The recent economic downturn and banking mess has revealed something startling. Most Americans only have money in their homes and nothing beyond that. This lack of saving is a recipe for disaster as we grow older.

So, why is saving so difficult for us? Well, you can blame it on a culture that thrives upon spending or you can blame it upon yourself. There is plenty of blame to go around for both. Either way, there is a simple way to save your money.

Setting goals sounds fairly goofy sometimes, but it is a vital step when it comes to saving money. Being generally frugal is difficult. Saving for a specific purpose, however, is pretty easy. Make sure to set some specific goals and things will go easier.

Now put a realistic timeframe into effect. Write down a specific date that you want to have your money saved by. Make sure that this date is one that can be achieved, or you may just wind up frustrating yourself. Now comes the hard part (ready?).

We are beings of routine. We do the same things over and over each day because it is part of our routine. Make saving money part of your routine. Put some money aside each day. It can be a tiny amount because it will add up over time.

As you work through your savings plan, write down everything that you spend. This way you can keep track of your spending habits. If you see that you are spending too much money in one area, see whether or not you can cut back on that spending habit.

Pay attention to the routine expenditures you have that are not really necessary. Hit Starbucks every morning? At $4 a pop, that is $80 a month. How about lunch time expenditures? Buy DVDs? Why not rent them? You can really cut costs if you just try.

Once you start trying to save money, there can be a tendency to overdue it. The goal is to save money, not become offensively cheap. Set aside some splurge money, but do not spend more than that.

Once you reach your first saving goal you will see how easy saving your money truly is. All it takes is a bit of planning in order to begin keeping your pennies in the bank. It is a lot easier to spend than it is to save, but saving with be more than worth it in the end.

Your FICO score (FICO is an anagram for Fair Isaac Corporation) is a score that is based on information received about you from any companies who have previously provided you with credit. It is basically the same as a credit score. This article aims to offer those people who have low FICO scores some free advice.

The first thing you should do is find out whether your credit score is actually considered low. The FICO scores range from 300 to 850 (a perfect score): anything under 700 is considered as needing improvement. This is easier to understand when you realise that the higher your score is, the lower your interest rates will be.

Free tip #1. Keep a close eye on your credit report. It is easy to obtain a free annual copy of your credit report by visiting annualcreditreport.com. Play it smart and order one from each of the three major credit bureaus (Experian, Transunion and Equifax), spacing them out every three months. That way, you will have a more regular update on your credit score. By keeping a watch on your credit report, you minimize the chances of mistakes or wrong information going unchecked and allow for any errors to be removed.

Free tip #2. Reduce most but not all of your credit balances. Your FICO score will definitely improve when you significantly reduce the balances on your credit cards and other debts. But here’s another smart move: resist the temptation to pay off the entire balance. If you maintain a relatively small amount on your bills it will indicate to any possible lenders that you are responsible with your credit.

Free tip #3. A secured credit card can be a bonus, especially if your FICO score is too low to allow you to obtain a regular credit card. However, they come at a price, usually in the form of a cash deposit. An example is when you place $500 into the secured account, you can charge up to that amount. You may well ask, “What’s the point? Why not just spend the cash?” The answer is clear enough – by using this line of credit you will be in effect raising your credit limit which in turn improves your credit rating. Be careful and look for one that has low fees.

Free tip #4. You may wish to obtain a sub-prime merchandise card as it may be the answer to your prayers in raising your credit limit. All this is is a card that is connected to a line of credit, allowing you to make purchases from a particular merchandiser and might as well allow you to earn credit card points. You place a deposit on your purchases with the remainder financed by the card without worrying on any high APR charges. The good news is that this new line of credit is reported to the bureaus, positively impacting upon your credit score.

Free tip #5. The “piggyback” method is particularly relevant to married women with low FICO scores but who have a husband with good credit. You are able to use your husband’s credit to improve your own – hence the name. It is much quicker than building credit on your own. You must have your husband register you as an “authorized user” of his account. It is quite possible that his complete account history is posted on to your credit report. Don’t think that this will create miracles though as it is possible that FICO will make changes to the way they view such “authorized users”.

Taking advantage of these free tips could quite possibly see you on the way towards achieving your goal of better credit and a better way of life.

According to BankRate.com, the cost of an unsecured personal loan is currently over 15% per year, if you manage to get a bank loan in today’s credit-starved environment. And that’s about your best such rate. Attempt to borrow against a credit card, for example, and it could be a lot more. Obviously, personal loans can get very expensive nowadays.

In many situations, though, a personal loan can be just about unavoidable for many of us. What if the car won’t start and you need an expensive engine repair to get it up and running again? Or your daughter needs braces? Or the washing machine breaks down?

When situations like these occur, many Americans resort to personal loans, including high-cost payday loans. Such loans now make up over 22% of the total non-mortgage installment loans at U.S. banks, up from only 11% in 1998.

