For those of you following the news, there have been whispers that the recession is over. Are the rumors true and we are finally out of the recession or is the economy just declining at a slower pace? In either event, it is almost a certainty that things will not go back to business as usual anytime soon. Hopefully we have all learned some lessons over the past year and a half; lessons that we should not soon forget even when the economy begins to improve. Here are a few things to keep in mind while the recession is fresh in our memories. 

• There are no guarantees in life. Whether it be your health, job or retirement account, no one is immune from changes. This point was driven home in recent months as people lost seemingly “secure” jobs, watched their savings dwindle and found themselves struggling to maintain day-to-day expenses.

• Exercise caution when using credit. One area that has seen big changes recently with more changes to come is the credit card industry. As we watched the housing market crash, banks fail and major corporations file for bankruptcy it was only a matter of time before the credit card industry was affected. Unfortunately many people have learned the hard way that the contract between creditor and card holder is binding only on the end of the card holder. For many, the terms and conditions have been arbitrarily changed to favor the credit card issuer, leaving the card holder “holding” the bag.

• Debt hampers your ability to reach financial goals. In the best of times, having a lot of debt prevents you from investing money in your future. When the economy takes a turn for the worse, it can make it impossible to pay both your debt obligations and other financial responsibilities. If you fall behind on your credit card or other loan payments you will quickly see your balances grow exponentially, making it even harder to get back on track when your finances improve.

• Those without savings will suffer. There are many people who make it a priority to save money for emergencies, retirement and other future needs. There is however a large percentage of the population that has little or no savings to fall back on during hard times. Without some form of “backup” plan, people who don’t have savings will find themselves facing a difficult time as the lending industry increases the standards for loaning money and using credit cards becomes less lucrative.

These are just a few of the lessons we have hopefully learned during the recession. Now is the time to put those lessons to use and make adjustments in the way we view and spend money. Even if the economy is on the road to recovery, there is bound to be another point in the future where things take a turn for the worse. If you were not prepared for this recession, take the steps necessary to improve your personal finances, putting yourself in a better position to weather the next storm.

In light of the recent turmoil in the mortgage lending industry, consumers can expect some important changes to take shape with regards to the fine print on their mortgage loans. The measures come after it was discovered that too many borrowers did not fully understand the terms and conditions of their mortgage loans, leading to one of the worst collapses in the mortgage and housing industries in seven decades. It was discovered that many consumers that didn’t fully comprehend what they were signing bought homes they literally could not afford.

Since it was so difficult for consumers to determine which kind of loan terms were right for them, steps have been taken to ensure that consumers an better understand the fine print. Some of the new adjustments include better explanations of the more risk parts of the mortgage loan like penalties for prepaying the loan. There is a push that the wording of the loan terms be written in plain English. The loan information would also include a segment with frequently asked questions and their answers before the application for the loan is completed.

Other improvements include clarified information about disclosures concerning annual percentage rates, fees, and other costs that would be the responsibility of the borrower. On loans where the rates are adjustable, lenders are required to show borrowers how their payment could change, including showing the borrower the highest monthly amount they may be responsible for paying during the life of the loan. In the event a borrowers monthly payment would be changing, the lender must notify them 60 days in advance. In the recent past, lenders were only required to give 25 days notice. Lenders are also required to send a monthly statement that includes payment options when consumers have payments that do not cover the amount of the loan’s interest. The statement would also outline the different payment options and their effect on the balance of the loan.

Another plus the comes along with the recent changes is that payments to brokers and loan officers that were once based on the terms and conditions of the loan would now be banned. This helps to prevent third-parties from negotiating terms that are not in the best interest of the borrower but would net profits for the broker or loan officer.

One drawback to the changes in the mortgage proposals some in the financial world are considering is that while the terms may be simpler, the paperwork is larger. Some feel that while the terms and conditions are more clear, it doesn’t mean consumers will still read all the information, especially now that the information is much longer in page volume. The federal government does plan to reach out to consumers to get their input on what should be improved as well. They will work to find out what other information is perpetually confusing to borrowers.

