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Archive for February 2009

This is a question from Peter of Idaho, US who has asked for the simple tips on how to survive in the current recession environment. First of all, thank you for asking such a timely question. This post will be important for every one.

So what should we do in the current environment? Here are some tips for your consideration:

1. Stop living on credit cards. If you don’t have cash in your bank, start changing your lifestyle. But make it a financial discipline that you would not use any credit cards at least for few months. If you do this, you will start reducing your monthly expenses. This works for real!

2. Be honest with yourself and with your family about your financial situation. Sit down with your family and share your financial situation with them. Ask for their help in reducing the expenses. If you can cut the expenses and start saving that money, bingo you should start doing that.

3. Pay off high interest debt. If you have any higher interest debts, start looking for money which you can divert to pay off this debt.

4. Make a plan if you loose your job, what will you do. What other family members will do? Start preparing for contingency plans. When you discuss all of this with your family, they may give you weird look. But it’s OK. Your job is start preparing for the unforeseen and keep your family together. It’s easier to fight out any recession together as a family if all the family member starts working rather than only 1 or 2 family members. Support each other during any tougher time and you will come out as a winner.

5. Preserve your savings if you can. Don’t use your savings for any luxury items. If you have to pay off higher interest debt, it’s ok to use your savings but not for other reasons.

6. Plan for the emergency. If you plan for the emergency before it hits you, you can handle it better. So prepare a plan and keep reviewing it as you go along.

7. Be smart about your house. If your house is becoming a liability for you, then put in on rent and you move out to a smaller place. With so many foreclosures, there is more supply of houses for rent than the demand. Take benefit of it! But don’t move out before you put it on rent.

Even though the above steps may be small steps but these will help you a lot in overcoming the tougher times.

At the end, don’t loose the hope and remain optimistic. All the best!

Jay Author

PS: As I was writing this post, I found a great post on the greatest financial mistakes.

Dear readers,

I thought it will fun to share with you some of the funny videos every month so that I can enrich your visit to this blog.

This will be  a short post with video links only. ENJOY!

1. Dog Pickpocket 

2. Cheerleading Fail

3.  Dad Dancing

Hope you enjoy the above short funny videos!

I got this question from Noori of Seattle, US asking ‘how can I create my budget fast?’.

First of all, thanks a lot to Noori asking this very timely question especially in this current economic recession time. Secondly Noori you are not alone facing this problem. By saying this, I don’t want to say that it’s ok not to do your budget just because it seems so tedious. My job is to make it easy for you and for the blog readers.

When I was creating my first budget just after college, I had real tough time. I kept on putting this task away for too long. One day I was checking my account and then I realized that my savings are zero. I started thinking how can I get control on my finances. That’s when I started thinking of putting up a budget. So here are the tips which I learned the hard way but you can learn the easy way by reading and acting on this.

1. Collect all your bills for a month and then put these bills in different categories like utilities, grocery, rent, etc. You should make sure that you creat your own categories which work for you. Here is a watch-out for you, don’t be too overconfident of yourself in the beginning that you can manage this system. So keep the system as simple as you can. Make it intuitive for you.

2. Once you complete putting all the expenses in their categories, add up the bills and see how much money you need to allocate for that category. While doing this exercise, you should challenge yourself for cutting the unnecessary expenses. Be realistic and start with a budget which you can live with.

3. Once you are ready to put your system to test, implement it for a month. At the end of the month, review your sum of the expenses and see if you are within your budget or out of budget. Target only that category first where you are busting your budget. Review it carefully and see how can you reduce your expenses. Be creative and see opportunities for reducing your expenses.

4. Check the expense for each category again and see how you did for your target category. If you achieved your target, then reward yourself with something which you enjoy. Don’t overspend just go for affordable ideas. This step is very important.

5. Over the time you will fine-tune your budget and review it every month. And as you achieve your targets every month, you will be more confident for the bigger challenges.

6. So what’s the big challenge? Now it’s time for looking for room to start saving money. You were really creative when you started reducing your expenses by using out of box ideas. The same creativity will help you again. Start with a small saving target.

7. Stick to your budget and start saving money!

So isn’t it easy to put up a budget? Well that’s the fact but implementing it is the real challenge. You should look for help from your spouse or friends or relatives who can be part of your budget review and can monitor your performance. If you can’t manage yourself well, then let others help you manage your financial actions.

For those computer-savvy readers, I am sharing some resources here:

 Jay Author

This is the second question I got last week from June of Phenix and she asks “What is Google Earth?”.

