Archive for October, 2008

Teens Saving Money

Friday, October 31st, 2008

Help your teen build strong money management skills.

One of the best ways to build a strong financial foundation in teens is by starting a savings plan early on. Over the past few years, there have been more teens saving money and the results are clear. When you take the time to teach good financial practices to your children, these skills will carry them through life, helping them to build up a nest egg that they can rely on in the future. If you want to start your kids down this financial path, here are a few tips on how to get your teens saving money now.

1. Set up a reward system.

At first, before the benefits start to kick in, your child may need some extra incentive to start saving money. Try setting up either a reward once they reach a certain dollar amount, or you may even want to offer to match their savings, dollar by dollar. This is a great way to get your teens saving money and offers them some real incentive, as well as hard evidence, that saving is very beneficial. Even if you only add a few dollars to their account at a time, this extra money will help them get motivated and stay focused.

2. Start discussing sound financial principles with your child.

Once you’ve got your teens saving money, it’s a great time to start talking about setting financial goals, and working on the follow through. For example, you can ask your child to set a goal as to what they would like to be able to buy, that they cannot afford right now. This helps them see the value of the hard work they are putting in towards saving for that item and once again, will keep them motivated. However, it is important that they understand that spending all that they have saved up isn’t the best solution and that they should have long term goals, as well as short term goals.

3. Take them to the next level.

Once you have your teens saving money and they are learning more about goal setting, you can take their lessons to the next level by incorporating information about setting up more than one stream of income. Help them to set up a portfolio, use a p2p lending service like Loanio to lend money, or open a high yield savings account for them so that they can start to watch their money grow. This is also a good time to start talking about investments with your teen, even if they can’t quite make their own just yet.

4. Get them interested in continuing education.

One of the best ways to get your teens saving money is by teaching them how the stock market works and how they can add to their savings account easily. There are numerous online sites that will provide users with free example “money” that can be used to invest in theoretical stocks. This is a great training method that has no risk, but can be incredibly useful in teaching lessons about stocks. You may even want to take part in these yourself and set up a competition to see who can make the best theoretical picks.

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Is Your Online Bank Safe?

Thursday, October 30th, 2008

Is online banking for you?

Online banking has become incredibly popular and it is very useful. For those that rely on online banking, there is an accepted risk that goes with exposing your financial information online, but before you jump in, it is a good idea to do a little checking to make sure that your online bank is indeed safe for your to use. Don’t wait to find out until your accounts are cleared out. By running your online bank through this checklist, you should be able to decide whether or not their online portal is what you should be using.

First, it is necessary to make sure that your log in page and your account page are hidden behind a secure certificate. These are known as SSL certificates and they provide encryption that will block hackers from attaching your funds by getting your log in information. In addition to this precaution, if you are using an online bank it is very important to run your own firewall and antivirus protection software.

A good hacker can place a keylogging program on your computer, and you’ll be practically giving them your log in information without even realizing it. Keep all of your passwords off of your computer and store them in a safe place. Make note of your log in urls as well to ensure that if something does happen, you can quickly take care of the issue.

It is also a good idea to read through the terms of service and privacy policy for any online banking site. These agreements contain very important information and even though they are about as interesting as dried toast, you need to take the time to carefully read it to see how they will be handling and securing your data. If you don’t understand anything, don’t be afraid to ask the bank for clarification.

You should also take the time to test out an online account before you transfer a large amount of money into it. Give it a few weeks to see how the dust settles and whether or not you will feel safe putting your money in that institution. By depositing only a small amount of money at first, you are minimizing your overall risk and getting a better idea of how the bank operates day to day.

If at any time you question the security of your online bank account, report it immediately. Most banks do offer fraud protection now, but in many cases, you’ll be the one that catches it. Always review your statements carefully to see if any unauthorized access has been gained.

By taking a few simple steps early on you can easily set up an online bank account that will be useful and easy to understand. Never rush in with an online bank and take the time to run them through the better business bureau before you proceed. The time you spend on due diligence now will definitely come in handy should anything go wrong.