But before you sign up for your next personal loan, consider the following alternative possibilities —

– What about borrowing against your cash value life insurance policy.? This is a low-interest alternative if you have this type of policy, and it’s the most common type.

– Selling stocks, Treasury bonds, etc., can be a fast way to drum up some hard cash – just be sure you understand you’ll have to pay taxes on any gains or interest.

– What about borrowing against your cash value life insurance policy.? This is a low-interest alternative if you have this type of policy, and it’s the most common type.

– Consider a home equity loan. If you own a house with equity in it, you can probably borrow against the equity at a fairly low interest rate and at the same time get a tax deduction. Check out LendingTree.com for a list of lenders.

– Family or friends. Perhaps your dad can fork over some cash. Just make sure you pay him back.

– Ask your creditors – particularly local merchants who may be more flexible – if they might be willing to extend your payments a month. If they are, make sure you’re not getting charged extra for the privilege of paying your bill late – or if you do get charged, find out how much.

– Consider asking your employer for a pay advance – assuming of course you have an understanding employer.

Good vs Bad Debt

You need to recognize a simple fact of personal finance: Never borrow money for consumption. That’s bad debt. Only borrow for investments that will increase in value (and increase by more than the cost of the loan). Borrowing money just in order to spend it is a terrible idea, a royal road to bankruptcy or other financial land mines. As Eric Tyson says in his book, PERSONAL FINANCE FOR DUMMIES:

If you spend, say $2,000 [which you've borrowed] on a Caribbean vacation, the money is gone. Poof! You may have fond memories and even some Kodak moments, but you’ll have no financial value to show for it… I’m not saying don’t take a vacation. Definitely, take one, two, three, or as many as you can afford yearly. But that’s the point – what you can afford. If you need to borrow money… [then you can't afford the vacation]…

And precisely the same advice applies to almost any consumer purchase: home computers, expensive meals, clothes,, yes, even a new car – anything that decreases in value and eventually becomes financially worthless. If you have to borrow to buy it, you probably can’t afford it. According to Tyson “The financially correct amount of bad debt [you should have] is zero.”

But this does not apply to things that “retain and hopefully increase in value over the long term, such as an real estate, education or your own business.” For these uses, debt is acceptable, up to a limit – the limit being the point at which making payments causes you to be no longer able to save sufficiently to accomplish your financial goals.

That is all terrific advice, but the fact is that, sometimes, you simply may not be able to avoid adding to your debt load – an emergency or other urgent situation leaves you no alternative but to seek a personal loan. In those kinds of situations, what are your best options?

Essentials of Personal Loan Essentials

Here are a few basics to keep in mind whenever shopping for an unsecured personal loan:

First and foremost, never borrow more than you need. Given the high interest rates in today’s credit environment, you’ll want to keep the amount to an absolute minimum.

Second, compare terms from several lenders. Never look at just the monthly payments – consider the total cost of the loan, including any hidden charges like credit insurance or other fees. Don’t skip the small print on the loan agreement. Don’t assume what you’re being told by a loan officer is binding. It’s what’s in writing in the contract that counts.

Third, begin by trying your credit union before a bank. Credit unions usually have more favorable terms than banks and are often willing to make small unsecured personal loans to their members.

Fourth, don’t pledge valuable personal assets when you take out a small loan – it’s almost never worth the risk. And avoid using credit cards or payday loans if at all possible – the interest rates, especially on the latter, can be prohibitive.

Fifth, remember that the interest you pay on unsecured personal loans is not tax deductible.

Subprime Loan Pitfalls

If you’re in the subprime lending category, everything gets more complicated. As you know, subprime lending has tightened up greatly over the past months (and is now almost nonexistent in the mortgage market). However, if you are employed, you can still find cash in an emergency – you just have to be prepared to pay a steep interest rate for it.

But exactly what does the term “subprime” mean? The definition varies by lender, but in general terms subprime means a FICO score of 650 or below. Among the other criteria commonly used are: a bankruptcy within the past five years, a foreclosure within the past 24 months, or a debt-to-income ratio of 50% or higher. Some highly conservative lenders will even brand you as subprime if you’ve been late on one or one or two credit card payments over the past 12 months.

There are a couple very important factors to bear in mind if you find yourself considered subprime and yet need to take out an emergency personal loan. One is to recognize that you’ll be viewed differently by different lenders – you don’t have to jump at the first offer you receive. Shop around. As said, be sure to try your credit union first – and also one or more banks that have departments providing subprime lending. Try using one of the online services that allow you to apply at several lenders simultaneously, like Lending Tree

Here are a few more important points for subprime borrowers to bear in mind:

Never put valuable assets at risk in order to make a small loan.

Don’t risk valuable assets in order to make a small loan.

Don’t allow several lenders to access your credit report at the same time. Several inquiries on your credit report within a short period can further lower your credit score.

