How Better Health Translates into Financial Success

Better health may be the most underrated component of financial success. But if you realize that your body is your “vehicle” in life, the possession through which all other activities are possible, you begin to realize the magnitude of this connection.

There’s virtually nothing you can do in life without good health, and the better your health is, the better you will be able to weather the stresses of life, and the more you’ll be able accomplish.

Better health can have a direct impact on your financial fitness. Consider some of the benefits that will come to your finances as a result of having better health.

1. Lower healthcare costs.

This is the most direct financial impact from better health. If you are healthy, that will mean fewer trips to the doctor, fewer drug therapies, and fewer trips to the hospital. And if you are self-employed, or have a private health insurance policy, better health will also mean lower insurance premiums.

That can save you a small fortune over a lifetime.

2. More energy at work.

One of the biggest reasons why some people are more successful than others, on the job or in business, is because of a high energy level. That’s not something you will have if your health is compromised. But if you feel good and you take good care of yourself, energy will just flow from your body. That energy can be used to accomplish tasks that you won’t be able to if you are in poor health.

You’ll work faster and more efficiently, you will be more alert in all that you do, and you’ll probably even sleep better. All of that will leave you in a better position to take on new challenges that can take you in directions that will lead to higher pay.

You can think of having good health as a way of winning by default. You will outperform others doing similar jobs, and establish yourself as a high-level performer. If you are in business for yourself, it can be an even greater advantage. When you feel good, you’re also confident, and that’s an important foundation to build on in taking your business to higher levels.

3. An improved outlook.

Optimism is often tied to circumstances. One of those circumstances is your health. Even if other aspects of your life may be in some level of disarray, if you enjoy good health you will feel that you are able to take on any challenges that come your way. When you feel this way you can hardly help but be optimistic – and that’s important when it comes to finances.

An improved outlook will not only help you in your job or business, but it can also help in investing money. Because you have more confidence in your ability to make a living, you’re in a better position to consider wider investment options. For example, if you are certain of your career abilities, you’ll be more likely to invest aggressively in equity investments, confident that even if the worst happens you will be able to overcome it.

When you have a positive outlook, others cannot help but look to you as a leader and that can not only benefit you in your career or business, but it also extends to all other areas of life. Your social life and community involvement can be improved as a result of having better health. You will be in a strong position help others, rather than to rely on others to help you. More connection with others will lead to more contacts, and that will create more opportunities everywhere, including your career or business.

4. One less (major) issue to worry about.

We live in a world that seems as if there is more to worry about than we have the capacity to handle. But if you are in good health, you will have one less very important issue to worry about.

We already have TV and the Internet letting us know several times each day about all the many, many, many threats to our health. Not only are there the usual warnings about heart disease, cancer and stroke, but we’re treated to a regular stream of other diseases that we never knew existed. The message often seems to be if you’re not worried, then you need to be!

But if the messages are even remotely true, being in a state of worry is never constructive. By taking care of your health, you can approach these issues in a constructive way. Better health comes about through better living, and that gives you some sense of control over your health. Rather than concerning yourself with which prescription therapies you need to be on, you can instead work on avoiding ever having the disease or condition in the first place.

We’re less prone to worry when we have a plan of action that we can use to deal with a potential crisis. Rather than worrying, you can choose to eat better, exercise more, lose weight, and give up certain bad habits such as cigarette smoking or heavy alcohol consumption. You will create a positive direction that will leave little room for worry.

Better health might not remove all of your worries, but it is a really big one that, once out of the way, frees your mind to concentrate on other areas of concern. The less we can worry about anything in life, the better prepared we are for whatever else we need to do. That will lead to a clearer head that will help you to move forward in life. And when you’re moving forward everything else seems to fall in to place. That can include your career and your finances.

Though the connection can be very subtle, better health creates a foundation that you can build upon that will ultimately lead to greater financial success. The next time you want to start a new financial initiative, you may want to put on some running shoes and take up jogging first. You’ll feel better and it will clear your head for the new challenge that you are taking on.

Are you taking care of your health? If so, how have you seen that improve your financial situation?

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Will 2013 be “The Year” to Buy a House?

This is almost a cliché question that gets asked at or near the beginning of each new year. And it’s mostly a question that’s asked by real estate agents and home builders. But I’m neither a real state agent nor a homebuilder, and I do see some solid indications why 2013 could be the year to buy a house at a bargain.

There are compelling reasons why 2013 could in fact represent a rare opportunity to buy.