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The Danger of Auto Bill Pay

Wednesday, October 29th, 2008

As our society gets busier, it’s been increasingly important to automate several aspects of our lives. One of the first areas to be automated was the payment of monthly bills and for many, this is an essential system that helps them avoid late payments. However, there are a few dangers that are associated with auto bill pay programs that should be discussed. By keeping these points in mind, you can use auto bill pay options to your advantage, without having to worry about additional problems.

Auto Bill Payment Programs – are they for you?

The first major concern is a lack of funds. If you don’t have a reliable income that is always deposited on time, you can end up with late bills, angry creditors and a real problem on your hand. If you are using a checking account for your auto bill pay, it is vital to make a note of when your payments are due and then take the necessary steps to ensure that you will have more than enough to take care of the bills that you owe for that month. This is also a problem for those using a credit card, especially if they get too close to their limit.

Next up, there is a big concern over hidden fees and charges that you may not catch. If you don’t get paper bills, or if you don’t take the time to read your electronic statement, you may end up paying too much and you’ll never be the wiser. The best example in this case would be a phone bill that does not have a set amount for long distance. This can fluctuate from month to month and if you’re not paying attention, you can easily end up with a bill that is three times the norm or more, and you’ll have to come up with the difference to make sure your other bills are paid.

Other companies may tack on extra fees, or you may be charged for each transaction. Always take the time to read the fine print before getting involved with auto bill pay systems and make sure that you are completely aware of what you’ll end up paying every month by keeping tabs on your statement.

The last major problem facing users of auto bill pay programs is security. It is vital to go with a program that provides top notch security and data protection. You don’t need that payment information being broadcast across the net, and all too often, this can happen. Hackers are an issue, especially now that so much sensitive information is available. If you are not sure about the level of security for the auto bill payment service that you are using, it is best to find a service that you can trust.

Auto bill pay can be incredibly helpful, but as with most things in life, there is a downside. However, by keeping these points in mind and by staying diligent on reading your statements, you can make it work for you.

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Should You Be Worried About the Economy?

Tuesday, October 28th, 2008

If you are worried about gas, try carpooling.

If you follow the news, chances are the state of the economy may have you a little concerned. Bad news is rampant, the housing market is shaky and doom appears to be around every corner. While there are some definite problems with the economy right now, that doesn’t necessarily mean that you need to start panicking. Smart money management is always important, but if you find that you are overly worried about the state of the economy, there are a few steps that you can take to shore up your financial defenses and stop worrying.

The first step is to take a hard look at your mortgage payments, car payments and any other loans that you may have. If they are calculated under a variable rate, now is the time to start allocating a little extra each month to ensure that you have enough to keep up with the payments. If your mortgage payment looks like it is going to be too high, act quickly by negotiating with your bank for either a payment deferment or even a refinance. No one wins in a foreclosure situation and most banks will be willing to work something out with you.

The second step is to think about consolidating your credit card bills if necessary. If you are paying on multiple cards that all have high interest rates, you could be wasting a lot of money each month. Take advantage of a low or no interest card that will allow you to transfer those high balances into one. Just make sure you read the fine print to see how long the interest rate will remain low. Or use Loanio to receive a loan from lenders, this is easy and painless to do. This not only helps you save money on high interest fees, but you can also save time by paying only one bill every month.

Next, you can take a look at what you’re spending and how rising prices are affecting you. For example, the cost of gas right now has many people worried. You may find that you’re spending more to get to work than you may make for the day, or the ratio may have changed dramatically. If this is the case, consider setting up a carpool with other workers to save money, or you may even be able to arrange to telecommute. There are many ways that you can reduce your monthly expenses and free up more money to handle the rising cost of necessities.

This is also a good time to think about setting up an emergency fund. This is a very beneficial type of savings account that can tide you over if you run short during the month, or if you end up with a personal crisis on your hands. When you have the security of a savings account, emergency fund or other means of income, you’ll be in a much better position to weather any economic storm.

