A debt management plan is basically an arrangement between you and your creditors so that you can pay off your debts in a way you can afford. Debt management professionals know how to draw up a suitable debt management plan because they are very knowledgeable about consumer debt and have the necessary experience to negotiate with creditors.

Why choose Money Tailor? Money Tailor knows debt management is personal and emotional. In times of crisis, what people need most is support and guidance. They cannot simply follow a to-do list to get out of debt. As the name Money Tailor suggests, a debt management plan works best if it is personalised and carefully tailored to your individual needs.

Money Tailor isn’t a wise old man giving you profound advice about life. Giving you advice is not the same as actually doing something to help you. With Money Tailor, you have an aggressive team of experts with one objective—your financial freedom. To reach that objective, they know precisely what information to gather from you and your creditors. After that, their experience and negotiation skills will provide a debt management plan that is tailor made for you.

You barely need to do or even think about anything by yourself. You no longer need to face your creditors and experience the stress that goes with it. Your personal adviser at Money Tailor is both a financial expert and a sensitive counselor who will guide you on your journey out of debt. Your peace of mind and emotional well being is their utmost priority.

Disclaimer: We do not work with this company and it is not our intention to endorse nor denounce the company or companies you see before you. These posts are not to be considered as legal or professional advice, and are to be used for personal education purposes only.

When rich people have debt, it is usually for the purpose of funding their business enterprise. They use the money obtained by credit for the purpose of increasing production far beyond the level for which their own resources can normally attain. Another typical use is for the purchase of capital items such as luxury vehicles, homes, or commercial property. This means that the use of debt for the rich businessman results in significant benefits. Wealthy countries are often described as industrialized. This means they have a highly developed system of industry that churns out vast quantities of products for the consumers of the world. Capital expenditure for these countries may include construction of infrastructure such as highways or railway systems. We could say building a space shuttle is also capital expense item. If wealthy countries borrow money, this is where the funds go. In the end, they end up even wealthier.

When poor people have debt, the situation is very different. Poor people often borrow out of necessity. They go into debt because they simply do not have enough money to afford basic goods needed to survive. What are these goods? Food, shelter and clothing are among these. In the same manner, poor countries need money to have funding for their agriculture program and housing program. They also need money for public education and health services. Since poor countries do not have high levels of industrial and commercial output, revenue from tax collection is not enough to fund basic services, much less development programs. If they do not borrow money, there will be insufficient funds to give basic services to its people.

So next time you feel bad about having some debt, remember that debt is part of the modern way of life. People, businesses, and entire countries have debt. Why shouldn’t you? All you need to know is how to manage debt wisely and effectively.

Debt suicide is not an unfamiliar term. People kill and get killed because of money. It is not surprising that people also kill themselves because of money. One of the most popular stereotype images is the ruined stockbroker who jumps off the building because of losing money. Or it can be the gambling addict who racks up a huge debt from the local loan shark. When the goons close in, he shoots himself first because of the fear of the torture that will be inflicted on him.

Suicide is not a topic discussed in business schools. It is never thought of as a financial concept. The connection of debt and suicide lies within the field of psychology. Suicide can be one of the results of severe depression. Suicide is perceived by the depressed individual as a viable solution to their problem. It is permanent and effective in eliminating the problem because it eliminates everything.

However, choosing suicide has its disadvantages. The most obvious is that it does not offer the opportunity to use any other alternative solutions. It would be such a waste if there was a better solution available that includes staying alive. You can easily find debt management professionals who can give you an extensive list of solutions.

Another disadvantage of suicide is that it leaves a lot of loose ends. For someone with friends or family, suicide will cause a tremendous amount of grief. And most likely, the financial problem experienced by the depressed person is still there and will continue to be a burden to the family. Suicide also involves serious moral issues. This is why some choose to make their suicide appear as an accident.

So before insurmountable debt tempts you to commit suicide, think again. You will die eventually anyway, so no need to rush. The best solution is to talk to someone… anyone.

Observing your net worth can be stressful as time goes by.  But building g a secure future is possible while maintaining your lifestyle.  Here are some milestones you can opt to strive for.  It’s never too late to start building your financial future.

20s: The beginning

At this age anything is possible.  Regardless if you think nothing can stop you, this is the time in your life to get the initial habits right. Good foundation is important in any endeavour you undertake and getting this down to a tee will make things easier in the long term.

