The Top 3 Post-College Financial Pitfalls

With winter semesters across the country coming to a close, soon-to-be college grads will be anxiously awaiting the end of the spring. Proud students will walk away from their educational institutions with the degrees they have expended blood, sweat, tears—and hundreds of thousands of dollars—to earn, and with a wealth of knowledge and experience that will send them off into their adult lives. In a nation still recovering from several financial crises, and where the cost of higher education leaves the majority of graduates  in debt, the thought of navigating the post-grad financial waters may be a bit daunting for some–  and understandably so. Moving away from home and managing many new responsibilities—financial and otherwise—will be difficult in the beginning, and of course, some will make much worse decisions than others. The following describes the top3 most common financial pitfalls newly graduated young adults tend to make:

Moving Out Without the Means

We are all told early on that living outside of ones means can lead to trouble, but at no other time is this more true than right after completing college. Most grads will want to avoid moving back home after school, but without the help of student loans to pay their housing (quite the contrary—many loans will have fallen into repayment by then) this becomes an especially complicated issue. Rent and student loan payments are only a small portion of the equation—food, utilities, transportation, etc. have a way of piling up on unsuspecting post-grads. If living at home is an option, you will find you have much more financial flexibility when it comes time to take what you’ve saved and move into a place of your own.

Acquiring Loans

On top of the student loan debt many face after college, millions of young adults are also roped into using pricey credit cards to pay their expenses, or large sums of money in the form of personal loans. Incurring this often unmanageable debt sets post-grads up for failure from the get-go. Not understanding interest rates or built in features of a particular plan cost them much more money in the long run. Lawsuit settlements loans are a smarter investment when it comes situations in which the recent grad is unable to work or is involved in debt incurred by legal issues. This type of loan can actually help graduates pay their bills and manage their finances while complex or lengthy settlements are being reached. Avoiding late payments will also improve credit and the standing of personal financial records.

 Avoiding Effective Budgeting

For those who are lucky enough to receive relatively well paying jobs after graduation, it can be difficult to be responsible with your earnings and resist the urge to spend more than what is saved. Keeping a detailed record of your monthly earnings versus your monthly expenses goes a long way in identifying where too much is being spent, and where that much more can be saved. Emergency funds or long term savings will ensure that there won’t be any need to take out expensive or unnecessary loans, which ultimately can help recent college graduates avoid huge pitfalls and start off toward a future of financial security.

 

Author Bio: Hailey Andersen is an avid blogger who enjoys sharing her insights on financial planning and education. 

Why Invoice Finance Could Be Your Business’s Lifeline

SMEs are a cornerstone of the UK economy, recording an estimated combined turnover of £1.5tn and employing just under 50% of the overall workforce. However, these businesses are heavily threatened by cash-flow. In fact, almost half of SMEs admit that they perceive cash-flow to be of considerable threat within the next 12 months, and 17% are extremely concerned about its impact on the future of their business.

Since the recession struck in 2008, the level of funding from traditional banks to SMEs has crashed, exposing businesses to considerable financial risk and in need of finding resource elsewhere to cover running expenses; many are finding this in the form of invoice finance.

Invoice Financing

According to recent research, unpaid invoices are the leading cause of cash-flow shortages for SMEs, with 24 per cent of businesses experiencing issues relating to late payment. The average wait for payment is currently 38 days – just under eight working weeks – and the national late payment debt is a phenomenal £30.2bn.

Invoice Financing is essentially an agreement between a business and a lender, that allows capital tied up in unpaid invoices to be unlocked for an instant cash-flow boost. There are two forms of invoice finance: factoring and discounting.

Invoice Factoring: factoring is a flexible funding and collections service: the bank acts as your credit department and chase payments for you, which could save you a substantial number of office hours.

In invoice factoring, the lender will immediately make an agreed percentage of the invoice available, with the rest made available once the invoice has been paid. In return, they recover interest on the amount loaned.

Invoice Discounting: discounting allows you to borrow money against your incoming invoices, but leaves you to manage your sales ledger for confidentiality purposes. You’re lent an agreed percentage of funds against your current unpaid invoices. As your debtors pay, the money goes against the amount borrowed, enabling you to borrow more.

