When a marriage breaks down one of the biggest problem areas is finance. Each member of the couple has a feeling of insecurity immediately. Where, they wonder, will they live after separation and divorce? They will need to consider divorce mortgages – where the lender understands the situation from which the couple have come and does everything to help people make a new start.

A home, perfectly naturally, has a feeling of security, but as soon as that security is under threat, emotions are raised. A home is where you will have been with your spouse, and possibly raised a family too. So when things go wrong, it is no wonder that people put up their defences. However difficult it will be the subject of finances will have to be discussed between husband and wife, and divorce mortgages will have to be raised.

It is important to ensure that current payments on the house are maintained: existing mortgage payments, house and contents insurance, endowment policies. Arrangements to cover these costs should be made immediately, as non-payment will lead to anger, resentment, and worse – a possible blot on credit ratings.

Emotions will be running high, but it is important to discuss financial affairs sensibly with a view to the future for both parties. Independent legal advice is the best way forward as each seeks to secure a mortgage after divorce. If circumstances ended up meaning a court had to decide the division of finances then it may mean one party gets more money than the other, but both parties should realise that there is only so much to go round. Financial stress can be such that during separation and even after divorce, couples still consider living under the same roof to avoid the need for another mortgage after divorce.

If there is enough money in the pot to buy two houses, then mortgages after divorce would not present a problem, and a court would primarily be concerned about the welfare of any children.
However, if there is not enough money to fund two post-divorce mortgages, the court will of course consider selling the original home and dividing the proceeds as it sees fit. Again, the primary consideration will be for the needs of the children. A home has to be provided for any children, whatever the hopes and needs of the other parent.
It is unlikely that either party will ‘lose everything’ as the court has wide powers in aportioning assets. However, it could also rule that the deeds of the house are transferred in full to one party.

One or both parties can easily be left searching for a mortgage after divorce. It is very difficult thing to have to do at a time of great stress. Some building societies specifically provide divorce mortgages. Sometimes one party appears to take charge of financial affairs, and this can leave the other party feeling vulnerable and unsure. Mortgage brokers can help in this situation. Divorce mortgages cater for the fact that you may need to minimise your monthly mortgage payments until finances are under control. Divorce mortgages can provide additional features and benefits which will not be available when you choose a mortgage from a standard range.

Emergency funds are considered to be a necessity as far as financial security is concerned, since it can provide one with financial resources that one can resort to and depend on when an emergency arises such that when one is sick and have the burden of paying huge medical bills, or unexpected home or major car repair.

When one has no emergency fund, one can be obliged to acquire debt on your credit card that might take several years to repay with interest that would later cost so much more.

However by putting an extra thirty to fifty dollars every month in an individual “emergency savings account” one can be secured with what emergency the future may bring. In doing this, it is recommended that one regards them as an additional bill, to be punctually paid each month.

Yes, one can and should budget and allocate the extra money for emergency fund, as this is very significant when one refers to his “financial future”. Here, the goal is to create savings from budgeting your income; the emergency savings should ideally be equal to at least three months your living expenditures.

What’s important is that you should steadily put a certain amount of money aside, and only use it for real emergencies.

Not like an investment, the success of one’s long-term savings funds does not really count on the amount of return or interests but on placing a fixed amount of money away constantly and steadily so to have immediate access to it at all times. In spite of one’s financial status, the initial step in the process of constructing one is by knowing where your money is presently being consumed or spent.

When one recognizes and determines where one’s earnings are spent, then it will be easy for one to choose and make a decision where to trim down expenses. In other words, budget. Budgeting is putting or setting aside money for anticipated and unanticipated future use. It is here that one sets up a goal so as to save. So set an emergency fund as your goal.

Checking, savings, money market accounts and “certificates of deposits”, are great places to keep one’s cash that might be needed on quick notice.

The amount saved from budgeting can either go to your savings goal, emergency fund or both. One could utilize the money saved from budgeting financial expenses by saving half of it to your savings account and half of it for emergencies. This way, you achieve your goals in savings and at the same time put in funds for emergency use. It’s your choice.

Budgeting is one of the earliest and most important aspects of personal finance. The basics of budgeting is simple. However, each persons financial situation is different so a one size fits all sort of budget plan does not work for everyone.

If you are a person who has an income that is not always the same, the standard budget can be a little hard to maintain. The following are some great tips for how to manage budgeting when you have a varying income.

