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How to Calculate Finance Charges on a New Car Loan.

While some people save until they can buy a car in full, most people take out a car loan. This makes newer and better cars more accessible to everyone. However, it also makes car ownership even more expensive in the long run. Before taking out a loan, you should consider the additional money you will pay in interest for the duration of your loan. These payments, also known as finance charges, will be included in your payments and can be calculated either as monthly payments or as a sum total over the life of your loan.

Part 1 Clarifying the Terms of Your Loan.

1. Determine how much you will borrow. Typically, buyers will make a cash down payment on their new car and borrow from a lender to cover the remaining cost. This borrowed amount, known as the principal, will serve as the basis for your car loan. Keep in mind that you should put as much money down on your car as possible to minimize the amount borrowed and reduce your finance charges.

This step will require you to know roughly how much your new car will cost. See How to Buy a New Car for more information about finding a good price and working within your budget.

2. Figure out the annual percentage rate (APR) and duration of your loan. The APR reflects how much additional money you will have to pay beyond your principal for each year of your loan. A low APR will reduce the yearly and monthly amounts of finance charges on your loan. However, many low-APR loans are longer in duration, so the overall cost may remain relatively high. Alternately, a short-term loan with a higher APR may end up being cheaper overall. This is why it is important to calculate your finance charges beforehand.

Getting a low APR on your car loan may mean seeking other lenders beyond your car dealership. Be sure to do your research and select the cheapest available combination of APR and duration. See How to Get a Low APR on a Car Loan for more information.

3. Find out how many payments you will make each year. The majority of car loan payments are made on a monthly basis. When calculating your monthly payments, you will need to know both how many payments you will make each year and how many payments you will make in total. This information can be easily found in the terms of your car loan.

Part 2 Calculating Your Monthly Finance Charges.

1. Save time by using an online calculator. There are many car loan payment calculators available for free online. Take advantage of these free services if you don't want to spend the time calculating your payments yourself. Search "Car loan payment calculator" and you will be provided with many options. If you still want to work it out by hand, continue to the next step.

2. Find your interest rate due on each payment. Start by converting your APR to a decimal by dividing it by 100. For example, if your APR is stated at 8.4%, 8.4/100 = 0.084. Next, find your monthly percentage rate by dividing your APR decimal by 12. So, 0.084/12 = 0.007. This is your monthly percentage rate expressed as a decimal.

3. Multiply your monthly percentage rate times your principal. If, for example, your principal were $20,000 (if you borrowed $20,000 to buy your car), you would multiply this by 0.007 (from the previous step) and get 140.

4. Input this number into the monthly payment formula. The formula is as follows: Monthly Payment = (Interest rate due on each payment x principal)/ (1 – (1 + Interest rate due on each payment)^ -(Number of payments)). The top part of the equation (interest rate due on each payment x principal) is your number from the previous step. The rest can be calculated using a simple calculator.

The "^" indicates that the figure (-(Number of Payments)) is an exponent to the figure (1 + Interest rate due on each payment). On a calculator, this is entered by calculating 1 + interest rate due on each payment, hitting the button x^y, and then entering the number of payments. Keep in mind that the number of payments is made negative here (multiplied by negative one).

In our example, the calculation would go as follows (assuming a loan duration of 5 years or 60 months):

Monthly Payment = (0.007 x $20000)/(1-(1+ 0.007)^-60.

Monthly payment = $140/(1-(1.007)^-60).

Monthly payment = $140/(1-0.658).

Monthly payment = $140/0.342.

Monthly payment = $409.36 (this number may be off by a few cents due to rounding).

5. Calculate the amount of principal paid each month. This is done by simply dividing your principal amount by the duration of your loan in months. For our example, this would be $20,000/60 months = $333.33/month.

6. Subtract your principal paid each month from your monthly payment. In our example, this would be $409.36 - $333.33. This equals roughly $76. So, with this loan agreement, you would be spending $76 per month in interest payments alone.

Part 3 Calculating Your Loan's Total Finance Charges.

1. Find your monthly payment. To find your total finance charges over the life of your loan, start by calculating your monthly payment. How to do this is explained in the previous section.

2. Plug that number into the total finance charges formula. The formula is as follows: Monthly Payment Amount x Number of Payments – Amount Borrowed = Total Amount of Finance Charges.

So, in our example, this would be.

$409 x 60 - $20,000 = Total amount of finance charges.

$24,540 - $20,000 = Total amount of finance charges.

Total amount of finance charges = $4,540.

3. Check your work. To be sure that you calculated your total correctly, divide that number by the total number of payments (60, in this case). $4,540/60 = 76. If the result matches your monthly finance charges you calculated earlier, then you have the correct number for total finance charges.

Tips.

Use this process to compare loan plans to ensure that you end up with the lowest possible value for overall finance charges.

Using an online loan calculator will always be simpler and more convenient than working out the numbers on your own. These online calculators are always accurate.

The calculator included on most smartphones is capable of doing the math here. If you don't have a smart phone or calculator to use, try typing your equation into Google's search bar, as it will solve most simple problems.

With good credit and a large down payment, it may be possible to get a car loan with 0% APR.

Warnings.

While uncommon, some lenders can use a more complicated form of interest called compound interest that will throw off these calculations. Be sure to ask if your car loan charges simple interest (the kind described in this article) before counting on these equations.



November 28, 2019


How to Calculate Finance Charges on a New Car Loan.

While some people save until they can buy a car in full, most people take out a car loan. This makes newer and better cars more accessible to everyone. However, it also makes car ownership even more expensive in the long run. Before taking out a loan, you should consider the additional money you will pay in interest for the duration of your loan. These payments, also known as finance charges, will be included in your payments and can be calculated either as monthly payments or as a sum total over the life of your loan.

Part 1 Clarifying the Terms of Your Loan.

1. Determine how much you will borrow. Typically, buyers will make a cash down payment on their new car and borrow from a lender to cover the remaining cost. This borrowed amount, known as the principal, will serve as the basis for your car loan. Keep in mind that you should put as much money down on your car as possible to minimize the amount borrowed and reduce your finance charges.

This step will require you to know roughly how much your new car will cost. See How to Buy a New Car for more information about finding a good price and working within your budget.

2. Figure out the annual percentage rate (APR) and duration of your loan. The APR reflects how much additional money you will have to pay beyond your principal for each year of your loan. A low APR will reduce the yearly and monthly amounts of finance charges on your loan. However, many low-APR loans are longer in duration, so the overall cost may remain relatively high. Alternately, a short-term loan with a higher APR may end up being cheaper overall. This is why it is important to calculate your finance charges beforehand.

Getting a low APR on your car loan may mean seeking other lenders beyond your car dealership. Be sure to do your research and select the cheapest available combination of APR and duration. See How to Get a Low APR on a Car Loan for more information.

3. Find out how many payments you will make each year. The majority of car loan payments are made on a monthly basis. When calculating your monthly payments, you will need to know both how many payments you will make each year and how many payments you will make in total. This information can be easily found in the terms of your car loan.

Part 2 Calculating Your Monthly Finance Charges.

1. Save time by using an online calculator. There are many car loan payment calculators available for free online. Take advantage of these free services if you don't want to spend the time calculating your payments yourself. Search "Car loan payment calculator" and you will be provided with many options. If you still want to work it out by hand, continue to the next step.

2. Find your interest rate due on each payment. Start by converting your APR to a decimal by dividing it by 100. For example, if your APR is stated at 8.4%, 8.4/100 = 0.084. Next, find your monthly percentage rate by dividing your APR decimal by 12. So, 0.084/12 = 0.007. This is your monthly percentage rate expressed as a decimal.

3. Multiply your monthly percentage rate times your principal. If, for example, your principal were $20,000 (if you borrowed $20,000 to buy your car), you would multiply this by 0.007 (from the previous step) and get 140.

