Personal Finance News Saturday 9/29

Phil's Personal Finance Tip of the Day:

What Would You Give Up to Buy Your Dream Home?
By Marilen Cawad | TheStreet.com – Fri, Sep 28, 2012 12:52 PM EDT

NEW YORK (TheStreet) -- With interest rates at record lows, it's hard to ignore the constant "buy now" real estate pitches. If you're renting and thinking now is a good opportunity to see what house you can afford, you are probably also thinking about what you may have to give up to buy that house. In a survey released by Century 21 Real Estate, renters said they are willing to contribute less to their 401(k) to buy their dream home. Not a good idea, says Eve Kaplan, a financial adviser with Kaplan Financial Advisors in Berkeley Heights, N.J. "The problem we often face as planners is convincing folks to postpone the 'here and now,' including enjoyable things, and focusing more on the future," Kaplan says. "It is really difficult to live on Social Security, which never was designed to be the sole source of retirement savings." Americans are just not saving enough for retirement.

According to a recent BlackRock survey, 58% of all 401(k) plan participants were not saving the maximum with their plans. The survey also found that eight in 10 retirees regret they did not save more for retirement through their 401(k) plans.  "Contributing less to one's 401(k) could often mean sidestepping a valuable company match," Kaplan says. "It's OK to sacrifice for a home, but a better sacrifice would be to forgo the dream home -- gourmet kitchen, media room, etc. -- and retain 401(k) deferrals."

 

Instead of reducing or stopping your 401(k) contributions, Ron Howard, managing principal at Siena Wealth Management in San Jose, Calif., recommends reducing or eliminating some other expenses.

To read the entire article from Marilen Cawad | TheStreet.com:
http://finance.yahoo.com/news/buy-dream-home-163800979.html

Inspirational Quotes@Inspire_Us from Twitter:
Courage is knowing what not to fear. -Plato

Personal Finance News Friday 9/28

Phil's Personal Finance Tip of the Day:

How to get the best mortgage interest rate

Want to qualify for the best mortgage interest rates? You'll want to know these five things that impress lenders.

By Terence Loose | Yahoo! Homes – Thu, Sep 13, 2012 6:27 PM EDT

Have you been thinking of buying a home or refinancing your mortgage, but wonder what it will take to qualify for those great mortgage interest rates you've heard touted in the press?

Well, the quick answer is that it will take a pretty impressive financial history, says Chris Boulter, president of Val-Chris Investments, Inc., a California company specializing in residential and commercial loans.

"You're going to have to have very good credit and a stable work history," he says. That could start you toward getting a mortgage interest rate on a 30-year fixed rate loan that, as of September 6th, 2012, was a low 3.65 percent, according to Mortgage News Daily, an organization that provides housing news and analysis.

Boulter adds that if you don't qualify for the lowest rates, you could still qualify for rates that are typically a percentage point higher, which is still very good, historically speaking.
[Want to see today's rates? Click to compare rates for multiple lenders now.]

So don't give up just because your credit isn't perfect. Instead, read on for details on how to qualify for the best mortgage interest rates and what to do if you don't qualify.

Requirement #1 - Great Credit

Do you pride yourself on paying your bills on time? Good news. Mortgage lenders like to reward responsible bill paying with their best interest rates, says Boulter. In fact, he says credit score is the most important piece of information for the lender.

"Your credit score is the first thing a bank is going to look at," says Boulter. "They need to see a credit score in the very good to excellent category in order to qualify you for the most favorable rates."

And if you're wondering what very good to excellent is, Boulter says a score of 720 or above hits the mark, according to the Fair Isaac (FICO) scale, which most banks use. That scale, by the way, runs from a low of 300 to a high of 850, according to the Fair Isaac Corporation.

Want to find out what your credit score is? Good news: you are entitled to one free copy of your credit score every year. You can order it at securemycreditreport.org.

And if you don't like the results, there are some ways to improve your score. According to the FICO website, some tips include:

• Set up payment reminders so you always pay your bills on time. Paying bills on time is one of the biggest factors in your credit score.
• Reduce the amount you owe. Yes, this is tougher to do than say, but this is another biggie. Start by using your credit cards less.

To read the entire article from Yahoo Homes:
http://homes.yahoo.com/news/tips-for-best-mortgage-rates.html

Scripture of the Day from Dave Ramsey.com:
Romans 5:4–5 — Not only that, but we rejoice in our sufferings, knowing that suffering produces endurance, and endurance produces character, and character produces hope, and hope does not put us to shame...

Please listen to the Dave Ramsey show live on WOR 710 from 2-4 PM EST. You can also listen to the 3rd hour 4-5 PM EST. at Dave Ramsey.com.

Personal Finance News Thursday 9/27

Phil's Personal Finance Tip of the Day:

The Key to Retirement Success is Simple

by Chris Kissell

Published September 26, 2012

Bankrate.com

As the clock ticks and retirement looms, millions of Americans are worried. Thanks to a combination of overspending, undersaving and damage caused by the recent financial crisis, too few have saved too little for their golden years. The crisis has also caused retirement planning to be less of a priority for most citizens who are trying to make ends meet.

