Christian Finance Blog
Spiritually Prosperous, Financially Rich!

There is a portion of the American population that is familiar with the inner workings of the stock market, but for most people, it still remains a bit of a mystery. With all of the ups and downs that consumers have seen ever since the crash of 2008, people remain very leery of getting involved on any level with the market. According to an article released in USA Today, nearly six out of ten Americans either don’t invest in the market or think it’s a bad idea. The unfortunate reality is that personal investments will become a large portion of future income. Not every area of market investment has seen such dramatic shifts and here’s a list of some of the best long-term investment strategies that people should look into:

Coming Up With The Capital

Most people live from check-to-check. This is one of the unfortunate realities of the current market. Coming up with the start-up capital to begin investing is obviously the first step. Some people have used a home or auto refinance strategy to come up with the money. Another option is to open up a separate account that is automatically withdrawn from you paycheck. You should first look at your monthly budget to figure out how much you can afford. This might require some changes to your spending habits but the sooner you start saving, the better.

Considering the Long-term

You need to take the long view on what you’re going to need in the future. For years now, 401k’s and IRA’s have been the most popular investment vehicles for those looking to save for retirement. 401k’s are traditionally offered by employers to their workers as a way to put aside money. This money is matched by employers, usually up to six percent. Some people prefer IRA’s due to the diversity of options. These are two of the most stable long-term strategies that have a very low level of risk and should be a part of any savings approach.

Diversification

People who jump into the stock market are often unaware of the risk of investing in too few options. If you’re putting any amount of your savings towards the market, you need to diversity your holdings. Mutual Funds are the best way to spread out the risk through many stocks.Another interesting strategy would be to try currency trading with FXCM as it could protect you from some of the market volatility if things go back. Ideally, you shouldn’t put any more than ten percent of your holdings in any single stock option. Spread everything out across options like property, commodity, and mutual funds so you are giving yourself extra protection against the collapse of any single investment sector.

There are many other savings options for consumers and if you’re not that familiar with all of the options, it would be best to speak with an investment professional first. You can also look online for other tips towards similar goals. You can always invest in the short-term in various stocks currently trading on the market, but it’s essential that you don’t confuse the two. You don’t want to risk money that you can’t afford to loose on a stock that has too much risk attached to it.

Payday loans can be a convenient financial tool in an emergency, but make sure you can pay your lender back on time to avoid high interest rates often associated with these cash loans. Many lenders offer rollovers for customers who can’t pay in full, but be careful with this option, as you could end up paying more for your loan than you intended.

Payday loans and cash advances are provided by independent lenders without backing from banks or other bigger financial institutions. Because of this, payday lending is a riskier business for lenders. They charge higher interest rates than a bank or credit union would to compensate for their bigger risk. If not paid back on time, a payday loan could have annual interest up to 400% or higher.

Storefront payday lenders usually require customers to pay off their payday loans in one lump payment on their next payday. If you can’t afford to pay off your loan right away, a lender may offer an extension or a rollover, but payment plans aren’t always flexible.

Online lenders usually offer more flexible payment options, with installment plans usually available for customers who need them. An installment plan will likely cost you less than a rollover, so consider borrowing your payday loan online if you think you’ll need to pay it back in smaller chunks. Instant payday loans have the added benefits of automatic payments withdrawn from your bank account every payday so you don’t have to worry about mailing a check in on time to pay off your loan.

If you need to borrow emergency cash, make sure to take the interest rate into account before you borrow and adjust your loan amount according to what you can afford. When you’re responsible with payday loans, you won’t need to worry about interest rates or payment plans. Be smart and pay back your loan on time to avoid creating additional financial trouble for yourself.

Realize that you will find assets available that will help you plan. Genworth Financial provides details about long-term care and just how to pay for the price of care at http://insuranceresourcesforyou.com/ and also on the Genworth site, http://www.genworth.com/content/home.html. Don’t make presumptions regarding your existence or those of family members – plan in advance, put that plan into action, and become confident concerning the future.

With economic volatility and uncertainty rippling throughout the country, it’s not surprising that many families are looking for immediate solutions to their problems. But now more than ever, it’s important to consider your family’s long-term health, security and happiness. Providing for long-term care is just as vital as providing for wellness and financial stability, but is often overlooked until there is an immediate need – and then it can be too late.

