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Category Archives: Finance

Financial Aid for Students

Great

The great thing about this type of aid is that it is there so as to allow those financially disadvantages students the opportunity to be educated. As long as the student continues to remain eligible on a yearly basis, then the aid is always there for them.

It is also true that any aid you may be granted is only intended to help supplement any other financial support you may have from other sources.

Available

It is available from Government, state, Educational institutions and private companies. The purpose of this aid is to help with the educational expenses which include many things such as fees, school books, accommodation, transportation costs and other expenses the student may incur.

Provide that the student qualifies with the conditions of the loan provider and also as long as the student is capable of meeting the financial needs to service the loan on a monthly basis then financial aid can be obtained.

Many

Monetary aid can be obtained from many different sources and if you are a doctoral student, then you may be eligible for a full scholarship.

As mentioned above this aid can be It is usually provided by private companies, Government both Federal and State., and by the educational institutions themselves.

Research

It is always important of course that you conduct your own research into the types of financial aid that your require because no-one knows your situation as good as you.

One of the best places to gain more useful information is the educational facility itself, these places always have councilors who are armed with the latest information about what financial aid is available.

The last place you can go to is the internet, why go here last? The reason is so that once you have received the information from your educational institute, you can then use the internet as a ‘double check’.

Get a Low Interest Credit Card

With interest rates on some credit cards rising to over 23%, even low balance credit card debt can be crippling. One of the first research elements a prospective borrower should look at is the interest rate on transferred debt. This interest rate is often lower than the usual interest rate for the credit card, and can be an especially good deal for borrowers who have debt already. Another element to consider is the interest rate on new purchases – this rate will be the main concern in the years to come, as this new credit card will probably become the most heavily used. Borrowers often worry about annual fees, but these are often temporary. Getting a credit card with low interest rates will save a borrower significant sums, usually much more than the annual fee. Plus, once good credit is established, the annual fee may later be waived.

Another interest rate will usually apply, as well – the rate for cash advances. Cash advances are usually limited to a couple hundred dollars, but credit card companies often insist that when paying back the balance, the credit portion must be paid back first, then the portion that the cash advance applies to. So if you are going to keep a balance on your credit card, be aware that cash advance interest rates are higher than the regular interest rates. Cash advances can be incredibly helpful in emergencies, though, when a credit card cannot be used.

Visa and MasterCard are by far the most commonly accepted credit cards, so less commonly used cards such as American Express and Discover often offer special rates for new customers. These rates are worth attention, even if you think that you may not be able to use the card as easily as your previous credit cards, because transferring the balance to these new cards to obtain the lower interest rate may significantly lower your payments. While your AmEx or Discover Card may not be accepted as often, they can be a good tool to achieving your financial goals.

Even less commonly used are credit cards that are store specific, such as gas cards or department store cards, but these cards can offer incredible deals on interest rates. They rely on the fact that consumers will often switch their spending patterns to the new gas station or store, and this increased revenue makes up for the lower interest rates. A slight change in your habits, such as consistently using the new credit card at the new gas station, can lower payments and improve credit scores.

Pay Back Student Loans

  1. Have a Plan. Work out a strategy that will allow you to pay off your debt well before you graduate.
  2. Have a Savings Plan. It might be an advantage for you to either get a part time job to help you or look at other methods of raising passive income. Some methods to raise extra needed cash include setting up a crowdfunding campaign, start an online business or even write some eBooks about something you are passionate about
  3. Double Think about Consolidation. This is the method of pulling all of your existing loans into just one loan. The advantage of this is that you will only have one payment to worry about and you will also probably get a discount from the finance company
  4. Debt Reduction Through Work. There are several things that you could do to help reduce your level of debt, you might like to try your hand at self-publishing on the Kindle platform, you might like to set up some sort of internet venture or one of the quickest ways to make money online these days is to set up a crowdfunding campaign. This is my favorite because it means that you can get money quickly, you can either use one of the more popular crowdfunding sites or even use your own software (there are low cost plug ins that can get you set up within minutes).
  5. Earn as you Learn. Enquire at your campus office to find out more details about their work to study programs. There are many different programs available, you just have to ask the right questions.

Can Avoid Bankruptcy

You didn’t plan to get laid off or the insurance company not to pay your claim. That’s not your way; you have always been self-reliant and independent and paid your way. You have been slammed and knocked down, but you know that you will get back on your feet given some time.

