Here are some tips to help you stay out of debt with credit cards:

1. Pay Monthly Balance - The first sign of credit card problems is failure to pay your monthly balance which can result in fees and interest charges piling up quickly. If you avoid spending more than you can afford and pay off your balance regularly, you will never find yourself in trouble in the first place.
   
2. Pay More than Minimum - Those that can't afford to pay off their entire balance should at least pay more than their monthly minimum in order to reduce the principle amount that you owe and avoid further compounding interest charges.
   
3. Find a Solution Quickly - Credit card debts that are out of control may require further intervention from credit card issuers or even debt assistance companies. If you cannot afford to pay off your credit card, simply call up your credit card issuer and request that they lower your interest rate or you will transfer your balance to another issuer that offers a better deal.
   
4. Transfer to Lower Credit Card - Some credit card issuers offer low introductory rates that can allow you to pay off your debts more easily. You can transfer your existing balances to these new credit cards.
   
5. Consolidate Your Debts - Unsecured debts can be difficult to overcome and may require debt consolidation in order to escape. There are two main forms of debt consolidation: credit counseling and debt settlement. Credit counseling will let you pay off your entire debt in a new plan negotiated between you and representatives of your credit card company. Debt settlement involves a third party working to reduce the total amount you owe and setting you up on a payment plan.
   
6. Use Home Equity - Home equity loans offer interest rates far below that of credit cards and other loans. Therefore, many people use their home equity loans to pay off their credit card balances in whole and then pay off the home equity loan at a lower interest rate.

There is a disturbing credit card trend emerging in the UK that may boil over into the US. Increasingly, people are resorting to their credit card to pay off mortgages or rent payments. A recent report showed over a million householders in the UK fell into this trend with more than six percent of them admitting that they needed to use credit in order to be able to meet their other financial obligations. Just as in the US, many people there are being hit by the credit crunch, interest rate hikes and housing costs all at once and it is making it difficult to stay afloat. In the end, credit card use can only enter someone into a death-spiral of debt that ends when no more credit is available and the customer can not afford to pay the balance.

The trend is also already impacting Americans; however, legislators are working to pass laws to tighten lending practices. These new laws may be aimed at curbing the use of credit cards; however, people will always have the ability to take out a cash advance and spend it on mortgage or rent payments. In the end, it is important for people to seek help as soon as they experience problems paying off their mortgages rather than compound the problem by using credit that they cannot afford to pay back. After all, by transferring your mortgage balance to your credit card, you are effectively paying interest twice! And this can add up-- one couple reported that their $900/mo ARM jumped to $1,700/mo only months after starting to transfer their balances. Be sure to act now before things get too bad.

There are many pros to having a credit card, but lets take a look at some of the cons. Banks will never let you know about them so we've made a list here:

1. No Annual Fee - Most credit cards except for American Express will negotiate or waive annual fees if you press them about it. The next time you receive a call from your bank about an annual fee just tell them that you prefer not to pay it. The bank will likely waive the fee if you upgrade or allow you to pay using reward points. Some credit card issuers will even abandon the fee alltogether!
2. Rollovers - Rolling over is the term for carrying your credit card balance forward rather than paying it on time. The cost is typically 24% per year, which is the highest that banks can charge for loans. This is never a good deal for you and should be avoided at all costs.
3. Balance Transfers - Typical bank promotions will tell you to transfer your debt and only pay a four percent processing fee and no interest for one year. This sounds good in theory but banks require you to pay off your old balance before spending any more. This means that if you make a new purchase you will be charged interest on that purchase (carrying over) until you pay off the transfer balance. You can beat the game by opening a second credit card or transferring your balance again, but this may only result in more confusion.
4. Unauthorized Charges - Criminals that steal your credit card and use it to make fraudulent purchases while signing your name aren't covered under the typical liability policies of credit card companies. In these situations, banks will only pay for charges made after you reported the card stolen. And even then, federal law permits them to charge you $50 of this amount before being required to cover the rest.
5. Free Cards - Many credit cards are free but only if you pay off your balance every time. If you do, you should get as many as possible as it gives you access to great deals. If not, re-evaluate your need for credit cards as they can quickly become a burden with excessive interest rates.
   

