A Personal Finance Guide

Payment Protection Insurance Has an Over-Haul

The Competition Commission has asked for a ban on selling payment protection insurance (PPI) when people take out credit agreements. However lenders say the price of personal loans will rise.

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PPI covers repayments if the holder is not able to pay due to accident illness or job loss. The commission wants insurers to wait 14 days before contacting the holder regarding purchasing cover.

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Lenders claim this could result in increased costs for customers and may leave some with no way to repay the debt if they encounter financial difficulties. The proposal from the Commission is to make it easier for people to shop around for PPI’s.

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90 per cent of the 13 million policies sold are to borrowers with personal loans, mortgages and credit cards. The PPI market is worth over 5 billion pounds a year.

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However, recently the Financial Services Authority has fined many lenders for mis-selling cover. A record 7 million pound fine was imposed on a major building society.

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Complex products - Buying PPI in conjunction with a loan or credit card can often be more costly. Some lenders charge as much as 28 pounds per 100 pounds covered, but if you purchased cover separately this could be as little as 2 pounds 65 pence.

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Many people, however, are unaware that they can buy PPI from other lenders and find comparing prices is difficult due to the how complex the product is. PPI policies that are paid upfront and the cost added to the debt are also facing being banned by the commission. It said that this makes it difficult for borrowers to shop around and switch products.

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Giving consumers a personal quote is another proposal. Lenders would need to clearly state the cost of the policy, both individually and when added to the repayments. The provider then has to wait 14 days before they can contact the customer and Read the rest of this entry »

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Section 529

Many grandparents want to do something to help their grandkids move forward in their future. Education is a huge part of a child’s future. Saving for post secondary studies is extremely difficult for many of the modern families in North America today. If it is something that you wish to help your grandchildren with, there are ways that you can do this. Section 529 is a plan that is designed to help you save more money in a tax advantaged way so that your savings multiply over the years in a significant manner. Saving for the education of your precious grandchildren is now easier than ever before.

Section 529 is an available plan in all states but it is best to take one out in your very own state. You may be able to receive additional benefits by doing this. It can offer all kinds of protection including security from creditors as well as grant and scholarship matching opportunities where your savings amount could possibly be matched to double it. There are two different kinds of 529 plans that you can choose from. It is important to make sure that you understand all of the details regarding each of them.

One type of the 529 plan is the prepaid plan. The other type is the savings plan. These are not the same and they can vary quite a bit. Make sure to ask questions of the bank personnel that help you to set up your 529 plan. You can choose to buy tuition credits or make specific deposits into this plan. Be sure to read through any fine print and be aware of all of the details. The money that is acquired through one of these plans can later be used for anything that is related to schooling such as tuition, books or other necessary supplies.

There are several benefits to choosing one of these savings accounts. There are tax deductions that you can qualify for and the account always remains within your control. You can choose when the b Read the rest of this entry »

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What Does Reconcile in Accounting Terms Mean? Don’t Learn the Hard Way!

Simply put, the term “reconcile” in accounting means to match up, compare, and bring into balance what the bank, credit card company, or lender shows actually happened in your account with what you have recorded on your own records (software or written down in a registry). Another term used in place of “reconciling your account” is “balancing the checkbook.”

Why or when would these balances be different? Well, with a checking account, for example, one may write a check for a couple hundred dollars to a friend to buy his/her old computer. One would then mark in their registry the amount of the check and subtract it from the ongoing balance. Well, let’s say the friend takes the check and puts it on his/her shelf and it sits there for months. Well, when you get your checking account statements the balance is inflated because it does not show the deduction of the check amount that your friend has in his/her possession. A few months later the friend deposits the check. The month that the check clears the bank one would reconcile their account and mark that the check cleared the bank in his/her registry.

Don’t Learn The Hard Way

It is so important to personally, and with a business, to keep good records of purchases you make and checks that you write either in a good software program or in a registry. If one doesn’t, he/she can really find themselves in a pickle if times get tough.

Life is a Hard Teacher: It Gives the Test First and The Lesson Follows

When I was newly in college I learned the hard way. At the time I owned a beater for a car and it would break down on me every now and again. I only paid a couple hundred dollars for the thing, so it wasn’t that big of a deal. Well, one day in particular I took it into a shop to get repaired. It cost me a little over $200, which I simply wrote out a check to Read the rest of this entry »

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