Years ago, families lived more simply and much more frugally than the average American household. Today, the Amish continue to live simply and frugally, and as more families experience the difficulties of the lingering recession – it’s becoming more commonplace to look for new ways to live on less.

The Amish are careful with their finances. They are taught to save money from the time they are children, most are entrepreneurs and most have family and friends and churches to assist them if they fall onto difficult times.

Here are some ideas for living simply and more frugally – things we can learn from the Amish:

Start Saving As a Child: if you’re an adult that didn’t save when you were a child, unfortunately you can’t turn back time and do it all over again! But if you have children of your own, you can teach them to save money from a young age. A good way to do this is to allow your child to keep 10% of any money they earn or receive as gifts and save the rest in a bank account for the child when they turn 18 or 21.

Live at Home: In Amish families, most people live with their family until they get married. They work and help contribute to the family expenses, but it is far less expensive for everyone involved to not have a family with multiple mortgage or rent, multiple utility expenses, etc.

Own Your Own Business: If you own a business as a family, you can employ your own children for much less than it takes to hire workers.  Many times you can work a small business around a full time job, making it possible to increase your income.

Get Group Health Insurance: Many Amish families contribute to the church for health care premiums. The amount each person pays is based on the age and number of family members. The money is placed into a group fund, and if any member of the church has health expenses that cannot be paid on their own, money is pulled from the fund to help pay for the health care expenses. While you will be hard pressed to find a church doing this outside Amish country, there are many group health insurance plans that exist to help keep premiums more manageable for all participants.

Don’t be Wasteful: Use what you have rather than buying new whenever possible, don’t waste things. You can often make do with what you already have, but we’re so used to running out and buying something new whenever we need it that we forget to re-purpose items we have to fulfill other needs.

When you invest in a bond, you are essentially entering into a financial relationship with an institution that is loaning it money in exchange for locking in an interest rate. The borrower is either a business that is issuing the bond in order to acquire capital to build up their business, or its a governmental agency that is doing so in order to fund a public project.
Bonds are more predictable than stocks but it depends on the different types of bonds as to how risky they may be. Consumers can determine the amount of risk by looking closely at the interest rate. If it appears certain that you will be able to get back the bond’s principal by the date it matures, then you can consider it low-risk bond. These types of bonds include Treasury bonds and corporate bonds that are issued by large,  public companies. Bonds that are higher risk include mortgage-backed securities and junk-bonds Junk bonds are bond s that are rated below investment grade at the time of purchase. These can be enticing because of their higher yields. But they carry a much higher risk of default and therefore are not considered a good deal for anyone looking for a safe investment.
If you are looking to invest in a bond, it is best you know all of your options. Here is a brief overview of the kinds of bonds that are available:

I Bonds
I bonds are savings bonds which are backed by the US government. The difference between I Bonds and the regular treasury bond is in the interest gained. The rate earned on I Bonds is a combination of two rates: the fixed interest rate set when the investor bought the bond and a semi-annual variable rate tied to the current inflation rate. The maximum you can purchase for an I bond is $5,000 per calendar year. The interest will stop accruing 30 years after it is issued. If this bond is cashed and used to pay education expenses, it is completely tax-exempt. Earnings from I-Bonds are exempt from state and local taxes. Federal taxes can be deferred until the bond is redeemed or reaches the date of maturity.  If you redeem a bond within the first five years of purchase, there will be penalties. If the bond is cashed after the first five years, there are no penalties, .

TIPS (Treasury Inflation-Protected Securities)
To protect investments against inflation you can purchase inflation indexed $1,000 bonds known as TIPS. Tips are guaranteed to beat inflation because the principal is adjusted every six months according to the consumer price index. The term on TIPS is from five to 30 years. Interest is paid out  every six months until maturity. During the time you have the bond, the principal amount increases if inflation occurs. However, the interest rate on these bonds is set when purchased and will never change.

