Falcon Academy

Archive for the ‘Money’ Category

Do you find that keeping control of your finances is becoming increasingly difficult?

In today’s society, advertisements bombard us with offers which encourage us to Spend! Spend! Spend! With promises such as-

“Easy Credit!”

“Pre-approved loans!”
“3 years interest-free credit!”
“Free gift when you apply!”

To most people this can all seem rather tempting, given the current “live for today” attitude. But too much can be spent on luxuries, leaving not enough to pay the bills.

Certain kinds of debt may be appropriate, such as a mortgage or a car. Many people, however, try to buy more than they can afford. Indeed, banks and businesses encourage us to do so.

Credit cards can be too easy to obtain yet too difficult to maintain, especially when people find themselves borrowing from one card to pay off another.

Credit may even be advertised as free – but we still have to pay in the end.
Many families can loose up to £1,000 a year in instalment debts, resulting in a drop in their future standard of living. Families often live from payday to payday with little or no savings for emergencies.

In America personal bankruptcies have doubled in the last 10 years. Most of these people had jobs yet unexpected bills or reductions in pay caused their bankruptcy.

Many economists agree that a global recession is on its way.
British people have over £130 billion of personal debt. It is estimated that, on average, there is £3,000 of debt from credit cards, loans and overdrafts for every adult in the country – and that’s excluding mortgages.

The amount borrowed from credit cards has more than doubled in the past 4 years.

Debt is fine, if you can afford the repayments. But what if you lost your job?

The time to get out of debt is now!

One major benefit of getting out of debt is avoiding interest payments. For instance; if you owe £1,000 on a credit card with an interest rate of 18.9% per year, and you only pay the minimum, say 3% per month, it will take over 13 years to pay it off plus a HUGE £848 in interest.

But if you double your payments to 6% per month, the debt will be gone in less than 5 years and the interest paid will be £292.

Savings can be gained by switching mortgages and if you fix your interest rate for 2 or 3 years then you can rest easy knowing what your repayments will be for the next few years. But make sure your mortgage is flexible so that you can pay off more if you do have some spare money.

Bank loans or hire purchase agreements can be trickier to pay off, as there may be penalties for early repayment. Just stick to the repayments and make sure that you don’t get tempted into any more debt. Remember that covetousness (i.e. desiring what we see) = debt! This is because we often get into debt over what we want, not what we need.

There are warning signs to indicate whether you are heading for financial difficulties. Look at the following list of 10 signals. If any one applies to you then it’s time to take a closer look at your budget. If more than one applies then you could already be in financial difficulty.

• Using a credit card for purchases that you normally pay for with cash.
• Taking out loans to pay off debts.
• Paying only minimum amounts due on credit cards.
• Receiving “overdue” notices.
• Using savings to pay bills.
• Cashing-in or borrowing from, life insurance policies.
• Working overtime to make ends meet.
• Using your overdraught to pay bills
• Juggling debts and only paying the most demanding.
• Obtaining credit card cash advances for day-to-day living expenses.

If you’re seriously worried about your overspending, The Citizen’s Advice Bureau offers free debt information.

Once your debt is under control, you need to think about saving. A standing order straight into your savings account is a good idea as the money goes straight out of your current account every month along with the bills.

Always remember never to get into debt over things that have no long-term impact on your life. For instance, do you really need an upgrade on your computer? Is a new DVD player really such a necessity? And what about a second car? Is it really essential or just an expensive convenience?

Don’t forget to also take a close look at the small things in life. For example, do you really need to go and have a cappuccino every time you pass a coffee shop? And packing a sandwich for work instead of buying one can save you about £40 a month.

But by far the most important thing to do when it comes to personal finance is to keep a constant check on your outgoings. Don’t wait for your bank statement to scare you next time it comes through your door. Remember the old saying that an ounce of prevention is worth a pound of cure.

How you spend and manage money is a tangible way to measure your values.

1. Are you able to keep the promises that you make?

When you borrow money you are making a promise to the person or financial institution that you borrow from to pay the money back. Is it more important to keep your promises to your friends and family who probably won’t legally make you pay the money back or is it more important to pay the financial institution that can ruin your credit score and will more likely use legal options. Perhaps you honor all of your obligations in an equal fashion, either trying your best to keep your promises or breaking your word.