1. Interest rates are at record lows – but who knows for how long?

Mortgage rates are currently at historic lows. That is to say that they are lower than they have been at any time since mortgage rates have been recorded. They are even lower than what they were during the Great Depression of the 1930s. That fact alone merits close investigation of a purchase opportunity.

But with the economy slowly but steadily improving, and debt levels skyrocketing, it’s an open question as to just how long rates will stay this low. The Federal Reserve has indicated that the record low rates will continue through late 2014, opening up the possibility that they will go higher thereafter.

Since we can’t know exactly how events will play out in 2014, the only thing we do know for sure is that we have record low mortgage rates in 2013. That means we should view 2013 as a year of opportunity, at least as far as mortgage rates are concerned.

How much of a difference do rates make? A $200,000, 30-year fixed rate mortgage with a rate of 3.5% will have a monthly payment of $898. Should that rate go up to 4.5%, the monthly payment will increase to $1,013. If the rate goes to 5.5%, the monthly payment will increase to $1,136. Translation: The lowest monthly payment you’re likely to get almost certainly will be obtained in 2013.

2. Property values are well below peak.

Even though property values are recovering in certain markets, overall they remain well below their 2007 highs. It is still possible to buy a house at 30% to 50% below the peak of a few years ago.

However as the economy improves, and certain markets lead prices higher, 2013 may prove to be the long predicted bottom of the market. Waiting just one or two years may mean buying the same property at a price that is several thousand dollars higher.

2013 is shaping up to be a combination of record low mortgage rates, and property values that are well off their recent highs. Buying in at these prices, with these mortgage rates, can save a homebuyer many thousands of dollars over the term of a 30-year mortgage

While it is always possible that mortgage rates can go even lower, and property values could fall even more in future years, that scenario remains a blatant speculation. For 2013, we know for a fact that we have record low rates, and relatively low property values. In itself this is an unusual combination of events.

3. The economy is gathering steam.

Though it isn’t across the board, the economy is recovering, and that usually points to higher house prices – at least eventually. It is even possible that economic growth could gather steam, and extend to more sectors, due to factors that are unseen at the present time. There is sufficient pessimism about the economy that the most extreme outcome appears to be stronger growth.

That scenario is also speculation, but not entirely beyond the realm of possibility either. Should that happen it probably will not be noticed until price increases are significant. By then it will be too late to take advantage of what has probably been the lowest property values of the last decade in many markets.

4. Rental markets are getting tight in some areas.

In many markets, thousands of households have gone from being owners to being tenants. In addition, many people can no longer qualify for a mortgage based on stricter lending requirements. This is causing an explosion of tenants in some areas, which is causing rents to increase.

At some point, rents will rise to a level where it will be more expensive to rent than to own. When that happens, property values will begin to increase to accommodate a higher number of buyers.

5. “Fiscal cliff” tax hikes have already begun.

One of the less fortunate outcomes of the recent Fiscal Cliff resolution is that taxes are increasing this year. Most conspicuous is the 2% increase in the payroll tax. Several years ago, under the Bush tax cuts, the Social Security payroll tax had been lowered from 6.2% to 4.2% on the employee portion of the tax. Fiscal Cliff negotiations have restored the higher rate. Capital gains rates have also increased for many taxpayers, and many other taxes have either increased or are set to do so.

Since owning a house, with its tax deduction for mortgage interest and real estate taxes, has traditionally been one of the best tax shelters for the largest number of households, the increase in taxes could cause people to shift emphasis into buying a home. Renters in particular will be more exposed to higher taxes, and homeownership is an obvious solution to that problem.

Am I predicting that 2013 will turn out to be one of the best home buying years in decades? Not necessarily, but the stars do seem to be aligning in that direction.

Do you think that 2013 will prove to be a good year to buy a house?

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5 Job Interview Questions You Must Be Prepared to Answer

It’s often easy to think that interviewers ask unfair questions on job interviews, and that is true some of the time. But there are several job interview questions that you must be prepared to answer if you’re to have any hope of landing the job. They are tough questions, and not only should you be prepared to answer them, but you should be able to do so with some level of comfort. You can’t count on your resume alone to get a job. Here’s what you need to know!

1. Why should we hire you?

What the interviewer is asking for here is for you to provide a brief summary of your skills and abilities. Your explanation will need to be concise, but it will also have to fully answer the question.

In today’s job market there can literally be hundreds of candidates applying for the same job. You’ll need to be able answer this question in a way that will make you stand out above the rest. The interviewer isn’t just asking for a factual answer either. They’re looking to see how well you think under pressure, how well you present yourself, and how much confidence you have in your own abilities.