In the end, credit cards can be a good or a bad thing. If religiously paid off, credit cards give you access to free money and great rewards. However, if you fail to make payments, credit card debt can become crushing with high interest rates and other fees. Therefore, it is very important to evaluate your financial situation before using a credit card to make sure you have enough to cover.

Payday loans may seem like the easy way out of temporary financial problems, but many people fail to realize the crippling expenses behind the loans. These loans carry an average fee of around 25% with a repayment period of only a few weeks which combine into an APR that can reach into the thousands. Unfortunately, many consumers do not hesitate to renew their loans every month - which turns payday loans into an addictive cycle in many cases. It's easy to get into the habit of taking out new loans each month just to get by, which creates an enormous problem given the excessive interest rates here. If you are looking for cash, you may be better off looking at credit card debt, credit union loans, overdrafts, or non-profit loans - all of which are likely to be cheaper debt that payday loans.

When a loved one dies, often the only thing the family’s mind is sorrow, but people cannot mourn those who pass forever. Death is a natural part of life that happens to us all and eventually people have to move on. One of the major steps facilitating moving on is having a funeral to honor the life of the deceased. A funeral, however, is anything but easy to arrange or easy to pay for.

According to the National Funeral Directors Association the average funeral costs more than $6,000. Though getting the best bargain may be the farthest thing from your mind after a family member’s death, there is nothing wrong with honoring the deceased in a respectful yet reasonably priced manner.

Here are some suggestions on managing funeral costs:

• Shop around. It sounds crass, but prices can range greatly from funeral home to funeral home. Many people choose a funeral home because the family used it in the past or a friend held a funeral there, but with so much money at stake you are doing yourself a disservice by not at least exploring your options.
• Though it is not always possible, try planning some elements of the funeral in advance. This way you can not only compare prices during a less stressful time, but you can even get input from the person who matters most: the one who will actually be honored at the funeral. If your grandfather would prefer a simple casket, for instance, not only are you saving money but you are carrying out his wishes. 
• Consider cremation instead of burial. A “direct” cremation can cost less than $1,000. In a direct cremation the deceased is cremated without an actual funeral service or viewing, which saves significantly on the associated costs. Even if you want a viewing for your loved one, a cremation is still less costly than burial as a plot and memorial are unnecessary. 
• A casket is often the most significant cost of a funeral so shop around and consider getting a less expensive one. Also, many people do not realize that you do not have to buy your casket from the funeral home. Funeral homes often have extraordinary markups on their caskets so be sure to compare – you can even use the internet to purchase a casket and it can be delivered to a funeral home within days. 
• Like in a wedding, flowers can add a large amount of expense to a funeral for very little use. A reasonable amount of flowers done well can add greatly to the funeral without adding great cost.
• Do not buy a package from the funeral home as they often contain numerous unnecessary or overpriced items. 
• Do not buy new clothes for burial, especially outfits the funeral home offers. An excellent, and free, alternative is burying the deceased in a favorite or recognizable outfit. If you prefer a suit, consider a reasonable suit from department store instead of a tailored suit. 
• Do not purchase a rubber gasket, sometimes called a protective sealer. Though many funeral homes recommend it, it is said by some inside the industry to be overpriced by hundreds of dollars and completely ineffective.
• Monuments, like coffins, are a very large expense that can be curbed by both comparing prices and opting for a simpler, more subdued design.
  

Finally, there is sometimes assistance available for paying for the funeral:

• Social Security Administration: offers $255 that is payable to a spouse or minor children of the deceased for use towards funeral expenses. It is available if you meet “certain requirements” according to the government’s official website.
• Veterans Administration: Veterans of the U.S. Armed Forces as well as certain civilians who worked for the military are entitled to be buried at a national cemetery for free.

A death brings with it many responsibilities for the family of the deceased. The family needs to make funeral arrangements, call family members and deal with the funeral and burial among other things. One thing that a family shouldn’t have to deal with is the distribution of the possessions of the diseased. Everyone should have a will in their name, regardless of their assets or age.