-          Establish a source of income.  At this age, you are at your prime.  Companies will go for you at this era in your life.  You are moldable into any corporate image they envision you to be.  Your ability to absorb and learn is at its peak.  So use this to get a good inflow of cash whether you be on the corporate path or establishing your own small business.  The point is, get some quids in your pockets.

-          20 percent rule.  Whether it be 200 or 20,000, regularly allotting a portion of your earnings will eventually build up your nest egg.  This will be of great use later on.

-          Establish good credit history.  Apply for a credit card, and use it wisely.  A pattern of responsible credit use is vital when you apply for a loan to purchase a car or a condo

30s: Almost there

Though some would choose to settle down, others continue towards the path they started during the 20s.  The key here is strengthening those foundations started in the 20s.

-          Own a house.  Real estate regardless of what experts think is something one should strive for. Not necessarily for investment, but more of something to say you own and not always depend on rent.

-          Investments.  This is an opportune time to set aside a portion of your savings for higher-risk yet higher yielding investments. These would be stock markets or mutual funds.  You are still young enough to take those calculated risks without sacrificing your whole nest egg

-          Start building for retirement.  Consider your retirement separate from your emergency fund.  This should be equivalent to about three monhs’ worth of expenses to tide you over unforeseen, temporary circumstances such as getting fired.  Retirement fund is up to when your source of income has diminished or is totally gone.  

-          Get health insurance.  Normally this is supplied for by companies to their employees as their benefit.  If you are self-employed or your company doesn’t provide his, you should get this while your premiums are relatively low because of your age.

40s: All set

You now know what you want out of life and has accepted the implication this has on your earning capacity.

-          Determine retirement expenses.  Start visualizing that you are 60 and start building a budget of monthly expenses.  Calculate how large your nest egg needs to be in order to yield that amount in today’s interest rates. 

-          Increase your savings portions.  Your ability to earn should still be still going north peaking at around 50.  Allot more percentage to your nest egg, control your expenses, don’t be tempted to spend more because your cash inflow is now bigger

-          Reduce or eliminate debt.  Strive to be debt-free by the end of our 40s.  In case it is unrealistic, do no incur additional debt unless it makes sense to borrow if interest rates are really low.

-          Respect money.  The amount of material wealth you have is not a measure of your worth, nor is it a reflection of your happiness. Financial stability is not about having the largest savings or the largest salary, it’s understanding the minimum amount that covers your particular needs and rare indulgences.  This will let you live a life free and fulfilled and not compromised by the need for money. 

Accumulating Wealth and investing in your future takes careful planning.  Preserving wealth should be given equal care and consideration, particularly during today’s challenging economy.  The important question is, “What steps can I take to best preserve my wealth?”

The interest in preserving wealth is universal.  Everyone wants to protect their assets from the risk of market volatility, taxes, rising healthcare and educational costs, and inflation.  Protecting your wealth, in order to enjoy it today and to live the future financial life you want for yourself and your family, can be achieved.  Planning can help.

Wealth protection starts with a plan. 

Wealth protection, or mitigating against risks to the value of your assets, requires a forward-looking, integrated wealth management plan.  Understand your particular goals and develop a plan to help you move toward your objectives.  Periodic reviews of strategies already in place will also help ensure that the plan is current with any changes in your situation or future goals. 

Your asset allocation may be too risky for what you want to accomplish.  Today’s market turmoil may have led some investors to realize they are not as tolerant to risk as they thought they were during more stable markets.  You may find, for example, that your investment portfolio has undue exposure to volatile sectors of the market that would produce serious losses in a downturn.  The credit crunch, real estate slump, and heightened market volatility, in addition to other potential concerns, have demonstrated the need for the regular portfolio reviews and, when appropriate, rebalancing to reflect holdings consistent with your objectives. 

 Next: you can integrate tax-efficient strategies to keep more of your money

First of all, mobile phones are no longer high tech luxury items nor are they just simple communication devices. People now use their mobiles to socialize through SMS. You can take photos using camera phones and share the photo with friends through MMS. Newer features include video calls, e-mail and internet browsing. Only 15 years ago, a mobile phone is just a businessman’s bulky equipment. Now mobile phones have become stylish fashion accessories for young adults and teenagers. Even younger kids crave these high tech “toys”.