There’s also a relevancy factor to the question. That is to say that your answer must in some way indicate that you have a grasp of the position you’re applying for, and can articulate the skills that you have that enable you to do the job.

For most people, it will be impossible to answer this question off the cuff. The best way to handle it then is to have a brief summary that you’ve prepared and rehearsed in advance. You should be able answer the question confidently in about 2 to 3 minutes. If you can answer it in 15 seconds the answer will almost certainly be unsatisfactory. And if it takes much longer than three minutes, the interviewer may detect uncertainty.

2. Why do you want to leave your current job?

The interviewer is usually looking for problems with this question. What is your opinion of your current employer? Do you get along with your supervisor? Do you get along with your coworkers? Do you have an attitude problem?

Your task will be to convince your interviewer that all is well in your current position. You feel good about the company, you like your boss, and you get along well with your coworkers. The only reason that you would even consider leaving is because the job of the interviewer’s company is to good to ignore!

Once again, advance planning for this question is essential. Rehearse your answer over and over, and have it ready to roll the moment you’re asked.

3. Sell me this pen.

Okay, this is not really a question but it is a request. If you are not in sales, another variation of the request could be what would you do about Problem X? Once again, the interviewer is asking you to prove your abilities.

As a job candidate this is one of the most irritating and embarrassing requests an interviewer could make. But if you refuse to participate in addressing the request, your candidacy for the job will almost certainly be over.

It will be difficult to prepare for this request in advance since you can never know what the specifics will be. The best strategy to deal with it will be probe and delay.

Start by asking the interviewer questions either about his or her needs for the pen (or whatever they ask you to sell them), or for more specific details about Problem X. While the interviewer is answering your questions, you should be silently building your presentation or solution.

Sometimes, in the course of your line of questioning, the interviewer gets off track and the “sell me this pen” or “what would you do about Problem X” requests go away. But even if they don’t, you’ll have bought yourself time and information to make a more impressive presentation.

4. What salary are you looking for?

This question can be a disqualifier, so you should do everything you can to not answer it. You may be able to get around the question by turning it back on the interviewer. Ask them, “What salary range are you looking to pay for this position?”

If the question doesn’t go away, insist that you would like to hold salary discussions after the interview, when you have had more time to assess the position. The interviewer will probably appreciate your position on this. In truth, salary should not be discussed in an interview, but held until there is mutual agreement to move forward.

5. What are your greatest weaknesses?

This one is something of a trick question. If you fail to indicate that you have any weaknesses, the interviewer may perceive it as either arrogance or lack of self-awareness. Either way you lose, so you will have to be prepared to answer the question.

Answer it as diplomatically as you can. Once again be prepared in advance, with a short list of two or three weaknesses that you have that are unlikely to damage your candidacy. For example, you could answer it with “I just don’t have a lot of tolerance for people who come to work late too often.” Or, you could say, “I don’t like office gossip.” Either answer makes your weaknesses appear to be a lack of tolerance for the very same issues that are likely to bother the employer as well.

When you go on a job interview you should not only expect tough questions, but you should also be fully prepared to answer them. With some advance preparation and rehearsal, you’ll be fully prepared for whatever questions that come your way.

Note: Once you land the job, make sure to implement some ways to get ahead at work.

What is the toughest question you’ve ever been asked in a job interview?

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3 Things You Can Learn from Your Insurance Policy

When most of us sign up for insurance, we don’t really look closely at the paperwork. We often take it on faith that the insurance agent tells us we are covered, we sign the necessary papers, and begin paying the premiums.

However, you can learn quite a bit if you actually read your insurance policy. And you really should. Otherwise, you might end up with a few unpleasant surprises.

Here are some things you can learn from your insurance policy:

1. How Much Coverage You Actually Have

Do you know how much coverage you actually have? If you are in a car accident, your insurance company won’t pay out an unlimited amount of money. Instead, you are subject to limits. Find out what those limits are, and what they apply to. The amount of liability coverage you have often differs from the amount of money the insurance company will pay if you are the one injured in an accident that is your fault.

Likewise, you want to double-check the coverage amounts listed in your life insurance policy, homeowners policy, disability policy, and other policies. Make sure you really know how much coverage you have.

As your assets increase, you might need to boost your coverage. $20,000 in disability coverage might have been sufficient for your family 15 years ago, but what if you have a better job now, and the lifestyle inflation to go with it? As your home increases in value, you might want to increase your homeowners coverage to reflect the new situation. Check your policies, and determine if you still have adequate coverage.