1. Try to keep an average income to work with. If you can come up with an average income, either an actual average of your income or the minimum amount you can make, if know, then use that as your income on your budget.

2. Learn to be flexible. You have set expenses and then you have variable expenses. Learn to be able to adjust your variable expenses to meet your income so your budget is always balanced.

3. Keep on top of things. You should always look over your budget each month, but with a varying income, you need to do this often. This will allow you to stay on top of your budgeting and ensure you are keeping things in check.

4. Know the bottom line. You should always know that magic number – the amount of money you must have every month. Once you reach your magic money that will meet your basic needs then you can rest easy knowing you have the needs met and now you only need to worry about working with what you have left.

5. Try a weekly budget instead of a monthly budget. You may need to work your budgeting into a weekly plan. To do this, take the amount you must have and divide by four. This is what you must have each week in order to meet your expenses for the month. This will be put back immediately. Then you can budget out your expenses for each week. This may help if you are paid each week.

Budgeting with a varying income can be difficult. It can take some time to develop a style and method that works best for you and your situation. Do not forgo a budget, though, because it is too hard. A budget becomes very important when you can not count on a certain income each month. It will help you to stay in control of finances, so work at it and stick with it.

In the world today, it is not at all unusual to find yourself short of the cash you need to pay your bills, feed your family and maintain a reasonable lifestyle. For every working stiff who runs out of money before they run out of week, there are unfortunately a number of shady characters willing to loan you all the money you need at an exorbitant interest rate. You will have to be careful to avoid these loan sharks when you find yourself in need of quick cash.

Loan sharks are not just something made up in Hollywood to sell movie tickets. Unfortunately, loan sharks are all too real and getting involved with one can wreak havoc on your personal and professional life.

Loan sharks prey on people in financial distress. These people are often unable to obtain loans through traditional channels like banks and savings and loans. Often this is because of either bad credit or the nature of the debt they have incurred. A compulsive gambler may not be able to convince their local bank loan officer to help pay off their gambling debts. Likewise, if your credit is poor, you will find it extremely difficult to obtain a loan at a reasonable interest rate. Any time you borrow money, it is vital to know the interest rate you will be required to pay. If you interest rate is too high, you may never be able to pay off your debt. Your debt may pile up faster than you can pay it off. This is good for the loan sharks but bad for you. Loan sharks want to keep you in debt. This makes you dependent on them for ever increasing amounts of money.

Even if you are not a gambling man and not involved in any shady dealings, you can still fall victim to loan sharks of various stripes. Many so called payday loan and payday cash advance companies are actually loan sharks in disguise. They often charge exorbitant rates of interest in exchange for the quick cash they dispense. Although technically legal, these businesses are considered loan sharks by a great many of their former and current customers.

No matter what type of loan sharks you get mixed up with, extricating yourself from their clutches may be one of the biggest challenges you will ever face. Loan sharks, both the legal kind and the back alley kind, are notorious for chasing down the money they are owed. While not every loan shark is of the old leg breaking school, they will find ways to make your life miserable until you pay them what you owe. They will most likely visit you at your home or place of work to demand their payments. This tactic is extremely effective for the loan sharks and highly disconcerting for you. In addition to putting your personal relationships and your job in jeopardy, these type of tactics violate your sense of personal freedom and personal space.

The best way to deal with loan sharks is not to get involved with them in the first place. Anytime you need a loan, make sure you deal only with reputable firms. Make sure you know with whom you are dealing and that you get a full disclosure of the interest rate charged by the lender and all associated fees. One of the most common tricks loan sharks use to keep their customers in debt is to charge extremely high late payment fees, often as high as 1 to 1.5% per day. You can see how quickly your loan can spiral out of control at rates like this.

If you’ve already fallen into the clutches of a loan shark, the best way (probably the only way) to make them go away is to pay your debt in full. You may need to swallow your pride and borrow the funds you need from your relatives. It is always hard to admit to financial problems, and many people let their debt get completely out of control before they seek help. Your family and friends will most likely be willing to help you out with your financial issues. They will probably be more understanding than you expect. After all, most people wrestle with financial demons at some point in their lives.

Once you have banished the financial demons that loan sharks represent, it is vital that you not repeat your past mistakes. If you have a problem with gambling, seek help for your addiction. It is important to get your financial house in order so that you will no longer be easy prey for the loan sharks that prowl the financial waters.