4. Input this number into the monthly payment formula. The formula is as follows: Monthly Payment = (Interest rate due on each payment x principal)/ (1 – (1 + Interest rate due on each payment)^ -(Number of payments)). The top part of the equation (interest rate due on each payment x principal) is your number from the previous step. The rest can be calculated using a simple calculator.

The "^" indicates that the figure (-(Number of Payments)) is an exponent to the figure (1 + Interest rate due on each payment). On a calculator, this is entered by calculating 1 + interest rate due on each payment, hitting the button x^y, and then entering the number of payments. Keep in mind that the number of payments is made negative here (multiplied by negative one).

In our example, the calculation would go as follows (assuming a loan duration of 5 years or 60 months):

Monthly Payment = (0.007 x $20000)/(1-(1+ 0.007)^-60.

Monthly payment = $140/(1-(1.007)^-60).

Monthly payment = $140/(1-0.658).

Monthly payment = $140/0.342.

Monthly payment = $409.36 (this number may be off by a few cents due to rounding).

5. Calculate the amount of principal paid each month. This is done by simply dividing your principal amount by the duration of your loan in months. For our example, this would be $20,000/60 months = $333.33/month.

6. Subtract your principal paid each month from your monthly payment. In our example, this would be $409.36 - $333.33. This equals roughly $76. So, with this loan agreement, you would be spending $76 per month in interest payments alone.

Part 3 Calculating Your Loan's Total Finance Charges.

1. Find your monthly payment. To find your total finance charges over the life of your loan, start by calculating your monthly payment. How to do this is explained in the previous section.

2. Plug that number into the total finance charges formula. The formula is as follows: Monthly Payment Amount x Number of Payments – Amount Borrowed = Total Amount of Finance Charges.

So, in our example, this would be.

$409 x 60 - $20,000 = Total amount of finance charges.

$24,540 - $20,000 = Total amount of finance charges.

Total amount of finance charges = $4,540.

3. Check your work. To be sure that you calculated your total correctly, divide that number by the total number of payments (60, in this case). $4,540/60 = 76. If the result matches your monthly finance charges you calculated earlier, then you have the correct number for total finance charges.

Tips.

Use this process to compare loan plans to ensure that you end up with the lowest possible value for overall finance charges.

Using an online loan calculator will always be simpler and more convenient than working out the numbers on your own. These online calculators are always accurate.

The calculator included on most smartphones is capable of doing the math here. If you don't have a smart phone or calculator to use, try typing your equation into Google's search bar, as it will solve most simple problems.

With good credit and a large down payment, it may be possible to get a car loan with 0% APR.

Warnings.

While uncommon, some lenders can use a more complicated form of interest called compound interest that will throw off these calculations. Be sure to ask if your car loan charges simple interest (the kind described in this article) before counting on these equations.



November 28, 2019



How to Easy Finance a Car.

You’ve found the car of your dreams. Now what do you do? How do you get the money for it? When an individual decides to buy a new or used car, he or she often needs to finance part of or all of the vehicle’s price. Because cars are such a big purchase, many buyers can't provide cash down for the vehicle, so they choose to finance a car over a period of time. There are two financing routes you can choose to go down — either getting a direct or a dealer loan. Before you choose to finance your next vehicle, you should do your homework to ensure that you get the best deal.


Method 1 Doing Your Homework.

Find out how much you can afford up front. If you know the ballpark value of what you want to pay for a vehicle, and how much you can afford to pay in cash, you will know about how much you will need to finance.

Maximize your down payment. A smart way to finance a car is to get as much of a down payment as you can. The more you can pay at the beginning of a deal, the less you will have to pay in interest. Even if you have to temporarily sell some assets to buy the car outright, that can be a better deal than financing a major portion of the cost.

Know your credit score. Much of the financing offer for a car is based on your credit score. Those with good credit will get better interest rates and cheaper car financing offers. This is important no matter who you finance your vehicle through.

Find out your credit score either through the dealer or online at websites like www.annualcreditreport.com, www.freecreditscore.com, www.creditkarma.com, or www.myfico.com.

If your credit score is higher than 680, you are considered a prime borrower and are eligible for the best interest rates available. The higher your score, the better bargaining position you will be in.

Compare loan rates online. There are many websites that compare deals at no cost. Additionally, it is a great way to get in contact with various companies.

Get the necessary materials together. Most lenders will want your name, social security number, date of birth, previous and current addresses, occupation, proof of income, and information on other outstanding debts.


Method 2 Getting a Direct Loan.

Contact certified lenders. Local and national banks, as well as credit unions can give you the terms and interest rates they are offering on used car loans over the phone and online. Shop around and find the best rate for you. You don't have to apply for financing through the dealer, though you certainly can. Oftentimes you can get a fairer deal when you figure out your financing first before you walk into the dealership. Apply for financing through a bank or an app that connects you to lenders.

Oftentimes, credit unions have the lowest interest rates, especially if you are a member. Check with your employer to see if they have any connections with local credit unions for you to take advantage of.

Many lenders offer 5 year loans on vehicles that are five years old at most. Older vehicles are often only eligible for 1 to 2 year loans. In many cases, the fear is that an older car will break down and then borrowers will default on their loans.

Additionally, lenders often impose mileage restrictions (often 100,000 miles) and will not finance salvage-titled vehicles. Typically, they will only fund loans for vehicles purchased through a franchised dealership, not through a private party or independent dealer. In these cases, you’ll have to get a deal loan. See below.

Solicit rate quotes from several lenders. The interest rates offered on used car loans are generally 4 to 6 percent higher than rates offered on new car loans. This is because lenders are fearful of financing used vehicles.

Be as specific as possible with a lender. Provide the lender with information about the vehicle you choose. You will need to provide the car's make, model and VIN number, among other things. The more detail you can give the lender, the more firm your rate quote will be.

Talk to lenders about any fees or extra charges. Some lenders offer low interest rates and make back the money by tacking on additional fees and charges to a loan deal. You'll want to know about these, as well as any other specific loan agreement aspects like prepayment penalties, which can trigger fees if you pay the loan off early.

Get prequalified. Fill out the paperwork ahead of time. Many banks or lenders will pre-qualify you for a car loan based on your credit score, the type of car you plan on purchasing, and your driving history.

Ask the lender with the best rate offer for a pre-qualification letter. It should outline the terms and conditions of the loan. Bring this letter with you to the dealership when shopping for the car. When you go to the dealer's lot, you can show them evidence pre-qualification from a reputable lender. This will expedite the car buying experience. It will also tell the car dealer you are ready to buy.

If you haven’t prequalified, you can get financing at the dealer's lot for a one-stop shopping experience, but having other lender alternatives helps you to get the best deal.


Method 3 Getting a Dealer Loan.

Get a loan through a new or used car dealer.

In general, interest rates offered by dealerships are higher than interest rates you can find directly from a lender. In many cases, smaller dealerships work with third party lenders to finance your vehicle. Because they play the middleman, they pass off the costs to you. Therefore, you may want to apply for a direct loan first and cut out the dealership middleman.

In some cases, financing lenders like local banks and credit unions won’t take a chance on used cars. For used cars, most dealers will finance used cars they sell, regardless of its age. Therefore, you may want to apply for a dealer loan if a direct lender denies you financing.

Bring leverage. Bring interest rates from direct loan lenders, even if you plan on financing with the dealer. Dealers are more likely to offer lower interest rates, if you show them that you know what other lenders are offering. Make sure you research competitive interest rates based on your credit score.

Offer a down payment in cash or trade equivalent to at least 10% of the vehicle's purchase price. The larger the down payment, the less money you will have to finance and the less interest you’ll have to pay on that loan.

