Resist the Urge to Splurge

Many young adults expect to start life's journey with all the worldly goods their parents probably took years to acquire. A first apartment, for example, must be equipped like their parents' home they just left. Sure, moving into an empty apartment may be a shock after leaving a fully furnished home. But this desire for instant gratification can start risky financial habits that result in a lifetime of overspending and debt.

Your parents probably started out with used furniture or hand-me-downs from relatives. New items gradually were added after taking the time to save the money needed to make the purchases.

Today, because of easier access to credit at a younger age than ever before, young adults are able to completely equip their home with all that their hearts desire. Credit allows for instant gratification instead of the waiting period required to save for the outright purchase.

Anyone can visit a home furnishings store and secure an immediate line of credit, allowing the purchase of lots of new "stuff." No more need to suffer with used, damaged or (heaven forbid) out-of-style furniture when new stuff is so easily acquired. Unfortunately, it comes with a hefty price tag after interest payments are calculated.

The story of Janelle illustrates this point. Janelle had no intention of purchasing lots of furniture when she first entered "The Ultimate Furniture Store." She was on a mission only to find a dresser, which she had planned to pay for with money she had saved. However, the salesperson informed her that she could fill out a credit application and qualify for up to $5,000 on the spot. Janelle was encouraged to take five minutes and complete the application because that was the only way she would be able to receive a 10 percent discount on her purchase.

Thinking it foolish to pass up any chance to save money, Janelle completed the application. Her buying expectations suddenly broadened. Why buy only a dresser if she could qualify for $5,000 worth of additional furniture? Besides, she needed a better couch to replace her old worn one.

Why miss the opportunity?
Emboldened, Janelle also bought a new white leather couch. It almost filled up her entire studio apartment –- but what a statement it made when her friends came to visit! Everyone said they wished they could afford a couch like hers.

But when Janelle took care of her friend's German shepherd for a few days, the new couch was totally destroyed. The dog chewed the wood legs, ripped holes in the leather and pulled out most of the stuffing. The couch was beyond repair, and would have to be replaced.

When the friend returned from her vacation, she was unable to pay for a replacement on her meager salary. Furthermore, since she had no savings, she had charged more than $1,200 on her credit cards for the trip. Janelle would need to buy another couch on her own.

To make matters worse, Janelle still owed money on her destroyed couch since she had charged the purchase. In fact, in order to afford the monthly payments and keep them low, Janelle had stretched out her loan for three years. Not only did she have to pay for another couch, she was stuck making payments on a couch that was no longer in use.

This story illustrates just one way young adults choose to enjoy immediate gratification. There are many more examples, such as:

Financing a new car instead of buying a used car
Having kids too soon
Choosing a two-bedroom apartment instead of a one-bedroom apartment
Buying expensive electronics instead of lower-end items, such as a plasma wide-screen TV rather than a small-screen regular set
In our fast-paced world, you may feel that your parents' practice of saving for a purchase has become old-fashioned. The culture now says, "You want it, you got it!" But before you reject your parents' philosophy as hopelessly outdated, consider the benefit of paying cash for a purchase rather than simply charging it.

If a $1,000 television is paid for with cash, it costs $1,000. However, if the same TV is purchased with your credit card at 18 percent interest and you decide only to make the minimum payment each month, it will take you 12 years to pay off the balance! And you will have paid double the original purchase price, since an additional $1,000 would have been added through accumulated interest costs.

Resist the urge to splurge! Take the time to save for a purchase instead of financing it, and you will dramatically reduce the cost. Buying with cash involves patience, but the price of patience is well worth the wait.

Article Courtesy of
http://www.mindyourfinances.com/money-management/budgeting/081104-04

Gift Card

As more retailers file for bankruptcy or go out of business, more than $75 million in gift cards are at risk of being junk plastic this year. Even when a business reorganizes under Chapter 11 bankruptcy, gift cards are treated as loans to the company. After declaring bankruptcy, some retailers won't accept their own gift cards anymore. If you or your child received a gift card this past holiday season, make sure the issuer is still in business and use that card sooner rather than later.

Source: Anne D'Innocenzio, Associated Press, Chicago Tribune, 03/04/2008

Is now the time to buy consumer electronics?

They say there's no time like the present, and according to Richard Glikes, executive director of the Home Theater Specialists of America, that goes doubly so for buying electronic gadgetry. The reason? Blame it on China.

Given the state of the U.S. economy, spending your disposable income on high-tech toys may not seem like the best investment in 2008. But if you've already decided to purchase a TV or a new phone, you might be inclined to wait for prices to go down.