Government Backed Securities
Government-backed securities are available in the form of Treasury bills, also known as T-Bills,  notes and bonds. T-bills are short-term US government securities with maturity of a year or less and can be purchased through a broker, a bank, or directly from the government. At the date of maturity, the buyer of the T-bill receives the entire amount stated on the bond certificate. The amount difference between the face amount and the amount the bondholder paid for the certificate is considered the interest gained, which is also known as the ‘discount yield’. This interest is exempt from your state and local income taxes, but not exempt from federal income taxes. Treasury notes have longer terms than T-bills and a fixed interest rate. Notes are issued for 2, 3, 5,  or 10-year periods. Owners of Notes and bonds receive interest payments every six months and must be reported as interest income on federal tax returns.

Series EE
Series EE savings bonds are issued at a deep discount from face value . They pay no annual interest since the interest accumulates within the bond itself. When the bond matures, interest is paid out and it is exempt from state and local taxes but federally taxed . The Series EE is exempt from federal income tax if cashed and used for college tuition.

Corporate bonds
Corporate bonds are long-term interest bearing debt issued by a corporation. Corporations issue bonds as a way to increase company funds to finance major projects.  The terms on these bonds range from 10, 15, 20 years and longer and pay the highest interest rate of all the bonds, due to increased risk of default. If a company ends up in financial trouble, the corporate bondholders are paid first with short-term creditor’s payments to follow if available. .

Municipal Bonds
Municipal bonds called “munis” are issued by local governments. These bonds are long-term. and are tax free and tax-exempt . They are used by local governments to fund public projects. Their interest income is not subject to federal income taxes and if you live in the municipal bonds’ issuing state, its interest income is exempt from state and local taxes. Capital gains on these bonds are taxable.

The economy may be bad for many things financial but for your property taxes, the bad economy may be a good thing. If the value of your property has gone down in recent months, you might want to check into appealing the amount of your property taxes.

While many communities are trying continually to increase property taxes, you may still have a chance to reduce your property taxes and fight back against the increase in your municipality. Essentially, your property tax is calculated  by applying the a rate of property tax to the taxable value of your home. The value where you live may not be the same as the home’s market value and can mean that when housing prices go low, the taxable values should go low as well.

How To Appeal

Do Your Homework
Prior to showing up at your municipality’s office to request an appeal, you need to make sure there are no miscalculation in the current tax assessment amount you are paying. You need to do your own research based on other homes in your area and get a copy of your own property assessment for your records. You should also factor in any structural issues your home has that may affect the value of your home.

Make Contact
When you have checked out the above information and found that you have an eligibility to appeal your current tax rate, you’ll need to contact the tax official in your area and ask how the appeals process works. You should be able to calculated a new assessment amount based on your own research. Use that number and follow the directions by the tax official for filing the appeal properly.

Be Ready for the Fight
Simply filling out a form will likely not be enough to win the appeal. You will need to prove beyond a shadow of a doubt that your current tax assessment is much too high. Keep your documentation current and handy so you can refer back to it during the appeal process. Be sure to follow up on the appeal and don’t give up if you can prove your taxes on your property are too high.

In today’s economy, every bit of cash you can save for your future helps to cement your financial stability. Being proactive about the money you are paying on your property and keeping tabs on what is going on with the economy to be sure you are using your money wisely.

Lenders are now making it tougher for homeowners to just literally walk away from a home that has been foreclosed on and the value has gone below the outstanding mortgage amount due. The bank lenders are no longer going to take back the property so the homeowners will now need to continue responsible upkeep for their former home. It is creating an interesting problem for homeowners and the officials of the location the residence is located. As lenders used to put the foreclosed property up for auction, the fact that they are now essentially walking away leaves others in a tizzy about how to handle the situation.

Lenders have figured out that a property whose value has gone below the amount owed on the mortgage costs too much to maintain and it is more work than it is ultimately worth since the value of homes has gone so low. Lenders want to save money too so they aren’t interested in spending the cash need to take a property to auction. Instead, the banks have been telling the homeowners that the foreclosure process has been paused. The homeowner must once again be the responsible party for all legal and financial liabilities on the home. The twist in many of the stories is that the homeowner has often already moved off the property. As more properties are sitting vacant, there is a rise in vandalism and theft. Homeowners often return to find the house in disrepair and in some cases learn that the piping and other interior fixtures have been stolen.