Tips.

If you have a low credit score, consider asking someone with a high credit score to co-sign on a loan. A co-signor with a high credit score may help you to secure a lower-interest loan.

If your loan application gets rejected, don’t feel bad. Most likely, the lender doesn’t think you are able to pay back the loan on time. Reassess your budget and try again or try a different lender.

Warnings.

If you finance a used car, be prepared to pay for comprehensive insurance on the vehicle, which is more expensive than collision insurance commonly applied to used cars. Lenders require that you carry comprehensive insurance to protect their investment. Lenders often fear that if you damage the car, you will default on the loan, so they make you take out better insurance.

Be wary of dealers who advertise financing with "no credit check." Typically, these car lots sell high-mileage vehicles with inflated down payments and interest rates.




November 22, 2019




How to Easy Finance a Car.



You’ve found the car of your dreams. Now what do you do? How do you get the money for it? When an individual decides to buy a new or used car, he or she often needs to finance part of or all of the vehicle’s price. Because cars are such a big purchase, many buyers can't provide cash down for the vehicle, so they choose to finance a car over a period of time. There are two financing routes you can choose to go down — either getting a direct or a dealer loan. Before you choose to finance your next vehicle, you should do your homework to ensure that you get the best deal.







Method 1 Doing Your Homework.



Find out how much you can afford up front. If you know the ballpark value of what you want to pay for a vehicle, and how much you can afford to pay in cash, you will know about how much you will need to finance.

Maximize your down payment. A smart way to finance a car is to get as much of a down payment as you can. The more you can pay at the beginning of a deal, the less you will have to pay in interest. Even if you have to temporarily sell some assets to buy the car outright, that can be a better deal than financing a major portion of the cost.



Know your credit score. Much of the financing offer for a car is based on your credit score. Those with good credit will get better interest rates and cheaper car financing offers. This is important no matter who you finance your vehicle through.

Find out your credit score either through the dealer or online at websites like www.annualcreditreport.com, www.freecreditscore.com, www.creditkarma.com, or www.myfico.com.

If your credit score is higher than 680, you are considered a prime borrower and are eligible for the best interest rates available. The higher your score, the better bargaining position you will be in.



Compare loan rates online. There are many websites that compare deals at no cost. Additionally, it is a great way to get in contact with various companies.



Get the necessary materials together. Most lenders will want your name, social security number, date of birth, previous and current addresses, occupation, proof of income, and information on other outstanding debts.









Method 2 Getting a Direct Loan.



Contact certified lenders. Local and national banks, as well as credit unions can give you the terms and interest rates they are offering on used car loans over the phone and online. Shop around and find the best rate for you. You don't have to apply for financing through the dealer, though you certainly can. Oftentimes you can get a fairer deal when you figure out your financing first before you walk into the dealership. Apply for financing through a bank or an app that connects you to lenders.

Oftentimes, credit unions have the lowest interest rates, especially if you are a member. Check with your employer to see if they have any connections with local credit unions for you to take advantage of.

Many lenders offer 5 year loans on vehicles that are five years old at most. Older vehicles are often only eligible for 1 to 2 year loans. In many cases, the fear is that an older car will break down and then borrowers will default on their loans.

Additionally, lenders often impose mileage restrictions (often 100,000 miles) and will not finance salvage-titled vehicles. Typically, they will only fund loans for vehicles purchased through a franchised dealership, not through a private party or independent dealer. In these cases, you’ll have to get a deal loan. See below.



Solicit rate quotes from several lenders. The interest rates offered on used car loans are generally 4 to 6 percent higher than rates offered on new car loans. This is because lenders are fearful of financing used vehicles.

Be as specific as possible with a lender. Provide the lender with information about the vehicle you choose. You will need to provide the car's make, model and VIN number, among other things. The more detail you can give the lender, the more firm your rate quote will be.

Talk to lenders about any fees or extra charges. Some lenders offer low interest rates and make back the money by tacking on additional fees and charges to a loan deal. You'll want to know about these, as well as any other specific loan agreement aspects like prepayment penalties, which can trigger fees if you pay the loan off early.



Get prequalified. Fill out the paperwork ahead of time. Many banks or lenders will pre-qualify you for a car loan based on your credit score, the type of car you plan on purchasing, and your driving history.



Ask the lender with the best rate offer for a pre-qualification letter. It should outline the terms and conditions of the loan. Bring this letter with you to the dealership when shopping for the car. When you go to the dealer's lot, you can show them evidence pre-qualification from a reputable lender. This will expedite the car buying experience. It will also tell the car dealer you are ready to buy.

If you haven’t prequalified, you can get financing at the dealer's lot for a one-stop shopping experience, but having other lender alternatives helps you to get the best deal.







Method 3 Getting a Dealer Loan.



Get a loan through a new or used car dealer.

In general, interest rates offered by dealerships are higher than interest rates you can find directly from a lender. In many cases, smaller dealerships work with third party lenders to finance your vehicle. Because they play the middleman, they pass off the costs to you. Therefore, you may want to apply for a direct loan first and cut out the dealership middleman.

In some cases, financing lenders like local banks and credit unions won’t take a chance on used cars. For used cars, most dealers will finance used cars they sell, regardless of its age. Therefore, you may want to apply for a dealer loan if a direct lender denies you financing.



Bring leverage. Bring interest rates from direct loan lenders, even if you plan on financing with the dealer. Dealers are more likely to offer lower interest rates, if you show them that you know what other lenders are offering. Make sure you research competitive interest rates based on your credit score.



Offer a down payment in cash or trade equivalent to at least 10% of the vehicle's purchase price. The larger the down payment, the less money you will have to finance and the less interest you’ll have to pay on that loan.





Tips.

If you have a low credit score, consider asking someone with a high credit score to co-sign on a loan. A co-signor with a high credit score may help you to secure a lower-interest loan.

If your loan application gets rejected, don’t feel bad. Most likely, the lender doesn’t think you are able to pay back the loan on time. Reassess your budget and try again or try a different lender.

Warnings.

If you finance a used car, be prepared to pay for comprehensive insurance on the vehicle, which is more expensive than collision insurance commonly applied to used cars. Lenders require that you carry comprehensive insurance to protect their investment. Lenders often fear that if you damage the car, you will default on the loan, so they make you take out better insurance.

Be wary of dealers who advertise financing with "no credit check." Typically, these car lots sell high-mileage vehicles with inflated down payments and interest rates.




November 17, 2019


How to File a UCC Financing Statement.


If you funded your business through startup or small-business loans, the lender may require you to file a UCC financing statement. These documents are filed when you secure the loan with personal or business assets, and create a lien on those assets. While the UCC financing statement doesn't necessarily impact your day-to-day business, it may affect your ability to get additional funding.



Part 1 Completing the Form.

1. Download the UCC-1 form. A PDF version of the UCC-1 form typically is available on the website of the state's Secretary of State office. Download the form for your state. Although these forms are for the most part universal, some states have additional fields or requirements.

The state form's instructions also tell you what the filing fees are, which vary among states.

To find the correct website, do an internet search for "secretary of state" with the name of your state.

2. Provide direct contact information if desired. The first part of the form allows you to provide a phone number, email address, and mailing address if you want to make it easier to be contacted. These fields are optional.

Once filed, the form is a public record, so be careful about the identifying information you include.

3. Fill in the debtor's name and mailing address. The debtor is the person who took out the loan. It may be an individual, or it may be in the name of a business or organization. If the loan is in the name of the business, include the business mailing address.

There is space for additional debtors. Include them exactly as they appeared on the loan agreement. If there are additional named debtors that won't fit on the main form, you can file an addendum to include them.

4. List the name and address of the secured party. The secured party is the lender who made the secured loan. Usually this will be the name of the bank or lending company. Check to find out what address they prefer to be listed on UCC financing forms – don't just list the name of your local branch, for example.

