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7 steps to financial independence

Mon, 30 Jun 2008 16:34:26 EST

7 steps to financial independence Consider the pursuit of fiscal freedom this July 4.

Eleven score and 12 years ago, America's forefathers declared that we all had the inalienable right to life, liberty and the pursuit of happiness. And today, for a lot of people, a life of liberty and happiness includes financial independence. There's no one path to fiscal freedom, but there are certain economic truths that - while not necessarily self-evident - have proved effective in getting out from under too much debt and the tyranny of paycheck-to-paycheck living.

This July 4, declare your financial independence by following these seven steps:

1. Get financially literate
Benjamin Franklin said: An investment in knowledge pays the best interest. You can't make smart financial decisions if you don't at least understand the basics of money management. The Internet can be a great source of information, as long as you make sure you are consulting trusted sources. You can start your financial research at the LendingTree Smart Borrower Center, or try the U.S. Financial Literacy and Education Commission's www.mymoney.gov.

2. Formulate a budget
You can't make wise money choices if you don't have a clear idea of your financial situation. Keep a record of all your income and expenses for at least two months. Use that as a framework for drafting your own declaration of financial independence: a budget plan that includes a monthly savings goal.

3. Sweat the small stuff
An Abraham Lincoln here, an Alexander Hamilton there and pretty soon you're talking real money. Pay attention to the small, unplanned purchases you make, because they can add up.

4. Maintain an emergency fund
When, in the course of human events, the unexpected occurs, you need to be prepared. Always have stashed away enough money to cover at least three months worth of living expenses, so those inevitable rainy days don't turn into financial disasters.

5. Avoid bad debt
Not all debt is created equal. Taking out a loan to invest in a home can be smart. But piling up debt to fund a lifestyle you can't afford isn't.

6. Save for retirement
If your American Dream includes retirement, start saving early and watch your interest earnings accumulate over time. IRAs and 401(k)s are great ways to invest and build wealth.

7. Invest for the long-term
Old Ben F. had a million witticisms, and here's one more: Diligence is the mother of good luck. Don't buy into get-rich-schemes. Most money managers will tell you that committing to a prudent financial plan for the long haul is the surest way to achieve success.

Before you commit your George Washingtons to any pursuit, it's best to consult a professional financial planner.

7 things to look for in a REALTOR®

Tue, 24 Jun 2008 13:00:32 EST

7 things to look for in a REALTOR® Some basic criteria can help you pick a winner.

If picking a REALTOR® were a reality show, there probably would be no shortage of contestants. At last count, there were more than one million REALTORS® nationwide. Finding the one that best suits your needs, however, might be a little tricky. You'll want some guidelines to narrow the field of real competitors. Here are 7 things to look for in a REALTOR®:

1. A capital R
Not all real estate agents are REALTORS®, and that's an important distinction. REALTORS® are members of the National Association of REALTORS® and have sworn to abide by its strict code of ethics. Consider this a requirement for making it past Round 1.

2. Experience
Newness shouldn't be automatic grounds for elimination, but it's probably wise to look for someone who has been in the real estate business a few years. And while there's nothing wrong with giving a newer REALTOR® a chance, you may want to make sure he or she is working under the guidance of a more experienced mentor.

3. Knowledge of your neighborhood
You're not looking for America's Top Real Estate Agent, you're looking for a REALTOR® who best knows your local market. Whether you are selling or buying, it's important for your REALTOR® to have thorough knowledge of your specific area.

4. A good track record
Potential listing agents should get points not based solely on the number of listings they've had, but on how many of those listings have sold and for what price. Find out how many people a potential buyer's agent has helped find a home.

5. A good ear
And we don't mean musical talent: You want an agent who listens to you. If you're buying, you don't want to waste your time looking at homes that don't meet your needs, or be encouraged to spend more than you can afford. If you're selling, you don't want to be pressured into accepting an offer you don't think is fair.

6. Honesty
Not usually an asset in most reality shows, honesty is an essential quality in the person helping you buy or sell what's probably your most valuable asset. Don't be drawn in by an agent who tells you only what you want to hear. You want to know that he or she will give you an honest opinion about how much your house is worth, or how much house you can get for what you want to spend.

7. References
Consider this the finale. Once you've narrowed your pool to three finalists, contact at least two references for each. Figure out which one you think you'll work with best, then crown a winner.

7 money-saving summer travel tips

Mon, 16 Jun 2008 10:53:00 EST

7 money-saving summer travel tips Roam, if you want to, in 2008.

2008 may just become known as the year of the "staycation." The idea of vacationing in place during your time off from work or school has been around a while, but this summer, high gas prices, a weak dollar and jitters about the economy in general have many Americans staying home. Those who do plan to travel may need to be a little savvier to stay on-budget in '08. Here are 7 money-saving travel tips for all you summer "go-away-cationers":

1. Minimize driving
Rising gas prices mean that this may not be the best year to take that rambling driving tour across the country. Plan a modified staycation - leave home, but pick a destination (such as an all-inclusive resort) where you can go and stay.

2. Stay stateside
The dollar doesn't go as far as it did last summer in most international tourist destinations, so this might be a good year to take a domestic vacation. If you must travel abroad, you can usually get a better currency exchange rate at an ATM, rather than an exchange desk. Use a credit card for major expenses, such as your hotel bill.

3. Travel light
Most major airlines are now charging an extra fee for fliers with more than one checked bag and any especially heavy bags. Many have also increased the penalty for making flight changes once you've booked.