There is the stress of constant phone calls from banks and finance companies and the simple lack of money. There is seems to be no way out but to chuck it all in and declare bankruptcy. At least that will get everyone off your back.

Bankruptcy will stop the creditors in their tracks. It will stop them calling and harassing you. It will allow you to re-group and get things back on track. And sometimes there is no other alternative if you debts are too big and too overwhelming.

BUT Bankruptcy is no walk in the park. Bankruptcy is like financial nakedness. You are stripped of all but the bare essentials and made to parade around wearing that burden in public. Bankruptcy sure isn’t for the modest. Your name is put on a public register and remains there for 7 years, You need to hand over to your creditors all that you have of value save for a very very basic car and some tools of trade.

Not only that but you also have a person, called your trustee in bankruptcy, looking over your shoulder to ensure that you are handing over your excess pay and haven’t tried to hide anything. The same trustee can call you to court and grill you over your assets and what you do. You also need to hand over your passport to the trustee. Sure the trustee, most times, will let you travel, but who could afford to in these circumstances. Sure you will have not debts, but bankruptcy is 3 years of penury.

There are ways to avoid bankruptcy and get out of debt without putting your life on hold.

Debt Agreement

There is now an official way that you can do a deal with your unsecured creditors, called a Debt Agreement. Basically using a government licensed Debt Administrator, who is working on your side, you cut a deal with the creditors to take a lesser amount and freeze interest, fees and charges. Instead of lots of payments to all of your different finance companies and credit cards, you make a single payment to the Administrator. The Administrator looks after the creditors and they can no long chase the debts from you.

A Debt Agreement only deals with debts that are not secured. If you have finance on a car you need to keep paying that, but you can keep your car and home. You have more options and you can save a lot of money doing a Debt Agreement.

Informal Agreement

Debt Agreements will only cover unsecured debts up to $107,307 and where your after tax income is less than $80,480. These amounts are indexed and increase slightly every year. If you fall outside those amounts you can’t do a Debt Agreement.

Even if you fall within the Debt Agreement limits this may not be the best option for you. Most Debt Agreements need to be wrapped up over a term of around 4 years. This restricts even further the availability of this option. The sweet spot for Debt Agreements is where your debts are under $35,000. The average Debt Agreement is for $23,000 in total debts.

Informal agreements are agreements struck with creditors to payout debts. These have a lot more flexibility than Debt Agreements. There are no restrictions on the amount of debt or income or the term of any agreement struck. In addition agreements do not need to be uniform with all creditors.

Effects of Bankruptcy on Credit

Debt Resolution Companies and Your Credit.

Many people try to do whatever they can to avoid bankruptcy, for some people this includes entering into agreements with companies that promise a lower payment by consolidating their debt. These companies come in a variety of flavors. That is a topic for another time though. What many of them will do is enter into an arrangement with you where you make a monthly payment to them, then they either hold the money until they have enough to make an offer on any one particular debt, or they make small monthly payments to all of the creditors at once. The problem is, this doesn’t stop those creditors from negatively reporting to the credit bureaus. It also doesn’t necessarily stop the creditors from suing you in state court, obtaining a judgment, and garnishing your wages. Another problem is that if they do settle, it will show up as settled for less than full amount which hurts your score. On top of that, if you settle, you will likely get a 1099 from the company and likely will have to claim the forgiven amount as income on your taxes. That will either mean you will have a smaller refund or will owe.

How long does it stay on your report and what does that mean to you?

First of all, if you are in a tough financial spot and are having trouble paying your rent or making your house payment, this should not be a factor in your decision to file. That said, how long it stays on your report and how long the bankruptcy notation negatively affect you are two very different things. If you file a Chapter 7 bankruptcy, it is generally going to stay on your report for 10 years. If you file a Chapter 13 bankruptcy, that will stay on your report for 7 years after the case is discharged. Seven to ten years seems like a long time. It is a long time, but within that seven to ten year period you can still buy cars, houses, and get credit. The general rule is about two years after a chapter 7 you can get a home loan (sometimes only one year), almost immediately after the case you can get car loan and credit cards. Not too bad right? You should tread lightly here. Look at the offers you are receiving and only accept the best, it isn’t going to help you if you start applying for many cards at once, limit it to one or two at the most. When you can get credit is going to be dependent on your income, and on your credit score. I have seen clients with scores in the 500s prior to filing a Chapter 7 have scores in the 700s one year after the case discharged. On the other hand, I have seen other clients with low scores come back a few years later and they still had low scores. So what is going on there?