While the economy has been better, there is certainly no need to start panicking right now. Simply follow smart money practices, and you’ll be in a position where you can withstand whatever comes.

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Loanio Roundup – The Economy, Small Business, Loans, and P2P Lending

Sunday, October 26th, 2008

The Economy, Small Business, Loans, and P2P Lending

Welcome to the fourth edition of Loanio’s roundup. There’s more on the peer to peer lending industry in this post with several links for small business entrepreneurs to check out as well. Browse through and make sure you’re up to date on all the financial information. Might want to grab a coffee first.

We hope the remainder of your weekend is great!

The Economy:

  • U.S. banks still aren’t lending says Business Week.
  • Wall Street Journal looks at global currencies, markets buffeted.
  • FT goes in-depth on the global financial crisis.
  • American Bankers writes in closing act, Wachovia lays bare extent of woe.
  • Forbes says fear will subside.
  • The Economist posts the financial crisis: into the storm.

Small Business:

  • P2P Lending is offered as a funding option for home business owners at Cash Paid Surveys.
  • Blogging Stocks posts Entrepreneur’s Journal: Can’t get a business loan? Try a credit union
  • Your Outsource Solutions blogs “Online Marketing Tools for Today’s Small Business” e-Book Release.
  • 24/7 Wall St. writes Google (GOOG) Earnings: A Perfect Proxy For Small Business.
  • CNN Money points to a sharp drop in business lending – again.

Peer-to-Peer Lending:

  • Top Ten Reviews says Peer to Peer Lending is the next internet craze.
  • The International Herald Tribune internet lending sites come under stress.
  • About.com writes P2P Lending caught in credit crunch, Prosper.com pauses.
  • Maneo becomes first P2P Lending platform in Japan says Prosper Lending Review.
  • Lubbock Online features Peer-to-Peer Lending: beneficial for loaner, borrower, but also risky.
  • Champs Portals writes about hiccups in peer to peer lending start-ups.
  • New York Times asks is Peer-to-Peer Lending working for you?
  • Wall Street Journal says Peer-to-Peer Lending sites getting squeezed in credit crunch.

Loanio in the News:

  • Prosper Lending Review mentions us in Lending Club rapidly adding more states.
  • Southtown Star takes a look at Peer-to-Peer lending: Weighing benefits, risks.
  • A brief mention of Loanio in lending alternative hits hurdle by New York Times.
  • P2P Lender Prosper closes marketplace to lenders; Loanio unaffected for now writes Free Signal.
  • P2P Banking blogs Loanio says it won’t face registration process in near future.
  • A quick mention in Banking on Customers’ post what’s coming…

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Is Leasing an Auto a Good Option Right Now?

Friday, October 24th, 2008

Should you lease a car?

With the current state of the economy and rising interest rates, many are considering leasing an auto instead of making an outright purchase or financing one. While there are a few benefits that can come through a leased vehicle, this is a decision that will require some careful thought and weighing of the pros and cons before leaping. This is particularly true if you have never leased a vehicle before. Let’s take a look at whether or not leasing is a good option right now.

First and foremost, the most important thing to consider about a lease is the fact that you will have a buyout price at the end of the lease period. Many people forget about this extra fee and at the end of a few years find out that they really aren’t in any position to purchase their car. Unless you have more than enough money saved up to pay that extra fee at the end of a lease term, this may not be a wise option.

Another common problem facing those that lease is the fact that once the lease is complete, you won’t have a vehicle to trade in unless you do decide to purchase the leased vehicle. While leasing is convenient, it is often very difficult to get another car, especially if your funds are limited. Unless you plan on leasing for many years to come, this is something that must be considered. Essentially you’ll be paying for two to three years on a car, but at the end of the term, you’ll have little to show for your efforts.

While the interest rates for leases are usually a bit lower, there are some extra fees that may be included that can reduce any potential savings dramatically. It is vital to read through a lease document completely before you sign it to ensure you understand how much you will be paying now, during the term of the lease and when it is over. You may be told that your lease payment will be a certain amount when you are shopping for the car, but in actuality, you’ll have to add in other fees on top of that initial quote and your payment can be affected. Dealers that are above board usually do not tack on extra fees, but it does pay to be cautious.