A full order book doesn’t always add up to cash in the bank…

A common misconception is that invoice financing is a last-resort for firms struggling to win trade, but actually, maintaining a healthy working capital is critical for any business. In fact, many businesses with cash flow worries have no shortage of business, just limited resource to fulfil demand; a phenomenon known as overtrading.

Is it right for my business?

Before going down the road of invoice financing, it’s advisable to do the maths to ensure the interest rates don’t negate any profit margin. However, borrowing money against outstanding invoices be a really enabling solution for small businesses, in that it gives them back control over their finances and eliminates the worry and risk posed by clients who continually pay late.

Amongst small businesses in particular, this method of lending is becoming increasingly popular. According to ABFA, £16bn-worth of advances were made to businesses in 2012 through some form of asset-based finance, with invoice finance accounting for 43% of this and 83% of all invoice finance agreements made with SMEs.

As with any funding, there is an appropriate time for invoice financing. Used correctly, it can be a lifeline for businesses in need of winning back control over their finances for a healthy working capital.

Inforgraphic  from Aldermore.co.uk

Invoice Finance

3 Secrets Debt Collectors Don’t Want You To Know

debt
debt (Photo credit: Alan Cleaver)

Debt – possibly the worst four letter word anyone knows. It creates stress, anxiety, and in extreme cases it can you put you in trouble with the law, or ruin your credit. Most people don’t seek out this kind of trouble. In most cases, when you get into a past-due situation, there are a multitude of legitimate reasons that could land you there. For the vast majority of people, debt collection is not a common thing. If you’ve ever found yourself out of work, or have a bad month where lots of emergency situations popped up, you know how easy it is to fall behind on payments and start incurring the debt collector’s wrath. But, it doesn’t have to be all stress and fear. Following are the three secrets you need to know to beat back the debt collector’s harassment.

Let’s get this out here though – avoiding the calls and letters will only make matters worse. The more you avoid dealing with the situation, the more the debt starts to cause problems for your credit and other issues. Realize this though, you are not alone – there are roughly 30 million consumers being contacted by debt agencies. If you don’t start talking you’ll never get the debt resolved though.

They cannot threaten to withhold wages

Here’s a biggie and one that has been a great tool in the debt collectors bag. Oftentimes a debt collector will get a consumer on the phone and threaten them with legal procedures that will cause withholdings (automatic reductions in your pay) to get rid of the debt. This is illegal. Most consumers aren’t aware of this, and this is why the tactic is still used. If you are ever threatened with this, tell them immediately that you have rights and you will be contacting a consumer protection lawyer. Do everything in your power to get as much information: the debt collection company you’re dealing with, the agent you’re talking to, and the time and date of the phone call. It is possible to use this information to get your payments (legally) reduced, or in some extreme cases completely forgiven.

They cannot require large lump sum payments

Realize this: debt collection agents often work on commission. If they can talk you into paying off the debt with a big lump sum payment, they make a better commission. There is no requirement on your part to do this though. If a debt collector tells you that you need to give a large down payment to avoid incurring other fees realize that this is false. The agent is simply trying to get a larger chunk of money for his or her commission.

You can dispute the debt

You have the right to notify the debt collection agency that you want to dispute whether you really owe a specific debt or whether there has been a mistake. A common issue is when a consumer pays a debt to, say a medical office, but it’s between the time that the office issued the debt to their collector and when you have been contacted. If you are certain that payment was made, notify verbally and in writing the agency contacting you. At this point they, by law, must stop any debt harassment that is occurring. Also, agencies are required to notify of your right to dispute the debt.

Any sort of debt is frustrating and obviously should be paid off in a timely manner. But, as consumers, you need to know your rights so that you can avoid any and all debt harassment that can often occur when zealous agents work to close their debts. Make sure you notify any agent calling that you want a copy of your rights, and that (if you can) you will be taping the call. Ultimately, it’s in yours and the agency’s best interest to setup a plan to make payment easy, affordable and fair.

 

Author Bio: Sean Carter is an experienced writer who has written for many sites all across the blogosphere. His interests include finance, technology and home renovation.

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How to Make a Budget and Clear Your Debts

British debt is at an all time high. The majority of British people are living with personal debt of some kind, ranging from the manageable to the completely unmanageable. The former may include mortgages and car repayments, whilst the latter might include credit card and store card debt.