5. Indicate the collateral covered by the financing statement. Following the name and address of the secured party, there is space to identify the collateral that secures the loan. Be as specific as possible.

For example, if the loan is secured by real property, provide the legal description of the property that is listed on the property's deed.

If you need additional space for collateral, you can fill out an addendum.

6. Include applicable descriptions of the transaction. At the bottom of the UCC form, there are several boxes you can check if any of them apply to the particular transaction. If nothing suits the loan covered by the statement, you can leave this section blank.

7. Fill out an addendum if necessary. If there was extra information that wouldn't fit on the original form, you can include it on an addendum. This form is also available from the website of the state's secretary of state, and may be included with the main UCC financing statement form.

Some states require additional information for specific loans or transactions. If so, you'll enter this information on the addendum as well.



Part 2 Recording the Form.

1. Identify the proper location to file the statement. UCC financing statements are filed based on the residence of an individual debtor, or the location of the main offices of a business debtor. Usually the form is filed with the state's UCC office.

If real property is used as collateral, you may also need to file a copy of the UCC financing statement with the register of deeds in the county where that property is located.

2. Complete an Information Form if you want copies. While you may receive an acknowledgement copy when your statement is recorded, the information form allows you to order additional copies of the official recorded statement.

For example, if there are multiple debtors, you may want to order a copy for each debtor's records.

You can download an information form from the website of the state's secretary of state.

3. Submit form and fees online if possible. It's usually easier to file your UCC financing statement online with the UCC office, and often the fees are lower than if you file print forms. Check on the website of the state's secretary of state office to see if this option is available.

If the loan is secured with real property, you may still need to file a paper copy with the register of deeds for the county where the property is located.

4. Mail your financing statement with filing fee. If you don't want to file online, or if that option isn't available, you can mail paper copies to the state's UCC office. You may want to check for acceptable methods of payment. Typically you can pay by check or money order.

The filing fees are minimal, typically less than $20. Some states may charge a per-page fee if you file a paper statement.

5. Receive your acknowledgement letter. When your financing statement is recorded by the state's UCC office, you'll receive a letter in the mail along with an acknowledged copy of the official statement.

Keep these documents for your records. You may want to file them along with the documents related to the loan they cover.
February 10, 2020


How to File a UCC Financing Statement.


If you funded your business through startup or small-business loans, the lender may require you to file a UCC financing statement. These documents are filed when you secure the loan with personal or business assets, and create a lien on those assets. While the UCC financing statement doesn't necessarily impact your day-to-day business, it may affect your ability to get additional funding.



Part 1 Completing the Form.

1. Download the UCC-1 form. A PDF version of the UCC-1 form typically is available on the website of the state's Secretary of State office. Download the form for your state. Although these forms are for the most part universal, some states have additional fields or requirements.

The state form's instructions also tell you what the filing fees are, which vary among states.

To find the correct website, do an internet search for "secretary of state" with the name of your state.

2. Provide direct contact information if desired. The first part of the form allows you to provide a phone number, email address, and mailing address if you want to make it easier to be contacted. These fields are optional.

Once filed, the form is a public record, so be careful about the identifying information you include.

3. Fill in the debtor's name and mailing address. The debtor is the person who took out the loan. It may be an individual, or it may be in the name of a business or organization. If the loan is in the name of the business, include the business mailing address.

There is space for additional debtors. Include them exactly as they appeared on the loan agreement. If there are additional named debtors that won't fit on the main form, you can file an addendum to include them.

4. List the name and address of the secured party. The secured party is the lender who made the secured loan. Usually this will be the name of the bank or lending company. Check to find out what address they prefer to be listed on UCC financing forms – don't just list the name of your local branch, for example.

5. Indicate the collateral covered by the financing statement. Following the name and address of the secured party, there is space to identify the collateral that secures the loan. Be as specific as possible.

For example, if the loan is secured by real property, provide the legal description of the property that is listed on the property's deed.

If you need additional space for collateral, you can fill out an addendum.

6. Include applicable descriptions of the transaction. At the bottom of the UCC form, there are several boxes you can check if any of them apply to the particular transaction. If nothing suits the loan covered by the statement, you can leave this section blank.

7. Fill out an addendum if necessary. If there was extra information that wouldn't fit on the original form, you can include it on an addendum. This form is also available from the website of the state's secretary of state, and may be included with the main UCC financing statement form.

Some states require additional information for specific loans or transactions. If so, you'll enter this information on the addendum as well.



Part 2 Recording the Form.

1. Identify the proper location to file the statement. UCC financing statements are filed based on the residence of an individual debtor, or the location of the main offices of a business debtor. Usually the form is filed with the state's UCC office.

If real property is used as collateral, you may also need to file a copy of the UCC financing statement with the register of deeds in the county where that property is located.

2. Complete an Information Form if you want copies. While you may receive an acknowledgement copy when your statement is recorded, the information form allows you to order additional copies of the official recorded statement.

For example, if there are multiple debtors, you may want to order a copy for each debtor's records.

You can download an information form from the website of the state's secretary of state.

3. Submit form and fees online if possible. It's usually easier to file your UCC financing statement online with the UCC office, and often the fees are lower than if you file print forms. Check on the website of the state's secretary of state office to see if this option is available.

If the loan is secured with real property, you may still need to file a paper copy with the register of deeds for the county where the property is located.

4. Mail your financing statement with filing fee. If you don't want to file online, or if that option isn't available, you can mail paper copies to the state's UCC office. You may want to check for acceptable methods of payment. Typically you can pay by check or money order.

The filing fees are minimal, typically less than $20. Some states may charge a per-page fee if you file a paper statement.

5. Receive your acknowledgement letter. When your financing statement is recorded by the state's UCC office, you'll receive a letter in the mail along with an acknowledged copy of the official statement.

Keep these documents for your records. You may want to file them along with the documents related to the loan they cover.
February 10, 2020

How to Find a Buyer for Your Annuity.

Although an annuity is meant to provide steady income, particularly when you retire, there are circumstances under which you might decide to sell your annuity. For example, you might decide to sell your annuity in order to buy a home, invest in a business, or to cover the costs of an emergency. Perhaps you've done the math and discovered that your annuity isn't the best most profitable option for you, and you'd like to reinvest. To find the right buyer for your annuity, look for buyers who can give you the terms you desire. If time permits, get competing offers rather than going for the first buyer you find.

Part 1 Evaluating Your Annuity.
1. Determine whether or not your annuity is transferable. If your annuity is not transferable, then you cannot sell it under any circumstances. Check your contract to see if it is transferable. If you are trying to get immediate funds, list your nontransferable annuity as an asset or form of income and apply for a bank loan.
2. Determine if your annuity is a structured settlement. Check your contract or consult your accountant to learn about the laws in your state. Most states have laws that protect people trying to sell their structured annuity. If your state has a Structured Settlement Protection Act, your transaction will have to be approved by a state court. The Periodic Payment Settlement Act protects those who received a cash sum as a result of personal injury and wrongful death lawsuits, from spending the awarded money too quickly, which may then force them to turn to public assistance to meet their needs.
Don’t try to sell a structured annuity by yourself, especially if you are living in a state that does not have a structured annuity protection law. Talk to a trusted broker and attorney before you proceed.
3. Evaluate your annuity. Before you shop around for annuity buyers, find out what the resale value of your annuity is. Hire an accountant if you are unclear on the details of your investment and its relative worth. Keep in mind that selling your annuity always result in your receiving a lower amount of money from your annuity. You will get a lump-sum payment that is adjusted with a discount rate, meaning that you'll get about 8 to 14 percent less than you would if you waited for the payments.
4. Understand the tax implications of selling your annuity. All annuities offer tax-deferral from the time of your initial investment. Your distributions, however, are taxable. This means that your annuity grows tax-free in the accumulation phase, but is taxed as distributions are made to you. These payments are taxed as ordinary income.
Gains made by selling your annuity before it matures are taxable as ordinary income. However, losses on the sale are not tax-deductible as investment losses.
If you withdraw from an annuity before age 59.5, you are also charged a 10% tax penalty. However, exceptions are made in various cases, such as the death or disability of the annuity holder.
You can also trade your annuity for another qualified annuity contract without paying taxes on the first annuity. These "1035" exchanges can be tricky, so check with a tax accountant or investment adviser before proceeding.