We all hope and even expect that our living standards will be maintained throughout our lives. But the cost of living is rising, and the cost of long-term care is escalating beyond the rate of inflation. In order to avoid seeing “long life care” become an overwhelming burden, eating away at both your savings and your peace of mind, you can take steps to plan for your own future or that of your loved ones, so that you can continue to live life on your terms.

Talking about long term care can help facilitate a difficult time between you and your parents or loved ones, but according to Genworth Financial, 59% of Americans are uncomfortable discussing their needs with their family while 49% of individuals believe their family would be uncomfortable talking about it.

To avoid a demanding and fraught conversation, educate yourself about the types of long term care available, and consider what factors will contribute towards providing the type of care you or your family envision. Just because you love someone doesn’t mean you truly understand the day-to-day issues that confront a person. This sort of discussion necessitates being open to hearing about the challenges and the health of a loved one.

Most people would prefer to be able to stay in their own homes, but sometimes it’s not feasible. Discuss whether any improvements can be made to the house to make living at home easier. If it’s not possible to make home improvements, consider what other options would be preferable. Perhaps a person would rather live with a particular family member, or perhaps they would like to broach another solution.

If long-term care is a necessity, then planning for the cost of care is also a necessity. Paying for long-term care can be a crippling factor on it’s own, with both physical and emotional consequences. Consider long-term care insurance. Know what policies are available. If you require extended home care or foresee being in an assisted living facility or nursing home, then long-term care insurance can help ensure your have the means to cover cost. LTCI can give you both the freedom and flexibility to choose the plans and services that are best for you

Know that there are resources out there to help you plan. With economic unpredictability and uncertainty rippling through the country, it isn’t surprising that lots of people are searching for immediate methods to their problems. However as part of your, it’s vital that you consider your lengthy-term health, security and happiness. Supplying for lengthy-term care is equally as vital as supplying for wellness and financial stability, but is frequently overlooked until there’s an instantaneous need – after which it may be past too far.

Together with financial changability and doubt rippling with the nation, it’s not astonishing that numerous individuals are searching for instant techniques to their own problems. Nevertheless in your, it’s crucial that you take into account your lengthy-term well being, security and also joy. Delivering for lengthy-term attention is simply as essential because delivering regarding wellness and also economic stability, but is often overlooked till there is a sudden will need : and could be too far gone.

You.Azines. Annual official population poll predictions situation the amount of individuals aged sixty five or perhaps old is predicted to twice within the next 20 years. In addition, living expectancy is growing. Nonetheless, it’s a normal false impression which long-term treatment can be a need tied to the senior citizens. Depending on the You.Azines. Division regarding Medical health insurance and also Human providers, 40% of people utilizing lengthy-term treatment are actually 18-65 years of age.

All of us desire along with assume our residing requirements is going to be maintained all through our everyday life. However the living costs will be thriving, and the expense of lengthy-term attention will be increasing after dark fee associated with inflation. So that you can avoid seeing “long lifestyle care” turn into a enormous load, eating aside at equally your own cost savings along with your pleasure, it is possible to take action to prepare on your own potential or even the ones from your household members, to ensure that you will keep to reside in living within your terms.

Speaking about long-term attention might help help difficulty in between you and your mother and father or even members of the family, however depending on Genworth Monetary, 59% of men and women in america are unpleasant referring to their requirements making use of their loved ones while 49% of individuals think themselves could be uncomfortable discussing this kind of.

To prevent the challenging as well as tangled up dialogue, inform yourself concerning the forms of long-term attention accessible, as well as consider exactly what aspects may direct towards offering the kind of care you and your family photo. Since you want an individual doesn’t mean you unquestionably comprehend the day-to-day problems that confront someone. This type of dialogue necessitates being released to playing the issues and the your health of the relative.

Lots of people prefer to be capable of be in their particular houses, yet sometimes it isn’t attainable. Go over whether any kind of advancements can be produced on the residence to produce surviving in your house less complicated. If it is not feasible to create house advancements, think about the other options could be more ideal. Possibly someone prefer to accept a particular member of the family, or even they would like to broach an additional solution.

