Archives – July, 2009
Money Management
Now more than ever it is vital that we begin teaching personal finance so our youth are prepared for the financial realities of the real world.
Teaching money management skills that are focused on a ‘practical’ financial education will help to reduce debt, increase savings and ensure the financial security of millions around the world.
In today’s age, it is more important than ever that parents start teaching money management skills to their children. Teaching personal finance is not done in most schools due to budget restrictions and other red tape. Schools have a lot of other required coursework they must teach due to the ‘No Child Left Behind’ and teaching financial literacy is not part of that bill.
Looking at the statistics it is apparent the majority of parents do not have enough knowledge to teach financial literacy to their children. In fact, many parents today are experiencing financial troubles and wish they had someone that was skilled in teaching them personal finance matters. Parents who participate in home based businesses train their children frequently in the skills of finance by using the business as an example.
Teaching money management skills in today’s age is critical. There simple way you can begin teaching personal finance to your children so they are prepared for the real world! Even if you have made financial errors yourself there are teaching financial literacy resources available to help give your family a big advantage.
Three Tips to Teaching Money Management Skills Teaching personal finance will help your children to achieve financial security and can give them an advantage that they will benefit them throughout their life. Check out the list below to discover the top ways to teaching money management skills.
1) Financial Literacy Lesson Plans – Today there are financial literacy lesson plans available that help parents that want to be teaching money management skills to their children. Make sure the personal finance curriculum plans you choose have been designed by a team of experienced professionals. Teaching financial literacy is much more effective when the financial literacy lesson plans were developed by a team of financially successful entrepreneurs and teachers that have a track record of financial literacy lesson plan development experience. Teaching personal finance curriculum that combines top teachers with business leaders will put you immediately on the right track.
2) Communication – The backbone to teaching personal finance effectively starts with communication. Today’s youth are not focused on just “money”. It’s what money ‘allows them to do’ that motivates our children to learn about personal finance. When you teaching financial literacy be sure to ask about their personal dreams and find out how they want to live their day-to-day life. Then relate their aspirations to how having a solid understanding of money can help them reach their goals faster. You will be pleasantly surprised at how many youth want to learn about money when it your teaching money management skills that focuses on lifestyle.
3) Entertaining – By the time the average student graduates from high school they may have been in over 10,000 classes. That is why it is important that you are teaching personal finance in a way that makes you stand out from the thousands of presentations. Teaching money management skills in a way that engages the students will keep their interest. Teaching financial literacy in a fun, entertaining way will help them internalize financial literacy lesson plans so they benefit from this knowledge throughout their life.
July 31, 2009
Financial Report
International Financial Reporting Standards are standards and interpretations adopted by the International Accounting Standards Board.
Many of the standards forming part of International Financial Reporting Standards are known by the older name of International Accounting Standards. International Accounting Standards was issued between 1973 and 2001 by the board of the International Accounting Standards Committee. In April 2001 the International Accounting Standards Board adopted all International Accounting Standards and continued their development, calling the new standards International Financial Reporting Standards.
Objective of financial statements
the framework states that the objective of financial statements is to provide information about the financial position, performance and changes in the financial position of an entity that is useful to a wide range of users in making economic decisions.
Underlying assumptions
The underlying assumptions used in International Financial Reporting Standards are:
• Accrual basis – the effect of transactions and other events are recognized when they occur, not as cash is received or paid.
• Going concern – the financial statements are prepared on the basis that an entity will continue in operation for the foreseeable future.
Qualitative characteristics of financial statements
The Framework describes the qualitative characteristics of financial statements as being:
• Understandability
• Relevance
• Reliability
• Comparability
Elements of financial statements
The Framework sets out the statement of financial position (balance sheet) as comprising:
• Assets – resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity
• Liabilities – a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits
• Equity – the residual interest in the assets of the entity after deducting all its liabilities
and the statement of comprehensive income (income statement) as comprising:
• Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or reductions in liabilities.
• Expenses are decreases in such economic benefits.
Recognition of elements of financial statements
An item is recognized in the financial statements when:
• it is probable that a future economic benefit will flow to or from an entity and
• when the item has a cost or value that can be measured with reliability
Measurement of the Elements of Financial Statements
Measurement is how the responsible accountant determines the monetary values at which items are to be valued in the income statement and balance sheet. The basis of measurement has to be selected by the responsible accountant.
Accountants employ different measurement bases to different degrees and in varying combinations. They include, but are not limited to:
• Historical cost
• Current cost
• Realizable (settlement) value
• Present value
Concepts of Capital and Capital Maintenance
Concepts of Capital:
Financial concept of capital, e.g. invested money or invested purchasing power means capital is the net assets or equity of the entity. A physical concept of capital means capital is the productive capacity of the entity.