Part 2 Finding a Buyer.
1. Search for potential annuity buyers. Your best source for locating a potential buyers is the insurance agent that first sold you the annuity. They understand the market well and will likely have contacts for this sort of transaction. Additionally, they may also charge you a reduced commission for finding a buyer, as you already paid them a commission when you purchased the annuity. Alternately, you can search for an annuity buyer online. Before working with any of these companies, make sure that they:
Have positive, independent reviews of their services.
Have excellent customer service.
Can make a competitive offer for your annuity.
Are licensed to conduct business and follow all appropriate regulations.
Communicate timelines and figures in a transparent way.
Recommend that you first consult with a financial professional before selling.
Try checking with the Better Business Bureau (BBB) to identify whether or not the company is reputable. Companies with poor ratings from the BBB should be avoided.
Some reputable buyers of annuities include JG Wentworth, Catalina Structured Funding, Peachtree Financial, and Stone Street Capital. These companies can be contacted by phone or through their respective websites.
2. Hire a broker. If you are having trouble finding potential buyers, or if you can't find the price you think is reasonable, hire a broker. You’ll have to pay a brokerage fee, but you may stand to gain from the expertise of the broker's negotiations. Choose your broker carefully. Check their certifications to ensure that they are licensed to negotiate the sort of sale you want to make.
Ask the broker you want to hire for a quote. If they quote you a percentage, calculate it before you agree.
Look up the name of a broker you haven't worked with before. Any violations or complaints they have might be online.
3. Get offers for your annuity. Try to obtain offers from at least five companies before you choose. When you find companies online, use their quote form to get a free quote from them. A quote is not necessarily the amount you would receive, and it may not include the fee that may be deducted when a settlement is reached.
When you fill out the free quote form, give them only the standard information. Your name, email address and the name of your annuity should be the only information they ask for.
Do not give your social security number, bank information, or pay any fees to obtain a free quote.
Give yourself as much time as you can to make the sale. A rushed sale is less likely to get you a good deal.
4. Pick the best offer. Getting an offer of about 80% of the value of your annuity would be considered a good deal. Do not take a deal in which your buyer expects you to pay fees out of pocket before a settlement is agreed upon. Once you have finalized your agreement, all agreed upon court costs, legal fees and commissions should be deducted from the final settlement.
5. Gather your paperwork. To sell your annuity, you will need copies of your original annuity application and your annuity policy. If you are already collecting on your annuity, you will need your most recent disbursement check and tax return. If you have a settlement agreement, you will need a copy of that. Bring your valid government issued id, such as a passport or driver's license, and a written declaration that you are selling your annuity of your own free will.
Gather any other documentation your buyer requires, such as a copy of a court judgment for a structured annuity, or copies of any release agreements.

Part 3 Deciding What Kind of Sale to Make.
1. Decide what type of funding you are trying to get from your sale. Investigate the various ways annuity buyouts are made. Remember that no matter what kind of deal you make, the buyer will get the better deal in the long term. You will likely be offered anywhere from 60% to 85% of the value of your annuity. With this in mind, consider alternatives to selling your annuity.
If you are just selling your annuity to free up some cash, taking out a loan might better serve your purposes.
2. Consider selling as a straight purchase. If you sell as a straight purchase, the buyer will give you one lump-sum payment for your annuity. You will not go on to collect future payments. Choose to sell as a straight purchase if you are trying to get the largest immediate sum possible, or if you have determined that your annuity is not serving its purpose.
If you sell an annuity contract, you will have to pay ordinary income tax on your annuity's earnings.
3. Consider selling as a partial purchase. In this case, the buyer purchases your immediate annuity payments for a set period. At the end of that time, you once again collect your annuity payments as scheduled. Consider this option if you have a temporary shortage of cash, but would like to continue investing in your retirement.
4. Consider selling as a reverse purchase. Sell several years of your annuity. For example, if you are now receiving $1,000 per month for the next 15 years, sell your payments from years 5 through 10 only. You will get a lump sum for those years, but still receive your current payments up through year 4. You will then receive no monthly payments in years 5 through 10, but they will resume in years 11 through 15.
Know that this will result in a lower overall payout from your annuity. You will get the money for the sold years up front, but it will be lower than the total value of the payments from those years.
You also need to be sure of the value of the future payments before any deals are made.
This might be a good option if you need money now, but know you will be able to support yourself during an upcoming time period.
5. Consider selling as split purchases. If your buyer makes a split purchase, they will receive part of your monthly payment. If you only need $500 a month and your annuity payment is $1,000, sell half your annuity; you will get an immediate lump sum for the half you don't need, and continue to receive monthly payments of $500.
Even though you've only sold half the annuity, you will still pay ordinary income taxes on the deferred earnings and any gains made on the sale.

Tips. 

Give yourself as much time as possible to make the best sale. Let the companies you deal with know that you are making casual inquiries. If you appear to be shopping around without rushing, you will be more likely to get better, more competitive offers.
May 04, 2020


How to Prevent Arguments About Finances.


Money and finances are one of the most common sources of conflict for couples. Money problems can stem from not being open about your finances and having differing views of how money should be spent. To help prevent fights about finances, discuss each other’s views about money, come to a compromise that respects both your values, communicate about your finances openly, and set goals to help keep your finances in order.



Method 1 Discussing Your Views About Money.

1. Talk about your view on money. One of the money problems that arises between couples is due to their differing position on money. Some people are spenders and others are savers. These two mindsets can strongly clash. To help get past this problem, you should talk about these differences.

During this discussion, talk about whether you are a saver or spender.

Having open communication about your ideas and feelings on money can help you start to solve or eliminate problems.

For example, you may say, "I believe that money is hard-earned and should be enjoyed." Alternately, you may say, "Saving money is important to me. We work too hard for it to spend it often."

2. Discuss what money means to you. Often, the arguments about finances aren’t about money specifically, but about what money means to the people in the relationship. To help prevent any financial arguments, you and your partner should explain to each other what money means to you and what it signifies. This can help you understand each other.

For example, you may think that saving money means safety and security. You may think that saving money or spending it can show love and affection. Saving money may make you feel in control and like you have power.

You may feel that you deserve to spend your hard earned money on yourself, or you may feel that you deserve to save your hard earned money for future plans.

Determine if you or your partner use money as a way to measure success, status, or keep score with others.

Make sure to discuss any fears you have about money and the way that your family approached money growing up.

For example, you may say, "Saving money makes me feel safe. When we were growing up, we had no money, so having a savings account helps me feel like I'm taking care of my family."

3. Acknowledge your differences about money with an open mind. After you have discussed what money means to both of you, you should use the opportunity to understand each other’s position and ideas about money. You should not point fingers or try to make one of your right and wrong. There is nothing wrong with having different values about money. You have to work towards understanding, accepting, and compromising.

For example, work on understanding why your partner feels that spending money is something they have earned and deserved. Try to see how saving money makes your partner feel in control and safe.

Both you and your partner are two different people, which means you are not going to have the same opinions about everything. Communicating about your ideas of money can help prevent and avoid misunderstandings.