When lengthy-term care is often a necessity, next planning the buying price of care is another need. Having to pay with regard to lengthy-term care could be a massive factor about it’s personal, along with each emotional and physical effects. Think about lengthy-term treatment insurance. Understand what recommendations can be found. In the event you need lengthy house treatment or even assume through an assisted dwelling service or perhaps aged attention, next lengthy-term care insurance might help be sure that your contain the way to protect expense. LTCI can provide you with equally flexibility as well as flexibility to obtain the plans and also providers which are great for an individual.

Recognize that you’ll find assets obtainable that will assist you plan. Genworth Monetary provides information regarding lengthy-term attention and the way to pay for the buying price of treatment at http://insuranceresourcesforyou.com/ and also on the Genworth website, http://world wide web.genworth.com/content/home.web coding. Don’t help make presumptions regarding your lifestyle or even that relating to loved ones : prepare, place that plan into action, and become assured concerning the future.

Now more than ever, throngs of people are out of work and searching for their next source of employment. With such fierce competition for the few available jobs, it’s important for individuals to stay at the top of the masses if they hope to be successful. While there are many resources that can tell a job hunter how to search for a job, it’s just as important to know what not to do.

Failing to Network

Many job seekers search for jobs almost exclusively in online job postings. This is roughly the equivalent of limiting yourself only to the classifieds section of the newspaper.

Most companies do not post their job openings online, and the ones that do may not be the kind of efficiently run companies you want to work for. A company that has time to wade through a sea of emails from thousands of interested applicants for each position may be in the habit of wasting time. In addition, each applicant’s chances of getting hired are slim given the number of applicants, and the process is likely to be long and drawn out while the employer processes the mountain of resumes.

Online postings represent a tiny share of the job market. The vast majority of jobs are “hidden”, or not publicly advertised. This is especially true for jobs in the public sector such as special education programs or elementary school teachers. Employers want to hire someone they know they can trust, so they prefer to hire people that are recommended to them by their own human networks. Becoming a part of as many of those networks as possible through friends, family, and professional contacts can make you a player in that market.

Failing to Proofread the Resume

Your resume is, in effect, you…condensed into a piece of paper. A resume contains, or should contain, everything about an applicant that is relevant to the employer’s interests. Having a polished resume is essential to being invited to an interview. Many hiring managers will throw a resume in the trash at the first sighting of a typo. Not taking a little extra time to proofread a relatively short document that could determine the future of your career and finances is a sign that you don’t really care. The employer will assume that if hired, you would show the same level of dedication in your work.

Not Knowing who You’re Applying to Work For

As important as it is to create a concise, polished resume to help the employer find out about you, it’s equally important for you to find out about them. When you interview for a position, an employer will ask you a number of questions, many of which will revolve around your value to the company if hired. An employer wants to know what you’re worth to the company. He wants to know what you’ll do and how you’ll contribute to the organization’s mission and goals. If you have only a vague idea of what the company actually does or what the open job involves, your answers to these questions will be less than impressive.

It’s essential to put your best foot forward in today’s job market. By avoiding these common pitfalls, you have a much better chance of wowing an employer and getting a job.

Education-Colleges.com works to provide information and resources for those seeking teaching careers, matching them with schools that can provide education training such as an early childhood education degree.

While we are all struggling to pinch pennies every chance we get just to make ends meet every month, we also need to keep our futures in mind. Saving for retirement is often something start thinking about too late. The sooner you start saving for retirement the better and more comfortable your retirement will be.

Don’t let planning for your retirement be postponed simply because you find it overwhelming either. There are three quick steps anyone can take to begin saving for the retirement they always envisioned:

Set Goals

Before you begin saving for retirement, you need to envision how you want to live out your retirement. If you want to purchase a piece of land and live out your days there, then you need to budget for that. If you want to travel the world and experience numerous adventures, then you need to budget for that. Different goals have different prices so determine what your goals for retirement are first.

Do the Math

Once you determine your goals, you need to determine how much you will need to save monthly in order to reach your goals. While doing all this math may sound intimidating, online resources, such as Retirement Calculator.com, can help you calculate your monthly savings needs.

Start Saving

Once you know how much you need to save each month, you need to start making monthly payments into your retirement account. Don’t let other purchases get in the way of making these payments into your retirement account each month. Every penny counts, and you need to treat paying your retirement account just like you would paying any other bill. Every month set the money aside, and pretend like you are paying it to a debt.