4. Get creative with accommodations
Don't settle for the first room rate you're offered. If you're staying at a national chain hotel, check rates online, then call the hotel's national toll-free number, as well as the hotel's direct local number. Think about getting a room at an extended stay hotel with a kitchen, so you can save on food costs. And consider alternative accommodations - such as a hostel, a campsite or a friend or relative's house.

5. Be a high-tech gas price hunter
Technology has made it easier to find the cheapest gas prices anywhere in the country. If you're driving to your destination, go to one of the many online gas price sites and map out your route before you leave home. Once you're on the road, you can get updated cheap gas information via text message from those same sites.

6. Find savings in numbers
The cost of gas gets a lot cheaper if you share it with a car full of friends. Once you get to your destination, you can always go your own ways if you want.

7. Book smart
This year especially, you can get great discounts if you purchase a vacation package that includes your flight, hotel and rental car. And flexible travelers will find lots of last-minute deals.

7 truths about the housing market

Mon, 9 Jun 2008 10:30:00 EST

7 truths about the housing market Perspective is important when it comes to real estate matters.

Studying today's housing market is sort of like looking at an online map. Click the plus symbol, and you'll zero in on all sorts of details you didn't see before. Click the minus button, and you'll notice that those details disappear in the context of a whole continent. It's not that the picture being presented isn't accurate, but what you see depends on your perspective. The trouble comes when you try to make a street-level decision using what you learned from looking at a continent-wide map. So before you make any moves based on the last thing you read about real estate, take a minute to step back, and read these 7 truths about the housing market.

1. Nationally, the housing market looks bad…
There's no denying this statistic: The median price of existing homes in the U.S. dropped to $207,000 in 2007 from $221,600 in 2006. That's unprecedented.

2. ….but your neighborhood may be sitting pretty.
You'd be hard pressed to find a market that remains red hot, but many are at least stable, with median prices that are holding steady. A REALTOR® can be your best source for local-level information.

3. Housing is cyclical.
Just like our overall economy, the housing market goes through peaks and valleys, good times and bad. Statistics show that housing prices generally have risen steadily over the last four decades. If you buy for the long haul, rather than to turn a quick profit, you can generally be more confident in your real estate investment.

4. No one can predict the market bottom.
Estimates of when housing prices will hit their low point vary widely from economist to economist. We won't know when the market has hit bottom until after it starts to head upward again.

5. It's not necessarily a terrible time to sell…
…especially if you are also buying a new house. You might not get the price you would have at the peak of the market for your current house, but you'll probably get a much better price on the house you're buying than you would have several months ago. You might be selling low, but you'll be buying low too. Again, a REALTOR® can help you make the right decision for you.

6. Foreclosures are a small percentage of housing, in most markets.
Foreclosures seem to be concentrated in certain states, such as Nevada, where one of every 54 households received a foreclosure notice in the first quarter of 2008 and cities, such as Stockton, California, where the foreclosure notice rate was one in 30. In Vermont, however, the foreclosure notice rate was less than one in 103,000.

7. You can still get a loan
It won't be as easy as it was in 2007, but for borrowers with decent credit and steady income, loans at historically low interst rates are available.

7 steps to rebuilding your credit

Mon, 2 Jun 2008 10:30:00 EST

7 steps to rebuilding your credit It takes effort to repair a shattered credit record.

Not paying a bill is the financial equivalent of breaking a mirror. But instead of seven years of bad luck, you get seven years with a ding on your credit record, making it potentially more expensive for you to borrow money when you need it. That doesn't mean you should sit by for seven years and wait for your credit score to improve. Rather, it will take hard work and discipline - and not just luck -- to improve your credit score after a serious delinquency. Here are 7 steps to rebuilding a bad credit record:

1. Do some self-reflection
Figure out why you got into this situation in the first place. Did an unexpected event - such as a job loss -- throw you into financial crisis? Were you sloppy with your bookkeeping? Or did you just overspend? Have a plan for how you'll avoid delinquencies in the future.

2. Check your credit record
Get a copy of your credit report at www.annualcreditreport.com, and dispute any errors you find. You can also submit a 100-word statement, to be included on your report, explaining any negative information that remains.

3. Contact your creditors
Write to any lenders who reported the negative information to the credit bureaus and ask them to remove it. Be polite, explain your mistake and promise to never, ever do it again.

4. Get a loan
It may seem counterintuitive to be taking on more debt when your credit score is low, but the idea is to increase the amount of positive information on your report to show creditors that you are once again creditworthy. Borrow a small amount you know you can manage, perhaps to buy a car or make home improvements. Make sure you can refinance the loan without penalty, so when your credit score improves you can shop for a lower interest rate.

5. Get a credit card
If you get turned down for an unsecured credit card, try a secured one, which will require you to make a cash deposit to serve as collateral. If you pay your bill on time for several months, ask the credit card issuer to convert it to an unsecured card. Make sure the card issuer reports to the three major credit bureaus, and always shop around for the card with the lowest fees and interest rate.

6. Pay your bills on time
Along with credit card and loan payment delinquencies, late-paid rent and utility bills can also mar your record.

7. Avoid scams
Not that we're superstitious, but that black cat crossing your path may just be an unscrupulous credit repair company. It makes sense to get help from financial experts, just make sure they are legitimate. The justice department keeps a list of government-approved credit counseling agencies for your reference.