If your partner has illogical, irresponsible, or contradictory ideas about money, that is a separate issue. You want to accept different ideas about money, yet help your partner work through illogical money ideas that may harm your family.

Try saying, "I understand that you want to save money though I like to treat myself for my hard work. Can you explain to me why saving money is so important to you? I will explain to you why I think we deserve to spend some of our money."

4. Compromise with both of your sets of values. After you have figured out what each of you feels about money, you can then work on a compromise. Compromise means you both stay positive as you find a way to negotiate both of your values. Find some common ground that benefits you both. You should work on finding ways for both of your to compromise equally so one person isn’t giving up more than the other.

For example, you may come to a compromise where you set aside money each month to spend on yourself while your partner sets aside a similar amount to save. You both can come to an agreement on what things are considered special splurge purchases, and decide what you want to save money on to purchase or invest in in the future.

5. Take a break and come back to the discussion. If you and your partner are discussing money and start arguing or yelling, stop the conversation and go do something else. Stepping away for a moment will help you and your spouse have time to calm down and think more logically about what has been said.

You and your partner will not always agree about money. However, it is crucial that you learn how to compromise so you can meet everyone’s needs and address each other’s concerns.



Method 2 Communicating Effectively About Finances,

1. Be open about your finances. One way to help prevent arguments about money is the be open about your finances with your partner. This helps each of you be on the same page, so you won’t be keeping secrets about money or lying about money. These behaviors can cause problems and arguments.

When your relationship gets to the point where you start sharing bills and financial responsibilities, you should be open about all of your finances. This includes your debt, income, and financial obligations.

Tell your partner, "I want to share my finances with you. I have some student loan debt, a car payment, and two credit cards."

2. Keep your partner in the loop. You should share vital financial information with your partner so that you both stay informed of each other’s financial situation. This includes any changes to your income, tax returns, and credit reports. This helps maintain honesty and communication between you, and you can avoid potential problems if you keep something from your partner.

This often happens at the beginning of a partnership, when you let your partner know your financial situation. However, you should continue doing this throughout the relationship, especially if things change significantly.

For example, you may say, "My credit report has changed recently due to my recent bill payments. I'd like to go over what changed the credit report with you."

Another way to prevent arguments is to agree to text or call if you are thinking of purchasing something over an agreed upon spending limit, such as $100. If you or your partner is out shopping and finds something above the agreed upon limit, then sending a quick text or making a quick phone call may prevent an argument later on.

3. Establish weekly money talks. Another way to help prevent fights about money is to discuss any minor problems before they can turn into something worse. Getting together with your partner once every week or two to discuss the budget and any minor problems can help keep the lines of communication open and help prevent fights.

For example, you may get together and discuss how one of you spent more on groceries than was budgeted, or another minor financial problem. Addressing the problems early can help prevent the small things from turning into major problems.

You may say things like, "We went over the budget on groceries, but by cutting a few corners, we can adhere to it next month."

4. Talk about how you will approach helping out family. Many people help out family members financially. However, this can cause a lot of problems and arguments. To help prevent this, talk about what you and your partner want to do about helping out family members so you have a procedure in place.

For example, you may decide to help out a family member up to a certain dollar amount or a certain number of times each year. You may decide that you want to help out certain family members but not others. Discuss these issues with your partner and come up with a solution that you both can handle.

You may say, "I understand that your parents struggle, but we can only afford to help them for this set amount of money three times each year."



Method 3 Setting Financial Goals.

1. Create a budget. Budgets can help prevent a lot of arguments about money. Budgets create a solid plan for your money so there won’t be any questions or confusion about where the money goes and when. Budgets give you and your partner a guide to help stay on track where money is concerned.

If one partner has trouble adhering to the budget, you can look at the numbers and find areas that need improvement or adjustment.

Make sure to budget in money for extra purchases, such as an impulse buy or going out to dinner.

Include each of your money interests in the budget. If you like to spend money but your partner likes to save, budget those things in each month.

If budget has a negative connotation, consider calling it a “spending plan” instead of budget.

2. Share financial tasks. To help keep the financial responsibilities even and a joint effort, come up with a way share tasks and assign a duty to each person. This helps take all the pressure off one person and lets you work together to manage your finances.

For example, you may pay the bills while your partner makes and maintains the budget. You may focus on the savings account while your partner invests money.

3. Come up with long term goals. Figure out what your long term goals are for your money. Do you want to invest? Are you saving for a new car or house? Are there kids in the future? Do you want to take vacations? Each of these future plans are important. You should discuss what you and your partner want in the future and come up with a way to approach it.

Most of these purchases require pre-planning and saving. Prioritize what you want to save your money for.

4. Approach finances as a team. To help keep your finances running smoothly and eliminate any potential conflicts, work on your finances as a team. Even though one person may be in charge of the budget or paying the bills, you should talk about these ideas and sit down once a month to discuss the month’s finances.

You may decide to pay bills together and do the budget together instead of assigning the task. You may also switch back and forth and do a different financial task each month.

5. Consider having separate accounts. If finances and spending habits are a frequent source of frustration in your relationship, then you and your partner might consider setting up separate bank accounts and just maintain a joint account for your shared bills and savings. This may help to prevent arguments about finances if you each have a set amount of money to spend on whatever you want each month.

6. Seek professional help. If you and your partner fight too often about finances, you can seek professional help. You may want to visit a therapist who specializes in resolving conflicts in relationships. This can help you get past any barriers and help you learn how to compromise.

You may also want to visit a financial planner. Financial planners can help you figure out how to budget and compromise on financial issues.
February 25, 2020


How to Prevent Arguments About Finances.


Money and finances are one of the most common sources of conflict for couples. Money problems can stem from not being open about your finances and having differing views of how money should be spent. To help prevent fights about finances, discuss each other’s views about money, come to a compromise that respects both your values, communicate about your finances openly, and set goals to help keep your finances in order.



Method 1 Discussing Your Views About Money.

1. Talk about your view on money. One of the money problems that arises between couples is due to their differing position on money. Some people are spenders and others are savers. These two mindsets can strongly clash. To help get past this problem, you should talk about these differences.

During this discussion, talk about whether you are a saver or spender.

Having open communication about your ideas and feelings on money can help you start to solve or eliminate problems.

For example, you may say, "I believe that money is hard-earned and should be enjoyed." Alternately, you may say, "Saving money is important to me. We work too hard for it to spend it often."

2. Discuss what money means to you. Often, the arguments about finances aren’t about money specifically, but about what money means to the people in the relationship. To help prevent any financial arguments, you and your partner should explain to each other what money means to you and what it signifies. This can help you understand each other.

For example, you may think that saving money means safety and security. You may think that saving money or spending it can show love and affection. Saving money may make you feel in control and like you have power.

You may feel that you deserve to spend your hard earned money on yourself, or you may feel that you deserve to save your hard earned money for future plans.

Determine if you or your partner use money as a way to measure success, status, or keep score with others.

Make sure to discuss any fears you have about money and the way that your family approached money growing up.

For example, you may say, "Saving money makes me feel safe. When we were growing up, we had no money, so having a savings account helps me feel like I'm taking care of my family."

3. Acknowledge your differences about money with an open mind. After you have discussed what money means to both of you, you should use the opportunity to understand each other’s position and ideas about money. You should not point fingers or try to make one of your right and wrong. There is nothing wrong with having different values about money. You have to work towards understanding, accepting, and compromising.

For example, work on understanding why your partner feels that spending money is something they have earned and deserved. Try to see how saving money makes your partner feel in control and safe.

Both you and your partner are two different people, which means you are not going to have the same opinions about everything. Communicating about your ideas of money can help prevent and avoid misunderstandings.

If your partner has illogical, irresponsible, or contradictory ideas about money, that is a separate issue. You want to accept different ideas about money, yet help your partner work through illogical money ideas that may harm your family.