Saving for retirement isn’t difficult, but unfortunately doing so is often postponed. Many are overwhelmed by the task of planning for retirement and others simply choose to enjoy their money now. However, retirement planning is a must, and even after calculating your retirement yourself, it is still a wise choice to visit a professional financial planner. These individuals will be able to help you see unforeseen costs such as healthcare and assisted living, and will also help you better account for inflation so that your retirement savings is as accurate as possible.

Don’t wait until you are 5 years from retiring to worry about your retirement. There are hundreds of free resources online to help you get started, and to make retirement planning easier. You’ve worked your whole life so make sure that you are saving to afford that retirement you always wanted.

Guest Post by Jessica

It may seem like a simple question: Why should anyone avoid overdrafts on their bank account? But the simple answers – that they cost money in fees, plus end up as a “ding” against your credit score – only tell half the story.

The other half is learning how to be savvy about how you do it. The road to financial freedom is not one smooth highway. There are bumps, curves, narrow and wide sections, times when you’re stuck going slow and other times when you have to decide if you want to risk aggressively passing the other guy – all points where smart decisions must be made. It’s about developing the skills and becoming familiar with important tools.

Take the bank overdraft problem (please!). These days, we have many automatic withdrawals for everything from utilities and telecom (phones, cable TV and broadband Internet hookups) to car and home payments, insurance and condo fee assessments. The problem is when an emergency expense happens – it can drain your bank account even as those automatic withdrawals loom in the days ahead.

What to do?

You have several options:

Get cash advances from your credit card – The fees can be steep, particularly if the cost folds into your credit card balance.

Get a cash advance from your next paycheck – The fees are steep when you take a year to pay them off. But few borrowers require so much time. These payday loans are usually paid with the next paycheck to come, taken care of in a matter of weeks, not months or years.

Ask family members for cash advances – This actually works in some families, although data suggest it’s a rare phenomenon. When you borrow personal loans  from friends or family, be sure to articulate the transaction on paper before money changes hands.

As should be clear, each of these approaches requires you to do something different or something new. While that is difficult for most people, to change a routine or try something they’ve never done before, it’s all a part of good stewardship of your resources – money and intellect – to give it your best shot. When you do, you are practicing your God-given brilliance at finding solutions to sticky, costly problems.

Guest Post by Elisa

The number of financial problems affecting the people of the UK seems to be growing. With rising VAT, high inflation and many people unemployed – the highest figure in around ten years, in fact – people are consistently looking for debt solutions. Luckily, management of debt is not too difficult and people are increasingly seeking a number of clever ways to keep track of their outgoings, avoiding surcharges associated with credit cards or loans.

Before you get in touch with a debt management company, you must set out any bones of contention such as unfair bank charges, debt management plans, desires to claim back on wrongly-sold payment protection insurance, or anything like mortgage exit fees. Before you call the organisation you hope will deal with your finances, look through other information to help get a better handle of your debt problems.

Firstly, don’t ignore mounting credit card debts by avoiding mail sent by such companies. You need to seize the initiative and work out a monthly budget, deducting all outgoings and debts from your income. If there is any money spare, increase debt payments on higher interest debts or any secured loans such as mortgages; often you may only be paying off the interest.

From here, cut back on non-essentials to avoid more serious problems in the future. Small changes can have a major impact on finances. If you eat out during a lunch break, take a packed lunch instead; this in itself could save over £100 each month. Reduce the number of times you go out, too; consider not even bringing a credit card to work! Check your credit rating every six months or so to ensure there are no errors on your credit report, as this can hurt applications to credit cards in future.

Finally, reconsider the mobile phone companies, utility suppliers, banks, and broadband providers to get the best deal. Plenty of organisations will be able to assist you on this, such as price comparison websites. After all of this? Call a proper service for debt management and consolidation advice – you won’t regret it!

Shopping for new furniture is something of a national obsession in the UK – just head to your local chain DIY store on any given weekend for further proof of this fact. There’s no getting away from it – we all like to give our homes a facelift from time to time, whether that’s replacing what’s broken or giving a room a new theme with some tastefully chosen new items. As anyone who’s spent an afternoon idly browsing the aisles in Ikea can attest, a quick trip for a desk and chair can quickly turn into a three or four figure spending splurge.