Next, both service providers and phone manufacturers have been able to successfully market their products and services to young people who just keep on spending and spending until they drown in debt.

Service providers often offer the latest feature rich gadgets for “free”. All you need to do is sign up for a 2-year contract which you can’t get out of. They also offer tons of nice features like downloadable games and ring tones featuring the latest pop hits. You also need your mobile phone to vote in reality TV shows like Big Brother or Pop Idol.

Phone manufacturers are also regularly churning out new models just like designer clothes which change their collection from season to season. Image conscious people won’t allow themselves to be seen carrying an “obsolete” mobile phone.

Also, young people are easy lucrative targets for phone companies. They are financially illiterate and impulsive buyers. Combine that with peer pressure and you’ve got a formula for personal finance disaster. When kids get into payment problems, parents usually come to the rescue.

Lastly, mobile phone usage is simply following the general consumer trend. This trend shows that it is becoming easier and easier to spend more and access to higher levels of spending is becoming more available to younger people. Gone are the days when you have to travel to the store to spend money. You don’t need to watch TV or pick up the phone. You don’t even need to turn on your laptop. With your mobile phone, you can spend money anytime, anywhere, and you barely even have to move.

Interest is computed using a percentage rate just like any other form of loan or debt. You should at least have some basic knowledge of how interest is computed. Credit cards have a monthly billing cycle so they have a monthly interest rate. Obviously, the lower the rate, the cheaper it is to borrow money. There is however a world of difference as to how interest is computed so the rate alone is not enough to determine the better deal.

How do you compute interest in a typical loan? Multiply the principal or balance by the interest rate. You already know your interest rate but as for the balance, there are different ways credit card companies compute it. Therefore you should find out what method your credit card uses. You can ask the credit card customer service or try to find the information on your credit card bill. The most common method used is the Average Daily Balance. As the name suggests, the credit card company keeps track of your balance for each day of the billing cycle and takes the average for the whole period. Your daily balance increases as you add new purchases and decreases as you make payments. Some credit cards do not count new purchases and will only keep track of the balance based on the previous month’s ending balance and payments made in the current month.

Here is an illustration:

Average Daily Balance excluding new purchases:

[ Day 1-14 (14 days x £600) + Day 15-30 (16 days x £0) ] / 30 Days = £280

Average Daily Balance including new purchases:

[ Day 1-10 (10 days x £600) + Day 11-14 (4 days x £800) + Day 15-22 (8 days x £200) + Day 23-30 (8 days x £300) ] / 30 Days = £440

The interest or finance charge you pay could either be based on a variable rate or a fixed rate. When you have a variable interest rate, it means your credit card determines your finance charge by adding a certain percentage to the official base rate from the Bank of England. Therefore, your monthly interest can be different from month to month depending on how the base rate fluctuates. Having a fixed rate means your interest rate remains constant. However, there is no such thing as a real fixed rate. Included in your agreement for using the credit card is the option for them to increase the interest rate if there is a drastic change in the official base rate.

With the high cost of oil, one’s finances can take a hit without you knowing.  Don’t get further into debt by the rising cost of fuels.  As such we’re dedicating an article on saving on fuel. 

