Financial Check Up Reminder

We are now nearly halfway through the year and it’s a good time to take a look at your financial goals. In life, it’s easy to get caught up in the day to day and put financial plans on the back burner. But here are two thoughts.

Take a good long look at your financial goals and see if they have changed. Make sure that when you put together a plan it is both actionable and quantifiable. When a plan is actionable, it is something that you can actually do. For instance, an actionable plan is saving a certain amount of money per month. A non-actionable plan would be winning the lottery. A quantifiable plan is one where you can measure at the end of the year whether or not you have succeeded in it. Let’s say you were to put away $200 a month for the remainder of the year. You should have $1,200 if you save for July, August, September, October, November and December. If you don’t have $1,200 on December 31st, then you haven’t reached your goal. Take the remainder of the year to work on consistent saving, budgeting and investing methods.

If you were planning to make contributions to your favorite charity, there has never been a better time to do it. Charities that support the welfare of the local community are in a recession also. In a time where community services are much needed, charities have to get by with much less. Plus, it’s also a tax deduction you will be able to take for 2008.

Start with those two and check back here for more ideas soon.

Wishing You Wealth in all its Greatest Forms,

Alex

Is Your Mortgage "Under Water?"

The words “under water” have taken on new meaning as many homeowner’s who purchased a home in the last few years have experienced the value of their home dropping below the balance remaining on their mortgage.

There is good news with Fannie and Freddie, the government sponsored companies that buy and insure mortgages and provide liquidity so that new loans may be made. If your loan is held by either or the FHA (Federal Housing Administration), you may be able to refinance your property up to 105% of its current appraised value.

The possibility is that you may be able to get a lower interest rate or reduce your monthly payments. If you quality, you may even move from an adjustable rate to a fixed one. Owner occupied properties up to four units, including single family residences, condos and rental properties are all potentially eligible for this. [Bankrate.com]

To find out more about the eligibility, go to the government website here.

Wishing You Wealth in all its Greatest Forms,

Alex

Credit Card Companies Complain, but Consumers Rejoice!

President Obama put the pen to paper on May 22 and made changes to the way that credit card issuers do business. The changes were “common sense reforms designed to protect consumers.” Advocates are happy, but banks have already begun campaigning that the new reforms may hurt cardholders in the long term.

Let’s take a look at these changes. It’s called the Credit Card Accountability, Responsibility and Disclosure Act, but has been named “CARD” for short…a very fitting name. Some changes will occur in 2010, while others could happen in 90 days.[SmartMoney.com]

• No Surprise rate increases
If your card company wants to raise your rates, they now have to let you know 45 days ahead of time and let you know why in writing.[LaTimes.com]

• Bills in Advance
Your monthly bill has to be mailed at least 21 days before your payment is due. [SmartMoney.com]

• Restrictions on retroactive rate increases
The rate on an existing balance can’t go up unless you are at least 60 days late on a payment. And even if you are 60 days late, your credit card company has to restore the prior rate if you pay the minimum for the next 6 months.

• On time Redefined
If you pay your credit card before 5pm EST it will be considered paid on the same day. And in the chance that your payment due date falls on a weekend or holiday, you cannot be subject to late fees because they weren’t open.

• Fight Higher Rates.
If you are paying different rates for different kinds of transactions, you can now apply any payment above the minimum to the highest rate balance.

• Additional Protection for College Students
College students will be able to get credit, but within reason. There’s little reason for college students to graduate with loans and high credit card balances, which is a double whammy to getting started on the right food. Account limits will be either 20% of their annual income or $500, whichever is greater. The goal is to make this market less attractive to issuers and reduce the amount of exploitation.[SmartMoney.com]

• Protecting Future Generations
The new legislation bars companies from issuing cards to most people under age 21. Those younger than 21 will only be able to use a credit card under one of the following conditions: They can prove they have the means to pay the debt (or their parent or guardian promises to pay it off if they default).They are emancipated minors. They are designated secondary cardholders on a parent or legal guardian’s account.[CNBC.com]

• Universal Default Ending. This is the practice where if you make a late payment to one credit card company, they all get to raise your rate. Under the new plan, if you make a late payment to one, others cannot hike your rate and bury you.[SmartMoney.com]

• Over Limit Fees by Exception. Your account cannot be put over the limit without your advanced okay to do so. [SmartMoney.com]

Credit card companies are staunchly against these changes because without the extraordinary amount of fees, there will be less revenues. I believe that going forward, there will be less rewards and new annual fees.

Whether or not these changes help America become more financially independent remains to be seen. But I believe every bit helps and believe that credit card companies will need to also take a pay cut during these difficult economic times.

Wishing You Wealth in all its Greatest Forms,

Alex