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How Bankruptcy Works

Sat, 21 Jan 2012 21:00:18 +0000

In these difficult financial times more and more people are turning to bankruptcy. Bankruptcy isn’t pretty, but it’s often the option of last resort. if you’ve been considering bankruptcy and aren’t sure of your options it can be a daunting task and a difficult decision. here is a little background on the different types of bankruptcy and how bankruptcy works.

How Bankruptcy Works originally appeared on About.com Financial Planning on Wednesday, December 21st, 2011 at 12:54:23.

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How Bankruptcy Works

Don’t Make These Mistakes When Buying a Car

Fri, 06 Jan 2012 13:00:14 +0000

For many people, a vehicle is a necessity. we often depend on our vehicles to get us to and from work every day, transport children to events, and even for pleasure. Because they are such an important aspect of your life, you want a vehicle that is reliable, comfortable, and maybe even a bit stylish. the vehicle choices are almost endless, so finding the right combination of wants and needs with an affordable price tag can be challenging. Here are 5 of the biggest mistakes you should avoid when purchasing your next vehicle that can save you thousands of dollars each year.

If you aren’t buying a new car there are still plenty of things you can do right now that will help you save money on related expenses:

Don’t make these Mistakes When Buying a Car originally appeared on About.com Financial Planning on Friday, December 9th, 2011 at 12:42:11.

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Don’t Make These Mistakes When Buying a Car

Should You Refinance Your Mortgage?

Mon, 31 Oct 2011 10:00:17 +0000

Mortgage rates have fallen quite a bit this year and 30-year fixed mortgages are averaging close to 4 percent right now. These rates are significantly lower than just a few years ago, so those of you who bought a home in the past are probably hearing a lot of talk about refinancing right now. Refinancing can certainly make sense because a lower interest rate means lower monthly payments, and ultimately a lower total cost of the loan. but is the decision to refinance really that simple?

Unfortunately, there’s more to a refinance than simply deciding to go ahead with it and get a lower rate. if you aren’t careful, you could actually find yourself in a situation where the refinance ends up actually costing you more money. So, find out if your situation makes refinancing a good idea, and if not, learn how you can make a mortgage refinance pay off in the future.

Should You Refinance Your Mortgage? originally appeared on About.com Financial Planning on Wednesday, October 19th, 2011 at 14:04:07.

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Should You Refinance Your Mortgage?

Co-Signing a Loan

Sun, 30 Oct 2011 06:00:16 +0000

Have you been asked by a family member or close friend to help them out by co-signing a loan? On the surface it may seem like a great idea to be able to help out someone in need, but take a moment to think about the consequences before signing on the dotted line. Co-signing a loan is not much different than getting a loan yourself. so not only could it affect your credit, but you could be on the hook for repayment if the original signer fails to make payments. That could really put you in a hard position. so, here’s what you need to consider before co-signing a loan.

Co-Signing a Loan originally appeared on About.com Financial Planning on Wednesday, September 14th, 2011 at 21:07:39.

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Co-Signing a Loan

MassMutual: The Kids May Be Alright, But Parents May Retire In Poverty

Sat, 15 Oct 2011 22:00:10 +0000

Thursday, October 13, 2011, 11:52am

Because most family financial decisions are made with children at the top of the priority list – think saving for college, helping to pay for and insure that first car and the like – only three in 10 American parents say they are adequately preparing themselves financially for retirement.

Despite parents’ insistence on paying for their children’s education, half of those who set this as a priority say they won’t have the money needed to fund a future college education, nor do they know how much they need to save, according to the second nationwide study in Springfield-based MassMutual’s “State of the American Family” series of surveys.

“When I talk to families about their financial planning needs, we cover plans to pay for children’s college by asking how much of their child’s education they want to cover, what percentage of their income they want to save for it, and whether or not they think their children will receive any financial aid,” said Kevin Paasch, a MassMutual assistant general agent and sales manager at Commonwealth Financial Partners in Virginia Beach, Va. “Then when we discuss retirement, I ask if they plan to get any financial aid to help with retirement. I get puzzled looks, but the point is made, and we start reprioritizing their financial goals. Planning for your children’s education is a critical need, but prioritizing this above your own financial future may be risky.”

According to the survey, parents are also often caught in the middle between their own children’s financial needs and those of their own parents. Almost 25 percent of survey respondents said they were planning to care for elderly parents in the near future. As a result, an overwhelming majority of current parents – 71 percent – said it’s important they don’t place the same burden on their own children.

But avoiding that burden could prove troublesome.

Only roughly four in 10 (39 percent) Americans have developed a plan for their retirement saving. Among women, it’s only about three in 10 (31 percent) – despite the fact that women can expect to spend more than 50 percent more time in retirement than men. that may explain why more than six in ten (63 percent) of those surveyed said they plan to work part-time during their retirement.

But if the future looks bleak, the present may offer a silver lining. Despite lingering effects from the recession and a majority of respondents saying they were dissatisfied with their current financial situation, 60 percent of Americans said they were careful not to accumulate debt – up from 50 percent last year. another 70 percent of respondents said they want to have more control of and be more be actively involved in decisions regarding their own finances.

“It’s clear that today’s American family, regardless of how they are defined, is struggling with reaching their long-term financial goals and managing their finances day-to-day,” said John Chandler, senior vice president and chief marketing officer at MassMutual.