2. What is Actually Covered by Your Policy

It’s natural to assume that any damage to your home is covered by your homeowners policy. However, this isn’t always the case. There are some things, like flood damage or earthquake damage, that aren’t included in your homeowners policy. If you want this protection, you have to buy extra coverage.

Additionally, some treatments and conditions might not be covered by your health insurance policy. When you go to receive treatment, you find out that you will have to bear the cost yourself.

Read your insurance policy to find out what is really covered by your policy. It’s important to understand these items, since without this knowledge you might not be prepared for unfortunate circumstances, whether it’s the fact that a life insurance policy may not cover suicide, or that your dental coverage doesn’t kick in until after you’ve paid six months of premiums.

3. Who to Call When You Need Help

When disaster does strike, you’ll want to know who to call. Your insurance policy has that information, usually near the front in a spot that’s easy to find. Being able to contact someone when you are faced with a difficult circumstance can help, and it can get the ball rolling on your claim. The earlier you call, the faster the situation can be resolved.

Your insurance policy can give you an idea of where to turn, whether you need to get pre-approval from your health insurance provider for a procedure, or whether you need someone to assess the damage to your car after an accident.

Keep your insurance policies in a safe place, where they are protected. A good choice is a fireproof and waterproof safe. You want to protect these documents, since they spell out exactly what you can expect from the insurance company, and they hold the keys to how much protection you have for your assets.

What else can you learn from your insurance policy? Leave a comment!

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Earning More and Spending Less to Pay Down Debt

When it comes to paying down debt, people often focus on finding ways to cut spending. Others try to find ways to earn more money. In truth, in trying to payoff debt – especially if it’s a large amount – you’ll almost certainly need to do both.

How to Earn More Money

One of the things that makes earning more money difficult is that usually requires a substantial change in behavior. You will begin doing something new that will take up both time and energy. Fortunately there are different ways to go about this, and you can find the best ways that work in your situation.

1. Get a part-time job.

When it comes to earning more money this probably the most conventional route, and it does have its advantages. Because there are so many possibilities, you can find a job working in a business that really interests you. You can choose to work as many (or as few) hours as you’re comfortable doing. You can also choose between working a steady part-time job, or a series of seasonal jobs.

2. Start a side business.

Many people have skills that could be turned into a business. It could be doing some kind of repair work, tutoring or handling certain computer applications. Review your list of skills – all of your skills – and see what talents you have that may lend themselves to self-employment. Potentially, you could earn more money with a more flexible schedule than you would from a part-time job.

3. Participate in incentive programs at work.

Many companies have incentive programs to encourage employees. It could be an employee referral program, or even a bonus on sales or client referrals. Contact your human resources department and see what your employer has available.

4. Get a better paying job.

This can be the most radical step of all, but sometimes it’s absolutely necessary. If there’s room and opportunity to increase your salary, but your employer can’t afford the higher pay, you may have to change jobs for more money.

5. Sell some of your stuff.

This is probably the easiest step. You probably have all kinds of stuff sitting in your garage or basement that you could sell for cash. Gather it up, clean it and set a fair price, then plan to sell it either through a garage sale, the local newspaper or on Craigslist.

6. Take in a boarder.

If you have an extra room in your home, and local ordinances permit, taking in a boarder can be a way to earn a steady extra income.

Whatever route you take to earn more money, make sure that the extra cash goes into paying debt otherwise you’ll be defeating the purpose.

How to Spend Less Money

When you are in debt, cutting expenses is an obvious step. And just as with earning extra money, there are various ways to spend less money.

1. Make across-the-board spending cuts.

You can cut your expenses by a fixed percentage across the board. For example, you could decide to cut all of your spending by 10%. If your monthly budget is $4,000, this will mean that you’ll have an extra $400 per month to apply toward your debt.

Of course this may not be as easy as it sounds. It may be easy to cut your entertainment and grocery bills by 10%, but debt payments will remain fixed. You may have to decide to make deeper cuts in your variable expenses to compensate for the cuts that you cannot make in your fixed expenses.

2. Eliminate some expenses.

You can decide to eliminate certain expenses entirely. This can include subscriptions, certain services like cable TV, entertainment categories or a gym membership.

3. Eliminate some activities.

Entertainment will be a rich target here as none of it is absolutely necessary. Just make sure that if you do eliminate an activity, that you have an inexpensive replacement for it. For example, if you decide to give up going to the movies for a year, you may need to replace that with movie rentals or some other activity.

