way to look at the effect of compound interest.
This is the interest that is charged for the period and then divided by the principal. As mentioned, the effective annual rate is another effective way to look at the rate of compound interest in order to see the total accumulated interest of a year divided by the principal value.
Effective annual rates are a more useful way to measure and compare compound interests because they help normalize the different uses of compound interest rates and allow for easy comparison
In order to calculate compound interest, a simple equation can be used. The total amount accumulated is equal to the 1 + the percentage of the annual rate of interest, all raised to the power of the amount of years in question and then multiplied by the principal.
An easy way to estimate compound interest is through the Rule of 72.
Dividing the number 72 by the interest rate of return is a quick way to determine roughly how much time is required to double the amount of the investment. For example, if the expected rate of return is 8%, in 72 divided by 8, or 9 years the investment’s value will be doubled.
Many government agencies, such as the United States Securities & Exchange Commission also provide compound interest calculators online to easily calculate the interest that will be earned over a given time. All that is required is the principal amount, interest rate, compound frequency, and the number of years.

Cost of Living Index

Cost of Living Index

Changing Prices: Cost of Living Index


A cost of living index is a hypothetical price index that compares and measures the relative cost of living in regions or different times. The useful purpose of a cost of living index is its ability to measure the differences in the price of services and goods. It also allows for other items being substituted as prices vary.
There are a variety of methods that have been created in order to approximate a cost of living index, which includes different methods that allow substitution between items as relative prices change.
A cost of living index can affect many different things, including pension benefits, employee contracts, and government entitlements like Social Security. Often, the cost of living can cause adjustments to salaries annually based on geographic location.
Sometimes there are also yearly escalation clauses found in employment contracts can include future or retroactive percentage increases in salary which is not based on a cost of living index. These negotiated increases in salary are informally called cost of living increases or cost of living adjustments due to their similarity to other increases related to externally-determined indexes.
In the United States, there is the Consumer Price Index, which is derived from the idea of the cost of living index. The difference between the two is that the cost of living index measures changes in amounts that consumers spend over time on things such as clothing or food, but having a complete cost of living index could go further beyond this aspect and also describe changes such as environmental or governmental factors that have an effect on the well-being of a consumer.
The Consumer Price Index is a statistical estimate made based off the prices of a section or sample of a given item whose costs are periodically collected. Further divisions of sub-indexes and sub-sub-indexes are then generated for different categories as well as sub-categories of services and goods, being grouped to create the overall Consumer Price Index with weight adjustments reflecting their portion in the total of the expenditures by consumers.
It is one of many price cost of living indexes created by various national statistical agencies. The yearly change in percentage in the Consumer Price Index is used as an indication of inflation. It can be used to adjust for the effect of inflation in the actual value of salaries, pensions, wages, monetary magnitudes and price regulation in order to see changes in the actual values.
In most countries, the Consumer Price Index, as well as the USA National Income & Product Accounts and the population census, is one of the most carefully observed national economic statistics.

SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

 

The United States Securities and Exchange Commission announced fraud charges against a Washington State-based company and its owner for defrauding investors with claims to raise billions of investment capital under the JOBS Act and invest it exclusively with domestic companies.

The SEC alleged that Daniel Peterson and his business USA Real Estate Fund 1 guaranteed investors that they could procure considerable returns from an upcoming offering in a product backed by prominent financial companies. Peterson told investors that the 2012 JOBS Act would allow him to raise billions by advertising the offering to the American public, and produce significant profits for early investors. Mr. Peterson took advantage of his investors’ sense of patriotism by promising to invest the funds of the offering in exclusively American companies, and help assist the state of Washington in their economic recovery.

The SEC alleges that Peterson utilized investor money for personal expenses, and is continuing to solicit investors in his scheme.

“We have brought these charges to stop Peterson’s illegal activity before his fraudulent plan picks up more momentum,” said Michael Dicke, the Associate Director in the SEC’s San Francisco Office. “The American JOBS Act is intended to aid small businesses with their capital raising efforts, not to legalize fraud or provide unscrupulous entrepreneurs with the right to make fraudulent claims to dupe investors.”

According to the complaint filed in a Washington federal court, Peterson sold common stock in his fund from November 2010 to June of 2012 to more than 20 investors in Washington and five other states. Through e-newsletters and e-mails, Peterson claimed that he was preparing to raise billions in a subsequent offering of “preferred” securities, which he claimed would yield 10-year returns of up to 1,300 percent. Peterson then claimed that two prominent financial firms had partnered with him to bring this offering to the marketplace and that the firms had conducted proper due diligence on his fund and were in the process of structuring pricing models and sales agreements.

