Personal Finance Resources

With so much information at your fingertips these days, identity theft has become a huge issue in the United States and credit card companies are looking to help their clients avoid identity theft at every turn. Identity theft credit cards provide protections available to you for no extra cost, and give you that added security to put you at ease when using your credit card. Each credit card company will offer different identity theft credit card protection for you, and it’s best to know whats out there when applying for a new credit card.  The following is a breakdown of four major credit card companies, and how they deal with indentity theft:

Discover’s Identity Theft Credit Card Protections

• Credit File Montitoring - All three credit bureaus are monitored for unusual activity every business day, if anything is found that could indicate fraud, you will be contacted promptly by means of an email, text message or mail.
• $25k Identity Theft Insurance - Provides each client theft insurance up to $25k with no deductible for expeneses associated with identity theft (not for New York residents).
• Expert Identity Theft and Credit Report Advisors are always on call to answer any questions.

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It is important to know how credit card interest is calculated. It is not calculated the same way that a CD or an interest bearing savings account is calculated.  The key problem for the consumer is that the credit card interest rate is calculated daily.  I’ll will explain more in a minute on this.  First let’s go over the typical balance types that credit card companies use:

• Average Daily Balance
  By far the favorite of credit cards.  Every day, your balance is recalculated with any payments, adjustments and/or additional finance charges.  With some credit cards, new purchases are also included in this calculation.  At the end of the month, these daily balances are averaged over the number of days in the billing cycle.
• Two Billing Cycle Balance
  This method is most advantageous for the credit card company.  This method is an extension of the average daily balance method, but utilizes two billing cycles to come up with the average daily balance.  The typical grace period (which is usually 28 days) is non-existent under this method.  Also, all your payments, regardless of size, do not truly reflect in the interest calculation until two fulls months later.  Definitely shy away from this kind of offer.
• Adjusted Balance
  If possible, this is the method you want to be using.  Under this method, all payments and credits are subtracted from the preceding billing period ending balance.  Therefore all interest calculations for the current month are being exacted on a lesser balance.

So when you are shopping credit card offers, take the above information into consideration.  It may not sound like it makes much of a difference, but you will see in a moment just how much of a difference it can make.  Remember above how I said that credit card interest is calculated daily?  This is how virtually all credit cards calculate interest.  This means that every day compounded interest is added to your balance.  But Jeffry, I don’t see it reflected in my balance, what are you talking about?

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Does it seem like you just can’t get ahead?  Like its paycheck to paycheck, and zero room for errors?  I’ve been there.  When I was in college, I was living on 59 cent bread and 49 cent lunch meat.  I could barely make rent and pay payments on the thousands of dollars I racked up in credit card bills.  The financial pain of higher education is incredible these days.  But you may have other reasons why there isn’t anything left at the end of the month…

Today, I want to look at some possible cost cuts you can do to increase your monthly saving habits (or generate some new ones).  I have compiled a chart that will show you how small monthly or daily cuts in your budget can really save a lot of money over time.  But it takes discipline, and you must be ready to commit to saving money as a daily habit, to achieve any real monthly savings.  Here’s some things to ponder:

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I am proud to introduce my user friendly, simple, free home budget spreadsheet.  I took the home budget spreadsheet that I have been using for the last few years, and modified it so that it is dirt simple to use, and helps you to predict your future savings!  Just a few instructions to follow, to make sure there is absolutely no confusion:

1. Line 5 of the spreadsheet is where you enter your after tax or net income.  It is entered by month, so that if you have a job that is not salary and your earnings vary month to month, this home budget spreadsheet will still work for you.
2. Column B of the spreadsheet is where you enter all the line item expenses that you are budgeting for.  Try to come up with an average for the year, as you don’t want to change these items as the year progresses, if possible.  All the automatic calculations assume that the budget items will not change.
3. Cell B22 of the spreadsheet is where you enter your bank account’s balance at the beginning of the year.
4. Columns C through Y are where you will be entering your actual monthly expenses, as they happen.
5. Check the automatic calculations for your predictions!