How to improve your score after bankruptcy.

If you do as you did and nothing else has changed, your credit score is probably not going to change much. The lowest that your score could possibly be is between 300 and 403 depending on the type of FICO score. The highest that it can be is about 850 but that too depends on the type of score. If you use no credit your score isn’t going anywhere. So what can you do? The first thing that I recommend is going tohttp://www.annualcreditreport.com and getting all three reports for free. This is something you are able to do once a year. Once you have these, you will want to review them, possibly with the help of your attorney to determine if the credit reporting agencies are properly reporting your debts as discharged in bankruptcy. If they aren’t accurate and they refuse to fix the errors, you may have remedies either through your old bankruptcy case, or a cause of action under the Fair Credit Reporting Act (FCRA). Once your report is in order, you can start rebuilding. A good idea is to start with a secured credit card or with a store brand card. With a secured card, the creditor generally has you put down $300.00 to $500.00 and that becomes your credit limit. There is very little risk to the card holder because they have the security of your deposit, but the benefit to you is that they will report to the credit bureaus. If you are in need of a car, a car loan with a reasonable payment is another great way to improve your credit score so long as you are able to and actually do make your payments on time. My secret credit score repair weapon is IBR. If you have federal student loans and you are low income or living paycheck to paycheck, you should at least look into this program. IBR stands for Income Based Repayment, you can apply for it at the following site. https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven. The great benefit of this plan is that many people who had filed bankruptcy may be eligible for $0.00 payments. If you are eligible and you sign up for, and are approved for a $0.00 or whatever payment, each month that passes where you make that payment (yes, even the zero dollar payment, if you are eligible) is a month that your lender reflects as an on time payment to the credit bureaus. The more on time payments you have, the better your credit score will become.

Take Control Of Company Insolvency

  1. Get as much information as you can about the process. There are very good insolvency practitioners you can involve in the process to make it easier for you. They can help you with deciding the next best course of action and to know the possible outcomes. Liquidation services can actually go a long way in reducing your stress levels because the experts offer you a better sight of the next path to take.
  2. Remain focused on the future remembering that liquidation and insolvency is not a process that is unique to you. Gone are the days when they carried stigma; the recent recession has made them common. Therefore, the best you can do is to start by putting everything into perspective and work towards a better future.
  3. Take some time out even though liquidation is a process that can be demanding. When you take a little time to breathe, you will find that you are more prepared and positive about the current business situation you are facing. Do some fun activities such as listening to music and dancing, walking the dog or even hitting the gym to take your mind off things for a while. It is a simple way of reducing stress and renewing your thoughts and moods.
  4. Vent. When you have an ally you can share feelings and thoughts with without feeling judged, then you definitely will be in a better position to take control of the stressful state. Expressing how you feel about the process loud might not do much in stopping the liquidation or insolvency process but it does help relieve anxiety. You will feel calmer and relaxed when you share your deepest feelings with a trusted friend.
  5. Accept things that cannot be changed. The liquidation process might be inevitable, but instead of regretting certain decisions you made in the past, it should be time to focus on areas that can be changed to improve the situation. Let go of issues that you can do little to change and focus on turning the situation around to your advantage.

Big Fat Greek Deception

The Greek Extend and Pretend Game

Any expert who was looking at the situation from a purely mathematical perspective would have known years ago that the Greek debt is simply not payable. The real mess had been created when loans were being given out to the Greeks. That was the time when debates would have made sense. Around 2009, when the world woke up to the Greek crisis, it was already too late!

Greece,was like a college student who had somehow gained access to multiple credit cards and now had such a huge balance that bankruptcy seemed like the only option. The revenue generated by the Greek government from taxes was not even enough to pay the interest due on the debt! So the Greeks simply did not have the wherewithal to hold on to this debt till eternity even if they wanted to. They were going to default even if they simply made an attempt to pay the interest due on the loans.