Concepts of Capital Maintenance and the Determination of Profit Accountants can choose to maintain financial capital in either nominal monetary units or constant purchasing power units. Physical capital is maintained when productive capacity at the end is greater than at the start of the period.
The main difference between the two concepts is the way asset and liability price change effects are treated.
Profit is the excess after the capital at the start of the period has been maintained. When accountants choose nominal monetary units, the profit is the increase in nominal capital. When accountants choose units of constant purchasing power, the profit for the period is the increase in invested purchasing power. Only increases greater than the inflation rate are taken as profit. Increases up to the level of inflation maintain capital and is taken to equity.
July 27, 2009
Mortgage Loan
“Mortgage loan modification” may be a new concept to you because loan modifications were not really done much until recently. Since the housing crisis and mortgage meltdown began, lenders have been forced to come up with creative ways to protect themselves from losing money. At the same time, government officials have been pushing lenders to rework the terms and conditions of troublesome mortgage loans in order to help homeowners avoid a serious foreclosure epidemic.
Many of the troublesome mortgages that people have were made by lenders who either used high-pressure sales tactics, or steered you into getting a mortgage loan you would not be able to afford after a few years. Because of this, government regulators threatened to force lenders to complete mortgage loan modifications if they would not do so voluntarily.
So what exactly is it? The term “mortgage loan modification” is a long term solution that is used to describe an *interest rate reduction, *principal balance reduction, or *loan term extension. These changes are made in order to reduce your monthly payment to a lower one that you can afford. Lessening the amount you have to pay in mortgages every month would allow you more breathing room in your wallet to cover car payments, child care, tuition, or any host of other expenses you may have.
* Interest rate reduction – If you currently have a high fixed interest rate, or have an adjustable interest rate that started off low but is set to increase, your lender may offer you a reduction in your rate to a lower fixed interest rate. This lower rate will decrease your monthly payment. For example, if you have a 30-year fixed loan for $200,000 at 8%, your monthly payment would be $1,467. If that rate gets reduced to 6%, your monthly payment goes down to $1,199.
* Principal balance reduction – If your home is worth less now than when you bought it, your lender may rework your loan so the loan amount (also called the principal balance) reflects your home’s current worth instead of what you paid for it. For example, if your home was appraised for $250,000 when you bought it but now it is only appraised for $170,000, your lender may reduce your principal balance from $250,000 to $170,000. Even if your interest rate stays the same, since you now owe less, your monthly payments will be less.
* Loan term extension – Many lenders are offering you the opportunity to take longer to pay your loan back. This is called a loan term extension. For example, if you have an aggressive 15-year loan for $200,000 at an interest rate of 8%, your current payments would be around $1,911 per month. If you extend that same $200,000 mortgage to the standard 30 years at the same interest rate of 8%, your payments would be just $1,467. Some lenders are extending loan terms up to 45 years which would make the payment just $1,371. The good thing about a loan term extension is that although you may not be planning to stay in your home for as long as your loan term, you still have the option of taking advantage of the lower monthly payment until you decide to sell and move.
If you want to know how you can get a mortgage loan modification too, it’s simple. Ask your lender for it. Millions of homeowners throughout the country are negotiating with their lenders and crafting unique plans that give their wallets a break. There are specialists that are trained to work on your behalf to get your loan modified quickly.
It is important to note that the process of any mortgage loan modification takes time. In order to get yours modified as soon as possible, begin the process right away. Make sure you work closely with your specialist to provide whatever documents and records they request. The mortgage loan modification process can be very involved, but when it is successful you get to enjoy the long-term benefits.
July 23, 2009
Debt consolidation is a form of debt management where you are able to work with an experience credit counselor to find a loan and method of debt consolidation that can help get your finances under control and plan for a stronger financial future. You can use this method to consolidate credit card debt and should consider it before bankruptcy or your other drastic financial measures take over. Credit card debt affects millions of households around the world. When you are looking for a way out from under suffocating credit card debt, you need a plan that will work now and prevent debt in the future. Debt consolidation can offer that.
Credit Card
First, take the time to find a credible debt consolidation company and make sure they have credit counselors experienced in credit card debt. The best method is to work with a local debt consolidation office (as opposed to an online company) because of the heightened level of responsibility and ability to check them out. You can contact your local BBB or financial regulatory agency to find out if the debt consolidation companies you are considering are reputable.
Next, meet with them about the services they offer to find a company who will give you what you need in the way of credit card bill relief. You should not be asked for payment until the services have been completed and they should be offering you a range of services to find relief from your debt. Included in these possible services should be debt negotiation and credit counseling. Debt negotiation helps settle your debt for lower amounts and credit counseling helps you plan for the future.