Don’t allow several lenders to access your credit report at the same time. Several inquiries on your credit report within a short period can further lower your credit score.

If possible avoid payday loans, also called cash-advance loans, altogether except as an absolute last resort, and even then only use them on rare occasions – never more than once a year. They entail phenomenal interest rates. Payday loans have burgeoned into a billion-dollar industry in the U.S. but they can be disastrous to your financial health.

Everyone is looking at their budget in these hard times. People are going through all their direct debits and standing orders and seeing what they can afford to cut to save some pennies. It is with some irony then that at these times of hardship one of the first things to go is Life Insurance.

As a qualified financial advisor, I quite often wonder how people prioritise various aspects of their financial situation. It is very amusing to see that people consider Cable and Sky TV to be an essential expense, and for some bizarre reason life insurance is not. It is for this reason and the fact that I have a lot of clients at least seeking advice before making cutbacks that I feel this article is worth writing.

A story was related to me once about a man who had a fatal car crash while returning home from work one evening. The car he was driving was a complete write-off and so subject to a full insurance claim. A few weeks later two insurance men walked up the widows driveway with two cheques, one for 20,000 and the one for 25,000. The cheque of greater value was not for the deceased life insurance policy but for his motor insurance.

The question to be asked here is, with these two cheques, what do you suppose the widow is in a position to replace first, the support given by her husband or his flash car? Sad but true. What I am trying to get across is that we have become, as a nation, more preoccupied by the value of our things that we are undervaluing ourselves. This is particularly evident now when cash flow is a pressing issue for everyone.

So you are looking at your income and outgoings and you’re wondering “do I really need to spend this money every month on life insurance?” Well in my opinion it is simple, if it was worth buying in the first place then it is more than worth keeping now. In fact you will probably need it more. If times are hard for your family right now with your income coming in, imagine for a second what it would be like if you were not here and you family did not have the benefit of your income. I tell you now times will be a lot harder and the luxuries of the likes of Cable TV and Sky TV will then be the first things to go.

Now this article is not meant to be scaring anyone into keeping on your life insurance payments. Scaremongering is not part of my business. What happens to you and your family is of little concern to the likes of me. What I do know, however, is that as a professional financial advisor, I deal with bereaved relatives on a day to day basis. Some of the deceased have life insurance, often not much, and some have none at all. What they all have in common is that they all say they wish they had planned better for the tragedy that has befallen them.

The fact is I would have made them sort it, but I can’t deal with everyone, however much I would like to, so hopefully someone will read this and take some note and make sure they are protected for the worst.

One thing I would definitely urge is that if you are finding money tight, which of course the majority of us are in the present climate, and you are considering doing away with your life insurance in order to free up some extra cash, please do one thing and consult your financial advisor before taking any drastic action. You may not know that if you have had any health issues since originally taking out the plan and you then stop the plan, you may not be able to restart the insurance plan in the future. You could even consider the possibility of transferring to a cheaper plan. It may not give the same amount of protection as before, but it may save you a bit of money in the meantime, and at least you will be partially protected, which is the important thing after all.

When it comes to unsecured debts, the option of getting a fresh loan to pay them off is present. One could file for an Unsecured Debt Consolidation Loan, allowing account holders to merge debts which have no collaterals into the account, as well as avail of a new loan.

This scheme could also help you can easily manage your finances through the monthly payments that have been trimmed to one. This loan is useful specifically for debts that do not require collaterals or those not supported by a property that the could be turned over to the creditor, who could sell it in case you are unable to pay your debt.

A perfect example of this takes shape with multiple credit card problem scenarios. Credit card holders could easily purchase items using their cards. A monthly payment to the bank then follows, to cover for whatever expenditures credit card holders incur in their credit card usage, thereby completing the operation dynamics of credit cards.

Since the scheme does not require a collateral, there is only one way to settle your debts and this is by availing of financing schemes like consolidation loans. Although your balance would not be lessened, as opposed to debt negotiation settlement, this will still help you.

First get a lower interest rate by comparing the interest rates you are currently paying. The interest rates for unsecured debt consolidation loans is about 7%. But credit card charges ranges from 7% up to 30%.

The possibility of haggling for better rates is present for credit cards, depending of course with one’s card company, but as situations often are, missing out on such obligations are known to lead to more headaches and woes. With a unsecured debt consolidation loan, companies won’t hesitate offering such options for concerned parties, provided of course debtors show confidence in their capacity to pay.

In a situation related to multi credit card woes, a consolidation loan is a great financing scheme to opt, to resolve payment and debt concerns. Though consolidation loans won’t lower one’s balance, as opposed to debt negotiation settlements, consolidation loans will actually help out.

Furthermore, an unsecured debt consolidation loan will boost your record because you can again make timely payments, plus points for your credit score. The more you learn about unsecured debt consolidation loan, the more you will see the wisdom of this type of scheme.