Corrective Money Management

When it comes to money management, there are two broad umbrella categories of skills: habitual skills and corrective skills. Habitual skills include all of the practices involved in good money management on a day-to-day basis: budgeting, saving, responsible shopping, etc. Corrective skills are the money management skills that are required in emergency situations. This can be anything from knowing how to cancel a stolen debit card quickly to effective credit negotiations.

This article will focus on developing good negotiation skills. If you have creditors trying to collect on your debts, and have at least some funds to start cutting back on your credit card debt, you will benefit greatly from adding the skill of credit negotiations to your money management skill set. Credit negotiation is an essential part of corrective money management skills. While habitual money management practices would keep credit issues to a minimum, why not start practicing some corrective money management habits now to cut back on creditor troubles?

Credit Negotiations: How It Works

Debtors often forget that creditors and lenders are often willing to work with them on a case-by-case basis in order to work through credit negotiations. Creditors are very often willing to do this even if it means cutting you a break on what you owe and not collecting the full sum. Because creditors are so used to not collecting all of a debt anyway, showing that you have some income and assets, as well as showing good faith to repay your creditors, can make you look like a gem amongst this crowd. More often than not, a creditor will be willing to negotiate with you if you are in this position. Oftentimes, they don’t really expect to get anything without having to spend large sums of money chasing debtors. No one likes this. If you don’t make them chase you, but come to them willingly, you might find yourself in the driver’s seat for employing some good credit negotiation skills.

Not Just for Credit Card Companies

Credit negotiations don’t only happen with the credit card companies. Whether you are dealing with a credit card company or your neighborhood community bank, most creditors are happy to take something when they are used to getting nothing. You may find it’s easier to work with a local creditor rather than a large credit card company. Using good credit negotiations skills to determine how much you are going to repay as well as agreeing to a fixed schedule for repayment will take you a long way. Demonstrating good faith also helps a lot when dealing with creditors. Put these corrective money management skills to use today to help turn your situation around.

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Why should we keep away from credit cards

I’m sure that there is no need for me to start writing the definition of credit, as most of you already have at least one credit already or are about to get one soon. But is the credit a necessity or is it just trendy? Have you ever wondered how did our parents managed to live their lives without having a credit card? And…was their life better that way?

I believe it was, based on the following reasons:

  • Interest rate – usually you’ll have a quite high interest rate for a credit card and you’ll end up paying 2 or 3 times the credited amount. And things get even worse if you are late in paying your monthly rates. It is like a vicious circle from which it can be pretty difficult to get out help but that doesn’t get you out of paying the credit.
  • The equivalent in purchased goods – most of you will notice that you are using the credit card to buy goods you can very well do without or which can wait until you manage to raise the money to buy them. But you buy them anyway. Why? Just because it makes you feel better. So you end up paying a high interest to the bank just so you can feel better? Quite a pretty expensive good mood, I would say!
  • The temptation – trust me, it is always there! Funny thing: every time you’ll manage to cover a part of the credit, you’ll not consider that you still have to pay the difference, but rather that you have some extra money to spend. And you WILL spend it! Some even get the second credit card in an uninspired attempt to close the first credit card. They only end up having 2 credits to pay.
  • The risks – yes, there are some risks you are exposing yourself to when carrying a credit card in your wallet, such as interest rate increasing, hackers, identity thieves and many others. There are also few less dangerous, such as buying something you don’t really need just because there is a promotion and you have the money available (even if it isn’t really yours).

I have a credit card myself, I’m not going to lie, and I am working on closing it and never getting one again. It is too easy to get it and too difficult to get rid of it…kind of like drugs. So, if you don’t have one yet, you should think twice or more before going to the bank. Isn’t there another way of getting the money you need? And if you have a credit card already sorry, but it’s too late for you…

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How to have lots of fun with low budget

Recently I found myself in the situation of not having any budget for more than gas and credit. But it was only the first week of a very looong month and I am young and willing to have fun. That proved to be less difficult than expected, as I’ve discovered many ways to have fun with little or no money. I’m going to share those with you.

Out for a drink – usually a bar or a coffee shop was also included but these places can be easily replaced by a friend’s home or your own. The money you need to prepare the drinks will represent about 5-10% of the money you would have spent if going out for the drinks. Plus that there is no tip needed

Watching a movie – you can do it indoors, renting the movie or watching an old dvd. FOR  FREE. It’s as simple as that.