Once you are through the process of finding the right credit counselor to work with they should walk you through the process in the easiest and most reassuring way possible. You should feel confident about your journey and have hope in the future for your credit card accounts. The credit counseling is important and you should pay attention and work with the credit counselor to make sure you have a plan in place to help you avoid making the mistakes that got you into debt and instead learn how to budget, plan and spending your money wisely. You can find a way to consolidation credit card debt and plan for a stronger financial future with a little help.
July 19, 2009
Credit Card
Every consumer in America has the right to a free credit report once every year by law as of September 2005. But since that law has passed there has been nothing but confusion.
The web sites that say they are offering this so called free credit report, are asking us to give them our credit card information. Does that sound like a free credit report to you?
You may have even given your credit card number to these companies to sign up for a thirty day trial for a credit service that has almost nothing to do with getting your free credit report.
In all fairness, you can cancel this service after thirty days. But how many people do you think forget and end up with monthly or even annual credit card charges?
In fact, these companies are counting on you forgetting about the thirty day trial and charging that fee on your credit card. But if the law says you get a free report, what’s the deal?
A lot of people are confused about these free credit reports because of how some companies are marketing the free credit report. Hopefully, this information will clear a few things up for you.
For people who just want the bottom line, a free credit report is available at www.AnnualCreditReport.com and this is the only official site that helps consumers to obtain their annual free credit report.
This site’s security protocols are excellent with physical and technological security and encryption. That’s important for identity theft purposes because the information on your credit report should be seen by your eyes only.
So if this site is readily available and anyone can get a free credit report once a year, what’s the catch? Here is the catch: the credit report you get from www.AnnualCreditReport.com does not have any credit scores.
Now you may be asking, “Then what good is getting this free credit report without a credit score?” There are a few good reasons why you may want to look at your credit report even without a credit score.
Did you know that more than forty percent of all credit reports have errors? If you spot these errors, you can get them cleared up before it affects your credit score. If you contact a credit bureau about an error, they have to clear it up or remove it after thirty days by law.
If you monitor and review your credit report, you can check to be sure that you are not a victim of identity theft. If someone takes over your accounts and charges up thousands of dollars in debt, they can destroy your credit score in a matter of hours.
These are just a couple of good reasons why you want to get your free credit report once a year and inspect it just to be sure everything looks like it should. You can get your free credit report online at www.AnnualCreditReport.com or by phone or through the mail.
So where do you get your credit score from? This is where the confusion comes in and here is the answer. The law Congress passed did not say anything about a credit score just one free credit report a year per consumer.
You have to pay a service to get your credit score and some companies are confusing people with the way they are marketing this. They offer you a free credit report and score and many consumers believe it’s their annual free credit report.
But if you have to sign up for a credit service they offer for a 30 day trial period, does that sound free? What these companies are counting on is you forgetting about the 30 day trial and charging a fee on your credit card once that trial period is over.
It’s in the fine print, but how many people actually read that. So here is a good common sense rule of thumb. Any time you have to give your credit card information, ask yourself, “is this really free?”
Many of you probably know this is happening because you have been trapped with this kind of marketing tactic. But for those of you that just want your annual free credit report, you can at least be aware as to what is really going on and have a no nonsense way to get it.
July 16, 2009
Easy Mortgage
When you need to obtain a mortgage for bad credit, there are a couple options you have to choose from. Before you commit to anything, it is crucial that you know your options and spend some time thinking about this important decision. Whatever you decide is something you may be stuck facing and paying off for the next 30 years, so do not take this decision lightly.
Your mortgage for bad credit options are basically the following:
1. Search for and try to find the best offer with your current credit situation
2. Focus on credit restoration to qualify for preferred treatment
There are a number of companies and organizations that will approve you for a home loan no matter what your credit score, but that comes with major consequences. You’re likely to pay outrageous fees and the interest you’ll pay on the loan will be two to three times the average rate.
As a result, not only will it cost you hundreds or even thousands of dollars more to live in your home every month, but by the time you pay off your mortgage it could cost you hundreds of thousands of dollars more. That’s because each month you pay your mortgage, more money is sent to the bank to pay interest than to actually owning your home. You’re simply paying a fee.
Whether you need a mortgage for bad credit to purchase a new home, refinance your current home, or buy a second home, you’ll end up paying more with these plans – and not just in mortgage payments. Because of your bad credit, your closing costs could be higher and you may end up paying private mortgage insurance (PMI), which is nothing more than a fee because of your bad credit score.