All of Peterson’s claims were false; he never created an investment product, the stated returns were made up, and he has never had any affiliation with any Wall Street firm to underwrite his purported offering.

The SEC claims that Peterson used investor funds to pay his rent, entertainment, food, vacations and luxury vehicles. Peterson also is alleged of using investor funds on clothing, luggage, and expenses at a Las Vegas casino. 

Broke Doctors: Wait, What?

Broke Doctors: Wait, What?

 

 
As a considerable number of doctors struggle to keep their practices afloat, some are buckling under finance woes and pushed into bankruptcy. 
 
A bankruptcy filing among those in the medical field is a trend that has accelerated in recent years industry experts say, with potentially crippling consequences for patients and doctors. Some doctors are still able to keep their practices open post bankruptcy, but for others, the filing represents a career-ending event. 
 
Chapter 11 bankruptcy filings by medical professionals have spiked recently as noted by Bobby Guy, the co-chair of the American Bankruptcy Institute’s health care committee, who is responsible for tacking bankruptcy trends tied to distressed companies. Guy claims there were at least eight filings in the past couple of weeks, which he remarked as “highly unusual.”
 
Just five years ago, Florida-based bankruptcy attorney David Langley did not have a single medical professional as a client; however, since then he has handled at least six bankruptcy filings involving doctors. Two current clients—an OB/GYN and an orthopedic surgeon—also are in the midst of filing for bankruptcy. 
 
None of Mr. Langley’s clients were facing malpractice suits that forced them into dire financial situations; in fact, all regarded as top-notch doctors.
 
The struggling economy has taken a toll on doctors’ revenue as consumers cut back on elective procedures and office visits. Doctors also point to the shrinking insurance reimbursements, the rising costs of malpractice insurance and fluctuating regulations as impediments to maintain a steady practice. 
 
Primary care professionals are also facing similar challenges. Langley remembers one client, a solo doctor whose patients lacked insurance and were mostly on Medicare. As the economy weakened in the wake of the recession, fewer of this doctor’s patients could afford to make visits. As a result, cash payments and reimbursements plummeted. To come up with cash to keep the practice afloat, the doctor was forced to take a second job at a local hospital. The extra income; however did little as the doctor’s debt ballooned. 
 
Two years ago, state tax officials showed up at the doctor’s office to shut the clinic down. The doctor called Langley and was able to file an emergency bankruptcy suit online while the officials were pacing in the waiting room. The doctor gave the officials the bankruptcy case number, and they exited without closing the clinic. 
 
A similar medical professional was on the brink of bankruptcy in 2011; by 2010, she lost almost half of her patients causing her annual revenue to drop nearly 30 percent. This doctor hired Guy and was fortunate enough to restructure her debt and keep her business going. 
 
Every day since the filing has been a struggle, however. “Every time payroll comes around, I wonder if we will be able to keep this up,” she said. “I try not to think too much about it because it paralyzes me with fear.”
 
Source: CNN
 

Crash and Burn: Microsoft Fined $730 million by European Union

Crash and Burn: Microsoft Fined $730 million by European Union

 

European regulators have fined computer giant Microsoft roughly $730 million for failing to uphold an agreement to offer users with a choice of Internet browsers. 
 
The European Union warned the software empire last October that it faced a steep fine following the results of an antitrust investigation launched in July. The investigation revealed that Microsoft had breached a five-year agreement to provide European customers with a choice regarding which browser they could use. 
 
“Legally binding contracts reached in antitrust decisions play a prominent role in enforcement policies because they allow for rapid solutions to competition matters,” said an antitrust official with the European Union. “A failure to comply is a serious infringement that must be sanctioned properly.”
 
This is the first fine imposed by the Commission for a breach of a contract or commitment made in the context of an investigation. 
 
Microsoft shares dropped 1% in pre-market trading as NASDAQ futures rose slightly. The steep fine could have been significantly larger as the European Union has the authority to impose fines of up to 10% of a company’s annual revenue, or approximately $7 billion in Microsoft’s case. 
 
According to the commitment, which dates back to 2009, PC users setting up Microsoft’s Windows operating system were supposed to see a “choice screen” offering 11 different browsers, including Microsoft’s Internet Explorer. The prompt; however, was removed following an upgrade to the Windows 7 operating system in February of 2011, depriving 15 million European Internet users a choice of browser. 
Following the announcement of a sanction, Microsoft apologized for what it labeled as a “technical error,” which lasted over a year. Microsoft announced that it had fixed the problem as soon it was made aware of the mistake. 
 
