Financial Management – iFinance Help

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Having a grasp on your finances is vital. You could easily lose everything if you are not careful. There is no greater tragedy than that. After all, it is your hard-earned money.

That is why it always pays to be smart. iFinance Help is your financial management partner.

 

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Understanding Loans Before You Borrow

If you need to get a loan it’s very important to understand how everything works. When having a full understanding of the ins and outs of borrowing money you’ll be able to have a better grasp on when you should get a loan and when you should avoid it. Also, you’ll be able to decide what type of loan would better suit your needs and how to get the loan that is most beneficial to you.

So what do you need to do in order to get a loan? What’s the price of borrowing money? Why, more money of course! When you borrow you obviously have to pay everything back plus a little extra in the form of interest. That’s the way loans work, but you knew this already in theory. Costs are a crucial part of acknowledging how loans work and will help you make much better choices about what types of loans to target. Some lenders might not make it easy for you to understand all the costs involved, so it’s always a great idea to check the numbers yourself.

For most loans you can use a Loan Amortization Calculator to understand how everything works. If you want to fully understand how the numbers work, use a spreadsheet and play around with the numbers by changing the variables. Costs can be tough to understand sometimes, so spending some time to get a complete picture in this area will prove valuable to you in the long term.

How Paying Back Your Loan Works

A loan qualifies as a loan by definition if you repay it. Repaying your loan sounds simple enough, as you’ll pay it gradually over a pre-determined period of time. You’ll be making monthly payments that account partly for the loan balance, and also a small portion in interest. You’ll do this until the entire amount is paid. Loans can differ in terms however, as you can get a loan and repay it over very long terms, or very small terms. When having to repay over small terms, your monthly payments will naturally be higher, but you’ll also have to pay them for shorter amounts of time. When going for a big loan on a 30 year term, the monthly payments might not seem that much now, but have to take into consideration that things might change for you 10 or 20 years from now. So when you do commit to a 30 year loan, understand what it means for future you and be prepared to manage it.

How To Qualify For A Loan

When requesting a loan, the lender will look at your file and determine if you are eligible for a loan. To qualify for a loan, the easiest way is to have a good credit score, as this will show lenders that you’ve paid off loans in the past and you are very likely to repay that loan. You’ll likely get the loan on a reasonable rate too because you’ll be deemed low risk. If you have poor credit however, you can still get a loan. You may need to also offer something as collateral to secure the loan – this will allow the lender to sell something of yours if you are unable to pay your loan back – but you will also have the option of getting somebody you trust with a good credit score to co-sign the loan. Obviously, they have to trust you as well because if you are unable to repay the loan, the lenders will ask them to do it for you.

Use this information to be better prepared before applying for a loan. Your chances of getting it at a good rate will surely improve.

Stock Market Investing Basics

The stock market has always been an attractive proposal for anyone looking to invest some of their savings with the goal of turning a profit over time, or even over night. And while you can certainly benefit a lot from investing in the stock market, and even make a fortune in short amounts of time, you can also lose big amounts of money if you don’t know what you’re doing. In this article we’ll look to explain some of the basics of investing in the stock market and hopefully help you understand some of the better practices to follow, while avoiding common mistakes.

So what are some of the good practices you should be applying to make sure your stock market investments are a success? Read on to find out!

Company Background Research

Investing in a company without having any knowledge of their background is suicide. This is what will make or break your investment from the get go. Regardless if you choose to go after bigger more established companies that look like a safer choice, or new companies trying to become the next big thing, you need to understand where they’re coming from. How has their stock evolved in the last few months and years(where applicable). Do they pay dividends? How are their industry trends looking? Is their competition doing well, or doing poorly? These and more variables need to be researched to have a full understanding of that company’s profile.

Company Financial Health

Now that you have a good understanding of a company’s background and their history it’s time to look at their financial health. Are they making steady profits? Do they have any debt? What new products and/or services are they launching, and how are their current products and services selling on the market. Are their stock going on a slight upward trend or downward trend? All of these are things you should be looking into and writing down.

Timing Is Important

Don’t buy stocks when a popular company’s stock has plummeted for some reason you might find odd. This is a common mistakes beginners make, thinking that company is bound to bounce back and you’ll make some easy money buying stock at a discount. There is a reason others are selling their stock, and if you don’t understand why that is, don’t buy. Timing is obviously very important when investing in stocks, but it’s so much better to invest in a well respected company that’s on an upward trend even if the stock price is higher. If it keeps climbing you’ll be happy in the long run.

Diversify Your Portfolio

Another common beginner mistake is to invest all or most of your money in 1 or 2 companies. This might seem appealing at first, but what happens if one of them goes on a downward spiral? You’ll lose most of your investment, and you don’t want that. It’s much better to instead invest that same amount into 10 companies. Sure, your profits might be smaller, but more consistent over the long term, and much safer too. As long as you perform good research, you’ll have every chance of hitting several winners, and the ones that don’t pan out won’t hurt you nearly as much.