Alfonso Canella says the resulting retirement crisis should be obvious to everyone. The senior lecturer at the Brandeis International Business School in Waltham, Mass., says most workers will build their retirement on the principal of their savings, not on investment returns. Retirement planning should not be pushed to the bottom of your to-do list. His message is that people must start saving immediately and must squirrel away more than they think they will need.

As he says, "It's that simple."

The recent financial crisis has had a major impact on all aspects of the retirement system -- defined contribution plans, such as 401(k) plans, as well as defined benefit plans, or pensions.

What is most problematic from your point of view?

The largest problem is the woeful undersaving in the private and public sectors. If you have a defined contribution plan, or DC, which is the plan where you put away pretax dollars into, say, a 401(k) plan. These plans, which are most prevalent in the private sector, allow a worker to contribute up to $22,500 per year pretax. (Editor's note: The limits are $17,000 for workers up to age 50 and $22,500 for workers 50 and older.)

Read more: http://www.foxbusiness.com/personal-finance/2012/09/26/key-to-retirement-success-is-simple/#ixzz27hF3zfWP

Scripture of the Day from Dave Ramsey.com:
Mark 9:23 — Everything is possible for one who believes.

Please listen to the Dave Ramsey show live on WOR 710 from 2-4 PM EST. You can also listen to the 3rd hour 4-5 PM EST. at Dave Ramsey.com.

Personal Finance News Wednesday 9/26

Phil's Personal Finance Tip of the Day:

'Free' Checking Costs More-Banks Boost Minimum-Balance Rules, Fees as New Regulations Squeeze Revenue

By Robin Sidel | The Wall Street Journal – Mon, Sep 24, 2012 11:37 AM EDT

 

So-called free checking accounts are more expensive than ever, as the lumbering economy and new regulations squeeze bank revenues.

 

To avoid a monthly fee, bank customers in the U.S. must keep an average minimum balance of $723 in checking accounts that pay no interest—up 23% over last year, according to a new survey from data provider Bankrate Inc., which analyzed 477 checking accounts at 247 banks and thrifts. The average monthly fee on noninterest checking accounts rose 25% to $5.48, also a record.

Banks have raised fees on automatic teller machines, overdrafts and checking accounts for customers who don't meet new standards tied to account balances or regular deposits.

A public outcry last year over the prospect of new monthly fees for using bank debit cards forced big banks to retreat from the idea. But a soft economy, low interest rates and new government rules that followed the financial crisis are prompting banks to flex their muscles on existing fees.

Martha Vockley, of Reston, Va., would like to put some excess cash into a high-yielding online bank account. Instead, she stashes the extra money in her interest-bearing checking account at SunTrust Banks Inc. (STI) to meet a minimum-balance requirement and avoid a $17 monthly fee.

"They have a lot of my money. It seems like this is overkill," said Ms. Vockley, 53 years old. Switching banks, she said, would be too time-consuming.

To read the entire article from The Wall Street Journal/Yahoo Finance:

http://finance.yahoo.com/news/-free--checking-costs-more.html

 

Scripture of the Day from Dave Ramsey.com:

Proverbs 10:4 — Lazy hands make for poverty, but diligent hands bring wealth.

 

Please listen to the Dave Ramsey show live on WOR 710 from 2-4 PM EST. You can also listen to the 3rd hour 4-5 PM EST. at Dave Ramsey.com.

Personal Finance News Tuesday 9/25

Phil's Personal Finance Tip of the Day:
Should You Wait on IRA Donations?
By ANNE TERGESEN/The Wall Street Journal

Many experts are betting that Congress will revive a popular tax provision that allows those ages 70½ or older to save on taxes while donating assets in their individual retirement accounts to charity.

But if you intend to give money to charity this year, don't wait for Congress to act.

The charitable IRA rollover provision, which expired at the end of last year, allowed IRA owners ages 70½ or older to donate up to $100,000 of their IRA assets to a charity. The donor didn't receive a tax deduction for the contribution. But he or she didn't have to report the IRA withdrawal as taxable income, either. And the contribution could count toward the annual required minimum distribution, or RMD, that people 70½ or older must take from a traditional IRA.

For many taxpayers, this "leads to a better outcome" than taking a tax deduction for a charitable contribution, says Ed Slott, an IRA expert in Rockville Centre, N.Y.

Why? By reducing your adjusted gross income, the tax provision may help you keep it below the thresholds at which you could lose some of your deductions and other tax benefits, or become subject to higher Medicare premiums and taxes on your Social Security benefits.

To read the entire article from The Wall Street Journal:
http://online.wsj.com/article/SB10000872396390444450004578002112287693002.html?mod=WSJ_PersonalFinance_PF14


Scripture of the Day from Dave Ramsey.com:
Philippians 4:13 — I can do all things through Christ who strengthens me.

Please listen to the Dave Ramsey show live on WOR 710 from 2-4 PM EST. You can also listen to the 3rd hour 4-5 PM EST. at Dave Ramsey.com.