First of all, thank you June for asking this question as recently Google has upgraded Google Earth and it is much more powerful now than the earlier version.

Here is the wikipedia definition of Google Earth first:

Google Earth is a Virtual globe, Map and Geographic Information program that was originally called Earth Viewer, and was created by Keyhole, Inc, a company acquired by Google in 2004. It maps the Earth by the Superimposition of images obtained from satellite imagery, Aerial photography and Geographic information system Computer graphics globe. It is available under three different licenses: Google Earth, a free version with limited functionality; Google Earth Plus (discontinued), which included additional features; and Google Earth Pro ($400 per year), which is intended for commercial use.”

The recent version is in the beta 5.0 stage which means there could be some bugs and the users are encouraged to share these issues with google so that google can fix these issues and can upgrade the beta version to a stable version. In this beta version, there are so many upgrades that I am listing only some of these for your quick reference:

  • You can check how your neighborhood is changing over the time.
  • You can keep an eye on the global warming effect.
  • You can also check how the arctic ice shelf is depleting.
  • This is great, you can dive into sea or ocean and can explore the under water world. Pretty neat!
  • You can track the earth online and you can create your own movie. My son is going to love this!
  • You can watch majority of the well known historic monuments sitting at home now.

If you are excited like me, then here is the official tour of this product. Watch the movie here to learn more about the Google Earth 5.0.

There is another related product called as Google SketchUp where you can create, modify and share 3D Models of any structure or place. You can use this to create the dream children’s play park layout.

If you are excited about the possibilities of Google Earth, you can download it here.

Download Google Earth Now!

Enjoy the Google Earth and see the world through your computer,

Jay Author

We received few questions related to various topics in the last week and I am trying to reply these one by one through these posts.

Here is the first question from Rommi of New York asking “How can I repair my bad credit?”.

First of all, do you know it’s very easy to fix your bad credit through few easy to follow steps?

But before I share with you these steps, let me ask you how do you know that you have bad credit score. Have you got your credit report? Do you know your credit score? If you have all this information, then you are on the right track. If you haven’t got the credit report yet, you should immediately get one.

You can get free credit report from any of the following websites:

1. Free Credit Report from Consumer Direct:

2. Free Credit Score from Privacy Matters:
Privacy Matters 1-2-3

So I consider that now you have got your credit report and you are ready for action to fix your bad credit. The suggested steps are as follow:

  1. Review your credit report carefully and identify the problem areas.
  2. Once you identify the problem areas, check which one is more critical. In majority cases I have seen that credit card issues are more prominent. If it is due to any other reason like that old defaulted loan or any other such issue, at least now you know the real issue. Remember you can’t find the solution if you don’t know the problem.
  3. Do you know your balance sheet? Are you asking what is this? Do you know your total income every month? Do you know your expenses? Are you spending less than what you earning? If you don’t have this snapshot of your financial life, then you should create one. Use this to analyze where you need to cut your expenses.
  4. Start creating a budget every month if you don’t have one. Identify areas where you can save money or reduce your expenses. Once you identify those areas, divert that money towards paying your outstanding debts quickly.
  5. Review your all outstanding debts and consolidate them to one loan.
  6. Always pay high interest debts or loans first until these are paid in full. Use any surplus cash to pay the next highest debt.
  7. If you have number of credit cards, then cut high interest credit cards instead of canceling them. By cutting those plastic cards, you will not use them but at the same time you will have credit in place on your credit history.
  8. Check out your garage and other household items and see if you can set up a garage sale and use this cash to pay back your debt.
  9. If you have too many credit cards, you should review all the credit cards and decide which ones you want to cancel. You should always inform them that you want to cancel the card.
  10. If you are not disciplined and use credit cards with no control, then you should opt for prepaid credit cards or secured credit cards. This will ensure that you don’t cross your expenses.

OTHER RELATED RESOURCES

1. Credit Secrets Bible – A powerful eBook on how to manage your credit and how to fix your credit score.

2. Credit Repair eBook – This book is written by an ex-bureau manager.

3. Bad Credit Repair Financing – This is like getting money even with bad credit.

4. Blueprint for clean credit

There are many other steps which can be used to repair bad credit and you can learn all about those by educating yourself. 

As I always say that education is the first step towards any solution so please do share this article with your relatives and friends. Let us build a better community by helping others.

Wishing you all the success in fixing your bad credit,

Jay Author