Try saying, "I understand that you want to save money though I like to treat myself for my hard work. Can you explain to me why saving money is so important to you? I will explain to you why I think we deserve to spend some of our money."

4. Compromise with both of your sets of values. After you have figured out what each of you feels about money, you can then work on a compromise. Compromise means you both stay positive as you find a way to negotiate both of your values. Find some common ground that benefits you both. You should work on finding ways for both of your to compromise equally so one person isn’t giving up more than the other.

For example, you may come to a compromise where you set aside money each month to spend on yourself while your partner sets aside a similar amount to save. You both can come to an agreement on what things are considered special splurge purchases, and decide what you want to save money on to purchase or invest in in the future.

5. Take a break and come back to the discussion. If you and your partner are discussing money and start arguing or yelling, stop the conversation and go do something else. Stepping away for a moment will help you and your spouse have time to calm down and think more logically about what has been said.

You and your partner will not always agree about money. However, it is crucial that you learn how to compromise so you can meet everyone’s needs and address each other’s concerns.



Method 2 Communicating Effectively About Finances,

1. Be open about your finances. One way to help prevent arguments about money is the be open about your finances with your partner. This helps each of you be on the same page, so you won’t be keeping secrets about money or lying about money. These behaviors can cause problems and arguments.

When your relationship gets to the point where you start sharing bills and financial responsibilities, you should be open about all of your finances. This includes your debt, income, and financial obligations.

Tell your partner, "I want to share my finances with you. I have some student loan debt, a car payment, and two credit cards."

2. Keep your partner in the loop. You should share vital financial information with your partner so that you both stay informed of each other’s financial situation. This includes any changes to your income, tax returns, and credit reports. This helps maintain honesty and communication between you, and you can avoid potential problems if you keep something from your partner.

This often happens at the beginning of a partnership, when you let your partner know your financial situation. However, you should continue doing this throughout the relationship, especially if things change significantly.

For example, you may say, "My credit report has changed recently due to my recent bill payments. I'd like to go over what changed the credit report with you."

Another way to prevent arguments is to agree to text or call if you are thinking of purchasing something over an agreed upon spending limit, such as $100. If you or your partner is out shopping and finds something above the agreed upon limit, then sending a quick text or making a quick phone call may prevent an argument later on.

3. Establish weekly money talks. Another way to help prevent fights about money is to discuss any minor problems before they can turn into something worse. Getting together with your partner once every week or two to discuss the budget and any minor problems can help keep the lines of communication open and help prevent fights.

For example, you may get together and discuss how one of you spent more on groceries than was budgeted, or another minor financial problem. Addressing the problems early can help prevent the small things from turning into major problems.

You may say things like, "We went over the budget on groceries, but by cutting a few corners, we can adhere to it next month."

4. Talk about how you will approach helping out family. Many people help out family members financially. However, this can cause a lot of problems and arguments. To help prevent this, talk about what you and your partner want to do about helping out family members so you have a procedure in place.

For example, you may decide to help out a family member up to a certain dollar amount or a certain number of times each year. You may decide that you want to help out certain family members but not others. Discuss these issues with your partner and come up with a solution that you both can handle.

You may say, "I understand that your parents struggle, but we can only afford to help them for this set amount of money three times each year."



Method 3 Setting Financial Goals.

1. Create a budget. Budgets can help prevent a lot of arguments about money. Budgets create a solid plan for your money so there won’t be any questions or confusion about where the money goes and when. Budgets give you and your partner a guide to help stay on track where money is concerned.

If one partner has trouble adhering to the budget, you can look at the numbers and find areas that need improvement or adjustment.

Make sure to budget in money for extra purchases, such as an impulse buy or going out to dinner.

Include each of your money interests in the budget. If you like to spend money but your partner likes to save, budget those things in each month.

If budget has a negative connotation, consider calling it a “spending plan” instead of budget.

2. Share financial tasks. To help keep the financial responsibilities even and a joint effort, come up with a way share tasks and assign a duty to each person. This helps take all the pressure off one person and lets you work together to manage your finances.

For example, you may pay the bills while your partner makes and maintains the budget. You may focus on the savings account while your partner invests money.

3. Come up with long term goals. Figure out what your long term goals are for your money. Do you want to invest? Are you saving for a new car or house? Are there kids in the future? Do you want to take vacations? Each of these future plans are important. You should discuss what you and your partner want in the future and come up with a way to approach it.

Most of these purchases require pre-planning and saving. Prioritize what you want to save your money for.

4. Approach finances as a team. To help keep your finances running smoothly and eliminate any potential conflicts, work on your finances as a team. Even though one person may be in charge of the budget or paying the bills, you should talk about these ideas and sit down once a month to discuss the month’s finances.

You may decide to pay bills together and do the budget together instead of assigning the task. You may also switch back and forth and do a different financial task each month.

5. Consider having separate accounts. If finances and spending habits are a frequent source of frustration in your relationship, then you and your partner might consider setting up separate bank accounts and just maintain a joint account for your shared bills and savings. This may help to prevent arguments about finances if you each have a set amount of money to spend on whatever you want each month.

6. Seek professional help. If you and your partner fight too often about finances, you can seek professional help. You may want to visit a therapist who specializes in resolving conflicts in relationships. This can help you get past any barriers and help you learn how to compromise.

You may also want to visit a financial planner. Financial planners can help you figure out how to budget and compromise on financial issues.
February 11, 2020


How to Write a Proposal Letter.

A proposal letter is a professional letter that states, in an abbreviated form, why an organization, institution, or company should support a professional venture of yours. You might write a proposal letter for a number of reasons—for example, to request a grant, a business loan, or that a publisher accept your book idea. There are general formats, details, and arguments you should make in each instance, although the specifics will vary based on the recipient’s requirements. In all cases, however, you must be succinct, informative, and persuasive.

Method 1 Writing a Grant Proposal Letter.
1. Review the eligibility guidelines so you can offer proof throughout the letter. Most public and private organizations that issue grants for research or other projects have a detailed list of eligibility requirements. You must meet these requirements to be eligible, and you must confirm to the organization that you meet these requirements.
Check the organization’s website or call or email them to get complete and up-to-date eligibility guidelines.
Instead of dedicating an entire paragraph to explaining how you meet each requirement, weave this information into the body of your letter as you write it. For instance, if the organization has certain requirements concerning the types of projects the money can be used for and separate requirements for how that money will be allotted, describe these issues in separate paragraphs instead of trying to cram all the information into one.
2. Introduce your organization to an appropriate degree in the first paragraph. If you are not in regular contact with the grant organization, you should introduce your organization in fairly substantial detail in the first body paragraph of your letter. For instance, provide the name of your organization, what it does, why it does it, and who benefits from your organization's work.
If you have had previous contact with the grant agency or organization, don’t rehash basic information the recipient already knows. Instead, mention any changes or developments your organization has made since you were last in contact.
3. Explain your need for the grant and its importance to your organization. Make this the central focus of the second body paragraph. Tell the recipient what your organization hopes to accomplish and what group or groups in society are the focus for your efforts. Also explain why your research, charitable effort, or venture is important and what sort of outcome you are expecting to have.
Balance optimism and realism in this section and throughout the letter. Don’t make outlandish claims like “ending poverty” with this grant. Instead, explain how the grant will help “alleviate food insecurity for at-risk children both before and after school hours.”
4. Provide a timeline and other practical details on how the grant will be used. In the third paragraph, include realistic content about the timeline your project will require, the locations you will operate in and/or impact, and similar information.
State when the project will begin and how long you expect it to run. Be as precise as possible: “If the grant is approved, we intend to operate the program from August 25, 2020 through August 24, 2021.”
Some grants are location-specific. If this is true of the grant you apply for, you will need to indicate where your organization is based, the geographic area that will be studied during your project, or the geographic area that will benefit from the project.
5. Mention how much the project will cost and how much grant money you are requesting. Be as specific as possible so that the grant organization can get an idea of how crucial its funding is. Provide this information in its own paragraph or integrated into the prior paragraph on grant use details.
Particularly if you are applying for a grant without a pre-determined funding amount, be sure to state precisely how much money you are requesting.
Be precise in your cost estimates and provide supporting documentation as enclosures in your application packet, as per the organization’s application instructions.
6. Include any additional information requested in the application instructions. The grant agency or organization may require additional information that should be included in your proposal letter, or it may require separate documents as enclosures in your packet. Refer to the application instructions carefully and frequently, and contact the organization whenever you have questions or need clarification.
Additional documents may include financial budgets, past financial records, and past records indicating the success of similar projects performed by your organization in the past.
Make sure your grant request isn’t delayed or even rejected because you failed to provide a required piece of information.