Instead of accepting the situation and letting the inevitable happen, the IMF and others came up with an ingenious plan. They would lend the Greeks more money at an outrageous 14% interest rate. The money that they lend to the Greeks will be used to pay back interest on the very loans that were due to them.

So in essence they were lending money and taking it back right away. However, the huge 14% interest rates on the new loans caused the old Greek debt to grow. As a result of playing this extend and pretend game for five years, the Greek loan has now become much larger than it originally was.

Obscure Losses

When looked at in retrospect, the Greek bailout attempt seems to be an attempt to obscure losses in reality. The math simply revealed that the Greeks are obligated to pay much more than what is mathematically possible. Hence, by extending even more credit and pretending that things will get better over time, the IMF seems to be attempting to obscure the losses of the investors who have made the investments. The Greek population has been forced into extreme austerity as this “extend and pretend” game is causing massive unemployment there.

The Referendum

The Greeks recently faced a situation where in the IMF would not extend more credit unless Greece accepted humiliating terms and without the IMF’s assistance, Greece basically did not have the cash to pay its obligations. Therefore, a default was all but inevitable. As a result of this, there was a lot of panic in all the financial markets in the world. If Greece defaulted on their loan, they would also end up exiting the Euro.

Therefore, most Greeks were trying to get hold of their Euro denominated deposits and were trying to convert it to gold or some other real asset that would hold value even if the Euro became worthless in Greece. The result was massive bank runs wherein the already bankrupt Greek banks were struggling to pay back any money to the depositors triggering fears of a financial collapse.

As a result, the Greek government reacted by shutting down banks till the crisis was resolved. They limited the amount of withdrawals to 67 Euros per day per account. This was the amount of money that a family would require just to survive the day. Regardless of the restrictions imposed, there were people queuing up outside banks and waiting for hours to withdraw as much of their money as they could.

The Greek Prime Minister was unsure about how to deal with the IMF and the creditors. He therefore let the public decide whether they should accept the humiliating terms offered by the IMF or whether they should simply default. Over 61% of the Greek population voted in favor of the default. Hence, the Greeks refused to accept the IMF bailout at first sending markets across the world into a tailspin. However, later a deal has been struck out between the creditors and Greeks and Greece is not defaulting on its debts, at least momentarily.

Stay Out of Bankruptcy

Some billionaires have risen above others by avoiding payment to contractors and others who have supplied them with goods, such as buildings or vehicles. They moved their money into trust accounts or created off-shore accounts where such was drained off over time. Some also use a spouse or partner to gift money to while their business was operational.

The problem is they have left others to face bankruptcy who they then refused to pay. These are usually the contractors and their sub-contractors that usually involve small family businesses that cannot sustain big losses.

Money is an invention for power and some think that the world owes them so they don’t care who they hurt in their rush for the biggest slice of wealth. So how does the little guy avoid going into bankruptcy.

Years ago this was a problem faced by me when a shift in the economic security of Australia saw an inevitable depression hit my business. It was heightened, however, by a break-down of marriage and three teen-age children dependent on me. The situation was extremely dire as I owed money to many that could not be paid back.

Working my way through it was the first step. Securing a job that took me inter-state and gave me the opportunity to avoid debt-collectors and others allowed me to repay all the debts over several months. Because of making good on them no one pursued me. That is probably the best lesson one can learn from being honest.

My father reared me with this thought “if you never tell a lie you won’t get into trouble.” To me bankruptcy when one could and should repay people is a lie. The ones to whom my business dealt were honest, hard -working, and responsible folk. What right does anyone have to deny them their just rewards?

Before one declares bankruptcy think of the consequences. If everyone stops paying their bills the world of finances will also cease. While money is an invention it is the basis on which the World Order stands. If it crumbles so does everything about our civilisation. So instead of bankruptcy choose a better way and repay debts, even if it takes months to do it.

Create a Budget

How Can You Create A Budget?

You can create a budget simply by using a paper and pencil or using more sophisticated monthly budget planner tools that come pre installed with templates and a variety of options that help you stay in control of your finances. However, here are some basic tips to create a budget for both individuals as well as business owners.

Make a Vow to Follow Your Budget

Most people tend to create a budget but fail to follow it. Even if you miss your targets the first few times, you must ensure that you start keeping on track. As you practice this, you will realize that budgeting is a useful tool that really helps you to save your money and make informed spending decisions.