Many adults postpone writing a will when they are younger; however, the simple fact is that death doesn’t wait for anyone. Others postpone creating a will because they are unsure how to start the process while still others avoid creating a will because it may a few hundred dollars – but this is a worthwhile investment.

Wills are important because they allow you to not only dictate who receives your material objects, but they also decide more important issues after your death. One of the most important issues typically addressed in wills is the future of any of your children who are still minor. You can specify in your will, for example, to have your best friend take care of your children in the event of a tragic accident that leaves your children without parents. Otherwise, if a will is not on file, the courts may be left to decide who takes guardianship.

Even in the event you die leaving your spouse behind, the distribution of your assets may not be according to your wishes if you lack a will. Think that your spouse will simply get all your property? Wrong: depending on the state you live in, your spouse may have to share the estate with any adult children, parents or even siblings in the absence of a will.

By using a will you can avoid the state defining where your assets are distributed. The government has very specific guidelines as to how assets are divided and any deviations must be made in a will. For example, in some states if you have a wife and two kids, the government will allocate half of what your assets to your wife and half for your children to split. If you want to leave more money to your wife or money to someone or something else, this must be specified within your will. With a will, you are free to distribute your assets to anyone and any organization you want.

Equally important is being able to assert who gets what particular assets. Assets may be split by the government but it is often difficult for them to decide who receives what assets. For example, will your wife receive your automobile or will the children? This could result in your family engaging in a legal battle with each other over particular assets – a beloved watch for instance - a problem that can be avoided through the creation of a will.

Ultimately, it is always smart to have a will on file to protect your wishes as well as your family from unnecessary turmoil. While it certainly will take a little bit of extra time, effort, and money right now, the peace of mind of having a will far outweighs the cost.

Don’t let the government and people you don’t know decide who gets your assets and even children and don’t leave your family in limbo regarding your assets after they have finished mourning your death. Stop making excuses and create a will because unfortunately you never know when you might need it.

Information on investing can often be somewhat dry and technical, but when your money is on the line, you should always be informed about your options. This article will explain to you, in plain language, two of the most popular forms of investing: index funds and mutual funds - as well as tell you which one you really should probably use.

Index funds and mutual funds can both be thought of as baskets filled with various stocks or bonds – but here we will focus on funds containing stocks. Now, a stock is simply a piece of a company. A stockholder is no different than a partial owner of a company, except that in most cases a stockholder owns a tiny piece of the company and for that reason doesn’t get to be involved in everyday decisions about the company’s operations, like a normal owner would; however, because stockholders are partial owners, like owners, their piece of the company increases with value when the company is doing well and decreases in value when the company is not.

So, index funds and mutual funds really just own pieces of other companies, they themselves don’t actually do or make anything, other than decide which stocks to buy, and it is here that the difference between index and mutual funds shows itself.

Index funds are so named because they attempt to mimic the performance of a specific financial index. A financial index is just a number that is derived from combining the values of whatever composes the index. To illustrate the point, when a news anchor says, “The market was down 15 points today,” he is often referring to the S&P 500.

The S&P 500 is an index containing the stock of 500 large corporations. When, on average, the value of these corporations decreases, so does the value of the S&P 500 index. If you bought an index fund that was based on the S&P 500, its movement would replicate almost exactly the movement of the S&P 500. The original idea behind an index fund was literally to be the S&P 500 – except that investors could purchase a piece of it. Of course, you can purchase index funds tied to numerous different indices besides just the S&P 500, such as the Wilshire 5000 and FTSE 100 among others.

Mutual funds are much different. It is easier to understand what they do, but harder to understand how they do it. Now, bear with me. A mutual fund is managed or controlled by a group of people. These peoples’ entire job consists of deciding what stocks to buy. Unlike an index fund, a mutual fund does not need to mimic a particular index, and therefore a mutual fund is free to buy stocks based on different investment strategies. So in other words, the group of people that manage a particular mutual fund buy stocks they like for the mutual fund, it is that easy. However, why they like certain stocks and not others is hard to explain and often doesn’t seem to have a real explanation.

Some groups of people who run mutual funds do “value investing;” they only buy stocks that seem to be a great deal. Others do “growth investing;” they only buy stocks that are in a business that is really booming. Others combine both methods… and the list goes on.