That might be a long wait, says Glikes. China is the production center for the vast majority of consumer electronics, and the heyday of cheap labor there may be rapidly coming to a close. For starters, blame the Olympics: In order to clear the air of pollution, many factories are shutting down in June, which could put a damper on the supply of many products. Also, China is tiptoeing towards better relationships with its workers: New labor and worker protection laws have pushed labor costs up 15 percent. The price of many components and metals used in making electronics is also going up.

Perhaps the biggest culprit of all: The falling U.S. dollar. The poor old greenback just doesn't go as far as it used to. Most notably it is falling against the euro, but it's also fallen considerably against the Chinese yuan, about 10 percent in the last year. In other words, if paid in dollars, Chinese companies now earn 10 percent less than they did a year ago due solely to the falling exchange rate. One can imagine that doesn't sit well with them.

In other words: Current prices may simply not be sustainable, and thus price increases may soon be on tap in order to shore up profits. Sure enough, prices are already going up for some LCD products. At the manufacturer level, says Glikes, prices in China are already up from 8 to 20 percent, and U.S. retail prices are soon to follow.

Get ready for a bumpy 2008.

Umbrella Insurance

Rece$$ion ???

Seven Reasons to Welcome a Recession
Thursday April 3, 10:34 am ET

ByJeffrey Strain, Special to TheStreet.com

Recessions breed fear.
It's only natural. A slowdown in production at companies can result in layoffs and restructuring. People fret about their jobs and worry that it will be much more difficult to find new employment if they are let go. These are understandable concerns.

But for contrarians and bargain hunters, recessions provide a world of opportunities. Here are seven ways that a recession can actually benefit your personal finances:

Affordable Homes
Those who bought homes looking to flip them for a quick profit and those who took out huge loans that they couldn't afford to pay will look at a recession with fear, but a recession should have little meaning for those who bought a home with the purpose of living in it for a long time.

Recessions are usually short-lived, and the housing market should recover long before most people are planning to sell their house.

For those who had been unable to afford a house because of soaring prices in the past few years, a recession is a golden opportunity. It brings housing prices down to more affordable levels. That means that many people who wanted to buy a house will be able to purchase one.

Recessions are also a good time to look for investment properties or vacation homes if either had been in consideration.

A recession gives anyone looking for quality housing a lot more bang for their buck than when the economy is flying high. Being able to purchase a quality house at an affordable price can greatly increase a person's net worth in the long run.

Low Mortgage Rates
In the attempt to ward off a recession, the Federal Reserve has made interest rates extremely low, resulting in more affordable loans for those who are in the market to purchase a house.

While these rates may not be available throughout the entire recession if inflation continues to rise, the rates will be around as long as the Fed can use them to ease the recession. Taking advantage of these low rates along with lower housing prices can truly make housing a deal.

Great Consumer Deals
As the economy sours and people buy less and less, stores need to provide better deals and discounts to attract consumers to their doors. This can mean steep discounts through sales and promotions, as well as financing that allows consumers to pay no interest over long periods of time.

These deals are not limited to the retail stores. It also means that there are great deals in the second-hand markets, since there are more people trying to sell and fewer people looking to buy. If you are an investor in collectibles and know them well, you can often buy collectibles at steep discounts during a recession that can be turned into a healthy profit when the economy recovers. For those who have saved money waiting for good deals, a recession is a great time to find those deals.

Inexpensive Stocks
While everyone is taking their money out of the market, hard economic times can be a great time to pick up stocks on the cheap when you look at them as long-term investments. Consumer stocks for large, stable companies such as Proctor & Gamble that provide necessities such as soap and toilet paper will do well no matter what the economic conditions.

Recessions can be a great time to pick up undervalued stocks if you know what you're doing. That can greatly improve your net worth when the stock market recovers.


Great Travel Deals
During times of recession, most people don't think about traveling. For this exact reason, traveling can be a great deal when the economy is shaky. Lack of demand results in excess inventory, which forces hotels and other related travel industries to lower their prices. It also means a greater inventory to choose from and the ability to bargain for upgrades and other perks. That dream vacation that you have always wanted to take can be a lot more affordable during a recession, when travel related industries are begging for your business.


Streamline Your Finances
When things look like they are going to get a bit tougher, people begin to look at their personal finances a bit more closely and start to trim some of the fat. They look at ways that their money can be better spent and how they can get more for each dollar that they do spend. They pad their emergency fund a bit more and don't spend quite as freely as they do during times of rapid growth. This trimming of the fat is a good exercise that can help you see the important financial goals that you want to achieve and, by doing so, help you reach them more quickly.

Lower Credit-Card Rates
If you have a good credit rating, you are in a position to get extra perks from your credit-card company. Credit-card companies see higher delinquency payment rates during a recession, and it becomes even more important for them to keep their best customers. That gives you extra leverage to ask favors from them, such as having your interest rates lowered and annual fees waived.