Most people with debt tend to worry about how to pay off what they owe. In the current economic climate, this has never been so true. With rising inflation, stagnant wages, high unemployment and a housing market in crisis, British people are finding that their debt is simply going nowhere. But there are some great tips and tricks for clearing your debt quickly, providing you’re willing to commit yourself to positive change.

Define Your Income

Your first step towards clearing your debts should be to draw up a concise list of all your incoming and outgoing monthly payments. This should include details about:

  • Your housing payments (rent/mortgage).

  • Your utility bills.

  • Food and clothing allowance.

  • Extra outgoings – phone, toiletries etc.

  • The sum total of your debts and you minimum monthly repayments.

This will give you a much clearer indication of exactly how you can improve your debt repayments, and therefore clear your debt faster.

Investigate Other Sources of Income

Once your income and outgoings has been defined, you will know exactly how much money you need to clear your debts, and how much you will need to set aside to do so.

Many people find that they are able to source funding from other areas in their lives, which will help them to clear their debts quicker. Sometimes friends or family are able to lend you money, or you may be able to release funds from your pension. Secured homeowner loans are another great way to raise capital to pay off your debts quicker, providing you have a property against which you can secure your loan.  You should ensure that you’re aware of all the potential implications of choosing any of these options. If opting for a loan, you can calculate your repayments at Nemo’s website in order to work these into your financial plan.

Keep Your Chin Up

It’s all too easy to feel depressed about debt. But this is actually the quickest way to get in trouble with your debts. It’s much better for you to be brave, face your debts head on, and hold your head up high as you tackle them in a sensible and straightforward manner. There are plenty of resources for people struggling with debt, and it’s important to remember that you aren’t alone.

Individual voluntary arrangements – everything you need to know

An individual voluntary agreement, also known as an IVA, is an alternative to bankruptcy that some people pursue when they are crippled by debt and can find no way out. An IVA is beneficial to people in certain circumstances, but if you need to know more, then let’s examine it in more detail.

What is an IVA?

An IVA is a formal agreement between you and your creditors which allows you to pay back your debts over an agreed period of time. Sometimes you are required to pay back all of your debt in an IVA but often the agreement is that you will repay a reduced amount to your creditors. They may agree to such an agreement so that they get some money back, rather than nothing if you filed for bankruptcy.

IVAs are not available for everyone and they depend on your circumstances. They are only suitable for people who have some spare funds each month with which to make repayments. You must also owe more than two creditors money and you must be unable to adhere to the original repayment agreement you had with them.

IVAs cover various types of debt, including:

  • Bank and building society loans and overdrafts

  • Credit cards

  • Personal loans

  • Store cards

  • Catalogues

  • Charge cards

  • Council tax arrears

  • Tax debts

  • Electricity and gas debts.

When is an IVA the right option?

It is important to remember that IVAs are not always the right option. An IVA is simply one option, although it could be the best way for you to work your way out of debt.

If it is available to you , an individual voluntary arrangement may be preferable option to bankruptcy. If your financial problems are temporary then it may be the right option for you. An IVA has a number of benefits compared to bankruptcy. You can save your assets and possessions if you choose an IVA over bankruptcy, and it should be remembered that bankruptcy can lead to serious problems acquiring finance in the future.

How does it work?

To arrange an IVA you will need to contact a registered insolvency practitioner to act on your behalf. There are a number of companies offering IVA services and a quick internet search will produce a list to choose from.

Your practitioner will help you come up with a sensible and doable plan to repay your debts and come to an agreement with your creditors as to how much you will repay and over what period of time. This is usually a term of five years.

If necessary, an insolvency practitioner can also arrange an interim order which prevents your creditors taking legal action against you while your proposal is being prepared.

So consider your position and whether an IVA could be the best option for you.