4. Eliminate a financial black hole or two.

Sometimes, after eliminating all the easy stuff in your budget, you’re still left with unmanageable expenses. This could be the result of a high house payment, a large car payment or even a vacation home that you have. If you’re actually finding it difficult to find savings in your budget, you’ll have to consider eliminating or trading down on major possessions. For example, dropping your house payment from $1,800 per month to $1,200 per month will be twice as effective as cutting your grocery bill and your entertainment costs by a combined $300 per month. Sometimes hitting the big stuff is the only way.

5. Substitution of services.

It’s often said that we have a service economy, which is to say that we pay other people to perform services for us that we mostly don’t feel like doing ourselves. You might be able achieve substantial savings by doing more of these services yourself. For example, if you have a lawn service, consider cutting your own lawn. Instead of getting your hair cut in a shop, consider cutting your own hair. Learn what you can about basic auto repair so that you can perform simple tasks on your car, such as rotating the tires, changing the oil or changing spark plugs.

You could try to pay down debt just by earning more, or by spending less, but understand that you can be twice as effective by doing both. The more money you can put toward your debt, the faster you will get out of debt. That will mean less time will ultimately be spent concentrating on the debt effort.

What suggestions do you have to raise cash to pay down debt? Leave a comment!

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What to Do After Paying Off Debt

If you’ve ever been deep in debt, it might be said that you’re a potential credit junky. That’s not a medical classification of course, but credit has all the capability of being a certified addiction. The problem is that it’s easy to get into, and just as hard to get out of.

If you’ve recently paid off substantial debt, the battle is only half won. The other half will be remaining debt-free. You can think of getting out of debt as winning the battle. But staying out of debt is about winning the war.

What should you do after paying off debt to make sure that you never get in that position again?

1. Stay on the budget you were on when paying off debt.

In order to get out of debt, you probably had to be on some sort of budget that freed up your income so that you could direct it into debt payoff. The best course of action is to stay on that budget. You’ve already developed financial discipline as a result of having the budget, and if you’ve been using it for a while it’s probably become a habit. And habits are always easier to maintain than they are to establish.

The other thing a budget does is that it recognizes the necessity of living beneath your means as a way of avoiding debt. The only way you will achieve any financial goal will be to adopt this strategy. If you already have it up and running, do what you need to keep going.

2. Redirect debt payments into savings.

Next to living beneath your means, the best way to avoid going back into debt is by living out of savings, rather than out of credit. To do this, you’ll need to create and continue to build a healthy savings account balance.

Now that your debts are gone, you should direct the money that you were using to make debt payments into savings. Since you have already learned to live without that money, it should be pretty easy to move it into savings.

But like just about any other discipline in life, saving money is about establishing good habits. If you’ve never done that up to this point, take advantage of the shift in your finances to develop the habit now. Once you have a healthy savings balance, you’ll probably find you don’t need credit anymore. And once you’ve done that, you will be closer to beating your debt problem for good.

3. Pay cash for whatever you buy.

Now that you’re out of debt, plan on paying cash for everything you buy. That doesn’t mean cash literally as in currency (although it doesn’t exclude it either), but it does mean that you should do most of your buying and bill paying with either checks or a debit card. The more that you can pay using cash or cash equivalents, the less reliant you’ll need to be on credit.

As for the convenience of credit cards, in the vast majority of purchase situations, a debit card will be just as convenient. Credit card use should be limited to situations in which either buyer protection is necessary, or there’s a higher risk of fraud in the transaction.

4. If you have to borrow to buy then you can’t afford it.

In addition to being convenient, credit allows us to buy what we cannot otherwise afford. But make a policy going forward that if you have to borrow money to buy anything, then you can’t afford it.

This single change in philosophy can keep you out of debt forever. Very little of what most of us buy is absolutely necessary. Most purchases are optional, and the notion that they are in any way necessities exists primarily in our own minds.

5. Remove anything from your life that may have encouraged debt.

This isn’t to say that the reason anyone gets into the debt is that “the devil made me do it,” but there are often external factors that can help the process along. You will have to identify as many of these factors as you can, then come up with a plan to either minimize them or eliminate them from your life completely.