Condominiums have become popular in recent years both as residences and investment opportunities. Are Condos a good investment?

There have been several reasons for the popularity of condominiums. The first is the changing dynamics of social life in the modern era. The time consuming need to maintain a detached home and its surrounding property is removed from the condo experience. Homeowners Associations, known as HOAs, generally take care of all the interior and exterior upkeep. Although they charge dues to fund these services, the dues are factored into the rental or purchase cost. The big thing seems to be the accommodation of today’s fast paced and busy lifestyle.

The increase in popularity is also a fueled a bit by the aging of the baby boomers and the overall increase in the aged population. An increase in the general population and the overcrowding this has caused in many urban areas has led to condominium construction as a viable alternative to suburban developments in many places. So, there are a lot of factors that are making condos popular. When something is getting popular, it stands to reason that it is also a very good investment vehicle.

Are condos a good investment? The answer is a resounding yes. There are some general guidelines and a few pitfalls, but this is true of any investment. What makes the condos a good choice, especially for the beginner in Real Estate Investment is their popularity and those HOA’s. The Homeowner Associations usually maintain a fairly strict standard within the condominium. While this may annoy some residents, it certainly aids the owners. One of the biggest problems facing the investor in rental property is insuring that the property is properly maintained to protect the investment. This is usually not a serious problem in condos.

Appreciation in value is the prime driving force behind a wise Real Estate investment. It does not matter if the condo is going to be used as a vacation time share property, a straight rental property, or even your private residence, the idea is that you should be able to sell it for more than you paid for it. The value of condominiums contains to rise as their popularity continues to grow. The very same factors that are pushing the popularity are not likely to change or ease off in the foreseeable future. The population continues to age and the life style continues to grow more active and more time pressured. Also, space is not going to get any less limited.

Condos are an easier deal and ideal for first time investors in Real Estate. However, the idea of even a good investment does not include anything like an iron clad guarantee of success. If you are going to be a successful Real Estate investor, you need to be an educated Real Estate investor.

It’s obvious that the pension system is in dire straits and within the talks and discussion of concerns; many people are sharing ideas that could revamp & re-ignite the pension system.

Recent research found that only half the working population belong to an occupational pension scheme and that over 50% of employers offering a defined contribution plan found that the majority of their staff failed to even sign up for it, even when the employer is making a contribution. What is the turn off from pensions and what (if any) is the turn on?

Could the following idea be the ON switch?

There have been a number of blogs and reports talking about changing the pension rules to make pensions more useful to people throughout their working lives and not just in retirement. The idea is simple and has got a lot of people talking.

The basic idea is that, at any age, individuals who have reached a certain level of pension fund should be allowed to draw down some of the tax free cash of their pension pot. Sounds great! But will the government go for it?

The Savings Gateway (created by the government) is an initiative to help individuals save up a lump sum of money. The aim is to help people to cope with the difficulties in life with having an accessible sum of cash. A change in the pension rules that allow for early access to the fund, as tax free cash, would also achieve the same result the government is looking for with the Savings Gateway.

The new rules would also work well with the new pension initiative in 2012. The so called government ‘Personal Accounts’. In 2012 all employers in the UK will be forced to be actively involved in the process of getting their employees auto-enrolled in a pension scheme. If they don’t have one, the government will create a ‘Personal Account’ scheme as a default pension.

Employees just don’t appear to want the hassle of saving into a pension for one reason or the other. Maybe the new rule changes (if implemented), would encourage a much higher percentage of employees to sign up for a pension, increase their pension savings or act and take matters into their own hands.

There’s more chance that more people will sign up for a pension in the first place if it also acts as a safety net of cash should you need it throughout your life.

This new rule idea has popular in the recent downturn of the economy and the feedback has been overwhelming. It appears that the majority of people would see the value of such a relaxation in the rules and welcome it. It’s understandable that there will be deeper complications that these initial reports are not highlighting. However it is still easy to imagine that many people will be encouraged to save more in pensions if such a benefit of tax free cash came as standard.

Maybe it’s not such a wild idea that a change in pension rules may aid in the recovery of the economy in some small way.

It can seem daunting at times to try and break into investing, after all, you may be simply wanting to make some basic investments, but find yourself confronted with a variety of different terms that you aren’t completely sure what they mean.

To help you with this, several common investment terms are defined below. This should be enough to get you started with some of your investments, at the very least; it should be noted, however, that this is nowhere near a complete list of investment terminology that is used today.