Having breakfast/ lunch/ dinner – although it’s so easy when you don’t have to cook and do the dishes, when no money available for eating in a restaurant, you can try and discover that there’s more to cooking than work. You can also have fun doing it! Plus that you get to eat something healthy and made with your own hands.

Shopping – it can be pretty difficult to resist the temptation of buying something new for an entire month (especially with all the post-holidays offers!) but…how can you do that when the card is empty? Actually, you can’t. But you can try updating the things you already have in your dresser. You might realize that the pink blouse you hated so much is not so bad after few adjustments. Plus that, when combined with your friends, music and drinks, it can be better than shopping.

Exercising – since the gym is not available for those without paid subscription, you must find alternatives for losing all the extra pounds gained during holidays. Don’t forget its winter and there are plenty of rinks available. Also I bet the dog (if you don’t have one, you should get it after the money is back) would love to play with you in the snow!

I’m sure that if you use your imagination, you’ll find many other ways of having fun with low budget. You just have to give it a try!

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Tips For Teaching Your Child To Save Money

Saving money is said to be the most important step, when someone is planning to execute a financial procedure. It is not only necessary for adults to save money and chalk out future investment plans but also it is equally important for children to plan their savings.

Money saved by children can help in funding emergency requirements or can also be a good support for meeting the expenses of college education. No matter whatever amount one earns, at least a little should be saved.

Saving secures the future. Children in some way or another should start taking interest in money and investment plans. They should be made acquainted with the children savings plan and education investment plan for supporting their studies.

A young child may not have the complete knowledge of the increasing cost of education but he should be made familiar with the basics of it and should be motivated to save money for his future.

There are three most important ways in which children in their growing years demanding money from their elders to buy stuffs they want, can be taught the importance of spending wisely and saving money at the same time.

Recognizing Wishes, Wants and Needs

First and foremost, children should be made to realize the differences that exist between wants, wishes and needs. Wishes and wants can be kept for a while during slightly tough times so that their genuine needs can be fulfilled. Moreover, they should learn how to spend buy things of need in a well-planned manner.

They should be taken to stores and shops where they can see how their parents plan their purchase. Unplanned purchase or buying things without proper knowledge can just mean wasting money. Also parents should avoid giving credit cards or excess money to their child as young children may not be able to spend money in a calculated way, if they get excess cash.

Encourage To Save From Pocket Money

Secondly, saving can be encouraged while giving allowance to children. The money can be given in denominations and they should be told to save at least some part of it every day. This will teach them the way to save money right from a young age.

You can open a student’s account for him and make him deposit the money. In this way, he will also be able to earn some extra money as interest and will soon gain the habit of saving money.

Get A Piggy Bank for Your Young One

Finally, another common way to teach children save money is by using piggy banks. These are especially meant for young kids so that they develop the willingness to save right from the beginning. But, for this, parents themselves should always practice saving and set a good example. Once they observe their parents regularly, they will easily learn to follow it because children always learn from their elders.

It is also very important to praise the child every time he saves an amount of money. It helps to motivate your child to save.

You can help your child get a head start on life and give them a solid financial education.

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Taxes, Separate Checking Account and she makes more than I do

Question – Should you invest or blow your tax return?

About now many are getting their tax returns. The key question for many – what should I do with my return? This has baffled many people for years especially since the financial crisis has devastated many. The conventional wisdom is to spend it on whatever you want. I can’t blame you; it was your hard earned money and you felt like you deserved that. On the other side, some say invest it. I can’t blame that reasoning because many 401k’s and IRAs were hammered.

I am not here to say what you need to do but we have to look at why you received an overpayment. The reason why most received a tax return is that you were paying more than your fair share of taxes to the government which is not a bad thing. Your money is used for different services for our local and national government. The fact that you paid more to them means that you used less of your money during the year. The government took more and the return of your money was less.

The key point is to take control of your money. Your money is too valuable to give away. Your tax liability can change at any given time during the year. So the step that you may want to take in the upcoming year is to work with your tax advisor or accountant to determine how you ensure that you are not getting a big fat refund on April 15. You want to be as close to a zero balance. You may want to adjust your withholdings on your W4. Try the IRS withholding calculator at the IRS website.

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