Here are some potential sources to help you get started:

• Cut back on “down time” – Or put another way, get busy! Downtime is necessary, but too much of it leads to boredom, and boredom is often remedied by spending money. Engaging in constructive activities is one of the best ways to avoid spending more money.
• Cut back on TV time – We’re often only minimally aware that TV is mostly one giant commercial. Most of the time you spend in front of the TV is watching programs that are trying to get you to buy something that you wouldn’t on your own. The less time you spend in front of the TV the more control you will have over your finances.
• Get rid of major assets that cause you to spend more money – This is a loaded point because the possibilities are almost unlimited. It could be that your house is so expensive that it’s keeping you on the financial edge. You could also have a car payment that’s out of proportion to your budget. Consider selling any possession you have that’s draining your finances.
• Make some new friends – If you have friends who are free spenders, you might want to consider finding some new friends. Friends with expensive hobbies and consumption patterns can hurt your finances for a lifetime.
• Expensive hobbies – Expensive hobbies can cause you to spend more money than you should, and this is another potentially very long list. Take a look at your past times and see which ones are costing the most money. For example, if an expensive skiing hobby is taking up too of your budget, you may want to consider replacing it with swimming at your local community swimming pool instead.

This list will be different for just about everybody, but it’s just to help you get started. Take a look at your own spending history, then determine where it is you are spending a disproportionate amount of money. Be purposeful about making changes where necessary.

If you’ve recently gotten out of debt, what kind of changes have you made in order to make sure that you don’t get back in? Leave a comment!

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3 Things You Can Learn from Your Credit Report

Reviewing your credit report every few months is an easy way to combat identity theft. Identity theft is a profitable form of crime because once you have someone’s personal information you can open up credit lines in their name and use those lines to buy items that you never intend to pay for. (Just make sure you use the government mandated AnnualCreditReport.com to view your report; other sites will charge you after the free trial period.)

But protecting your identity isn’t the only benefit to looking at your credit report. You can learn a lot from reviewing your report regularly.

3 Things You Can Learn from Your Credit Report

Here are three major items you can glean during your review of your credit report.

What Credit Accounts are Open in Your Name

This is one of the most important things to look for on your credit report. Each bureau’s credit report will list out all of the credit accounts that are open in your name. You need to make sure that you recognize every single account listed.

If you recognize all of the accounts you can move on. However, if you see an account (or multiple accounts) that you do not recognize and did not open your identity may have been stolen. If an identity thief has opened up a credit account (credit card, loan, and so on) in your name and using your Social Security Number then the creditor believes you made the charges. If you do not pay the amounts shown it will show on your credit report and severely damage your credit score.

Any unknown accounts should be immediately investigated. If you learn you have had your identity stolen you have a lot of work ahead of you: filing a police report, disputing the charges and accounts, and potentially freezing your credit.

What, If Any, Late Payments or Delinquencies are Listed on Your Credit Accounts

Even if you recognize all of the credit accounts listed on your report you need to dig a little deeper. Look at each reported credit account to see if there are any erroneous late or missed payments showing. If you haven’t missed a payment or paid late, but one shows up on your report, your credit score will be negatively impacted.

If you don’t find any late or missed payments, you can move on. However, if you do you need to dispute the late payment mark in writing with the creditor. They are required by law to research the error and if it truly is an error have it removed from your credit report at all three credit bureaus.

Which Companies are Looking at Your Credit

Another important area to review is to see which companies are looking at your credit report. There are two ways a company can look at your report: a soft pull and a hard pull.

A soft pull is used to send you pre-approved marketing messages like the credit card offers you get in the mail. These pulls are not used to determine a specific loan request and thus do not damage your credit score. Expect to see many inquiries listed here from various banks and credit card companies.

A hard pull is the opposite. Hard pulls do negatively pull down your credit score by a few points. These credit inquiries are done as part of a specific decision by a company as to whether or not to loan you money. If you apply for a car loan, the credit inquiry done on your report is a hard pull because the lender is trying to determine if they should let you borrow the money or not.

The important thing to learn here is if you have hard inquiries from companies you do not recognize, in that case, someone might have your identity information. Those hard inquiries would be where the identity thief is trying to convince a lender to give them a line of credit in your name. Again, if you find evidence of this you need to act quickly to shut it down or risk damage to your credit score (which can negatively affect your ability to get a mortgage, a car loan, and more).

What are some other things you can learn from your credit report? Leave a comment and let us know!

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3 Things You Can Learn from Your Credit Card Bill

Your credit card spending says a lot about you; it might even say things that you don’t even realize. There are many things you can learn from your credit card bill. Which ones can have the biggest financial impact on your life?

Gain Insights from Your Credit Card Statement

Of course your credit card bill is going to show you how much money you spent last month, but you knew that. Did you know it could show you many other things?

Spending Habits in Specific Categories

One of the greatest tools you gain access to by putting a majority of your spending on a credit card is a categorical look at your spending. For many people simply figuring out where they spent that $20 bill or what that $72 check last month was for is complicated. You don’t get any trend data or the ability to look at your spending from a 30,000 foot view.

However, when you use a credit card, you do.