We’ve gone over quite a few negatives about the leasing process, but there are a few positives to consider as well. First and foremost, the monthly payments are usually quite a bit lower. Considering the state of the interest rate market at this time, this is usually a very attractive selling point for many car buyers. The warranties are usually a bit better on leased vehicles and you may even be able to take advantage of some tax benefits if you do decide to go this route. Leasing is not for everyone, but with careful management and a complete understanding of the terms, they may also be very beneficial.

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How to Put Together an Emergency Fund

Thursday, October 23rd, 2008

Have an emergency fund.

If you are concerned about the state of your finances, your job or if you would just like to have a safety net that will be there to catch you if something goes wrong, an emergency fund is a very powerful tool to have in your financial arsenal. Emergency funds can be used for just about anything and these are the proverbial “rainy day” funds that can help you stay afloat when the worst happens. Since we can’t control everything in life, it’s always nice to know that you do have other options to keep you financially solvent.

Setting up an emergency fund is actually quite easy and although it can take a few months to get to the point where you won’t have to worry, you’ll have the satisfaction of knowing that you’re saving ahead for your future. This makes it a lot easier to keep going and keep working on building up that emergency fund.

The average emergency fund should contain at least enough money to pay your expenses for three months. Ideally, it should be for six months to a year, but the key is to get started and worry about the actual amount later. Once you have your emergency account set up, adding to it is the easiest part.

So, you’ll need to sit down and calculate how much money you make a month, and how much you are spending. Use one month as your basis for the average amount of money you would need and you can go from there. The main use for an emergency fund is typically to cover you if you end up losing your job, so use this as your template for building up your emergency fund.

Once you have a better idea of how much needs to go into your emergency fund, it’s time to get started on where you will be keeping it. While burying it in the back yard is out of the question, it is important to keep your emergency fund in a place where it can be quickly accessed. A savings account with a debit card or checks that you can write is ideal in this situation since you’ll be able to quickly withdraw your funds if necessary and you won’t have to wait for business hours if you are in the midst of an emergency.

Your emergency fund should not be tied to your regular checking account or any other account. This can help cut down on the temptation to spend your rainy day money while it is still quite sunny out. Remember, whenever you are tempted to dip into that account, what could happen if you lost your job today. Would you have enough money to pay all of your bills, and keep your house and car? This is very good motivation if you are having a difficult time keeping your hands out of the till. Work towards a bigger goal with your emergency fund and don’t forget to keep adding to it to make it grow further.

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Loanio Roundup – Credit and P2P Lending

Sunday, October 19th, 2008

Credit and P2P Lending

Welcome to the third edition of the Loanio Roundup. This edition looks at what is going on in P2P lending, the economy, and more. There are some links on college financing and a swift look at the auto industry. Browse the links below and tell us what you think. What are you most interested in hearing about? Have a good weekend!

The Economy:

  • Market Watch tells U.S. stocks slammed again; economic data come in bleak.
  • Business Week writes making Wall Street pay?
  • Kiplingers says heed the wake-up call.
  • New storm hits markets says FT. Is it too late?

Auto:

  • Auto dealers wait for sales rebound says Orlando Business Journal.

College:

  • Student Online Tips asks why the need to consolidate student loans?
  • Top Student Loans writes student loans – what you need to know about applying for student loans.
  • Scholarship Website talks all about student loans.
  • Geared Investor offers up reasons why you shouldn’t pay of student loans early.

Peer-to-Peer Lending:

  • Nice Words writes about the rise of peer-to-peer online lending.
  • New York Times talks about how in credit crisis, some turn to online peers for cash.
  • Wall Street Journal briefly mentions p2p lending in mortgage lending for sellers.
  • The Experience Economy discusses peer to peer: why P2P is better than capitalism an interview with Michel Bauwens.
  • Zopa shuts down US branch says Rate Ladder.
  • Making Money says he’s lending $1000 in The Street.com through p2p lender sites.