After a fun afternoon at your local Swedish interiors store – and a bank holiday spent putting up your new flatpack miracle – the last thing you may be in the mood for is a call to your home insurance provider. However, that quick call could prove to be a really smart move, especially if the worst happens in your home a few weeks, months of years down the line. Adding new furniture to your home will almost certainly increase the value of its contents – and it’s a wise move to make sure you’re covered for everything contained in your property.

In fact, regularly reviewing your contents is a habit that’s well worth getting into. Getting the best value out of your contents insurance is a fine art – you want to make sure you’re covered for everything, as if a disaster such as a flood or fire occurred, you’d only be covered up to the total value of your contents, even if more damage was caused. However, on the other hand, you don’t want to wildly overestimate the value of your contents, as this means you’ll be wasting money on cover you don’t need. If the value of your contents is £30,000 and you’re paying for £50,000, you’ll be needlessly throwing money down the drain each and every month.

If you’re planning a weekend of flatpack furniture building, it’s also worth checking that you’ve got accidental damage cover as part of your house insurance. As those amusing DIY shows we’ve all seen over the years have proved, swinging the hammer in the wrong place can have disastrous consequences. Make sure you’re covered before, during and after your weekend of DIY fun and the only thing you’ll need to worry about is whether your new pieces of furniture match the carefully-chosen colour scheme

Post by Alex

Westwood College is preparing students for their careers by introducing its new Employment Pledge SM program, available to new students. Eligible students who have not found employment six months after graduation will receive help with their bills from Westwood College for up to six months.

“The Employment Pledge is a first-of-its-kind program that reinforces our commitment to enrolling future graduates and our belief in their ability to launch a new career with a Westwood education,” said Rick Yaconis, Westwood College’s Chief Operating Officer. “We’re so confident that a degree from Westwood will prepare our graduates for their career that we will help graduates with their living expenses for up to six months if they don’t find a job in their field within six months of graduation.”

To be eligible for the Employment Pledge program, students must meet a number of criteria including attaining a minimum cumulative 3.00 GPA and actively work with Westwood’s career services department to attain employment in their field.

About Westwood College

Westwood College is an institution of higher learning with 17 campuses located in California, Colorado, Georgia, Illinois, Texas and Virginia. Westwood offers a hands-on, career-focused curriculum featuring three-year bachelor’s degrees in many in-demand fields. Westwood is accredited by the Accrediting Commission of Career Schools and Colleges (ACCSC) and the
Accrediting Council for Independent Colleges and Schools (ACICS), depending on the campus. For more information, visit http://www.westwood.edu.

You don’t have to spend big to look great – getting savings in the beauty aisle can be easier than you think. Finding your favorite beauty products for less doesn’t have to be hard. Follow these simple suggestions, and you could save a bundle on your favorite beauty products.

1. Join the rewards clubs at your favorite stores: CVS, Sephora, Walgreens, and Ulta all offer rewards that let you save money after you sign up. With programs that could help you get 10% off every time you purchase, you can get your favorite beauty products, at a lower price.

2. Shop Sales: Buying beauty products at reduced prices is a simple way to avoid spending too much. Look for tags advertising lower prices and keep an eye out for your favorite brands on sale. Sometimes last season’s colors are just as fun, but cost a lot less!

3. Use Coupons: There are thousands of websites dedicated to helping shoppers find useful coupons. Try Mommy Saves Big or Home and Beauty Coupons.com for starters, and lookout for more great coupon.

4. Check out grocery stores: While drugstores and recognized makeup stores might be the first place you look for your favorite makeup products, try looking in grocery stores as well. Don’t rule out Kroger, Walmart, Target or Meijer when it comes to finding savings on beauty products. They often offer a wide range of reputable brands, often at lower prices than drugstores.

5. If nothing else, buy double-duty beauty products, like sunscreen/body-lotion, or moisturizer/anti-aging cream. While this might not be the most glamorous way to get savings in the beauty aisle, it can save you quite a bit of money. You only have to buy one product, instead of two.

These suggestions could help you pay less for some of your favorite products – savings in the beauty aisle aren’t always easy to find, but a little extra planning can go a long way. Quality beauty products don’t have to be expensive, with the right research!

