The Kuma Project | Financial Tips and Money Management Advice

The Kuma Project Financial Tips and Money Management Advice

Things you thought are good for your credit score but are not

01/15/2013

A lot of people think that as long as you pay your bills, credit card debt, and other financial obligations on time, you will have an excellent credit score. Maintaining a clean credit history does not automatically translate to good credit scores. There are factors that you think might be harmless but in fact they may play a role in shaping your credit score:

Municipal debts

You may well know that creditors will report to the credit bureaus when you skip payments for your mortgage, auto loans, or credit card bills but these are not the only things you need to worry about. Your local government may actually report to credit bureaus if you do not pay your taxes, library fines, or even parking tickets. They maybe small debts but they can still affect your credit score and influence decisions when you are applying for a loan.

No outstanding loans

When you have several credit cards but do not have a loan under your name, your credit score may actually suffer. Scoring systems of credit bureaus actually tend to favor consumers who know how to diversify. One’s credit score maybe better if you have a car loan, mortgage loan, and some credit cards rather than having a totally clean slate.

Just cash

You may have made the best decisions and manage your debt well that you have a good cash flow allowing you to shop using cash. You avoid using your credit card since you do not want to have any more debt. Although this may sound as a wise move, it may actually hurt your credit score. Not using the plastic will cause a plateau on your credit score. Not using your cards for six months may prompt creditors to stop reporting them to the credit bureaus or cancel your account.

Posted, by KUMA in Financial Planning, Money Management, Personal Finance Tags: Credit score, Loans, Money Management, Personal Finance

Tips on how to negotiate your way to lower prices

11/28/2012

How much you can save on something, most of the time, depends on your negotiation skills. It can be very intimidating for a lot of consumers. If we think that price is too high, we just walk away. We often do not realize that we can negotiate for a lower price. In order to get to a more affordable deal, we must follow some tips that may not be always easy.

Research well

Know everything you can know about the product you want to buy or a service you want to avail of. Make sure you know how much others charge for that item. Have an idea about the profit margin the seller has and know if the seller has a certain deadline to get that product off his shelf.

Let the other side give a price first

Allowing the other party to give the price first gives you a chance to make a counter offer that will be favorable to you. Be sure to apply what you know about the item and use this as a leverage to get a better price. Remember that when you give the price first, you might actually be offering a higher price that what the seller is willing to offer you.

No need to be reasonable

During negotiations, remember to give an insanely low price if you have to give the first figure. This sets the anchor to be low and give you some room for a bargain. This also pushes the seller to focus on pulling the price up instead of pushing for the price they want. Do not think that you will be rejected because of your ridiculous offer, the seller knows that it is just part of the negotiation and that he will make a counter.

Walk away

This is a classic. It is one of the most effective and most powerful negotiating technique a buyer can do. The seller does not want to lose a customer. Walk away and see what happens.

Posted, by KUMA in Financial Planning, Personal Finance Tags: Low prices, Negotiating

When does Refinancing a Mortgage make sense?

09/18/2012

At some point most people will consider refinancing their mortgage. There are times when this can be a great idea and other times when it does not make sense at all. The big question is how do you tell the difference? Ultimately the best way to tell if it makes sense to refinance your mortgage is to look at how much you will end up paying in interest if you do refinance.

The best time to refinance a mortgage is when doing so will get you a better interest rate. The reason for this should be obvious as a lower interest will reduce the amount that you have to pay. Since most people are on variable rate mortgages anyway this is something that they don’t often consider but there are ways that you may still be able to get a lower interest rate. The most likely reason is that your credit has improved since you took out the mortgage. The other is that you have enough equity that you are able to get rid of the private mortgage insurance which while not technically lowering your interest rate has the same effect.

One thing to keep in mind if you are going to refinance to lower your interest rate is to make sure that you have enough time left on your mortgage to make it worthwhile. There are some pretty substantial fees involved in refinancing so if you only have a few years left on your mortgage the savings that you get from the lower interest rate may not be enough to offset them.

Another time when it might make sense to refinance your mortgage is if you are having trouble making your payments. In this case it might make sense to refinance to extend the time that it takes to pay off the mortgage. This will lower the monthly payments which will make them easier to make. There is of course one major caveat here; the extended mortgage will cost you much more in interest in the long run. Therefore you don’t want to rush into this and should really only consider it if you are really and truly struggling to make your monthly payments.

One other option that you may want to consider for refinancing is if you find that you are earning more than when you took out the mortgage and you can afford a higher monthly payment. In this case you will take out a shorter mortgage which will save you a considerable amount of interest in the long run. In fact this is one of the best reasons to refinance. The monthly payments on a fifteen year mortgage are not that much higher than they are on a thirty year mortgage, making the switch can save you tens of thousands of dollars in interest.