At minimum the major credit card companies offer a year-end statement that will break the last year’s worth of spending down into major categories. The best accounts will let you sort, analyze, and dig in to those categories – even down to specific stores.

With these modifiable views you can take a thorough look at your spending to figure out:

• Where you spent the most money last year
• How much you spent on groceries versus eating out
• How much you spent on car insurance
• How much you spent on utilities
• How much you wasted on interest and fees

You might be surprised by what you find. For example, if you spent just as much money eating out as you did on groceries, it might be time to pack a brown bag lunch more often. The spending analysis can help you change your spending for the coming year in a positive way.

Interest Rate, Interest Charges, and Other Fees Paid

If you are using a credit card wisely you shouldn’t have anything in this category. But hey, sometimes life happens, right? Seeing how much interest you paid on the balance and how much it will cost you to pay off with just minimum payments should encourage you to avoid paying interest moving forward.

If you unfortunately need to carry a balance for a long period of time, knowing your interest rate is the first step in finding a better deal. If your credit card is charging you 15% to 20%, you need to find a card with a low interest rate, a balance transfer offer, or both.

How You are Being Rewarded – and if it’s Enough

Maybe you’re a responsible credit card user that signed up for the card a long time ago. You know you get some sort of rewards for your spending, but can’t remember how much. Your statement will have a breakdown of what kind of rewards you are earning.

This can help you in two ways:

• you can tailor your spending to the highest rewarding categories for that card
• you can decide if you need to move to a more rewarding card

You might find out you have the perfect card for you. Then again, you might discover that you don’t spend any money in the best categories on that card and there is a different card available that offers you much better rewards for the areas you do spend in. Moving to a new card might earn you an extra 1-3% per year on your spending. That doesn’t sound like much, but over thousands of dollars of responsible credit card use it really adds up.

What are some other things you can learn from your credit card bill? Leave a comment!

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Chase Freedom vs. Citi Dividend vs. Discover it

For someone who is looking to maximize their credit card rewards, the word “bonus” can leap right off the screen. Just about any decent reward card will earn 1% cash back, but it is the opportunity to earn a 5x bonus that can really attract your attention.

Chase, Citi, and Discover are three of the major credit card issuers that offer very similar cards featuring bonus categories of spending that change each quarter. The broad outlines of these offers are nearly identical, but if you look closely, their details vary widely.

Let’s put these three in the ring and see who wins the fight.

Chase Freedom

As one of the most popular reward cards, the Chase Freedom has set the standard among cards with rotating bonus categories. Cardholders start with $100 cash back after spending $500 within three months of opening an account. Then, you will earn 1% cash back on most purchases and 5% back on the first $1,500 spent each quarter on eligible bonus categories and merchants. For example, in October, November, and December of 2012, the bonus categories are for charges from airlines and hotels as well as retailers Best Buy and Kohl’s.

But this Chase card also has a couple of other neat tricks up its sleeve. It is a little known feature that cardholders who also hold a Chase checking account will earn a 10% points bonus and an additional 10 points per transaction. That means that a $1 purchase will earn 12 points; 1 for the purchase, 1 for the 10% bonus, and another 10 points.

In addition, cardholders are also eligible to participate in Chase’s innovative Blueprint program. This no-cost benefit allows cardholders to pay some charges in full while carrying a balance on others. It also includes powerful budgeting and goal setting tools. There is no annual fee for this card, but there is a 3% foreign transaction fee on all purchases that are processed outside of the United States.

Citi® Dividend Platinum Select® Visa® Card – $100 Cash Back

Citi® Dividend Platinum Select® Visa® Card – $100 Cash Back card one-ups Chase by offering $100 cash back after $500 in purchases within the first 3 months of account opening. It features the same standard 1% cash back on most purchases, and 5% back on purchases from bonus categories.

The card features bonus categories each quarter so be sure to check out the current bonus rewards. Cardholders also receive several valuable travel insurance and purchase protection policies including travel accident insurance, lost luggage coverage, retail purchase protection, and price protection. There is no annual fee for this card, but again, there is a 3% foreign transaction fee whenever the card is used on the other side of the border.

Discover it

Discover recently replaced it entire line of reward cards with their new product, Discover it®, which is similar to the former Discover More card. The Discover it® card is still very similar to both the Chase Freedom and Citi Dividend cards, except there is no opportunity to earn a sign up bonus. Discover it® offers 1% cash back on most purchases and 5% cash back on eligible transactions in bonus categories that change every three months. Thankfully, this new product removed much of the the fine print that hurt the More card. The old More had some annual spending limitations that this new product does not.