In major cities, the abandoned properties need to be torn down at the cost of the taxpayers. Many lawsuits against the banks by city officials have been springing up in order to help cut down on the problems foreclosures are now presenting. The homeowner also suffers additional financial stressors because of the cost of maintaining and paying for the foreclosed property falls on their shoulders once again. The homeowner’s name is still on the deed and the title to the property, so legally the propery is still theirs. Both the bank and the city officials will legally hold the homeowner still liable which can be devastating to those trying to recover from the initial foreclosure and the issues that lead to it in the first place. The homeowners need to pay for the worthless property will they likely can barely manage to survive every day life, especially if they are now paying for their current place of residence. It can be a dicey situation for all involved in this new trend in foreclosures. Many questions are still going unanswered and it appears the trend of lenders doing the walk-away isn’t going away any time soon.

With so much pressure on the government to devote more focus towards natural resources, renewable energies, and restoring the environment, homeowners can benefit now from making their own green choices about their homes.

The American Recovery and Reinvestment Act of 2009 offers consumers special tax incentives  for homeowners improving the energy efficiency of their homes.  Depending on the location of your residence, you may qualify as a homeowner for a variety of tax credits and tax breaks at both state and federal levels for home improvements that improve energy efficiency. These home improvements include solar panels, insulated windows,wood pellet stoves, wind turbines, and even added insulation can help homeowners be eligible for tax credits.

The homeowner can receive a tax credit equal to 30% of the cost of the improvement, up to $1500 for any improvements that make the home more energy efficient, such as new windows, doors, and roofs. The tax incentive program runs from January 1, 2009 through December 31, 2010. Solar panels and other energy systems can earn a 30% tax credit up through December 31, 2016.

There are a variety of improvement ideas that are relatively inexpensive to implement but can save you big money. By investing in energy-efficient measures around your home, you also benefit from long-term savings by reducing utility, heating, and cooling costs on a monthly basis, keeping more money in your pocket. You can consult with contractors who are experienced with energy efficient improvements around your home and do a few projects that are in line with your budget.

Additionally, consumers and businesses that purchase an energy-efficient vehicle can also qualify for tax credit incentives. The credit percentage will depend on the type and weight of the vehicle purchased or leased during the time period of January 6, 2006 through December 31, 2010.

To find out more information about the energy efficient home improvement tax breaks and tax credits, you can either visit this site or this site. You can see what kind of home improvements are within the scope of the tax assistance programs and then decide which improvements can be implemented at your home.

As mortgage rates are getting better each day, many homeowners are getting in line to refinance their own mortgages for better rates. While it can be great for you to refinance your old mortgage, there are some things you need to know before you fill out the application. If you go into a refinance not fully prepared, you may risk mistakes and ultimately a denial. Many people are taking advantage of the low rates but the lending industry has changed a lot in recent times. There really is no such thing as instant approvals. You need to know what you are getting into.

Here is what you need to know:

Check On Your Credit
Lenders no longer approve most applications but rather fully investigate your credit report before making a decision. You’ll want to make sure you know what your credit score looks like before the lender does. If you have any smudges on your report, you’ll have time to clean them up before you complete your application, giving you a better chance to be approved the first time around. Lenders are no longer taking chances on credit risks so make sure your credit score is excellent or better before you go. If it isn’t, wait until you can bring up your score.

Check On the Value of Your Home
In addition to your credit score, you’ll want to check out the change in the value of your home since the recession hit. You want to make sure that your home value hasn’t decreased significantly over the years, leaving you without equity in your. If the value has dropped dramatically, you should hang out for awhile until home values come back up again.

Get Organized
Like we mentioned, lenders are no longer up for the instant approvals. They want to review and make sure your have your ducks in a row. Lenders will want proof of your income, copies of your taxes, and any other financial details they deem important. Having this information in an orderly manner will help show lenders you are serious and ready to finance. It will also help move the procedure along so you can be sure to get the best rates possible and not waste any time.

Is the Grass Greener?
Today’s low interest rates are good but make sure that what you have isn’t just as good or better. If your current interest rate is a bit higher but you are able to pay off your mortgage sooner than a refinance deal, you might want to stick with what you have. You also want to think about how long you plan to stay at your current residence. Hardly seems worth the trouble of refinancing for 30 years when you plan to move in 5.

