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Reasons Why You Do Not Feel Any Financial Improvement

man shoutingAre you still wondering how to improve your finances? Despite the news coming from the government that the economy is getting better, some people are wondering why they are not feeling it. Their financial improvement has yet to be experienced and a lot of them are wondering if the economic news is real or not.

Even if 2013 was a bad year or so-so year for you, let go of the past and just keep moving forward. Of course, you want to make sure that you learn the reasons why you are not keeping pace with the economic growth of the country. It helps to know so you can create a plan that will eliminate the mistakes that you made in the past.

How did the economy improve in 2013?

But before we can look at your personal finances, let us check how the economy performed in 2013. This will help you gauge just how far you have fallen behind in terms of your personal financial improvement.

One of the best indicators of an improving economy is displayed in the employment conditions of the country. Based on the information taken from the Bureau of Labor Statistics (BLS.gov), the unemployment rate in the country is steadily improving. Here are the data to prove this: (average unemployment rate per year)

  • 2007: 4.6%

  • 2008: 5.8%

  • 2009: 9.2%

  • 2010: 9.6%

  • 2011: 8.9%

  • 2012: 8.0%

  • 2013: 7.3%

Although the unemployment rate has yet to reach the pre-recession level, it has steadily improved since it reached the peak in 2010. Hopefully, this will continue to improve so more and more people will get their jobs back – or be employed for the first time.

In terms of the average hourly earnings, the BLS.gov reports a steady increase even as the unemployment rate had been rising. There were months when it was going down but on an annual average, the statistics are steadily rising. Here are the data to prove this: (average hourly earning per year)

  • 2007: 20.9

  • 2008: 21.6

  • 2009: 22.2

  • 2010: 22.6

  • 2011: 23.0

  • 2012: 23.5

  • 2013: 23.9

These figures along indicate that the US economy is indeed in a better place than it was before. But how does the consumers feel about it?

A recent poll done by Gallup.com say that various economic indicators prove that the country is indeed on the mend in 2013. It was a good year for financial improvement in the country. The highlights of the report are as follows:

  • Economic Confidence Index: improved from -21 in 2012 to -16 in 2013. Overall, the change is a positive 5.

  • Job Creation Index: improved from 18 in 2012 to 20 in 2013. This accounted for a positive 2 change.

  • Average consumer spending: improved from $72 in 2012 to $88 in 2013. This accounted for a positive $16 improvement.

The same site also reports that in January 2014, the economic confidence went even higher at -14. This is a good sign of further growth for the economy. The question is, are you feeling all of these financial good news?

Reasons why you may not be improving financially

If the answer is no, then we need to start searching for the reasons why it is so. While the economic growth and recovery may not give you an immediate financial improvement it should at least provide you with some level of relief. In most cases, the reasons for your continues financial slump might be your own doing. Remember how the bad spending habits in the past got you into trouble? You never realized it until it was too late. If you do not check yourself right now, you might be losing out on the financial opportunities that are cropping up because of the economic growth in the country.

Here are some areas that you may want to look into.

  • Budget plan. Start with your budget plan. If you do not have one, that is probably one reason why you are not feeling any change in your financial situation. This plan is one of the most basic tools that you will need to improve your money management skills. Create one if you have not yet started on the habit. If you already have one, check if it is still aligned with your goals. Budgets need revision every now and then as our needs change.

  • Credit balance. One of the clear signs that you are not improving is when your debt continues to pile up. When it is decreasing, then you are on the right path. If not, then this is another reason why you are not feeling any financial improvement.

  • Spending habits. Ask yourself: are you living within your means or have you been failing your budget? If your answer is no, then this means you are still incurring debt and that will not improve your finances in any way. If you are living within your means, you need to step it up. You need to start living below your means. That will free up some money to improve your financial stability.

  • Savings account. If your savings are not increasing, then your financial security may be in danger. If you have no savings at all, then you are in trouble. One emergency situation is all it takes to ruin your financial life. Do not let this happen. Grow your emergency fund and continuously contribute to your retirement fund.

  • Investments. Lastly, how are your investments? This is the most proactive thing that you can do to reach a significant financial improvement this year. Learn how to invest and put your money where it will go. Your savings account will not be enough to keep up with the average inflation rate. Only investments can make this happen.

What to do to improve your finances this year

Obviously, if you really want to improve your finances in 2014, you have to stop making excuses for yourself. Here are the three common excuses that people usually make that hinder their financial growth.

  • I do not know how to invest. This is a lame excuse. There are so many articles, guides and informative materials online that you can use to help you learn how to invest. You will never learn if you do not read about them. Also, experience is the best teacher. You will never learn how to invest if you do not try it.