Personal Finance News Monday 9/24

Phil's Personal Finance Tip of the Day:

Four common refinancing mistakes to avoid

Learn more about four common mistakes homeowners make when refinancing - and how to avoid them.

By Terence Loose | Yahoo! Homes – Thu, Sep 13, 2012 6:18 PM EDT

 

Are you thinking of refinancing your home mortgage but afraid you'll screw it up? While there are a number of common mistakes people make, take solace in the fact that these slip-ups can be avoided.

First things first, you want to make sure that refinancing is right for you, says Fred Arnold, a loan professional and treasurer of the National Association of Mortgage Brokers (NAMB).

"It has to make financial sense. It has to save you money and work for your future financial goals," says Arnold. For example, you want to ensure that with the new loan's terms, you'll save money. Another thing to consider is how long you plan to stay in your home. According to Arnold, to cover the cost of refinancing, it'll need to be about two years or more.

[Click to compare mortgage rates from multiple lenders on Yahoo! Homes now.]

So if refinancing sounds like a good option for you, read on for four common mistakes and advice for avoiding them.

Mistake #1: Failing to Shop Lenders

America is the land of freedom. And freedom usually means choice.

So when it comes to a decision as big as refinancing your home mortgage, the last thing you want to do is give up that choice by going with the first loan you're offered. After all, you could be talking about hundreds of thousands of dollars.

That said, don't expect a huge amount of options when it comes to comparing interest rates.
"Rates right now are phenomenally low," says NAMB President Don Frommeyer. "But there's not a lot of difference between lenders. Maybe an eighth of a point. "But that eighth of a point (or .15 percent) could add up over time.

Below is one instance that shows why it's still important to shop. Our example, which we plugged into mortgagecalculator.com, assumes a person is borrowing $300,000.

To read the entire article from Terence Loose / Yahoo Homes:
http://homes.yahoo.com/news/four-refinancing-mistakes-to-avoid.html


Inspirational Quotes@Inspire_Us from Twitter:
There is a difference between knowing the path & walking the path. -Morpheus

 

Personal Finance News Saturday 9/22

Phil's Personal Finance Tip of the Day:

Believing in yourself is more than half the battle

September 13, 2012 By Harvey Mackay

 

When I am interviewing potential employees, one of the traits that I look for is confidence. I’m not referring to hubris or arrogance, but someone who understands his or her ability and is not afraid to use it.

With the college football season just starting, it reminds me of a revealing story my good friend Lou Holtz told me when I helped bring him in to coach the Gophers football team back in 1984.

“I was at a convention just after taking the job at North Carolina State,” Lou said, “and I was talking to Wayne Hardin, who was coach at Temple.”

Hardin asked, “Lou, do you think you’re the best coach in the country?”

Lou answered, “No way. I’m not even in the top 10.”

“Well,” Hardin said, “North Carolina State hired you because they think you are. If you don’t act like you are, you shouldn’t even be coaching.”

According to First Draft, a newsletter by Ragan Communications: “Confidence doesn’t come naturally to most people. Even the most successful people have struggled with it in their careers.

The good news is that you can develop it, just like any muscle or character trait, if you’re willing to work hard at it. The better news: These tips can help you strengthen your confidence.

Here’s what to try:
• “Don’t compare yourself to others. Focus on your own achievements and ambitions, not anyone else’s. Other people will always be more successful than you at different stages of your life and career, and obsessing about them will only send your confidence plunging. Concentrate on identifying and improving your own unique strengths and skills.
• “Track your success. Keep a log of your accomplishments, large and small. Recording victories on a daily basis will make you feel more successful, and looking over your progress will boost your self-esteem. In addition, reviewing your achievements should give you some good ideas for what to work on next.
• “Practice being assertive. Take an active role in pursuing success, no matter how anxious you feel.

Start by visualizing situations where you feel nervous, and picture yourself being assertive. Make these scenarios as vivid as you can so you’ll be ready for them in real life.

Check your body language in a mirror, and practice good posture and a self-assured expression. Then go out and take a few chances, starting with low-risk situations. Once you’ve survived those, you can move on to bigger personal challenges. You may be surprised by how well practice makes perfect.”

A few more tips I’d like to add:
• Accept that failure is not the end of the world. Learn from your mistakes. Understand that the pursuit of perfection often limits your accomplishments. Many great achievements have been far from perfect, but were more than good enough to be proud of.
• Step out of your comfort zone. Push yourself beyond your known limits, and see how successful you can be. When you realize what you can accomplish, your confidence soars. Your potential is unlimited. You are the only one who can limit it.
• Set goals. Decide what you want to accomplish, both in your career and personal life. Reaching goals is a tremendous confidence builder. It also spurs you to set higher goals.
• Prepare to succeed. Keep improving your skills and you will build confidence. Knowing that you are capable is central to a positive self-image. Take care of both your body and your mind.

To read other excellent columns from Harvey Mackay.com:
http://www.harveymackay.com/columns/

Mackay’s Moral: Your mind is your most powerful ally in developing confidence.