With regard to the automatic calculation area, here are the definitions of what is being calculated:

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Ever thought that 60 miles per gallon would cut your monthly gas bill in half? Me too. The idea of the hybrid is almost too good to be true. And from a financial standpoint, it is too good to be true. The following information is a cost comparison between the Honda Civic Sedan and the Honda Civic Hybrid Sedan. Essentially the same car, except the hybrid uses half electric, and half gas power, thus improving gas mileage. According to Honda, the Civic gets 40 mpg on the highway, while the Hybrid Civic gets an amazing 51 mpg. This is where the salesman gets you. “It will help protect the environment while saving you tons of money on your gas bill every month”, a salesman might say. This is very convincing, as it appeals to both our emotional side in protecting the environment, as well as our wallet. But let’s take a closer look at the two:

• Civic Sedan: Starting MSRP - $15,010
• Civic Sedan: Highway MPG - 40
• Civic Hybrid Sedan: Starting MSRP -$22,600
• Civic Hybrid Sedan: Highway MPG - 51

Now, I have compiled a spreadsheet that will aid you in your financial evaluation of the hybrid vs regular car purchase. As always, I have run an initial estimation only, you will need to download the spreadsheet at the bottom of the post, and update the numbers per your circumstances. Let’s look at the findings:

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The following mortgage calculator will allow you to easily find the number of months and/or the number of years it would take to breakeven on your refinance investment (number of months and/or years at the new discounted payment to recoup the closing costs), as well as what your new mortgage payment would be.  This calculator will also provide you with the total savings you should expect over the life of the loan.  This spreadsheet tool is a must for everyone looking to refinance their home.  Let’s take a look at the following example:

The values above are purely an example and for demonstrative purposes only.  Be sure to get a good faith estimate from your lender to ensure that the closing costs you think you will be paying are the actual closing costs you will be paying. A refinance tends to be much easier to acquire than a new mortgage.  Take advantage of this fact, even you have less than perfect credit, and shop around. Find a lender that doesn’t charge any points to procure the loan, and whose appraisal, survey and document fees are cheap, comparatively speaking.

The mortgage calculator refinance breakeven is in spreadsheet format and is free to download here:

 Mortgage Calculator Refinance Breakeven.xls provided by Personal Finance Resources

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A mutual fund, simply defined, is an investment vehicle which allows a group of many different investors to pool their money together with a clear financial objective - to make money. It consists of an extensive collection of stocks and/or bonds, which is managed by a professional or group of professionals called an investment advisor. The mutual fund was created for those investors who feel investing their money by themselves to be too risky or just not savvy enough, but who still want to take benefit of the shared market. And benefit they do.

Mutual Fund Shares

Shares in the plan are purchased for you according to the rules of the plan and many restrictions on investment and redemptions apply. The shares are issued or redeemed by the investment advisor(s) typically in large blocks. These professionals issue and redeem shares throughout the day to keep the mutual fund making money. Mutual fund share prices are determined at the end of each business day by adding up the current value of the securities in the portfolio (after any expenses) and then by dividing the sum by the total number of shares outstanding.

Mutual Fund Diversification

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A Reverse Mortgage HECM, sometimes referred to as a Home Equity Conversion Mortgage (HECM), is a special type of home mortgage that lets a homeowner convert a portion of the equity in his or her home into money in their pocket. Simply put, a reverse mortgage is the exact opposite of a regular mortgage. The lender pays the borrower, and the borrower’s debt will increase as the equity in their home decreases. It allows individuals aged 62 and older to convert their home’s equity into tax free cash to help act as a second income during retirement. A reverse mortgage is a great way to tap into the equity of your home if you are not looking to sell your home and are also looking for tax free income. You may be asking yourself, just how does this work, and when will the loan need to be paid back?

Reverse Mortgage Loan Details

Reverse mortgage loans can be withdrawn in one (or more) of three options:

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