Loanio in the News:

  • US News says Credit Crunch? Your Move, Peer Lending
  • Loanio briefly mentioned in Finextra’s P2P lender Zopa reports soaring uptake as credit crunch bites
  • Banktech writes Loanio.com rolls out peer-to-peer lending platform.
  • Free Signal says just-launched P2P lender Loanio joins Finovate Conference Demo lineup.
  • Nuwire Investor posts Loanio.com Lowers the Risk in “High-Risk.”
  • Peer-to-peer lending: Weighing the benefits, risks of borrowing from strangers, friends by Yahoo! Finance.

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How to Fix a Mistake On Your Credit Report

Monday, October 13th, 2008

Know your credit!

We all make mistakes, but when it comes to your credit report, a simple or small error can have a big impact. In fact, one small error is more than enough to drag down your FICO score and could even prevent you from getting a loan in the future. It is very important to monitor your credit report and score on a regular basis to spot any errors that occur. This will enable you to take quick action to fix any damage that has been caused before it can affect you adversely. Here are the steps you need to take to fix a mistake on your credit report.

1. File a Dispute.

This is done through the actual credit bureau. Since there are three different major reporting agencies, you may need to monitor all three to see if all of your reports are being affected. Each one will have to be dealt with separately, especially if the error appears on all three reports. In many cases, it may take 60 days or more for something to show up on a report, so if you do spot an error, you will need to keep monitoring your other reports as well.

All three bureaus now offer the ability to file a dispute online, or you can file it by phone or through regular mail, depending on your preference. You will need to select the reason for your dispute and provide the correct information if necessary. Expect to wait up to 45 days for a response one way or the other.

2. Contact Creditor Directly.

If your dispute is denied and you are certain that there is still an error on your report, you can contact the creditor directly. Keep a record of all communications and send a copy of everything you send to a creditor to the three major reporting agencies as well. Always use registered mail when you contact a creditor, since they will need to respond to you within 45 days to remain compliant.

If you do not hear back within that time frame, you will need to contact the reporting agencies to update them on the status of the dispute. In many cases if the creditor has not responded within that time frame, the agencies will simply remove the error.

3. Know Your Rights.

It is a very good idea to review the Fair Credit Debt Collections Protection Act so that you are aware of your rights when it comes to dealing with creditors, reporting agencies and collection agencies. The information contained in this act will assist you in determining your further course of action if you cannot get the error removed from your report.

With diligence, you can protect your credit rating from adverse affects due to errors, but it is up to you to make sure that they are taken care of promptly. If you are not currently monitoring your credit reports, you may want to consider doing so, especially if you plan on applying for a loan within the next 180 days.

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Loanio Roundup – Wall Street Crisis and the Resilient Dollar

Sunday, October 12th, 2008

The Resilient Dollar

Welcome to the second edition of the Loanio Roundup. This edition focuses heavily on the national economy and peer-to-peer lending news. We hope you enjoy pursuing through the links below. Leave a comment and tell us what you think – we’d love to hear your views on the Wall Street Crisis and National Bailout.

The National Economy:

  • McCain reshuffles rescue deal writes Wall Street Journal.
  • NPR asks is the financial storm about to break?
  • Business Week talks on the financial crisis: how to stop the panic.
  • Economist focuses on the resilient dollar especially on why the greenback has managed to so far withstand the financial panic.
  • NYT says ignoring reality has a price.

Career and Home:

  • CNN Money says jobless claims fall from 7-year high.
  • Yahoo! Money presents the How-to Guide: Buying Life Insurance.
  • Kiplinger talks about marriage and money.

Peer-to-Peer Lending and Loanio in the News:

  • FiLife writes new age borrowing: peer to peer loans.
  • My Card Blog posts Loanio launches person-to-person lending service.
  • American Banker writes Loanio P-to-P firm caters to subprime borrowers
  • Center Networks says peer-to-peer lender Loanio launches to help credit challenged people obtain loans.

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