For the purpose of this article, the particular investing style a mutual fund uses doesn’t matter much because in the end they are mostly wrong. That’s right, most mutual funds underperform the market, and since you can basically receive market returns through an index fund, an index fund makes more sense.

There are two main reasons index funds make you, the investor, more money. First, in all honesty picking winning stocks, stocks that are going to go up in value faster than the average stock, is really quite hard on as large a scale as mutual funds need having millions of dollars to invest. Very few people are able to analyze and interpret data about a company’s orders, costs, debt, outlook, management, macroeconomic issues as well as countless other variables.

Now, if picking winning stocks is that hard both index funds and mutual funds should do about the same because it is all luck anyway and they both have some stocks - and who knows how any particular stocks are going to do, right? Well, because it is so difficult to determine what stocks are going to do, that argument would be right except remember that group of people I talked about who decide what stocks a mutual fund buys? Well, those people want to get paid, in fact they want to get paid a lot.

According to data, the average mutual fund manager makes almost a half million dollars a year and these high salaries are reflected in higher fees for mutual funds. Also, the buying and selling of stock carries associated costs which are more likely to occur with a mutual fund. These differences show up in the comparison between index funds and mutual funds time and time again.

In fact, according to most reliable data, index funds outperform some 80% of mutual funds on both a before and after tax basis. That means 8 out of 10 times you are better-off being in an index fund than a mutual fund. So the next time you see an add for a mutual fund, consider whether you would like to bankroll some fund manager’s million-dollar lifestyle or your own? If you choose your own, choose an index fund.

Retirement is the phase of your life where you should be doing the things you always wanted to but never got a chance to do. When working 9-5, there is seemingly nothing people look forward to more than getting to retirement – but surprisingly, many people retire and don’t know what to do with themselves.

Here are some ideas for how to fill your newfound free time after retiring:

1. Spend time with family. With hectic work schedules, it is often difficult to make time for the people closest to us. Now that you’re retired, make a real effort to enjoy time with your loved ones. Whether it is traveling and staying with your grown children for a few weeks or just spending more time with your spouse at home, reconnect with your family.
2. Learn something new. It seems obvious, but really sit-down and think about it. Is there an instrument you always wished you could play? Or maybe you have always had an interest in cars. Whatever it is, delve in by taking lessons or reading about it. You may just find a new passion.
3. Join a group based around your favorite hobby. Whether you enjoy chess, reading, bridge, knitting, or gardening – whatever it is you can probably find an interest group. Not only is it a great way to grow your knowledge in the area, you can meet great people and expand your social circle.
4. Take charge of your health. Make a real effort to become knowledgeable about your health and keep your fitness-level high. Join a walking group or a health club. Looking and feeling great will only make retirement that much more enjoyable.
5. Explore your town. You don’t need to travel the world to find new and exciting things. Sometimes, just spending time a few miles from where you live will allow you to discover new and interesting things you never had time for when working.
6. Plan a vacation. If you can afford it in your budget, see a place you’ve always dreamed about. 
7. Revive your skills. If you were a good cook but rarely had the time as you moved-up the corporate ladder, try some new recipes.
8. Connect with old friends. Though it may have been years since you’ve spoken, make an effort – you might just find a new best friend.
9. Get a pet. A pet can add volumes of energy to your household and keep you young.
10. Indulge yourself. This is the time to do things for yourself with the money you have been saving all this while. Get a makeover, get a massage, or try an expensive restaurant.
11. Get active in your community. Whether you want to participate in local politics or join a volunteer association, it is a great way to make a difference.
12. Relax, relax, relax. After years of working, it can be hard to sit-back and enjoy peace and quit. Give it a try.
    

Retirement is not a phase when you need to have less activity in your life – it is just a phase where the one activity that used to monopolize your time is gone: work. Make the most of your new freedom and enjoy, you’ve earned it.

Thinking of taking a new loan? Wondering where you can find the best possible terms? The truth is that so-called ‘family loans’ may be the best option to get away with minimal or no interest charges; however, these types of loans are notorious for causing complications with those closest to you. It is important to carefully weigh the risks and benefits before committing to any loans, especially those with family members. This article will introduce the advantages and disadvantages of family loans and discuss ways to minimize complications.

