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During these times of economic turbulence and insecurity we all have a immense need for sickness, accident, unemployment & redundancy protection. Most of us have a mortgage, loans, credit cards, utility bills and everyday living expenses that would need to be paid if we were to lose our jobs through a redundancy, become ill or suffered an injury and be unable to work for a while.

With household budgets already stretched you should think seriously about protecting yourself and your family. If you or your partner lost your job through a redundancy and you ended up unemployed for a long period of time. How would you pay your mortgage and other bills? It is at times like this that debts start to rise as you struggle to meet your commitments. Then you start borrowing on your credit cards or taking out high cost loans and slowly your debts become bigger and you start to lose control and your debts spiral out of control.

It is impossible to predict whether you will find yourself unemployed or off work due to a long term illness or an accident. There are different types of protection insurance policies available today. You should consider taking out a protection policy to safeguard yourself from a financial disaster should anything happen to you or any of your loved ones. The Yorkshire Building Society recently estimated that the average Briton's savings would only last 52 days if they were unable to work and that 36% of Britons would only last 11 days. Scary isn't it.

The old adage of having a 'rainy day fund' looks like it is a thing of the past, with one in six people or 16% of us having to rely on credit to fund basic household breakdowns. 45% of Britons say that they could not afford more than £500 if an emergency arose and 20% of Britons said they could afford no more than £100, according to research carried out by the Alliance & Leicester. Based on these statistics it is important that you protect yourself.

There are two main types of Protection Insurance policies available:-

Accident, Sickness, Unemployment & Redundancy cover Generally known as Mortgage payment protection insurance (MPPI). It was designed to provide you with a monthly payment to cover your monthly mortgage payment and associated mortgage costs if you were to lose your earned income, through illness, accident, unemployment or redundancy. The payment period is often limited to a maximum of 24 months for Accident and Illness and 12 months for Unemployment and Redundancy.

Income Protection Insurance (also known as Permanent Health Insurance) This type of Insurance will pay you an income if you are unable to work due to an illness or injury and it usually pays out either until you return to work or you reach retirement age. Income Protection policies will usually pay up to 70% of you annual income. You can add redundancy cover to an Income protection policy. This type of policy may seem costly but it will pay you out for the term of the policy or until you reach retirement age in the event a long term illness, accident or redundancy that may lead to long term unemployment

We are generally apprehensive of the unknown and this is true of contacting debt Management organisations as we don't know what to expect. When you have made contact with a Debt Management charity you should then be put through to a debt management advisor. The debt advisor will assess your current personal financial situation and they will calculate your monthly affordability to pay your outstanding debts and commitments. (Mortgage, Loans, Store Cards and Credit Cards) Once they have accessed your current situation they will then be able to advise you what to do. They will recommend one of four different types of solutions, in order to provide you with a debt solution:-

1. Restructure your debt

Here you contact your loan providers and ask if you could increase the term of your loans, this will reduce your monthly payments. (just be aware that you will pay more in interest if you extend the term) You could depending on your age increase the term of your mortgage as long as it is paid before you retire or you may switch your mortgage to interest only from a repayment mortgage. This needs a lot of serious consideration as you will be leaving your home without a repayment vehicle to pay off your mortgage when you retire.(before doing any of these always take professional advise)

2. Debt Management Plan

Your debt management advisor will send every company that you owe money to a statement of your monthly income and outgoings. They will provide each of your creditors with a list detailing how they have broken down your payments and how much you can afford to pay each of your creditors monthly. You then repay your creditors back monthly and if your finances improve you will pay them more, in order to clear the outstanding debt you owe them. Your debt advisor will ask each of your creditors to stop charging you any further interest on the money you still owe them. It is dependent on each individual credit as to whether or not they agree to this.

3. Individual Voluntary Arrangement (IVA)

This is a legal agreement that is drawn up with all the companies that you owe money to. Your monthly payments are then agreed through the courts and you pay your IVA practioner who then pays your creditors as agreed. An IVA is managed by an IVA Practitioner who oversees the whole process. The repayments are based on your affordability and your creditors agreeing to a reduced payment over the next three to five years.