1. Car pool.  This is the ultimate cost saver.  Just think, if you share a car with at least one person, you actually save a maximum of 50% on your fuel cost.  Get 2 additional commuters and you can save up to 30%.  Not only can you save on the pump, you may actually gain a friend.
2. Put your car on a diet.  This just means, don’t lug around lots of things in your car.  The extra weight just means that you’ll spend more fuel going from one place to another without much value.  You don’t have to carry that box of encyclopedias every time.  On a more practical note, make sure you unload what you load in your car.
3. Keep a correct tire pressure.  It is estimated that for every 1 psi (pounds per square inch) of under-inflation, fuel economy drops by 0.4%. That’s not much, but if the tires are under-inflated by 8 pounds, that’s a 3.2% drop in fuel economy.
4. Change your air filters every 6 months. Dirty air filters keep clean air from reaching your engine to burn your fuel efficiently and thus ending up spending more on fuel. 
5. Aerodynamics.  This actually has minimal savings and it only applies when you’re actually driving at high speeds.  The faster you are traveling the more drag or (wind resistance) you encounter. When driving at these speeds, keeping the windows closed reduces and thus having your car not need to push further against wind resistance.  Now this only helps if you have a more or less aerodynamic car.  For cars with virtually zero aero dynamics (e.g. Hummer) you wouldn’t be saving much.  Now, traveling with closed windows has to be balanced against your car interior conditions. You don’t want to suffocate in your own car.
6. Heater and Air-conditioning.  During cold weather, closing your window and turning on the heat makes sense, as the heat is actually from your car’s engines.  Now on warm weather, that’s where the challenge is.  Using your air-conditioning actually utilizes the engines power.  So fuel efficiency goes down with air-con on.  Depending on the situation, you can actually have the air flow in from the outside using the “fresh” (as opposed to the recycle) settings of your car.  Of course this doesn’t make sense if the outside temperature is likewise unbearable. Remember, common sense is king.  Don’t save on gas only to find yourself in the hospital due to heat stroke.

Given these quick gasoline saving tips, you can chuck off those extra cost from your portfolio and utilizing your finances to other money making ventures.

Aerodynamics (hummer vs sports car)

Airconditioning

Costly for cold, free for hot.

Acceleration keep it in gear at 2000-2500 rpm

Same is true for money, it just transforms to different things through out your day.   Be it coffee or a cupcake.  That’s what happens to your money.  One of the ways to help you understand your finances is tracking how your money is transformed.  This means just a simple task of writing down what you spend and categorizing that expense to something meaningful to you.  Spend five minutes in the day to check what you’ve spent.  So at the end of month, you can see where your money was transformed.  It would turn out something like this

Food - 30%

Clothes – 40%

Utilities – 15%

Gifts – 5%

Charity – 2%

Car Maintenance – 4%

Medicine – 4%

Right then and there, do you think you should’ve spent 40% on clothes?   This simple monthly practice can help you determine if this is really what you are expecting yourself.

I personally prefer the use of credit cards to be able to track my expenses given that they report every single swipe of the plastic and all you need to do is just put in a category beside the item and viola.  If you prefer this, then the only thing you need to track is your cash expenses on a daily basis.  

A more advanced method is to identify your sources of money inflow.  And track how it flows out, that way you can determine if your inflow matches up with your outflow.  There are tools out there to help you, one such is MS Money or Quicken.  The are fairly easy to use and even provides tips on how you can utilize your cash as well as providing warnings to your cash outflow. 

Remember, you are what you spend, take a step back and look at yourself and from there you are one step further to financial independence. 

Make a realistic assessment of your situation. To deal with debt, you have to know your debt. You can start by organizing your debt. Know each and every amount you owe, whom you owe, and make sure you have all related documents handy. Even if you are looking at obtaining the services of debt management professionals, you still have to know the extent of your indebtedness.

There is no point in hiding from your creditors. It is a problem that will not go away if you just ignore it. You have to face the reality and be honest. Keep communication lines open either directly or through your debt solution provider.

The time to act is now. Waiting it out will not change your predicament and will most likely worsen the situation. The earlier you start thinking of how to deal with debt, the earlier you will find a solution.

The fact that you’re having problems with debt means you cannot afford to pay off everything. It is therefore important to prioritize which debts to pay first. Examine the consequences of non-payment to determine which accounts to prioritize. Among the worst consequences are being homeless or even getting sent to prison.

When dealing with creditors, you have to be both patient and persistent. They may not readily accept your offers so you have to try and try until you can come up with an acceptable agreement. Creditors usually prefer small regular payments over larger amounts which you pay irregularly or cannot guarantee time of payment.

If you do not have an organized budget then now is the time to organize your finances. Having a budget is important so that you know exactly how much you can afford to pay creditors. Do not make promises to creditors that you cannot keep. That’s what got you into debt in the first place. You made big promises when you signed those loan agreements or that credit card application form. Keeping a well organized budget will be beneficial long after you are out of debt.

Absolutely do not borrow more money. Yes, you may borrow money, but not more money. There are cases in which borrowing money would be the best solution, because of lower interest rates or better payment terms, but the objective will always be to reduce your total debt burden.

Lastly, do not hesitate to seek professional help on debt management.