This blog post was written by Check ‘n Go, an ethical payday loans and installment loans company. Check ‘n Go has been a leader in online payday loans and check cashing services for over 15 years, helping to build legitimacy to the consumer lending industry through their work with the Consumer Financial Services Association.

No matter how much money or how little you have spent in the creation of your home extension, there comes a time when you will eventually have to pay for the work you did or had done. Of course, the smaller the extension is, the less of a problem you will face, but in every case, you will still have a number of options at your disposal. Such options may range from paying for such a project through personal savings to various forms of lending and borrowing.

Regardless of which step you select, the first thing you will need to do is to create a budget that is the right kind for the task. It should be detailed and should guide you through exactly how much money you will eventually need to borrow. This is key, as you will not want to run out of money half way through a project.

Private or commercial?

Once you have figured out how much money you are going to have to put down, and presuming that you have discovered that you will not have enough in savings to cover that amount, then your next step will be to figure out how and where to borrow the money from a person or an institution. What you do at this point will depend on a number of different factors, such as whether or not the home extension in question involves your home.

If the extension involves your home, then you will continue to live there. However, if you are extending a property that is not yours for residential purposes, then you might be working on a developmental project, such as improving a property so you can turn a profit on it during the sale. Extending and then selling a property is not an uncommon practice these days and popular amongst builders.

Commercial developers will be able to access a number of different financing options that will consider the final property values once construction has finished; this is something you typically will not be able to get typical providers such as building societies and banks to do.

A number of commercial developers are private investors. They make their money through loans to developers once they have examined the viability of the project in question. They will provide large sums of money through daily or monthly interest rates. Other lenders may be financial institutions that focus on the provision of funds for development projects.

Make use of existing equity

If you are improving your own home, then you will probably want to get the money by extending the mortgage you already have; this is called a re-mortgage. It releases your home’s equity due to the increased value of your home. You borrow the money you need and pay it back through your mortgage. In some cases, you might not face a significant increase in your monthly payments. When you come to sell your home you will pay back both mortgage charges together.

It was not too long ago that borrowing against your mortgage was difficult and rarely done, but the rules have been changed to make it much easier these days, so you can even play a number of lenders off each other when trying to find the best deal. Watch out for deals that feature low introductory payments, as these periods will inevitably come to an end.

The problem with those situations is that you might fancy yourself earning more money at the ends of those periods but if you aren’t, you might be stuck with much higher monthly payments that are much harder to pay. Be sure you know what you are getting into before you sign any papers.

Alternative Loans

You can also get additional loans beyond your mortgage, including loans from banks, specialist lenders, or building societies. These can be secured or unsecured loans, depending on whether they are secured against your property or not. Separate loans are generally over shorter terms than mortgages and come with higher repayments. Consider the pros and cons of each option.

Bio

This guest post was written by Andrew Potter from My Online Estate Agent. My Online Estate Agent is a UK low cost estate agent and charges a fixed fee to advertise on Zoopla and many other top UK property portals and provides all the online tool and guides you need to sell or let your property.

A Guide to Professional Indemnity Insurance

Many professionals need to be covered by a specialist insurance policy in their line of work in order to remain on top of their game and legally-compliant. Architects, lawyers and accountants are required by law to have professional indemnity insurance, and the world of business is shifting towards making appropriation of this cover mandatory.

Professional indemnity insurance, such as that offered by Markel Direct UK, is a form of business insurance that protects a person or company when they are accused of losing a client’s money through a poor work ethic or on-the-job mistakes, as well as reputational damage. A legal duty of care must be afforded to each contract and if this fails on one or more levels, an individual could be liable for losses incurred by their contractor.

Acting as a safety net, professional indemnity insurance protects against actions that could be financially devastating. If a claim of negligence is levelled against you, professional indemnity will cover legal costs to defend the status you hold and should a case be lost, it can also cover damages the person becomes liable for. Even if nothing wrong has happened, the policy will still protect you and pay legal costs.

The amount of indemnity insurance you need to take out varies due to a number of things. Every policy is different and there’s no all-encompassing answer to the amount of professional indemnity cover that ought to be bought, unless there is a contractual minimum established. When choosing the right amount of cover, factors to consider include the financial impact if things go wrong, as well as the value of the contract you are working on. This is when it’s good to have someone on your side who has been through commercial finance training and can help you if things go wrong.