First, it is very important to properly document the transaction as actual loan. This involves taking down the terms of payment along with any assets pledged as securities to back the loan. This will help prevent complications later when it comes to justifying the position to the IRS. Moreover, this will make income taxes much easier for your lender. There are two ways to approach the documentation process: (1) approach a lawyer to draw up the documentation or (2) simply do it yourself. Some of the most convenient options available can be found online in family legal software which provide templates for a number of situations. A properly documented loan can not only help resolve any disputes as to the numbers between family members but also keeps things legal with the IRS.

The IRS imposes several restrictions on family loans. It is important to specify that the loan is not a gift and that the lender is expecting you to return the money within a particular time period. Any interest payments received by the lender are considered income and are taxable by the IRS. If interest is not charged the IRS can still levy a tax on the interest that should be being charged. This complicated “imputed tax” basically means that if this is truly a loan, and not just a gift, there should be interest payments – and the IRS is going to tax the lender for these interest payments whether or not he is actually receiving them.

One of the other major tax implications to consider involves loans going towards mortgages. After all, one of the most common types of family loans is a loan to finance the down payment on a house. It is best to secure this note with your new house as it will help you take advantage of a whole range of tax deductions later, as interest payments are deductible. Additionally, trying to hide the source of income for your down payment could get you into major trouble with the authorities. Consequently, it is extremely important to bring this issue up when applying for a home mortgage.

Entanglement with the IRS’ crazy imputed interest can generally be avoided if the total loan amount of the loans between the two parties is less than $100,000. To explain, the $100,000 rule comes into play when the cumulative balance of all the loans between the concerned parties, including interest, is less than $100,000. This rule allows the imputed interest to be zero for the purposes of income tax if the borrower’s net income from investments within the given year is not more than $1,000. In almost all cases of family loans, the person borrowing the money is probably lacking significant investment income – so the lender should be safe from imputed interest tax.

In the end, it is often advisable to contact a tax lawyer before you enter into a large family loan because the tax implications can be complicated. You can avoid all the above hassles by simply legitimately charging interest on the loan that you give because and declaring the interest as taxable income.

Though in all this talk about tax troubles, we haven’t really taken the family relationship into account yet, but bad family debts can significantly impair if not ruin family relations. Carefully consider what each person is getting into before rushing into a family loan, and if you decide to go through with it draw up proper papers and keep your business and personal relationship distinct. There have been countless instances of families being torn apart over a good-natured loan – don’t become one of them.

In our world of fast, easy credit you may have the power to buy the car of your dreams, but if you’re not careful you could end up in a debt nightmare. This article concentrates on the mistakes that you are likely to make while taking a loan for your car – often the single purchase people are most likely to fixate on and daydream about.

Though it is seemingly obvious, it is worth repeating: carefully think about your options and your needs. How often have you heard people say that they’ve always wanted a particular car? Very few purchases are so obsessed over or seen as a status symbol by so many and this is a combination that can lead to impulsive, uncalculated purchases.

The most common error made while buying a car is seeing it as a short term investment and hence being casual about it. The significant price of a new car will certainly have an impact on your budget, so make sure your budget has an impact on your choice – carefully consider your options but above all pick a car that is right for you and that you can truly afford.

To aid in this, it is imperative to decide what car you want to purchase and how much you are willing to pay before beginning in depth discussions with salespeople at a car dealership. Do not get carried away by the persuasion of the dealer into making decisions that you are going to regret later – whether by buying the wrong model or agreeing to too high a price or too many fees.

Almost any new car is going to look great on the lot and seem great when the salesperson talks about it, so try to get an unbiased perspective on the performance and reliability of various models from trustworthy publications first.