  • I have too much expenses to have enough to save. This may seem like a valid excuse but if you think about it, there are ways for you to try and lower your expenses to make room for saving. Even if it is just a small amount, you should still save it. Soon, that will grow.

  • I am earning too little to invest. This is another poor excuse. Investing will help you earn on the side. Sacrifice some of your expenses for a couple of months so you can use the money to invest.

Financial improvement will take time and effort on your part. If the economy is improving and your personal finances are not, then that is a clear sign that something has to change with the way that you are managing your money. Stop making excuses for the mistakes in the past. It is time to move on to pick up the pieces of your financial life. Just make sure that you will implement the right financial habits from now on.

When Debt Freedom Is Not Necessarily A Prerequisite To Financial Success

stressed woman with stacks of documents on a tableDebt freedom is an overrated financial situation. It is true that there is nothing better than being debt free. Not having to worry about wasting money on interest and knowing that creditors can never come after you is a dream.

But here is the truth: society, specifically our financial industry will not give you access to a lot of financial opportunities lest you use some form of credit to your name. That is just how things are. Although you may choose to live without your credit card or not, you have to deal with the truth that it will make your credit score suffer. And when you have a low credit score, that will keep you from a lot of financial opportunities.

So regardless of what you think about successful people and debt freedom, it seems that lack of credit is not really a prerequisite of being a financial success. In fact, a lot of millionaires and billionaires are not exactly debt free.

How can you use credit and still be financially successful

But how can you use credit and still consider yourself financially successful? Is this really possible?

Believe it or not, it is very much possible. We’ve mentioned it time and again that the key to be a financial success does not necessarily lie on eliminating debt. The key is to educate yourself about debt so you can use it properly. It can be a tool that you can use to aid in your financial growth.

Sure you can always save up for a business start up or a home – but that will take ages! Instead to fearing debt, you need to learn how to master its use. It all boils down to how you choose to use so it will reflects well in your credit score. If not for these credit reports and the importance of having a credit history, we will not really bother with debt at all.

Here are a few facts that you need to know.

  • A good credit score does not necessarily mean being in debt. If you use your credit card pay your dues on time and in full at the end of the billing cycle, you do not have to worry about debt. The use of your card and your timely payment is enough to reflect well on your credit history.

  • You can have a good credit history if you pay within the grace period of your billing statement. You do not have to pay more than what you purchased. A lot of us think that credit means we have to pay interest on top of the purchase price of our transaction. This is not always true. If you pay within the grace period of your credit card, you do not have to worry about paying more money towards your creditors. No finance charge will be put upon you.

  • Your credit score will not suffer if you keep the activity low. You can even use your card just once a month or once every two months and that should be enough to satisfy the needs of your credit history.

  • You don’t even have to rely on credit cards. Your credit report also takes into consideration other loans like your mortgage, student loans and other personal loans. If you have these, then by all means you can keep your credit cards. As long as you can maintain the payments on these credit accounts, you should be able to keep your credit score high.

  • Monitoring your credit report is also a must to protect your credit score. Sometimes, people are very careful of credit and how they use their money but they fail to monitor their credit report. This is a mistake. You need to keep on monitoring your credit because identity theft can ruin even the best efforts to keep your credit in good condition. It does not even have to cost you a thing because you are entitled to one free credit report from each of the three major credit bureaus (Equifax, TransUnion and Experian) every year. That makes three free credit reports annually. Just visit AnnualCreditReport.com to download your free copy.

Although our main goal is to be a financial success, you need to understand that role that your credit score will play in your plan. The reason why we are making so much fuss about credit scores is because you will get a lot of financial opportunities with a high score. In case you do have to get a loan for your business or a property investment, you can benefit from a low interest rate that will greatly increase your personal wealth’s growth possibility.

Not only that, your credit score is one of the factors that employers look into when trying to figure out if they will accept an applicant into their company. It is also one of the requirements that help insurance companies compute for your premiums. Even utility companies will take a look at this to determine how much rate they will impose on your bill. The same is true for cellphone companies. And if you want to lease a place in an affluent neighborhood, some landlords will require a good credit score for that.

These are all important in the overall plan of your financial success and no small detail should be left unattended if you want to pave your way clear towards a financially rewarding life.

Key ingredients of your personal finances that will make it a success

What we have just discussed is the answer to why debt freedom is not a prerequisite to being financially successful. However, that is not the whole picture. A major mistake that people make is assuming that the amount that you earn every month is the main factor that defines your success. The truth is, it is not only about how much money you have in the bank. It is how you utilize that money that will define if you are successful in the monetary aspect of your life.

While the money that you make is the catalyst that will make you a financial success, there are other key ingredients that is also needed.

High credit score

Let us begin with the topic that we had been discussing so far: credit scores. You need to have a high credit score because that will enable you to take advantage of opportunities as they come by. If anything, this is one of the best reasons why your credit score needs attention. So keep your credit rating high by practicing the right money management skills.