Each year, more than 80 million people struggle to pay medical bills in reality they can not fit into their budget. Additionally 700,000 are forced into bankruptcy because of medically-related expenses. So what do you do if you have a whopper of a bill you can not afford to pay?

Here are some tips to help you manage those high medical costs:

Check With Your Insurance Company
IF you have insurance coverage but your claim for medical care was subsequently denied, file an immediate appeal and see it through.

Make An Effort
If you are not insured, at least show the facility that you owe that you have every intention of making good on paying your bill. They want to see a good-faith effort towards paying off your debt. Whatever you do, don’t ignore the bills. Contact the office and work in negotiating a payment plan you can afford. Your goal is to avoid being turned over to a ruthless collection agency and allowing the medical bill to negatively affect your credit.

Negotiate a Payment Plan
Office clerks in the billing department may try to play hardball with you but do not accept no as an answer without trying for a better deal. Ask for a discount for paying in cash. If you do not get anywhere with the desk clerk, ask to speak to a supervisor or the patient accounts manager who may have more pull in the decision-making department. Let them know honestly how much you can afford to pay each and every month and be sure to get the final arrangement agreed upon in writing.

Look for Financial Aid
Consult with the billing department about any available financial assistance you might qualify for as a patient. Many people assume they will not be eligible for such aid and end up missing out on that much-needed help.

Prepare Beforehand
If you are anticipating a costly medical procedure or treatment, start early and consult with the doctor prior to the procedure to discuss your financial concerns. Many physicians will agree to work with you, giving discounted prices for those without insurance or the financial means to afford the care. This can help alleviate the shock of a big surprise bill in the end.

Having medical concerns is bad enough but adding financial issues to the mix can make your medical issues worse if you are stressed about money. Medical emergencies are not predictable so it may be in your best interest to sock some money away in a savings account to back up what your insurance doesn’t pay. If you don’t have insurance coverage at all, make medical emergency savings a priority in your budget.

We are hearing a lot of people who are getting rid of their credit cards and accounts all together. They have had it with the rate increases, fees and charges and are not willing to continue to be beaten down by the difficulties in managing and maintaining credit card accounts.

While these are understandable reasons to get out of credit cards, they are somewhat short sighted. Credit cards still have advantages and are a good way to do business with retailers. Here are six good reasons to keep your credit cards and work through any issues you are having.

1. Safer than cash, debit cards and checks

Because you are not held liable when your credit cards are used fraudulently, they represent one of the safest methods of paying for things on a daily basis. Unlike cash, debit cards and checks where once the money has been taken, you are out the money and chances are almost nil in getting it back.

2. Accepted almost universally

Not only do credit cards trump other forms of payment in the U.S., but when travelling abroad, you will find that they make financial transactions almost seamless between currencies. The credit card companies handle the transaction on the back-end and you never have to be concerned about it.

3. Gives you options

How many times, when away on vacation, have you had to pay for an unexpected car repair or some other semi-emergency? If you are from an out-of-town location, paying for these kinds of things is much easier with a credit card. Most merchants will be hesitant to accept a personal check and chances are high that you do not have the cash to pay for the item in question. Plus, would you really want to use all of your cash for that purpose?

4. Earns rewards

If you have a rewards or cash-back card, you can earn some significant rewards for using your card for everyday purchases. While some of the restrictions have gotten tighter, they still represent the best reasons to own a credit card.

5. Transfer balances

The 0% interest balance transfer cards allow you to move your balances between cards and avoid interest while you crank on getting the balance paid down. Also, with the included checks, you can transfer the balances of almost any kind of debt that you have onto one of these cards.

6. Manage expenses

This is especially helpful for those who are in business for themselves or who travel a lot. Being able to manage your business expenses with a credit card is easier because you have one account into which to combine your transactions. It is also helpful from a tax standpoint, because your business expenses would be enumerated in one account which would be easily accessed at tax time. Just get out your statements and use to validate tax deductible items.

Yes, it is more difficult to work with credit cards right now, but that does not mean that their advantages have been completely wiped out. You can still benefit from them with the proper practices and methods in place that will keep you in good standing with the card issuers as well.