You can see the latest bonus categories on the Discover site. There is no annual fee for this card, and there are no foreign transaction fees on any Discover products. Unfortunately, the Discover card is less widely accepted than the Visa cards from Chase and Citi, especially overseas.

Conclusions

The Chase Freedom card appears to be the winner for most cardholders. While it offers a smaller sign up bonus than the Citi card, and fewer benefits, there is no overall limit on annual rewards. Furthermore, those with a Chase checking account who can take advantage of the additional bonus points can dramatically increase their cash back.

On the other hand, the Citi® Dividend Platinum Select® Visa® Card – $100 Cash Back provides superior purchase protection and travel insurance policies. Despite the improvements over the More card, the Discover it® card is still the weakest product of the bunch, if only because “it” offers no sign-up bonus.

Other Important Considerations

As with all reward cards, these products should only be used by those who always pay their balances in full and on time. Those who carry a balance should find the card with the lowest interest rate and not worry about rewards. Also, cardholders should be careful not to be too mindful of the rewards, especially the bonus categories. The last thing any cardholder should do is to spend more money in order to earn a reward.

Certainly it would be better to make a purchase in a bonus category the day before it expires than the day after, but rewards should never induce you to spend more that you would have. Finally, a quirk of each of these programs is that cardholders much remember to register for their bonus categories each quarter. Fortunately, the registration can occur anytime during the quarter and is retroactive to the beginning.

Which card is your favorite? Leave a comment and let us know!

Due to the changing rates, terms, and bonuses of cards we cannot ensure the accuracy of the card information. Please double check card data and rates when you apply. Also note that if you apply and are approved for some of these cards through these links, this site may receive some compensation.

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How to Make Sh*t Happen

One year ago we were about to have a baby and my productivity outlook for 2012 looked pretty bleak. The first two months after our daughter was born were kind of a blur and I got very little done.

The one thing I did make time for was a course called Make Sh*t Happen from master motivator Jenny Blake. I went through the lessons at all hours of the night – if I was up with our crying baby I’d login and make some headway with the little bundle of tears on my lap.

Getting Unstuck

Fortunately our daughter eventually outgrew her insane middle of the night crying fits and I started finding time to puruse the path I’d set in Jenny’s course.  The concept behind Make Sh*t Happen is that you pick one really big goal you want to accomplish and the course walks you through overcoming the obstacles that have been keeping you from your goal.

Finding Focus, Avoiding Distractions

It’s easy to get distracted, particularly when you’re unsure of your course or you’re avoiding something you don’t want to do. Even if the task is something basic. For example, trying to get my kids ready for bed can be one of the most frustrating parts of my day.  They only have a few small steps to get ready for bed but when they’re trying to avoid bedtime they can stretch that simple process into a lengthly series of distractions.

You may have a few things you need to work on to move you towards your big goal but if you avoid those things like my kids avoid getting ready for bed you can turn a half day project into a 6 month delay.  Maybe it’s something you’re unsure of or maybe it’s something you’ve done before and wish you didn’t have to do again (cough, income taxes).

Whatever the reason, if those roadblocks are there then you can be easily distracted and sidetracked.  You hate to admit it but you may be sabotaging your progress in order to avoid something you’re unsure of or worried about.

Making Stuff Happen

We all suffer from some form of roadblock and Jenny helps address them in her Make Sh*t Happen course.  She breaks your process of trying to make something big happen down into small steps and walks you through the necessary introspection and decision making steps.

That approach fits my personality so I found the course to be a big help in clarifying and quantifying what I was working towards. I can’t give all the credit to Jenny but I did release my Only 9 Minutes project to beta testing at the end of 2012 and managed to squeeze in the majority of the Debt Heroes book as well. Jenny has some pretty good testimonials on her course info page so I’m not the only one who made progress thanks to her.

Getting Results in 2013

So if you have something major you’d like to tackle in 2013, I’d suggest checking out Jenny’s Make Sh*t Happen course to see if it can get you rolling.  It’s probably not right for you if you don’t already have a specific goal in mind.  Just feeling generally motivated to take action in the New Year isn’t a good enough reason to sign up.  The people who went through the course with me were pretty motivated and knew what their big goal was, they just needed the course to help kick start their progress.

The course would be a perfect fit for you if you’ve had a big goal or idea you’ve been sitting on for a while.  If that’s you then I’d definitely recommend checking out what Make Sh*t Happen has to offer.  It’s a 10 week online course and starts on Monday so if you’re tired of putting off your big idea get signed up before it closes.

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