This can all be entirely eliminated by simply planning 30 – 90 days before you purchase your home. By putting a little effort in restoring your credit, you can erase any worries about getting approved for a mortgage. In doing so you’ll save thousands of dollars in the process and reduce your closing costs.
July 16, 2009
FHA Loan Requirements
FHA loans have allowed Americans to borrow money from the lenders for the purchase of a home. FHA does not make loans. Rather, it insures loans made by private lenders. These loans can also be obtained despite a poor credit history. The requirements for these loans are not strict and they can be got quite easily from the lenders. The interest rate is also lower than other type of loans.
Requirements for the FHA loans
1. Any past bankruptcy must be at least 2 years old,
2. You should have had a very good credit for at least 2 consecutive years following the past bankruptcy.
3. You should be able to show steady income for at least three years. The lenders will then be more confident about your repaying abilities,
4. Foreclosures should be at least three years old. This is a major requirement in getting a FHA loan,
5. You should be able to make a 3% down payment,
6. You need to have a valid social security number so as to prove that you are an American citizen.
But the FHA loans also have a disadvantage which can make them a poor option for certain people. This is because the lenders have loan limits depending on the county. Thus, the borrowers might not be able to get the amount of loan they really require to get the house. Moreover, Private Mortgage Insurance is required regardless of the amount of the down payment. This is another disadvantage of the FHA loans. There are lots of lenders giving the FHA loans. You need to do extensive search and compare offers by various lenders to find the best lender.
July 14, 2009
College Loan Assistance
Times are hard. With the financial crisis looming above our heads, our future plans and dreams might be stalled or scrapped altogether. With the job market becoming more competitive, when coupled with high unemployment rates, it is thus of paramount importance that one needs to be a cut above the rest.
Many students are trying to get into colleges which offer the required knowledge and technical expertise that will land them their dream jobs. But college is a pain. For one thing, going to college has become more and more expensive. Some students are lucky thru the help of sponsors and scholarships. But these things come along rarely and getting a good and worthy sponsor or scholarship is difficult when they are up against hundreds of applicants. Other students who did make it has to keep themselves in college by taking part-time jobs. However, this require them to juggle their time and their roles, both as a student and employee. The final option for others is a college loan assistance.
Many colleges offer student assistance funds, and there are various installment plans for them to choose from, as long as they are able to pay up right after they graduate. The great thing about college loans is that it is easy to obtain the money to help them complete the degree. Problem is, students have to make sure that their loans and college expenses are not too huge, and that their future incomes must have the capacity to repay their loans. Most students who obtain college loans are not knowledgeable about the terms and conditions of the repayment. On the other hand, others’ ability to repay the loan has been offset by a struggling economy, which does not assure them that they will get decent paying jobs. With a low income, and huge debts mounting, some people are drowning in their own personal, financial crisis.
What can the government and private agencies do in order to help these borrowers? For one, Lexington law firms can help by informing these borrowers about laws, decrees or programs set up by the government to assist these borrowers in keeping up with their repayment plans.
July 12, 2009
Credit Card Debt
The American public is swimming in credit card debt, and quite often drowning. Everyone would like to pay off these debts quickly, but with wages being cut in many industries, and the unemployment rate approaching 10% nationally, this is becoming more difficult to do. In answer to the consumers’ problems, the credit card companies have raised their interest rates, raised their minimum payments, and lowered consumer’s credit limits. This has pushed many people, who are at a loss as to how to pay their bills, to the brink of bankruptcy.
Now there is another, better, and more honorable way to handle these bills. The consumer can contact a credit card debt settlement company. They are easily found on the internet, and these companies can really obtain results and to making agreements with your creditors so that you can eliminate your debt quickly.
You may try to negotiate with the credit-card-issuers yourself, but this is the hard way. Debt settlement companies — the good ones — can do it quicker, and with better results, as they are used to bargaining with credit card issuers. Many already have a working relation with the lenders, and will be better able to present your case to them. These companies will negotiate a lower interest rate for you with your creditors. They will also negotiate for a forgiveness of some of your debt by your creditors. In many cases, this will end up cutting the amount you owe the credit card companies by 40 to 60%. You will also end up with only one lower monthly payment to the settlement company, rather than a multitude of monthly payments to all your creditors.
With a lower interest rate, the forgiveness of some of your debt, and a set payment schedule, it may be possible to be credit card debt free in a matter of only 18 to 36 months. You will feel better and a lot less stress!
Final Tip: By researching and comparing the best credit card debt settlement services in the market, you will be able to determine the one that meets your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned credit card debt advisor and money by getting better results in a shorter span of time.
July 3, 2009