Top Seven ways of Foreclosure Discounts Offer Instant Home Equity

Foreclosure is very common now due to the downfall of world economy. It might be owner’s nightmare but can be a good opportunity for them who want to buy a foreclosure property at a cheaper rate. Foreclosure of properties is the major cause for the weak condition of real estate sector, but it offers discounted home equity instantly. When the housing market crashed, home equity loan became popular. This is the type of loan where the borrowers take the loan based on the difference of amount between the price of the home at that point of time and what he/she actually owed for buying that home. To take the advantage of getting instant home equity at the discounted price of foreclosure, one should concentrate at the following points:

1. Avoid getting involved in higher bids

Foreclosure properties attract many interested buyers to take part in auctions and you might get tempted to take part in the bidding war. There are many buyers who bid until the price of the home is no more a good deal. So, judge the value of the property carefully and decide how much spending is worthy for that house.

2. Make a direct contact with the lenders

Establish a good relationship with the bankers and the lenders. Smart buyers always gather information about the foreclosure properties before the news is disclosed in the market. Sometimes this relationship might lead to ownership of the property without the competition from other bidders.

3. Arrange for pre-approved mortgage from the lender

If you can arrange for instant home equity loans from the same lender, it might give you advantage over other bidders. The lenders are always interested in providing liquid loans. You can later transfer your loan to other lenders, especially if they offer more benefits for better terms and conditions.

4. Ask the lender for repairing the property

You can ask the lender or the bank for repairing the property if the property is not in good condition. This can save unnecessary expenditure for fixing the damage.

5. Take help of attorney

The real-estate attorneys are really helpful when time comes for signing the agreement papers. There might many legal complications hidden within the terms. The attorneys are the best person to understand whether the deal is clear or not. It is wise to pay for them keeping the amount of money invested for the property.

6. Make a good bargain

You must wait to get a good discounted price from foreclosure of the property. It needs extensive research about different other foreclosed property to get the appropriate idea about instant home equity loan. Also, try to get an idea about the price difference from the lender. This might help you in coating closer price while bidding.

7. Visit the property before with an expert

The property to be bought should be visited before along with an expert, who is able to assess the exact condition of the property. This will help in perfect evaluation of the property price.
There are also other ways of getting foreclosure discounts in instant home equity loan from dependable options like LiquidLoans. The location and condition of the property is very important. If the property is in good condition and located in a convenient area or within better neighbourhood, it is easy to avail foreclosure discount. The home equity loan should be considered with much caution and the borrower should be aware of current market condition as well as changing market scenario. You must be able to assess your own financial condition to achieve all the benefits of home equity loan and discounted price from foreclosure.

Summary: Current downfall of finance market is causing in foreclosure of many homes and thereby having a chance to own the home at a discounted home equity loan. This loan should be availed with caution to protect one from financial loss.

Author’s Bio:
Shannen is a real-estate attorney and has experience in this field over 30 years. She has witnessed ups and downs of this market and interested in helping customers in getting instant home equity loan at discounted price due to foreclosure in various ways including LiquidLoans. Shannen likes to play golf in her leisure.

Get grip on your debt: Popular New Year’s Resolutions

It’s been difficult these last few years for family finances though the signs are that the worst of the trouble may be over. There is no reason for anyone to be complacent however even if your job is looking secure. The easy years of the beginning of this Century had a culture of the casual use of credit cards backed up by the rise in real estate prices. Both these things have changed dramatically and it is time to look to the New Year and how to ensure that your finances are in shape.

Why not start by looking at all your finances, assets and liabilities, note them down and prepare a proper monthly income and expenditure budget. There are obvious implications if your employment circumstances change. It is useful to be aware of what you might face if you were to lose your job and face a period without income. Have you any fallback position?

There are some savings potentially. It is worth checking whether you have some of your belongings ‘double insured’, perhaps as items themselves and within home contents insurance. Get rid of any such waste.

Credit card and store card debt can get out of control before you know it. If that has happened to you it is worth taking action to pay off balances which are incurring high interest rates. A consolidation loan is one way to do it but it is important to not then start spending again and ignoring a balance build up with the consolidation loan still running.

If you are offered a 0% balance transfer on a new credit card it may be part of the solution but make sure you fully understand the interest rate to be charged after the initial period.

There is no reason why you cannot become a more responsible shopper in 2013. There are always special offers to be had; discounts for buying in bulk but only do that on useful products that you use regularly. It is worth looking at whether there are genuine savings by shopping where there are loyalty points to be gained which can build up a value. As long as it does not tempt you into spending more than you would otherwise do then go ahead as long as it is not the most expensive shop in town.