2. How much money do you give back to others?

There is usually a correlation between the percentage of your money that you give to others who are less fortunate and the amount of time that a person volunteers to help others. The percentage of money that you give also will give you an idea of how self centered that you are. If you do not give a large percentage of money it does not make you a bad or a mean person, it just may be time to reflect upon what you truly believe in.

3. Are you a spender or a saver?

This is an area where moderation is probably the best thing to strive for. People who never have two nickels to rub together are living in the moment with no sense of what the future will bring. They are more likely to live the rest of their lives this way by making decisions with out properly measuring the potential future impact. Many adults with ADD are prone to these impulsive decisions and need to pay special attention before making any big decision. People who save every penny never truly live in the moment and deny themselves of the little joys of life.

The most important thing that you should take from this article is that the way you mange your money often tells a lot more about your values than what you say or what you tell yourself that you believe. How you spend your money is physical proof of your values. The good news is that you can change your habits with money to reflect the values that you want to have.

With energy costs higher than they have ever been in recent history, it pays to find ways to reduce your home heating costs. I put together some tips that are easy, cost effective and will all add up to reduce your home heating bills by a significant amount! You don’t need to be Bob Villa either. Some take just a minute or two. Even small changes will add up to big savings over the course of this cold winter!

Here are the 10 tips that I have personally used to save on my home heating costs:

1. Head down to the basement and reduce the setting on your hot water thermostat by about 10 degrees. I wouldn’t go below 120-115 degrees. The adjustment dial is typically a red knob towards the bottom of the water tank.

2. While you are downstairs, make sure you have clean filters for your central air-heating unit. A dirty and clogged filter will force your unit to work much harder and stay on longer as it struggles to fresh air through the clogged filter to heat the rest of your house.

3. Check your air ducts for gaps, leaks or disconnects. If you have any disconnects or leaks in your ductwork, your heating bills could be 25% higher than they need to be if these gaps were sealed. If you can’t do this on your own, hire a professional. This expert can also clean your ducts for added efficiency.

4. Adjust your thermostat a few degrees lower. Believe me, this really adds up. It may not seem like much of a difference to you, but you will notice the difference when you get a lower bill each month!

5. While we are on the subject of thermostats, consider replacing yours if it is not programmable. The reason is, you can set the thermostat so the temperature setting in your house is lower at night than during the day, when you are awake. Also, if you are away at work during the day, you can set it for a lower temperature and have it programmed to start heating the house a little bit before you come home. These aren’t too expensive and are easy to install and configure yourself.

6. Insulate your attic. Heat rises, right? If your attic isn’t properly insulated, all of the heat in your house (and your money) goes right through the roof. Literally! This does require some effort on your part, but following through on this tip will save you a ton of money over the years. Measure the square footage of your attic and buy rolls of insulation, greater than R-13 but no higher than R-30. Wear a mask and gloves when working with insulation because it irritates the skin.

7. Find those leaks and cracks! If you were to add up all of the small cracks and holes in your house, they would probably add up to a small window, wide open, letting cold air in and hot air out. Take the time to find gaps in windows, doors, pipes, electrical and phone lines, your dryer duct and much more. Put weather-strips around your doors and windows. You can buy insulation foam that comes in a can with a straw at the top that allows you to fill in tight spaces. It expands to fill even the smallest cracks. Of all of the tasks, this was the most fun finding and filling these gaps all around the house.

8. Close the vents in rooms that you do not use. I have one room in my house that is not currently in use. I shut the hot air ducts and made sure the windows and doors were properly sealed to limit energy leakage. Why waste your money heating up extra square footage of your house that you don’t even use?

9. Open drapes and shades for all of your windows during the day to let the sun heat your home. In the evening, pull them back down for added insulation. It is amazing how much direct sunlight streaming into your home helps to heat things up.

10. Your fireplace can help and hurt your heating costs. If you are not using your fireplace, make sure the damper is closed. When it is closed, inspect the damper and feel if cold air is still leaking in. If you are using your fireplace, make sure the heating in the rest of your house is reduced or turned off.

Taking the time to implement these tips will drastically reduce your home heating bills. You can get most of them done in just one day, but the payoff will last for as long as you live there! I followed through on each one of these tips and the following winter, my bills were about 25% lower, saving about $100 a month! So roll up your sleeves follow these tips and start saving money on your heating costs!