Determine How Much You Have and Your Income

You must know exactly how much savings you currently have in each of your accounts along with the interest rate that applies to it. This information is important in determining your net worth and how you should use your capital in the future.

If you work in an industry where your income keeps fluctuating, it may be hard to take a true reflective figure of your income. However, if you are not sure what figure to take you can take the average value of the last six months of income.

Know Your Debts

As long as you are not incurring additional short-term debt, you may be able to determine your monthly debt. As you make your budget, you will be able to help yourself out of high interest consumer debt but don’t expect it to happen overnight. Having a clear idea of your debts will allow you to structure your expenses accordingly.

Info of Managing Staff Costs

The importance of staff costs

For many budgetholders people are their biggest cost. Therefore this article sets out to look at some of the issues around people costs.

Issues such as: “What’s the cost per day of my people?” “When should I use agency staff, temps and contractors?” “My workload is seasonal, my staff aren’t. How do I manage?”

How much do my staff cost?

“There are 260 working days in the year, so my team member on a salary of £26,000 costs me £100 a day. Right?”

It’s the obvious answer, but it’s wrong!

A gross salary of £26,000 pa is less than the full cost of employing the team member. The employer also (often) pays employment taxes. In the UK this is Employer’s National Insurance, in 2014 this is 13.8% extra on the gross salary. Then there are the employer’s pension contributions (often 5% to 10% of gross salary in the UK). There are other benefits in kind (company car, private health cover, etc). Not to mention the cost of training, equipment (PC, tools, uniform, desk, etc), and any other employment costs.

All of these can increase the cost by 25% or so, quickly turning the £26,000 into around £33,000.

The 260 days a year isn’t too reliable either. We pay our people for 260 working days, but there are public holidays (8 in the UK, but often 11 in the public sector); holidays (typically 20 to 25, sometimes 30 in the UK), then time off sick, and away being trained (easily another 7 days, often more). So 260 days has come down to 220 days.

Our calculation of £100 per day has suddenly become £150 per day.

And that assumes that every day in the office is a productive day. What about the admin tasks that stop our team being productive? Team meetings, staff appraisals and issues, updates, timesheets, focus groups, union or First Aid responsibilities, etc?

These quickly add up. If they take up a day every week the staff cost per productive day is now almost £190. This is nearly twice our initial estimate of £100!

What about agency staff, temps, contractors, etc?

Now we know the real cost per day of employing our people we can compare this to the cost of temporary staff, and make a proper financial evaluation.

Be careful though – our decision will always be more than just a financial decision. The financial aspect is important, but there are other issues as well.

There is a proper place for temporary staff, to deal with temporary shortfalls in staff or skills – the problem comes when the temporary resource becomes permanent.

The highest cost temporary staff is usually contractors or consultants, in their various forms. They can frequently be costing us (and earning) twice or three times as much as the employee they sit alongside.

As they are so expensive the first question needs to be “Do we really need them?”

The next question needs to be “How do we make sure they are here for as short a time as possible?” As they are so expensive we need to ensure they are only doing the things we need their specialist skills for. Make sure they’re not wasting their time (and our budget!) doing the more mundane things our staff can do.

Then we need to make sure we have planned a quick exit route for them. We want them to do the job and leave, or we want our people to acquire their knowledge and skills by working alongside them. We don’t want to still be paying them a premium rate five days a week a year later!

I write this as one of those expensive training consultants! One of my clients illustrated this well. I designed the training, and the plan was for me to deliver the first two courses, with two of their people sitting in. We would co-deliver the next two courses, and they would deliver the following two, with me sitting in and giving feedback. After that I was no longer needed.

Dealing with a seasonal workload

Many businesses have a seasonal demand or workload, but their staff are available throughout the year.

This gives some interesting cost issues. Expensive overtime (or agency staff) is needed in part of the year, and in other parts of the year we are paying our staff even though they are not fully utilised.

There are several issues to consider here – some obvious, and some less obvious.

The obvious issue is about aligning the workload and staff availability. Are there any tasks that can be done in the quieter part of the year, obviating the need for overtime or temps? Alternatively, can we change when our staff are available? This could involve timing training for the quieter part of the year, or incentivising staff to take their holiday in a quieter time of year. (The key here is incentivising, not coercing – it’s their holiday entitlement, and up to them when they take it).