4. Bankruptcy

Circumstances might be so bad that your debt advisor may recommend you applying for Bankruptcy or you could wait until one of your creditor's makes you bankrupt. This solution is normally recommended when your debts are so huge and you have no ability to pay them off. Bankruptcy can last for 12months to 5 years.
Of course there is a fifth option which is to ignore your whole situation and carry on as though nothing is wrong - this is certainly not advisable as this is probably part of the reason why you are in this mess in the first place.

Here are two warnings that you need to know about:

1. What ever you do don't be tempted to abandon your property. Your mortgage lender can still add interest and charges to your debt until your home is sold. They can pursue you for the money for up to 12 years for their money. Try and sell you home first or seek a solution. Best solution here is pay the mortgage first each month this keeps a roof over your head and then divide what is left between the other creditors you owe money to after you have paid your utility bills and food bills. Make sure you pay them something each month.

2. Beware of Rent-buy-back schemes. This is another option which has appeared recently - Its being touted as the mortgage rescue plan or rent-back schemes and is not regulates at all. Be careful of these schemes as they will buy your home from you to get you out of a problem with your mortgage lender now at a knock down price for an immediate sale. They then offer to rent your home back to you so that you can continue living there. Slowly over a period of time they start to increase your rent in order to get you to move out. Take advice first!

In answer to the question of do Debt management Advisors bite? No they don't bite but they can help and assist you. However be aware of any debt management company that offer to take on your situation for an upfront fee and a monthly fee in order to help administer your debt management plan. They will bite you as you will pay less to the companies you owe money to and you will end up getting further into debt to get out of debt!

I am advising you to contact a professional advisor from a Debt Management company or the Consumer Credit Counselling Services (CCCS) and talk through your personal circumstances first and take their advice. Don't bury your head and hope the problem will go away or that you will win the National Lottery, the chances of that happening are 17,000 to 1.

Finance, like many other things these days, is a subject that people often make more complicated than it is. If you listen to the typical Wall street investor, they will use terms so technical that you'd think you were in a math class. Those of us who even passively read about finance will often hear of terms such as CDOs, M3, inflation, fundamental analysis, hedge funds, compound interest, and a bunch of other terms which are alien to our common understanding.

In the end however, the fact of the matter is that having an advanced understanding of these things is irrelevant when it comes to the goal of saving money and building wealth.

I think it could be argued that we have more misconceptions about money than about any other concept in the world. Having read many books on business and finance, I'm often amazed by the things I hear people say when talking to them about money. Most people believe that becoming rich involves having skill, beauty, or some other talent, while others even think that becoming rich requires you to rip other people off.

Here in the U.S., because our public schools don't bother to teach students about the importance of finance, many of them grow up being ignorant of the subject. Of all the subjects you could be ignorant of in this world, money should definitely not be one of them.

What is Wealth?

No matter what financial "experts" or investors try to tell you, the truth of the matter is that becoming wealthy lies within the individual more than anything else. Skill, beauty, and talent are not what truly makes a person wealthy.

But before I elaborate on this, I think I should start by defining the word "wealth." Many people are confused as to what "wealth" really is, and to be quite frank, if you don't know what wealth is, it is unlikely that you will ever become wealthy. The word "wealth" is defined as "owning labor, or owning anything which labor was required to create."

This means that a truly wealthy person will be the owner of things that someone had to labor for in order to create, or labor itself. If you run a company that has 100 employees, you own the labor of those 100 employees, and this would be a true form of wealth. If you have $100,000 worth of gold or silver coins, this is another true form of "wealth." I repeat, wealth is either labor, or anything which was produced by labor.

This brings us to an interesting conclusion. Because our society currently uses paper money and credit in exchange for goods and services, it brings to question whether or not we're truly wealthy as a society.

Think about it for a minute. If the definition of wealth is "labor," or anything which labor produces, then this would mean that our paper money, which was printed by the Fed, and credit, which was keyed into a computer, is not "true" wealth. No one labored for it. No one struggled to get it out of the ground. How can something be valuable when you can simply print it out in large quantities with ease, or key it into a computer?