While most people will look at a recession with fear and uneasiness, it's important to also realize that it's an opportunity to get some great deals and improve your personal finances. Taking advantage will allow you to reap greater benefits from all those dollars you have saved.

AKPK

AKPK bantu 41,366 orang bermasalah kewangan
21/04/2008 2:59pm


KUANTAN 21 April – Agensi Kaunseling dan Pengurusan Kredit (AKPK) telah membantu sebanyak 41,366 pengguna yang menghadapi masalah kewangan di seluruh negara sejak 2006 hingga 31 Mac lalu.

Ketua Pegawai Eksekutif AKPK, Mohamed Akwal Sultan berkata, daripada jumlah itu, sebanyak 29,685 orang mendapat perkhidmatan kaunseling dan selebihnya menerima bantuan melalui program pengurusan kredit.

Dalam tempoh itu, kata beliau, penduduk Kuala Lumpur paling ramai mendapatkan khidmat AKPK iaitu seramai 25,527 orang diikuti Johor Bahru seramai 5,494 orang.

``Kebanyakan yang hadir mendapatkan kaunseling itu ialah golongan yang kehilangan pekerjaan, kegagalan perniagaan, masalah kesihatan, penganggur dan kematian anggota keluarga,'' katanya ketika berucap pada majlis perasmian AKPK cawangan Kuantan di Teluk Chempedak dekat sini hari ini.

Mohamed Akwal menjelaskan, faktor yang menyumbang kepada masalah hutang dan ketidakmampuan membayar balik pinjaman berpunca daripada kelemahan pengurusan kewangan.

``Kebanyakan mereka tidak mempunyai pengetahuan membuat perancangan kewangan dan tidak berdisiplin dalam kehidupan mereka,'' jelasnya.

- Utusan

Dana pinjaman JPA kontang 2 tahun lagi

PUTRAJAYA 13 April – Tabung pinjaman Jabatan Perkhidmatan Awam (JPA) bakal ‘kering kontang’ dalam tempoh dua tahun lagi jika jabatan itu tidak mengambil tindakan tegas terhadap peminjam tegar bermula daripada sekarang.

Ketua Pengarah JPA, Tan Sri Ismail Adam berkata, tabung pinjaman tersebut kini hanya mampu bertahan sehingga 2010 dan tindakan proaktif untuk mengisinya semula perlu digerakkan daripada sekarang.

‘‘Tabung pinjaman ini perlukan modal pusingan untuk membiayai pengajian pelajar baru. Kalau sudah kosong ia akan menyusahkan banyak pihak yang benar-benar memerlukannya,” katanya kepada Utusan Malaysia di sini, semalam.

Ismail berkata, cadangan bekerjasama dengan Bank Negara Malaysia (BNM) bagi memburu peminjam tegar bertujuan memastikan tabung biasiswa jabatan itu tidak kering.

Pengarah Bahagian Pembangunan Modal Insan JPA, Datin Mardinah Mohamad berkata kelmarin, jabatan itu sedang menimbang untuk bekerjasama dengan BNM bagi mendapatkan maklumat kewangan individu yang gagal menjelaskan pinjaman pengajian mereka.

Mardinah dipetik sebagai berkata, melalui penyertaan JPA dalam Pangkalan Data Sistem Maklumat Rujukan Kredit Pusat (CCRIS) adalah mudah bagi jabatan itu memastikan peminjam membayar balik hutang.

Jika jalinan kerjasama itu terlaksana, pelbagai implikasi terpaksa dihadapi peminjam tegar termasuk kesukaran membuat pinjaman bank pada masa akan datang.

Sejak 1987 seramai 11,253 peminjam masih gagal menjelaskan pinjaman berjumlah RM135,759,932.

Ismail menambah, kebiasaannya peminjam akan mula menjelaskan hutang apabila tindakan undang-undang bakal diambil ke atas mereka.

‘‘Ramai yang kini berjawatan besar tetapi enggan buat bayaran. Jangan tamak. Itu tanggungjawab moral yang kita perlu lunaskan,” katanya.

Ditanya kesan daripada tindakan JPA itu akan menggalakkan peminjam beralih kepada ceti haram kerana gagal mendapatkan pinjaman bank, beliau berkata, masalah itu tidak akan berlaku jika peminjam membayar balik pinjaman mereka kepada JPA.

‘‘Kita bukan suruh bayar sekali gus. Kalau betul-betul susah kita boleh berunding. Bayarlah sikit-sikit. Jangan tak bayar langsung.

‘‘Kalau sudah berhutang kenalah bayar, kecualilah pemberi hutang itu beri percuma,’’ katanya.

Ismail berkata, prinsip utama dalam berhutang ialah setiap penghutang wajib membayar balik hutang kepada pemiutang.

Utusan Malaysia, April 13 2008