Reinvest Some Of Your Profits

Once some time has passed and your portfolio has grown, you should look to reinvest some of your profits into buying new stocks. Of course, you could stop and make a decent amount of profit regularly, but if you always stay active, always adding more to your portfolio while eliminating stocks that might no longer be profitable you will actually be maximizing your profit potential.

These stock market investment basics should help you be much better informed when just starting out with investing into stocks.

What Is A Credit Report And Why It Matters To You

Your credit report and credit score tell an important story about you. They tell the story of your financial history and everything related to every financial decision you’ve made. It is used to grade you on how good you are with managing finances, paying off your debts and how trustworthy you are in terms of paying off what you owe. To financial institutions across the US, having a bad credit score means you are going to get rejected for loans (or have to pay higher interest rates to secure one), rejected for credit and so on. It is something of utmost importance to make sure your credit report is as clean and as positive as possible.

To find your credit history and analyze it for yourself, you can go online and find any website that provides this information from the 3 main institutions: Experian, Equifax and Transunion. Either of these institutions will look at your entire financial history, analyze your decision making, grade you and put all of that information into a readable report. Any website that compiles a credit report with data from these 3 institutions will be accurate. You can compile your credit report online for as low as a dollar, and there are several websites that offer this service, so you can take your pick. Not only will you be able to check your credit score, but see your entire credit history.

This is important because checking your credit history and financial decisions on a regular basis will help you in identifying mistakes you’ve done in the past, and try to avoid making them again in the future.

You can consider your credit report to be something like a report card from school. Have bad grades and doors will close for you, have good ones and every door will be open. When you have a positive credit history, it will be incredibly easy to secure that loan(even very big ones) with very low interest rates, while having a poor credit score will obviously make it tough for you to secure any form of financial aid.

One extra thing that will show up on your credit report of significant importance is any fraudulent attempts by others against you in the past. You can even identify possible mistakes made by past lenders that you can then move to correct and clean up from your credit report.

You can use a credit repair company’s help to assist you with removing any errors from your report that could make your score rise back up over 600 in many cases. So before trying to go for a loan, always make sure to check your credit report and try to identify if errors exist. They can make a big difference.

A good credit repair company can also assist you in raising your score even if you have no errors on your report. They will devise a plan you can follow to start repaying some of your debt, which will in turn lead to your credit score rising back to decent levels.

Use this information to always be aware of your financial history, your credit score, and make it easier on yourself when trying to secure a loan.

The Different Types Of Savings Accounts

So everyone is saying you should be saving more money, and obviously that’s always a good idea, but what type of savings account should you use that better suits your needs? There are several options available to you and it can be confusing to pick one without fully understanding the differences and similarities between them. And as saving your money under the mattress isn’t really a viable solution nowadays, let’s look at finding out more about each type of savings account and identify the one that’s perfect for you.

Fixed Rate Bonds

This is the most inflexible type of savings account available. It obviously won’t be suitable for everyone, but here’s how it really works. This type of savings account has 2 important rules: you get a fixed length on the agreement, meaning your money will be fully locked in for the agreed amount of time, and your return rate is fixed as well. So when you agree to a 2 year fixed rate bond you deposit your amount of money and forget about it for 2 years. You won’t be able to withdraw it, and when the 2 years are up you’ll get it back plus the exact amount of interest that was specified when you first made the agreement.

Regular Savers Accounts

These types of accounts will normally pay slightly better rates than instant access account, but you will have to regularly deposit money into them. Basically you decide that every month you want to save a small percentage of your income and regularly deposit it into your saver account. Pretty straightforward. There can be 2 types of regular savers accounts however, the term based, where it’s actually fixed by nature, and the other would be the transactional based accounts where you can both put money and and withdraw money when necessary. You need to make sure you are fully aware of the terms and conditions of these accounts.

Simple Access Accounts

Probably the most popular type, this savings account allows you to have access to it at any time. You may also know it under the description of a ‘rainy day account’ where you can save money with a decent return but also be able to have full access to it at any time. So if you have a money related emergency your funds are easily accessible. You may have a limit to how many withdrawals you can do in a year, but generally speaking, you’ll have access to your funds when you really need them. As always, make sure to fully read and understand the terms and conditions.

Conclusions

Saving money is always important, so look to create a savings account and deposit there regularly. We’ve explained some of the various options available to you, so hopefully you can now make an informed decision that will better suit your saving needs. Remember, a dollar saved is a dollar earned, so always look to deposit extra cash into savings accounts, they’ll add up and you’ll have access to it during a rainy day.