After choosing an affordable model that fits your needs, you still have to get an auto loan to actually pay for it. Regardless of whether you finance through a bank or car dealership, following these steps will help you get the best possible deal:

• Carefully go through your credit report and FICO score (it’s the score that most lenders use to assess your credit risk), so that you can rectify any possible errors in order to qualify for the best loan terms. Also, being confident about your credit history prevents unscrupulous lenders from lying about your credit in an attempt to charge you higher interest rates.
• Never focus solely on one term of the loan. Do not allow a low monthly payment or a seemingly great interest rate cloud your big-picture view of the loan’s terms. Always keep the actual price of the car and length of the loan in mind because a seemingly incredible rate or monthly payment can often be a hook for a loan that is a very poor deal for you overall.
• Cars are commodities that depreciate in value very quickly so it is always a good idea to opt for the shorter length, higher payment car loan. Very few cars are good investments, and a higher payment loan truly makes you examine what models are in your price range. Unlike a mortgage, where at the end of the loan you are have a property that is generally worth more than your purchase price, cars lose most of their value with age and use - even driving a new vehicle off the lot significantly decreases its worth. Focus on this sobering fact to avoid getting carried away with financing your auto purchase. Also, choosing a shorter term loan gets you a lower interest rate which means you actually pay less for your car.
• Finally, always keep in mind that even if you have spent long hours pursuing a particular deal, you are not obliged to seal it. Retain an objective outlook and the ability to walk away. Sometimes, car dealerships count on the fact that people are either too invested or feel too guilty to stop the process. If you don’t like the way the deal is shaping up, leave before it is too late.
  

Retirement as a concept is not very old. It can largely be traced back to the creation of Social Security in 1935. At this time Social Security was used to guarantee a fixed basic income for older workers so that they would leave their jobs and create vacancies for younger workers.

Now that retirement is taken for granted, most people wonder if they are saving enough to take care of their needs when they stop working. Though there is a lot of dispute regarding the issue, many financial experts believe that you need approximately 70% of your pre-retirement income to allow you to continue living your same lifestyle after retirement.

The ability to live the same general lifestyle on 30% less money hinges on decreased expenses that come with retirement and an increase in age. According to a study by the U.S. Census Bureau from 2002, people between the ages of 45 and 54 spend approximately $15,000 on housing while people 75 and older spend only about $8,000. Also people between 45 and 54 spend more than $9,000 every year on transportation while those above 75 and older spend only about $3,000. This reflects a drop not only in the cost of buying a vehicle but also maintaining one - the money spent on gas and repairs – which often comes with not having to commute to work among other things.

Though retirement does not bring only savings, people between 45 and 54 spend $2,550 on healthcare a year while those above 75 spend $3,584 on average.

Significantly, this same study points out that income before taxes for a household kept by a 45 to 54 year old person is $64,974 while for people 75 and above it is only $23,890. The ability for many retirees to survive on a significantly reduced income points to other fundamental, or sometimes forced, changes in expenses.

As a person gets older there is a decrease in the number of dependents in the household which leads to a reduction in food costs and other household expenses. Also, with the kids moved out, maintaining a large house is not only an extra expense but also impractical. Many retirees downsize their homes and can use some of the excess proceeds to add to their savings.

The money that you spend on entertainment in retirement is difficult to predict or find reliable statistics on (though the Census Bureau does report on it – its methodology is too vague). Some people end up spending more because they have more time and the freedom to do what they please with it. The only difference might be that your definition of entertainment might undergo a transition. You might now be going to yoga classes instead of a concert – or you might go to more concerts and less yoga (now that the stress of work is gone)! But these are largely personal choices and difficult to speak generally on, but if you plan on traveling the world when you retire, save accordingly.

The only real answer to the question of how much you need to retire is “how ever much you plan on spending.” The answer depends on how you intend to spend your time as a retiree. Examining these important categories, you can see that generally retirement comes with some inherent savings related to not having to go to work any more as well as usually no longer have children in the house; however, there are those that retire and actually spend more money than before. How you plan on living during retirement is a uniquely personal choice – perhaps you are planning on taking advantage of the time to take the trips you’ve always wanted or maybe you are content to read the great novels you never had time for before. Both choices sound great but each comes with very different financial costs.

Whatever your vision of the perfect retirement is, start planning for it sooner rather than later - because you do not want to reach your golden years only to find that you do not have enough gold to live the years comfortably.