Posted, by KUMA in Refinance Mortgages Tags: mortgages, refinancing, refinancing mortgages

Top ways to organize your finances

09/18/2012

Money problems make us lose hours of sleep. We think of things we need to pay, credit card bills, utilities, or how we need to fund a check. You need to reduce this unnecessary stress by taking simple steps to organize your finances.

Organize your bills

When you know what to pay, you will most likely allot something for it. Make sure you organize your bills and place them somewhere you cannot miss them. Separate them from the other mails and have a specific place where you will be reminded about them. Trash the junk mails and file your bills and pay them on time. Late payments will cost you some money, a lot in the long run.

Pay on time

You end up paying more that what you owe when you do not pay your bills on time. There are times that we forget the due dates but there are simple solutions to this. You can write the due dates on a paper, set a reminder on your mobile phone, or schedule well so you can all bills on time.

Read your statements

You may have requested for a low interest rate credit card but policies change and interest rates may change. Make sure you read what you get in the mail. Read the fine prints of your credit card statement and be alert for any changes. If the rates go a bit higher, call your credit card company and ask if there is a possibility of lowering it. Try, and they might just say yes.

Automatic Payments

If you are a busy person and miss a lot of due dates, use technology and set up automatic payments for your bills and other financial obligations. Setting this up will save you a lot of money in terms of avoiding the penalties you usually have to shoulder because of your hectic schedule.

Posted, by KUMA in Money Management Tags: finances, organize finances

5 Easy ways to trim down your budget for entertainment

05/25/2012

All work and no fun is not a good life. It is always refreshing when you have time for watching some movies or maybe trying out a new restaurant. You have to keep your spending in check though when you go out or else you might run the risk of going over your budget. Instead of enjoying some entertainment, you end up worrying how you will pay things at the end of the month.

Here are some tips on how you can save some while still having fun:

Share the entree

If you are going out with your spouse or partner, consider sharing a good size of entree. Just inform the waiter that you will be splitting the entree and restaurants usually serve bigger portions in this situation.

Restaurant deals

Find deals on the internet where you can get restaurant discounts on certain days. You can sign up for their email update so you know when they are running such promos.

No cocktails

When you are on a tight budget, you might want to skip the menu of cocktails. This will save you a lot of money. They look good and most likely taste good but it can set you back around $7 or even more. Mix a good drink at home.

Potluck

In case you are hosting a get-together at home, you can encourage to have a potlock. This way you do not have to spend a lot for food and at the same sample the specialties of everyone.

Matinee schedule

If you cannot wait for the discounted movie tickets, you can watch a movie and attend its matinee showing. This time of showing will cost you as much as $5 less on the tickets. Good for popcorn, right?

Posted, by KUMA in Money Management Tags: budget, management, Money Saving

Money Tips: Dealing with Money Drains

03/07/2012

Unexpected things are expected to happen. This applies also to your finances. There will be unexpected expenses and you do not have a choice but to deal with it.

Emergency Fund

You have read it before and heard it before but having an emergency fund is really life saving. If you have not set up an emergency fund, you need to start now. It does not have to be one big drop but you can put about $50 a month and build it over time.

Do not stretch that budget

Leaving paycheck to paycheck is not financially healthy. You might be good at it but it is not a good habit financial wise. Find ways to cut your spending and see aspects of your budget which are not necessary and can be trimmed down.

Ask when needed

If you see extra charges on certain bills like a renewal fee or an overdraft charge, ask your bank if these fees can be waived. Be calm and see if there are solutions and options. If some fees cannot be waived, ask if you have an installment option.

When money drain moments come, it is easy to be frustrated or upset but the reality is that you have to deal with them no matter what. Leaving within your means and putting some money aside for unexpected payable is a good life line we can always count on.

Posted, by KUMA in Money Management Tags: budget, emergency fund, Money, money drains, Money tips

Money Saving Tips for the New Year

12/30/2011

The year 2011 has not been very kind to a lot of individuals and families. Did you spend within your limits? Here are some tips to save some money come 2012:

Travel

The rising costs of fuel translates to more spending when it comes to using our cars on a regular basis and a bigger chunk of our budget goes to motoring expenses. The cost for commuting thru public transport has also risen. It will be more practical to join a car-sharing program and also opt for a bike if your destination is just a few blocks away.