On the positive side you may have a fairly strong financial position, a surplus each month and have some decisions to make about investment. The rules are very much the same; think about your goals, short, medium and long term. Sometimes something as important as this is forgotten because of daily activity. It is sensible to write down a few priorities in order and perhaps use the internet to do some general research before making any decisions.

It is certainly worth asking for expert financial advice from more than one source including getting tax advice on the implications of the options you are considering. Once you take the plunge or if you have already done it promise yourself that you will keep a track of how your investments are progressing.

The basic message for 2013 is to keep control of your finances both assets and liabilities. Once you have everything recorded keeping track is a regular but not too time consuming activity. Start in January the way you mean to go on.

Author Bio: Darrell Hunt is a finance guest post contributor. He loves to write on financial topics like debt,credit card, bad credit loans, mortgage, personal finance etc.

The Subtle Sacrifices of Debt-Free Living

Debt-free living: It sounds like the dream, especially in today’s economic climate where hundreds of thousands of people, households, countries even are in more debt than they can manage. But without some debt could we be prohibiting our chances at a better life? With education loans leading to better paid jobs, mortgages equaling security and those little loans that may just help out in the short term does a strict no-debt life ultimately mean making sacrifices?

Owning Debt To Get a Loan

A credit rating is one of the most mind-boggling ways to assess a person’s suitability for a loan, this is because most loan companies require the borrower to have debt already in order to qualify. It’s a way of assessing whether a person has the ability to manage their debt, making them less risky. It could simply be in the form of a credit card used very occasionally and paid off in full regularly, this way if a loan is ever necessary it’s possible.

Loans Leading To Assets

DebtIn the case of a mortgage it may not be preferable even if the buyer has the money, to purchase a property out-right. Lenders often offer very good repayment plans which allow borrowers to pay the house off gradually and at a low fee. Without this it may be that the buyer has no money left over to make improvements to the property, which will ultimately make them a profit in the long run. There is also the buy to let option, whereby a buyer will take out a mortgage and then simply let out the property, safe in the knowledge that his/her tenants are paying off the loan for him/her.

With a car loan, those living without debt may choose to keep a car until its run into the ground, but surely lending money and repaying at a low fee may just result in a better motor which can then be sold on or part exchanged before it’s knackered.

Education Loans

These are some of the cheapest loans available to anyone wishing to further their career prospects with study. Sure in some industries it won’t be necessary to get into debt for a qualification, and experience can be just as valuable for some, but coming out of University on average $19,000 in debt shouldn’t be seen as scary when the average monthly repayments are so low. If the degree or masters helps boost employment opportunities then it’s a no-brainer.

Switching Debt

For those wanting to live debt-free credit cards may be seen as the devil, but if used wisely, as in the case of 0% balance transfer cards, it may work out beneficial to own one. A credit often comes with an initial period of 0% interest, whether that be on spending or balance transfers, so if when coming to the end of that period the lender is still in debt, taking out a 0% balance transfer card and transferring the debt onto the new card means saving the additional fees, just remember to cut up the old card.

Debt is always a scary prospect and stigmas surrounding it mean a lot of people try to outwardly avoid it, but the sacrifices made to stay debt-free such as never owning property, staying in a lower paid job or not finding employment and not being able to get debt if it really is needed may not be worth the fight.

Author Bio: Geoffery specialises in the money lending market and enjoys visiting sites like Wonga (https://www.wonga.com/) in his spare time for short term and payday loans inspiration.   

How can you Get Rid of Your Debt with These Debt Defying Strategies

Considering the financial situation that the world is in, most of us are experiencing a hard time with our financial life. Many of us are actually in debt and struggling with it. However, not all is lost. You can get rid of that nasty debt of yours through many ways. Get rid of your debt with these debt-defying strategies.

Budgeting

One of the most important things you can do is budgeting. Although it may seem like a tedious task, it will help you save hundreds of dollars every month. It may keep you from requiring credit card debt help.

When you receive your paycheck, sit down and calculate how much you actually need every month for necessities. These include rent, food, utilities and transport. With the amount you save, set a portion aside for spending and deposit the rest into your account. That way, you will never overuse your money.