Because of the intense competition in the credit card market, you may find your mailbox swamped with credit card offers of all kinds. The direct mail you receive and the advertising you see on various media all have a single goal: to entice you to take advantage of these 'special' credit card offers. How can you see through all the advertising blurbs and find the best credit card for you?

These are some key features to consider in your credit card comparisons. Keep them in mind when going through various credit card offers.

- Interest rate: This is the most important feature to consider. A credit card offers several interest rates, including: an introductory rate, usually of limited duration for a specified number of months; a standard purchase rate that will prevail after the special introductory period; and a cash advance rate, usually the highest.

The credit card offers on introductory rate will look similar, usually varying around 0-2%. The key aspect to consider is the length of the offer. The range could be anywhere between 3 months in some cards to 12 months. The cards that offer the lowest possible introductory rate running for the longest period will be the most attractive.

The normal interest rate is crucial to your future costs. You want this to be competitive. The key consideration here is whether it is fixed or variable. Variable rates change periodically, which may not be favourable to you in times of unstable or rising interest rates. Fixed rates will stay with your for a longer period, in some cases for the credit card's entire life. A downward trending interest rate may be a disadvantage but you could renegotiate this with the card issuer. Generally, the best credit card offers involve a fixed rate.

- Fees and charges: The trickiest decision here involves annual fees. Zero annual fees are being offered by some credit cards but the interest rates could be higher. Other cards impose an annual fee, ranging from lows of $30 to highs of $80 or more, but in exchange offer lower interest or enrol you in generous reward schemes.

Is the annual fee worthwhile? Compare a card that charges an annual fee against similar ones without annual fees, and evaluate the benefits it offers vis-à-vis the others. You may find it worthwhile to pay an annual fee if the credit card offers significantly lower interest (vital to you if you plan to carry a balance) or an exceptional rewards scheme you want to join (advantageous to you if you always pay off the entire balance).

Remember, though, that you maximise the benefits of rewards schemes if you use your credit card frequently. There could be a need to spend around $20,000 yearly; at 1 point per $1, that would give you 20,000 points which can be redeemed for something of value.

Other fees and charges could include over-the-limit fees, late payment charges, etc. Breaching of your credit limit as well as other terms can cause these to happen. You don't plan on doing that in order to avoid unnecessary costs.

- Benefits and protections: Each credit card offers a package of protection and benefits, but the scope differs widely. Examine them and see which ones might be of advantage to you. Protection against theft, loss or damage, fraudulent use, purchase charge-backs and extended warranties can be very useful. Frequent travel may look favourably on credit card offers of free travel insurance and related cover for lost/delayed luggage, car rentals, and others.

In the end, the best credit card for you is the one that provides the best fit to your specific requirements.

refinance: what you need to know? by Deepak jain

There are times when it makes sense to refinance your mortgage. It's important to have a clear financial objective in mind so that you're more able to choose the most appropriate loan. Ultimately, the decision is up to you to decide when it's best for you to refinance, based on your individual financial situation.
Refinance from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate
It's important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future. This means that if you have an adjustable rate mortgage (ARM), it may adjust to a rate that's higher than a fixed-rate mortgage . Now might be a good time to consider refinancing to a fixed-rate loan.
However, you must also consider the amount of time you plan on being in your home. If you're only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. If you're going to be in your home longer than seven years, it might be a smart move to refinance to a fixed-rate mortgage.

Refinance from a Fixed-Rate Mortgage to an ARM Again, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you're not going to be in the home that long. Doing so may be costing you money. Consider refinancing to an ARM instead ? you'll get a lower rate and lower your monthly mortgage payment.

A drop of just one half to three quarters of a percentage point in interest can lower your monthly payment. If you don't refinance, you may be paying too much every month for your loan, and that's never a good financial move. There are a few different ways you can lower your monthly mortgage payment.

First, you can simply refinance to a lower interest rate. A lower rate generally means a lower monthly payment.

Second, you can change the term of your mortgage. For instance, if you have a 15-year mortgage, you can lengthen the term to 30 years. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower. However, if you have a 30-year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to 20 or even 15 years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run.for more information:

http://www.clickaudit.com/goto/?65022

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