“We provided the commission with a candid and comprehensive assessment of the situation, and we have taken steps to improve our software development to avoid this mistake in the future,” Microsoft said in a statement issued Wednesday. 
 
Microsoft is no stranger to these sanctions; the software giant faced similar suits in the United States in the 90’s and 2000’s over its tactic of using its prominent position with Windows to promote its browser over competitors. 
 
Microsoft’s share of the browser market has plummeted as alternatives such as Mozilla’s Firefox and Google’s Chrome have grown in popularity.  
 
 
Source: CNN
 

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

 

 
College graduates under the age of 25 faces an 8.8 percent unemployment rate and of those lucky enough to secure employment, more than 50 percent work in positions that do not require a bachelor’s degree.
 
The upcoming class of 2013 will face an extremely grim job market, according to a new research report. 
 
Unemployment remains severe for young college graduates, and for those who will find employment, many will be forced to settle for low-level opportunities, the Economic Policy Institute reported today. 
 
The unemployment rate for recent college graduates between the ages of 21 to 24 has averaged roughly 9 percent over the last year, according to statistics from the United States Department of Labor, and when you include young college graduates who work part-time for economic means and those young individuals who have stopped looking for work in the past year, the unemployment rate sky rockets to nearly 18.5 percent. 
Although the job market has seen improvements over the past few years, the rates remain higher than pre-recession levels. Meanwhile, graduating at the wrong time and in the wrong market is likely to influence the earnings potential of these students throughout their entire career. 
 
“In general, they are not going to do well,” said Heidi Shierholz, an EPI economist. “These young people can expect lower earnings for the next couple of decades.”
Young college graduates who are working full-time are making roughly $3,200 less each year, than they were in 2000. The average hourly wage for these individuals was $16.60 last year, compared to $18.15 in 2000. 
 
As of last year, roughly 52 percent of employed college graduates under the age of 25 were not working in jobs that require a college degree, which is up from 47 percent in 2007 and 40 percent in 2000. However, EPI claimed the job problem for recent college graduates stems from weak demand for goods and services, rather than a lack of the appropriate skills or education. 
 
Source: AP

Forex Day Trading

Forex Day Trading



What is Forex Day Trading?
Forex trading is generally a twenty-four hour commitment that requires your full attention and in depth knowledge on how Forex markets work.  Although you may be able to avoid deep losses with the use of automatic Forex trading software, most that engage in Forex day trading do so on behalf of banks and large financial institutions.  One should not pursue Forex day trading if they are not prepared for the inherent risks involved in such an investment or do not fully understand Forex.  
Forex day traders will actively trade in short bursts and will generally end the day with no investments outstanding.  This differs from swing trading, where the investment lasts days to weeks and position trading which lasts months to years.  As such, the Forex day trader will need to watch the Forex quotes constantly for profitable trends and act quickly to avoid losses.
Forex day trading is a misleading term.  Although you may trade within a time frame of your convenience, currency markets generally trade 24 hours a day, generally with no trading occurring on Saturdays.  Therefore, you will find many individual Forex day traders active as early as 5am to find the latest news and make investment decisions on the Euro.  After all, national banks and other important economic bodies will make decisions that affect Forex rates in accordance with their local time and not a time that is convenient to the day trader.  If you cannot function this early in the morning or cannot commit to the time needed to research an investment properly, then you should not engage in Forex day trading.  
Remember that large financial institutions will always have better information and market access than individual day traders and will happily use this leverage to make a profit.  Conventional rules such as a ban on insider information in the stock market do not apply to Forex markets and Forex day traders will need to be perpetually aware of rumors and tips as well as news that affect their investments.
In short, Forex day trading requires diligence, quick thinking, broad knowledge of international finance and most importantly, the ability and time investment to make trades constantly in front of the computer.  Most aspiring Forex day traders will lose their initial investment when they are not aware of the risks and fail to invest enough time in monitoring the Forex quotes.  Due to this, one needs to be suspicious of Forex trading training programs that promise guaranteed profit or easy investing.  
As with all investments, no volume of returns is guaranteed and an individual trader will always be at a comparatively greater disadvantage when investing than the risks taken by banks and other institutions.  Minor fluctuations, such as gains or losses of .001 cents on a foreign currency can potentially create massive profits or the total loss of an investment.  The best Forex day traders are those that have cultivated prior experience with somewhat less risky macro and long term Forex transactions, such as swing and position trading.  Even then, those forms of trading depend on timing and information to buy and sell at the right times, which puts a new Forex day trader at a distinct disadvantage.

