Economic resolutions for 2011 - Revisited..The Paul Paterakis Power Team of RE/MAX Showcase

Some of our new year’s changes/adjustments are getting dusty already and we are only just over one month into the new year. Here are a few more thoughts to help us survive the economic recession and improve our economic status.

1. Assemble a personal financial statement. Create your own balance sheet, measure your assets and assess all your personal liabilities including credit card debt and short term loans. Get to your real net worth.


2.Analyze your liabilities. Divide you liabilities into two columns: current balances and what the same balances will be one year from now; use an amortization schedule for each loan. Be sure to include home mortgage(s), home equity loans, car loans and all credit cards. Include interest rate next to each loan type, balance and amount.


3.Analyze your short-term debt. Credit card balances and home equity loans; what principal payments can you make during the next 12 months to decrease the liability/balances. Can some of them be converted to lower interest/longer terms?


4.Create a monthly budget. It should already be a part of your household and
business plans; Assess your average monthly income and include realistic expenses for each week: groceries, utilities, car payments, mortgage payments, entertainment, medical and education costs. Keep an eye on your checkbook and bank statements for help in constructing your monthly budget.

5.Forecast your income. I know, it’s very hard but it should motivate you to prospect a lot more for new business! After you create your budget, take a hard look at it and do the best you can to have extra income available to pay down your short term debt. If you do this you will be, at a very minimum, fully aware of your weak and strong areas and you can go to work at it from that angle.

6.The credit card freeze. Open up your wallet or purse and pull out all those credit cards and lock them up somewhere out of your reach. Keep only one credit card for real emergencies and Starbucks is not one of them! Stick to your checkbook, debit card or cash: they remind you of actual balances as you try to use them. Just try it for 30 days and you will be amazed at how much less you will spend.

7.Show discipline. All of the above is totally meaningless unless you make a strong personal commitment to it. We are all guilty of financial waste and unnecessary expenses but we still need to be realistic at some point and end the needless costs. Try eating out less, buy only what is absolutely necessary, forget that bargain; only look at keeping money as your first real savings and there will always be bargains and “final sales.” Worst of all is to keep paying interest only on high credit cards balances, where will you be or go to next?

8.Save money. In an economic recession, along with our well known real estate pains, everyone is struggling to survive and talking about savings, retirement and plan contributions seems almost comical; however, it must remain a real part of every monthly budget. We must continue to contribute to all of our plans regardless of how little we can afford; as long as we put something in, it will add up. At the end of the day we all know that it’s not how much we make but what we get to keep that really matters.

A monthly/yearly financial statement and budget will accomplish three very important goals:
* Make you realize your real net worth
* Keep you focused on how much you are spending that you could do without.

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Newest Credit Card Restrictions Take Effect - PowerteamHomes.com

By now, most of us have already noticed that our credit card statements have taken on a more reader friendly look than they have in prior years. Information such as when payments are due, the amount owed, the consequences of making late payments and how much we are paying in fees and interest on different types of accounts are now easier to find. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 was passed by Congress with the intent to protect credit card users from unfair rate hikes and hidden fees. The bulk of this new Act has already taken effect, but the final phase came into force on August 22, 2010.

Here is a breakdown of some of the most important provisions of the law:

• Credit card statements must clearly disclose the following:
1. How long it would take to pay off a credit card balance if the cardholder makes only the minimum payment each month.
2. The total cost in interest and principal payments if a cardholder makes only the minimum payment each month.
3. The late payment deadline and postmark date.
• Credit card companies must give the consumer advance notice of forty-five days prior to significant changes to credit card terms. This includes change of interest rates and the benefits/rewards structure of a credit card.
• Bills must be sent out no later than twenty-one days before the due date.
• Retroactive interest rate increases are banned except when a cardholder is more than sixty days late paying a credit card bill.
• The interest rate cannot be increased within the first twelve months and promotional rates must have a minimum of six months in duration.
• The practice of double-cycle billing is no longer allowed. This is a practice by which credit card companies would use their customers' average daily balance from the current and previous month to calculate finance charges.
• Over credit limit fees are prohibited unless consumers specifically agree to allow the transaction to go through instead of being denied.
• Payments must be considered on-time if the payment is received by 5 p.m. on the due date.
• Credit cards cannot be issued to people under the age of twenty-one unless they have an adult co-signer or show proof that they have the means to repay the debt.

The newest provisions that recently took effect on August 22, 2010 cover the following:

• Credit card companies can no longer charge more than $25 for late payments except in extreme circumstances. A consumer may be charged more than $25 if the credit card company can show a pattern of repeated violations or if a card issuer can show that a higher fee reasonably offsets its own costs in dealing with the violation that spurred the penalty.
• Customers may not be charged for not using their cards.
• Penalty fees cannot exceed the dollar amount incurred by the consumer’s violation that spurred the fee. For example, if a customer is late making a $10 minimum payment, the fee can’t exceed $10. Or, if a customer spends $5 over his or her credit limit, the credit card company may not charge more than $5 as a penalty fee.
• Credit card companies may only charge one fee per infraction.
• If a credit card company increases the Annual Percentage Rate (APR), it must explain to the customer why.
• The credit card company must review the cardholder’s account six months after increasing the interest rate, and return the APR to the previous lower level if the cardholder has been on-time with payment.

These provisions were enacted to put a stop to unfair and deceptive credit card practices, but consumers must also analyze their own financial habits to make sure that they are not building up a credit card balance by paying off their monthly credit card balances and spending only what they can afford.

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