Have a 9-12 month emergency fund

Your emergency fund will obviously be for unexpected expenses that you could encounter in the future. There is no way that you can predict what will happen in the future and that means you have to be prepared for any event. We strongly encourage you to build up 9-12 months worth of emergency funds. 9 is the average number of months that a person is unemployed so it should be a safe reserve fund just in case you lose your job.

Updated retirement fund

By updated, we mean your current retirement fund contributions should be going along a pace that will enable you to get what you need when you retire on time -or even earlier. When financial experts say that you should pay yourself first, that does not mean buying yourself a new pair of shoes or designer clothing. It simply means you have to pay yourself in the future. Invest in your older self because they deserve to be rewards for all the hard work that they will be doing from hereon.

More than one source of income

Lastly, to be a financial success means you have to set up more than one source of income. This is how you become financially secure. If there is no security, your success could be fleeting. Do not let this happen. You have to try to cover your bases and make sure that if something happens to one income, you will not be left incapacitated.

15 Personal Finance Quotes Worth Contemplating On

moneyManaging your personal finances does not take a rocket scientist but you have to understand that you need to approach it carefully. There are rules to follow, temptations to overcome and decisions to make. In the end, your ability to make smart decisions about your money will take you a long way.

If you have no idea where to start, do not let that hinder you from achieving your goals. You just need to know where you can find the help that will give you the knowledge, skills and ability to be financially successful in life.

Quotes and tips about various aspects of your finances

Of all the personal finance education that you can get online or offline, there is nothing more substantial that getting advice from people who had been where you are – and succeeded. Actually, even if they are still going through the same thing as you, there is much to be gained from people who can understand what you are currently experiencing.

This is where quotes come in handy. Personal finance is something that you want to make sure you are doing correctly. Here are some of the best quotes that we have found that we hope could make a difference in your pursuit of financial success.

About debt

Debt is a problem that most of us have today. If there is any aspect about our finances that we need most guidance, it should be about credit. Here are 4 insightful quotes from people from all walks of life.

  • Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time. Johann Wolfgang von Goethe (German writer and politician)

  • Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like. Will Smith (Actor)

  • I try not to borrow, first you borrow then you beg. Ernest Hemingway (American author and journalist)

  • The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem. Suze Orman (Financial advisor)

About smart spending

If you want to improve your credit standing, one of the habits that you need to develop is smart spending. Here are two quotes from two well known business magnates in the country.

  • If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich. Mark Cuban (Owner of Dallas Mavericks)

  • Only buy something that you’d be perfectly happy to hold if the market shut down for ten years. Warren Buffett (Hailed as one of the most successful investors in the 20th century)

About budgeting

Budgeting is a key habit in financial management. We found two important advices from famous financial advisor, Suze Orman. She had been a strong advocate of budgeting even before the recession happened. Here are two important tidbits of information she shares with us:

  • If you’re not staying on top of your money, you are putting your financial well-being at risk.

  • Like your home’s closets, your financial clutter needs an overhaul every now and again, and the payoff will go far beyond the psychic satisfaction of neatening up.

Here are some tools that you could find useful from the SuzeOrman.com site.

Quotes about growing your money

About saving

Most people think of saving as a means to prepare for a more comfortable future. While that is true, that is not the only benefit to it. You can also keep yourself from incurring debt when save for an unexpected situation. Here are 4 quotes from another set of famous people from various professions and eras. We realized that despite the period, saving remains to be an important part of a fruitful financial life.

  • A penny here, and a dollar there, placed at interest, goes on accumulating, and in this way the desired result is attained. It requires some training, perhaps, to accomplish this economy, but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending. P. T. Barnum (American businessman and notorious showman)

  • It is the part of a wise man to keep himself today for tomorrow. Miguel de Cervantes (Spanish novelist, playwright and poet)

  • Put your financial life on autopilot as a form of ‘forced’ saving. Suze Orman (Financial advisor)

  • The art is not in making money, but in keeping it. Proverb

About investing

While all of the advises that you have gone through so far are important, investing is the direct way for you to grow your personal wealth. Here are three quotes that we have found to be relevant in making good investments.

  • It is better to have a permanent income than to be fascinating. Oscar Wilde (Irish writer and poet)

  • If you want to rear financial blessings, you have to sow financially. Joel Osteen (American preacher)

  • Old men are always advising young men to save money. That is bad advice. Don’t save every nickel. Invest in yourself. I never saved a dollar until I was forty years old. Henry Ford (American industrialist)

All of these quotes, although they may have proven to be true for the people who stated them, must be approached with caution. Some of them may be risky and must be assessed carefully before following.