Perkins Loan

Perkins Loan



What is a Perkins Loan?
A Perkins loan is a lower interest, needs based loan for college education offered by the federal government.  There are a number of reasons why the Perkins loan is an attractive option for financing a college education, not the least of which is deferred payment until after graduation, a low and fixed interest rate and eligibility for federal loan cancellation and consolidation.
What are the terms of a Perkins loan?
The Perkins loan has a fixed interest rate of 5% and has a repayment grace period of nine months after graduation or falling below half-time student status.  In the meanwhile, interest does not accrue on the loan until the loan begins to be repaid by the borrower.  The current limits for undergraduate students are $5,500 per year, up to $27,500 maximum.  Graduate students may borrow up to $8,000 per year, up to a limit of $60,000 that includes undergraduate Perkins loans.  The limitations and amounts are subject to the actual needs of the student and other aid received by the student.  You will need to repay this loan within 10 years, depending on the amount owed.  
How is a Perkins loan disbursed?
This loan is disbursed through the student’s school.  The school receives a certain amount of funds for Perkins loans through the US Department of Education.  The fund is then replenished through payments made by others that have Perkins loans in addition to occasional payments by the federal government for loan cancellations.  The school determines how the loans are disbursed, screens students for eligibility and will reflect the loans when billing the student or pay the student via check.  
How do I apply for a Perkins loan?
You must be able to demonstrate financial need as Perkins loans are limited and will only be given to those students that qualify.  You may need to consider other loan arrangements if you do not qualify for this needs-based loan.  To be considered for eligibility on a Perkins loan, one must submit a Free Application for Federal Student Aid (FAFSA) as early as possible.  As Perkins loans are limited, there is no guarantee that those that are eligible will receive a loan as these funds are limited.  You should check with your school’s financial aid office to determine if your school is one of the 1,700 institutions that received federal Perkins loan funding.  You will need to sign a promissory note ensuring that you will repay the loan according to the terms of the agreement.
What are the benefits of a Perkins loan to other student loans?
The Perkins loan interest rate is comparatively lower than the interest rates for other student loans.  Student loans have generally high interest rates due the money being borrowed in a short period of time for a specific purpose, when compared to a long term home or auto loan.  Interest does not accrue on the student loan with the student is still in school and many other loans would contain this provision, putting pressure on the student to graduate quickly and being repayment.  
You will not be able to discharge any student loan, especially those made by private lenders, but you may deferred payments on a Perkins loan if you demonstrate sufficient hardship.
What happens if I need to defer my Perkins loan?
As Perkins loans are disbursed by schools, you should contact your school immediately to request a deferral.  Failure to make payments on the loan will result in penalties.
Can my Perkins loan be cancelled?
The federal government will forgive some student loan debt under certain conditions.  Those with a Perkins loan that teach full time in low income schools, teach subjects that there are a shortage of teachers (mathematics, science, foreign languages, or bilingual education) or volunteer for the Peace Corps may have their loans cancelled by the following schedule:
• 15 percent canceled per year for the first and second years of service,
• 20 percent canceled for the third and fourth years, and
• 30 percent canceled for the fifth year.
Up to 100% of the Perkins loan, including interest can be cancelled through this program.
Can I consolidate my Perkins loan?
You may, but be aware that you will lose the previously state cancellation benefits if you choose loan consolidation.
Consolidation is not necessarily beneficial unless the student has other subsidized loans with higher interest rates.  Federal Student Loan Consolidation takes the weighted average of the loan rates and then extends the term, based on the preference of the debtor.  This term can be anywhere from 10 – 30 years.  The average rates are rounded up to the nearest 1/8 of a percentage and capped at 8.25%.
This grants the student financial flexibility in repayment, even if the amount repaid will be higher due to the longer term.  In many cases though, the lower interest rate ends up saving the student money.  
There are a number of pitfalls in federal student loan consolidation, such as picking a 30 year repayment, which will cost the student dearly in interest payments.  Additionally, the fixed interest rate at 8.25% is much higher than the Perkins loan 5%, so consolidation should only occur if the student also has Stafford, PLUS or other loans that need repayment.
How does a Perkins loan affect my credit worthiness?
Education loans are considered “good debt” as it represents an investment into ones earning potential.  The student’s credit score will not be impacted as long as this debt is repaid by the terms agreed upon with the school.
All federal subsidized loans lack an early repayment penalty, allowing the student to repay extra on the principal with every payment to reduce the amount of interest that will be accrued on the principal.  If you can afford early repayment, it is in your best interest to do so.
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