Food

The prices of food went up by as much as 5% this year. Before hitting the supermarket, plan what you need to buy so you will not be easily distracted with special offers. You can also ask the shopkeepers when they will be having price cuts or if you can get discounts for the regular items you are buying.

Holidays

If you are hurting because of the exchange rates, make most your money by looking for destinations where you can spend less for more. You will be able to find interesting cities, fascinating cultures, great weather for better prices.

Telecoms

You might be tied to a contract for your mobile phone and internet but if you are not, you can make use of comparison websites and see which deals will give you what you need for a monthly fee which will not hurt your pocket.

Posted, by KUMA in Financial Planning, Personal Finance Tags: How to Save Money, Money Management, Money Saving, Spending Plan

Money matters: When is the best time to buy big appliances?

12/05/2011

Think of what happens when you buy things on the last minute rather than planning the purchase well ahead of time. The first scenario will end up finding a so-so deal, while the latter gives you a good if not the best deal. The moral of the story is to find a good deal way ahead the time when you are in desperate need for a replacement.

There are certain times in the calendar when you can buy refrigerators, washing machine, dishwashers, gas ranges, and other appliances. Here are some helpful tips to guide you:

When is the right time to get a new appliance

When planning about your large appliances at home, you might want to have a rough idea of its life span and try to plan a purchase before they breakdown. This strategy will allow you to get the best value out of your money. So when you buy your appliances ask for an estimated lifespan and also monitor if they are starting to perform poorly.

Matter of timing

Consider following the suggested calendar below on buying appliances

January
A lot of stores will have new models coming in by the start of the year so most likely they will need to clear their inventory. And as the new year kicks off, you can even find more discounts.
May
During the spring, you can find a lot of refrigerator models on discount. New models are usually rolled out during the summer
September thru October
This is the best time to do major appliance purchases. Manufacturers release their new models during these months so the models of last year will be discounted.
Holiday Weekend
Name any holiday weekend and appliance stores will most likely have a sale on that weekend. You will most likely find a great deal during this holiday weekend appliance sales.
Anytime over the internet
All year round you can find a great deal as long as you search for them well.

Posted, by KUMA in Personal Finance Tags: Appliances, Money, Money Saving Tips

Ways to Prepare for Retirement in Your Forties

10/08/2011

There are some people that do not even think about retirement and how they are going to live on their retirement benefits until they are in their forties because when they are in their twenties and thirties retirement seems so far away. By the time they reach their forties they start to realize that in twenty-five years or so they are going to be ready to retire and enjoy life and the thought hits them as to how are they going to live on their retirement benefits. Now comes crunch time and they start to scramble and try to find ways to start saving. Here are some suggestions as to how you can start saving for your retirement when you are in your forties.

- The first thing is that you need to decide what kind of savings you are going to use. Is it going to be a savings account, a mutual fund, or an IRA? Whichever way you are going to save make sure that you stick to your goals and start saving, even it you have to start out small and then add more to what you are saving over time.

- You also need to know your what your retirement needs are going to be because it can be expensive. It is estimated that in order to retire you are going to need about seventy to eighty percent of what your pre-retirement income is to be able to be able to maintain the standard of living that you are now use to.

- Check to see if your employer has a savings plan for retirement and contribute to that. This would most likely be a 401K plan and it is possible that the company will either match or put in another percent above what you are putting in yourself. Since the contribution is taken out of your paycheck before taxes are taken out, your take out taxes will be less.

- Find out if your employer has a pension plan and then make sure you are covered by the plan. Make sure that you find out what your benefit would be once you retire. You also need to see what would happen to your pension benefit if you change jobs or you lose your job to downsizing.

- Once you start saving for retirement make sure that you do not touch your retirement savings. If you do you will not only loose interest and principal, but you may also have to pay penalties for early withdrawal and loose tax benefits. If you do change jobs you can either leave your savings in your current plan, put them in your new employer’s plan, or change them over to an IRA.

These are just a few ways that you can start to save for your retirement and make sure that you will be able to maintain the type of lifestyle that you are accustomed to. You should also find about what your Social Security benefits will be at the age of retirement because that information will help you know just how much extra you will need to have a month to maintain your current lifestyle.

Posted, by KUMA in Financial Planning Tags: 401k, Finance, Financial Planning, Money, Personal Finance, Retirement

The Credit Card Fees We All Hate…

09/28/2011

David Lazarus explains credit card fees in a way even I can really understand… I didn’t know the loophole the gas stations are using, and I think they should ban this asap. Seriously.

Keep in mind though, this is only for the state of California…

Posted, by KUMA in Credit Cards Tags: Credit Card, Credit Cards, Video

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