Stock

A stock is a type of investment that signifies a partial ownership of a publicly- traded company. Each share of stock purchased is an equal portion of ownership that grants the same rights and privileges as every other share of the same type of stock. Some shares of stock may be designated as “common” or “preferred”… these are very similar, though preferred stock usually gives up the voting rights of the shareholder in exchange for advanced dividends and more security in case of a bankruptcy.

Bond

A bond is an investment into a loan fund issued by a government or institution. The bond pays interest for the term that it’s active, meaning that the longer you have your bond investment the more interest you’re going to collect. Once bonds reach their maturity date, the bond expires and the total amount earned is paid to the investor.

Index

An index is a grouping of different investments that cover the same items. Common indexes are precious metals, diamonds, and industrials. Indexes can often be invested in as a broad fund in much the same way that you invest in stocks.

Mutual Fund

A mutual fund is an investment that allows individuals to invest their money into a previously-created diverse portfolio that usually contains a variety of stocks, bonds, indexes, and other investment opportunities. Investors in a mutual fund are usually considered to own shares in all stocks included in the fund.

Dividends

Dividends are a portion of a company’s earnings that are distributed among shareholders at the discretion of the company’s board of directors. Dividends may be paid in cash, shares of stock, or other means.

Money Market

A money market account is a type of mutual fund that invests in different loans and financial services while attempting to keep the initial investment low. Interest is paid on the investments as it is collected.

Bull Market

A bull market occurs when investment prices are either on the rise or appear likely to rise in the near future. It is also referred to as an optimistic market, and tends to have larger amounts of long-term investment.

Bear Market

A bear market occurs when investment prices are either falling or appear likely to fall in the near future. It is also referred to as a pessimistic market, and tends to have larger amounts of short-term investment in order to get the most out of temporary gains and avoid long-term losses.

Futures

Futures are investments where an individual pledges to purchase or sell certain commodities at a future date for a certain price. This is often used to get a lower price on commodities that will be resold later for a higher price.

Margin Trading

Margin trading is where a stock broker allows individuals to purchase shares of stock for a portion of the price, with the broker lending the remaining amount. The borrowed amount must be paid back when the stock is sold, and service fees must be paid to keep the margin account open before that time.

Or is your growing college fund killing your financial aid?

The more you save for college, the less chance you have at financial aid. This irony has created the urban legend that you will be better off if you don’t save and rack up debt, so the government will pay for your child’s education. As a responsible parent, or a loving grandparent, you want to save for the education of your future collegian – but you don’t want those savings to jeopardize any chance your child has at the best financial aid.

How can you avoid or reduce the effects of this paradox?

When you save for college, hold your assets in a manner that will have the least affect on your future Expected Family Contribution, or EFC. Financial aid is determined by first calculating the EFC – how much of student and parental assets and income are expected to be used for college expenses each year. Parents and students complete a FAFSA form (Free Application for Federal Student Aid) to provide their income and asset information to schools. The schools use the EFC calculation derived from the FAFSA to offer aid packages of grants and/or loans to fund the difference between the EPC and the total cost of tuition, room & board.

What is the expected contribution from student and parental income?

Income calculated after allowances*:
Student Income 50%
Parental Income 22-47% (based on income level)

*Allowances include: federal and state taxes, social security contributions, “income protection” ($19K for family of four), and “employment expenses” ($3100, typically)

Student Income includes:
Income from employment, business, contracting May include withdrawals from 529 Plan, if owned by someone other than the parent (such as the grandparent) Income from a trust or partnership (in some cases)

Parental Income includes:
Income from employment, business, contracting Income from non-retirement assets (real estate, stocks, mutual funds, bonds, cash) Withdrawals from IRAs and/or other retirement accounts May include annuity distributions

Not included:
Withdrawals from 529 Plan owned by parents Withdrawals from Educational IRAs

Income may change for year to year depending upon how the EFC was funded the year before. For instance, if the parents withdrew $10K from their IRA to pay for tuition, that withdrawal, while without tax penalty, is included in the income of the parents, and raises the EFC for the following year. However, $10K withdrawn from a 529 Plan is not included in the parent’s income and does not affect the EFC.

What is the expected contribution from student and parental assets?