On top of this, many clients set a minimum level of cover before doing business with partners; most large corporations require at least £1 million in cover, while government departments can ask for as much as £2 million.

Be sure to go with your head as well as your heart when choosing this vital legal accessory – things could go very wrong if you don’t.

In this day and age there is absolutely no need for debt to spiral in to bankruptcy. Over the past twenty years or so the legal framework for bankruptcy and managing debt problems has changed meaning that now there are more options available to individuals that are facing financial problems. One of the key ways to get on top of debt is to consider debt consolidation. This is where an individual takes out a new loan and uses this loan to pay off expensive credit or store card balances, loans with high interest charges or large monthly installments. Doing this leaves them with just one manageable monthly payment.

This is particularly effective if the credit rating of the borrower is still good and a new loan can be sourced on good terms. If the debt problems have already caused payments to be missed then the individuals credit rating may have already been adversely affected meaning that the best terms for a loan may not be available. Debt consolidation works by reducing your monthly payment on a loan compared with the aggregate amount payable on the previous loans. Although this means that the total amount of interest paid may end up being greater. The prime driver of this is to reduce the monthly payment to a more manageable amount. By doing this, money can be freed up so that living within a budget becomes easier.

Bankruptcy numbers have increased throughout the current recession but not as sharply as many analysts had thought. This is partly due to the increased use of debt consolidation loans and Individual Voluntary Arrangements (IVAs), many people have managed to avoid the ultimate sanction, bankruptcy. The smaller amounts of debt may be manageable, when it comes to larger sums take more effort to get your finances under control. Ignoring debt is a bad option. Debt may start to affect relationships and cause all sorts of future borrowing problems if it is left unaddressed. There is a good and effective legal framework for managing debt problems ranging from debt consolidation loans through to IVAs.

IVAs have been a successful factor in reducing bankruptcy proceedings. These are arrangements that are legally approved debt management plans. These allow debtors to agree with lenders what can be afforded, with an understanding that at the end of the IVA term, any remaining debt will be written off by the lender. Whilst this is not ideal for lenders, it does however offer them a structured and legally approved method of recovering some of the money that is owed to them rather than having to repossess or go to the expense and hassle of instigating bankruptcy proceedings against an individual.

You can ask all the big time personal finance gurus out there – from Dave Ramsey to Suze Orman – and they’ll all tell you the same thing: lending money to family is a bad idea. It invites a plague of ethical dilemmas and amateur mistakes that statistically often stack against the lender. But what are you going to do? It’s nearly impossible to refuse to help loved ones when they need it – that’s the point of love isn’t it? With that said, lending money by taking out personal loans, without proper consideration for the law and insuring yourself against all possible outcomes, is a bad idea. In today’s tough economic times it’s hard to say no to family members and friends who might need help, so if you say yes, consider the following:

Taxes

You might be mostly concerned about getting your money back in full from the borrower but you need to be mindful about making sure that the IRS doesn’t classify your loan as a gift if the amount exceeds $12,000. That’s the limit on non-taxable gift giving to one person and lenders must pay taxes on gifts in excess of that amount. The proper documentation of your loan agreement is as much about proving to the government you loaned the money as it is about ensuring proper repayment agreement.

The Paperwork

In order to protect yourself from owing unnecessary taxes, you have to make sure you create a proper loan agreement. This means determining the interest rate, loan amount, payment period, interest, and collateral if applicable, and putting it to paper. Once both parties have signed, it can be considered valid proof of a loan in the eyes of the IRS. But you have to make sure you follow federal guidelines for interest on loans between related parties. These rates are determined based on the payback period, and can be found by visiting the IRS’s website for rates rulings.

The Paperwork Part II

Make sure you list the income, if any, earned from your loan on your Form 1040 Schedule B. That way you avoid accidentally committing tax evasion on unlisted income. They take loans between related parties as serious as they take loans between anyone else. It’s important to remember that when it comes to the IRS they simply don’t have a sense of humor about anything.

Lend money to family members at your own risk. But even if it’s shady Uncle Harry you lend your hard earned money to, it’ll be Uncle Sam who will be coming to collect his due if you don’t take the necessary precautions. Being good family isn’t always easy, but preventing the government from getting its hands in on the deal is if you know the right things to do.

Guest post by Jess