With the First Wave of Baby Boomers Approaching 60 what are the Next Steps to Managing their Savings

As more and more baby boomers approach retirement, there is plenty of advice available on how to save for it but not much about what to do once you get there. This lack of information has left many future retirees confused. After years of saving, they are now faced with the challenges of planning, monitoring and managing their financial situation. in addition, they are also looking for ways to maximize savings for their grandchildren.

From determining future income sources and planning expenses, to calculating withdrawal rates and considering withdrawal strategies, certified financial planner Doug Lockwood provides simple tips on living life during retirement. Mr. Lockwood counsels investors on how to invest to reach financial goals and on other financial planning, investment and tax issues, he has presented numerous seminars on college savings, financial, tax and legal topics. in addition, he has appeared on a variety of television and radio stations throughout the country.

You’ve Retired … now what?

As more and more baby boomers approach retirement, there is plenty of advice available on how to save for it but not much about what to do once you get there. This lack of information has left many future retirees confused. After years of saving, they are now faced with the challenges of planning, monitoring and managing their financial situation. in addition, they are also looking for ways to maximize savings for their grandchildren.

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You’ve Retired … Now What?

Watch Out for Payday Loans

Mon, 12 Sep 2011 08:00:07 +0000

When times are tough and you’re looking for any financial help you can get, it’s only natural to start thinking about some alternative forms of financing. while payday loans and cash advances can really help you in a bind, it’s important you really understand what you’re getting yourself into. It’s quite possible to find yourself digging an even deeper hole while attempting to just get through a few rough weeks. so, before jumping into a payday loan take a few minutes to learn how they work, what they really cost, and what alternatives you may have available.

Watch out for Payday Loans originally appeared on About.com Financial Planning on Saturday, September 3rd, 2011 at 10:02:33.

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Watch Out for Payday Loans

Voices: Rebecca Hall, On Advising Foreign Nationals

Wed, 17 Aug 2011 20:00:08 +0000

Rebecca Hall is a private-wealth adviser with Ameriprise Financial in Reston, Va.

Foreign nationals who live and work in the United States are subject to very different rules concerning taxation and investment than U.S. citizens. the first question I ask new clients from other countries is, ‘What is your legal status in the United States?’ There are a number of possibilities, each with different implications for financial planning. are they a resident or non-resident? are they married to a citizen? what is their visa status?

From a planning perspective, an adviser can do these clients a tremendous disservice if they don’t understand their client’s official status in this country.

Foreign nationals are subject to some U.S. taxes, but not all. for instance, earned income is exempt from U.S. taxation, but investment income is not. and foreign nationals who own property in the United States have to pay real estate taxes, but they can’t deduct mortgage interest.

The United States has preferential tax treaties with many countries and these are an important variable in financial planning. Under these treaties some areas are declared exempt from taxation and others are not. each treaty addresses the issue of double taxation, but does so differently.

Tax treaties can even affect investment selections since there may be tax rules concerning different types of investments in a given country’s tax treaty. for example, it might make more sense for a client to invest in an individual bond rather than a bond mutual fund based on the rules of a particular treaty. Failing to be attentive to these rules could cause serious problems for a client. In fact, an adviser could place a client in a difficult situation with the IRS simply by moving funds from a bank account to a money market fund.

The Patriot Act has also made it much more difficult for foreign nationals to invest in the United States. some mutual fund or investment companies may not even accept business from nonresident clients. It’s important to check with such companies about your client’s specific situation prior to making investment recommendations. Their options may be more limited than you realize.

Finally, there are also cultural differences that come into play when working with foreign nationals. for instance, many are simply not comfortable with borrowing money. they are unwilling to take on mortgage debt and would sooner pay down a mortgage with their money than invest it. and advisers shouldn’t assume their clients have an accurate understanding of our investment markets; many foreign nationals need to be taught the basics of stocks and bonds.

A client’s status as a foreign national can certainly add complexity to financial planning. at the end of the day, working with them effectively really comes down to asking the right questions, understanding the intricacies of our tax code and taking into account the relationship between the United States and the home country of the client.

Credit card debt is one of the biggest problems most people face when trying to get a handle on their finances. Credit cards make it easy to spend more money than you have, and then the crippling interest rates and fees make it seem impossible to get out from under. while there isn’t an instant cure for credit card debt, there are steps you can take to put yourself on a path to becoming debt free.

It takes a little planning, a little budgeting, and some time, but if you keep at it you’ll find that you’re getting out of debt faster than you had imagined. Here’s the process to help you eliminate your credit card debt.

Getting Out of Credit Card Debt originally appeared on About.com Financial Planning on Sunday, May 29th, 2011 at 20:21:38.

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Getting Out of Credit Card Debt

College Students and Money

Fri, 20 May 2011 16:00:09 +0000

College is an exciting time for young adults, but it’s also a time of new responsibilities. This may mean managing money for the very first time. without a lot of formal financial education in school this can be overwhelming. it doesn’t have to be hard. a new student can go a long way by simply making a conscious effort to keep track of spending and understand what expenses are, and start putting a little bit away for the future. It’s never too early to get a handle on your finances. Ask any older person if they wished they had paid better attention to their finances in college and they will agree. Here are a few tips to help a new college student get off to a good start.

College Students and Money originally appeared on About.com Financial Planning on Thursday, May 12th, 2011 at 19:08:26.

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College Students and Money