Stop using the Cards

Although it may be hard at first, you have to stop using your credit cards. If you are serious about ending your debt, cut your credit cards so you will never use them again. Although this may be harsh, it works. Without the tool to create debt, you can only reduce it.

Spend wisely

No matter how much you earn, you should never waste money. If you buy things you can live without or don’t really need, stop spending money on it. One of the worst things you can do is impulse-buy items. If you see a sale that is selling a computer for half its normal price, leave it alone. If you don’t need it, don’t buy it, regardless of its reduced price.

Cut Costs and Develop Good Habits

Most of us take the little things for granted. We don’t realize that the little purchases are where most of our money goes. For example, a man spends $5 a day on a sandwich from a vending machine outside his office every day. That equates to $100 a month (if he works 5 days a week). He could always make his own sandwich before he leaves home for easily half the price.

If you buy an expensive packet of chips, try going a few brands down. When you look at the monthly savings, you actually save a lot of money. If you save even $1 on chips, you save $30 every month. That equates to $360 every year just by buying a cheaper brand.
By developing good spending habits, you will never spend more than you need to. That is unless you want to get credit card debt help. When you start cutting costs, they will develop into great habits.

Eliminate the Smaller Loans First

Many people try to pay off their car loan or home loan first. This is because they are some of the most crucial assets we have. However, when you are in debt, try paying off the quicker things first. If you have a credit card debt of $1500 and an auto loan of $15,000, it makes sense to pay off your credit card debt first. Pay the minimum amount on the other loans and pay off more on your credit card.

Get some Help

Although you may be trying to avoid this in the first place but in many cases, it becomes a requirement. If you have amassed a large amount of debt, you may need to get help such as credit card debt help. There is no shame in getting help if you consider all the benefits.

Many groups would be more than happy to help you out with your debt. These help groups will be able to impart professional advice that you can use in your daily life. Furthermore, they will act as your support when times get rough. However, if you don’t want to enter into such groups, you could always go to a family member and ask them for help.

As evident, you can implement many debt-defying strategies to get rid of your debt. Whether it is changing a few habits or making smarter payments, it is now easier than ever. Never be afraid to ask for help whenever you need it.

Advice On Debt & Credit Advice

Debt is fast becoming a problem in the United Kingdom – if not the world and with an average household debt standing at nearly £55,000, we’re sure you can see why.

Debt is a very sensitive subject – let’s face it, no one likes to talk about the subject, especially if you are experiencing financial problems yourself. The thing is, you’re not alone. The total UK debt stands at about £1.3 trillion and is due to gradually rise in 2012 and 2013 – and in fact for the foreseeable future.

So why does personal debt keep growing in the United Kingdom? Well, there is no one reason, but a certainty is that creditors keep on lending – even when your credit score is below par. Pay day loans are one example. A payday loan can be a good thing, as long as it is managed properly. Payday loans are exactly as the name suggests, a loan until you get paid by your employer. These types of loans usually carry extremely high rates of interest and can also charge initial fees. The high rate of interest can make the loan especially difficult to repay if left unattended past the loan repayment period. Always make sure you borrow from payday loan companies responsibly, or things can get out of control before you know it.

Other credit debts that have been incredibly popular over the past couple of decades is credit cards. Most people carry at least one credit card in their wallet or purse these days and is a preferred method of offsetting a payment until you get paid – especially if your credit card offers some kind of cash back incentive. However, if your circumstances change very suddenly, a credit card can go from being your best friend, to your worst. Late payment charges and interest will soon see your balance take off and if your balance exceeds its credit limit, further charges may be incurred.

Loans and various forms of credit are everywhere these days – you only have to open a newspaper, or turn on the TV and a creditor will be trying to sell you their services. A good looking woman, a happy family or someone running through a field will normally be featured, making the process look very attractive and risk free. The trouble is, it’s not. Governing bodies are trying desperately to get creditors to give consumers as much information as possible about these types of products, which of course is a great start. Consumers should also take some responsibility though – make sure terms and conditions are read and questions are asked, or you could find yourself with a nasty red letter in the post asking for more money than you intended to spend! If you are having trouble with credit, then try to find a company that will offer you free debt advice.