Student Assets 35% (drops to 20% for 2007-2008 school year)
Parent Assets 2.6-5.64%

Student Assets:
Accounts & assets owned by the student, directly Custodial accounts UGMA/UTMA accounts Trust accounts Coverdell ESA / Education IRAs (may be changing) Savings Bonds in the student’s name

Parental Assets:
Taxable accounts & investments (non-retirement) 529 Plans (owners) 529 Plans inside a UGMA/UTMA for the child (as of 7/1/2006) Savings Bonds Investment real estate

Not Included:
Retirement Accounts (e.g., IRA, Roth IRA, 401(k), 403(b), pension) Equity in primary residence Life insurance Annuities Withdrawals from 529 Plans and Education IRAs 529 Plan if owner is not parent or student (e.g., grandparent)

Obviously, the most advantageous position is for assets to not be included in the calculation. Otherwise, you would want hold assets as parental assets, instead of student assets, to reduce the EFC.

What are other considerations?

Some schools perform their own calculations, and may include other assets, such as equity in the primary residence. Gift, estate, and generational-skipping tax considerations – for example, grandparents may need to transfer assets to the parents or student to reduce the grandparent’s future estate. Parents and grandparents may want to maintain control over assets by retaining ownership, or placing restrictions on the assets (such as through a trust). Accounts directly in the child’s name, custodial accounts, UGMA/UTMA, and some trust accounts, become under the child’s control at their age of majority (in California, at age 18). Parents should be wary of reducing their retirement savings to fund college. Various types of accounts have tax benefits, or penalties, for withdrawal to fund higher education expenses. Accounts have differing returns, risk, and fees, which may greatly affect their ability to fully fund college expenses. Funds inside a 529 Plan are subject to penalty and income tax if withdrawn for non-educational uses, with some exceptions. Multiple funding strategies may be used to take advantage of the varying options and benefits: for example, a 529 Plan to fund the first few years of college and an IRA to fund the final year.

How can you learn to invest money? Well you could sign up for some expensive courses and hope to learn some special secret investment tips that will make you rich overnight. Unfortunately learning to invest money is not that easy. The tried and tested method to success is often a lot cheaper but more time consuming.

The first choice you need to make is how much time and money you have free to invest your money in. Obviously if you are short on time then trying to research and learn a completely new area of investing (for example futures trading). Instead you may be better of simply investing in a fully managed investment fund.

Obviously you should only invest money that you can afford to lose. If you cannot afford to lose the money you are planning to invest then you should seriously consider the riskiness of the investments you will make. If you cannot afford to lose the money then very low risk such as savings deposit account or a government bond may be the best option. On the other hand if you have spare cash kicking around that you can afford to lose and don’t know what to do with it then maybe investing in shares in the latest in fad technology stock may be the right investment for you.

The easiest way to learn to invest money is to simply read around the subject. The more you read, the more you’ll learn. The more you learn, the better investment decisions you’ll be able to make.

Retiring is supposed to be the time when you can sit back and relax after years of hard work, but for some people retiring is not plain sailing. As it has been reported in the news recently, there are a growing number of people struggling to survive on their pensions.

Although many people will have paid in to a company or private pension plan over the years, some pensioners are finding it increasingly difficult to survive financially on their current income.

There has been talk of increasing the retirement age of 65 up to 70 as life expectancy increases and people need their pensions for longer than ever before.

So what can you do if you are worried about retiring? Well there are ways to guarantee you will have a sufficient income for retirement. For instance, if you have a large amount of capital gaining very little interest sitting in a current account, consider investing it to get a monthly or annual income.

You could put your money in to an ISA which allows you to invest up to £7,200, providing tax free returns on your capital. And if you are over 50, from October you can invest up to £10,200 from participating financial providers.

If you need easy access to your savings, then a savings account could suit your needs. You can get competitive rates of interest on many accounts from various providers and if you need your savings unexpectedly, you are not tied down to a long-term agreement.

An alternative way to provide an additional income could come through property investments. Although house prices have fallen in the last year, there is still money to be made in renting, if you have the hard cash available to buy a property this could be a profitable investment.

For those who have recently entered the world of work in the last few years, it is imperative you start thinking about your retirement now because the earlier you save, the easier your retirement will be.

It is likely your state pension income will not be sufficient enough to maintain the lifestyle you have been accustom to when you have been earning money, so consider an additional private pension plan.

Many companies offer employees the opportunity to pay in to a company pension plan, but there are also many other pension plans on offer from financial providers, so do your research before making a decision.

It is vital you do extensive research before deciding what financial route you are going to take.