Method 2 Writing a Business Financing Proposal Letter.
1. Refer to any prior contact at the beginning of the letter. If your business is already established and has a previous relationship with the lender or funder you are contacting, be sure to mention that prior contact. This doesn’t guarantee success for your current request, of course, but it may strengthen your status as a “good bet.”
If you interacted with a specific contact at the company, mention that individual by name. For example: “Nearly seven years ago, I worked with Jane Goodson at your company to help secure the funding that got my business off the ground.”
2. Discuss the size, scope, and focus of your company. Include your mission statement and a short description of the products or services your company provides. To make your case for funding more convincing, also include details like the number of customers served, the number of employees, and information about any administrative boards.
Providing a brief summary of your business helps the funder get a better understanding of who you are, what you do, and why you are a good choice for funding.
Aim to spend 1 paragraph on this content, in most cases.
3. Pinpoint the amount of funding you need and why you need it. Take a paragraph to both identify precisely how much funding you are requesting and explain why you need financial help from the funder. Describe what, specifically, the funding will be used for.
For example: “The $50,000 loan we are requesting will enable us to expand production in our highest-profit product range and grow sales by an estimated 20% within 2 years.”
You may need to include budget data that spells out how funds have been used in the past and projections on how the funds will be used this time around. This additional data may need to be included as a separate attachment.
Regardless of how much information you include in the body of the letter itself, you should always state the total cost of the project and how much of that cost will be covered by the funder's support.
4. Explain how you will use the funding, specifically but succinctly. You need to provide enough information about how the provided funds will be used to make the prospective funder curious and excited by the prospect. Provide key highlights in a paragraph, mentioning specifics but not going into excessive detail.
This should only be a summary. With a full-scale proposal, this information can take pages. This information should take no more than a half page when writing a shorter proposal letter, however. Provide separate enclosures as needed.
5. Offer to provide additional details at the close of your letter. Since a proposal letter is shorter than a full proposal, make it clear that you are willing and able to provide additional details as requested. Do this instead of sending excessive amounts of information that has not been requested with your proposal letter.
For instance, you last sentences might read: “Should you need any further information, please feel free to contact me directly by phone or email. I would also be happy to meet with you at your offices.”
6. Include any necessary enclosures with your packet. Check over the application requirements again. If the prospective funder requires additional documentation along with your proposal letter, include it in the envelope as an enclosure. Note the enclosures in your proposal letter.
Possible documentation might include a list of board members, copies of your tax documents and financial documents, and resumes of key staff members.

Method 3 Writing a Book Proposal Letter.
1. Check the submission guidelines before starting the letter. Every publishing agency and publisher has its own set of submission guidelines. These can usually be found on the publisher's website—if not, call, email, or write to the company and request a copy of their guidelines before proceeding.
Submission guidelines outline the types of books a publisher or agent will accept, as well as the required format and content for the proposal letter.
2. Spend the first few paragraphs describing your book. Right from the start, you need to convince the agent or publisher that the book you want to submit will be successful in the marketplace. In the first paragraph, use around 300 words to write a brief but intriguing summary of your book. Write a second paragraph that describes the essentials of the book, such as genre, word count, and likely market.
If you’re writing fiction or creative non-fiction, outline your narrative and describe your main characters in the first or second paragraph.
State whether or not the book is finished at some point in these opening paragraphs. Note, however, that some publishers will not accept proposals for unfinished works.
3. Identify your expected target market and competitors. Use a paragraph to thoroughly describe the demographic your book is aimed at. If possible, provide provide statistics and make sure they address your target demographic in specific, rather than general, terms.
Perform a competitive analysis in this section. List a few main competitors to your book, explain how well these competitors do in the market, and describe why your book will offer something its competitors do not.
4. Provide biographical information, especially in relation to the book’s subject matter. Describe yourself and explain why you are the perfect person to write this book. Don’t fabricate or exaggerate details, but do put a positive spin on your personal bio.
Mention any writing experience and publishing experience you have.
Mention any experience you have with your book’s subject matter. For instance, if you’ve written a book about fashion and have experience as a fashion designer, include that in your letter.
5. Summarize your intended role in the marketing plan. Provide specific information about what your plans are concerning the promotion of your book once it gets published. Be specific, not general. Do not state what you are willing to do, but rather what you will do.
Instead of writing “I would be willing,” for example, go with “I will.”
Possible forms of marketing include professional blogs, book signings, and professional conferences.
6. Include a more detailed synopsis as a separate enclosure. You will usually need to include a 1-2 page synopsis that describes your book in fuller detail than your 300-word summary at the start of the proposal letter. Unless otherwise directed, include this as an enclosure, not as part of the main body of the letter.
Provide a full summary of the entire plot and purpose of your book. Include all the major details about the plot and significant sub-plots.
7. Enclose a sample table of contents and an extract, if requested. Some publishers expect you to send along a table of contents, an extract from the work, or both. Follow the specific submission guidelines provided by the publisher, and get clarification if needed.
If you do not yet have a table of contents, you may instead need to provide a brief summary of each chapter.
Some publishers and agents will request the first few pages or chapters of your book. Others may not specify which part of the book the extract needs to be pulled from. Regardless, the extract should be an example of your strongest writing.

Method 4 Formatting the Letter.
1. Start by placing your address at the top left of the letter. In the upper left corner of the letter, write your street address on the first line, then the remainder of your address (such as city, state, and ZIP code in the U.S.) on the second line. Left align the text (here and throughout the letter) and single space between lines.
You do not need to include your name or title in the return address, since this information is provided in the closing section.
Do not type out the return address at the top of the letter if you are using paper with a formal letterhead that already includes the address.
2. Include the current date below your address. Double-space after the return address and type the current date in "month-day-year" format in the U.S., or “day-month-year” in nations that typically use that format. The month should be spelled out, but the day and year should be represented by numerical values.[
For instance, write “October 8, 2019” (month-day-year) or “8 October 2019” (day-month-year).
If you are not using a return address because your paper has a formal letterhead, the date should be the first piece of information you add at the top left.
3. Type in the recipient's name, title, and address. Double-space after the date, then use a single-spaced line for each of the following: recipient name; recipient title (if applicable); recipient street address; recipient city, state, etc.
Alternatively, you can put the person’s name and title together on one line—for instance: “Mr. Thomas Jones, Director of Operations.”
Use the person’s personal title—Mr., Ms., Mrs., Dr., etc.—if you know their preference. It’s generally acceptable to assume “Mr.” for a male and “Ms.” for a female. However, you can instead choose to exclude the personal title and write “Thomas Jones” instead of “Mr. Thomas Jones.”
The entire block should be left-aligned and single-spaced.
It’s preferable to write to a specific individual at a company instead of writing a general letter to anyone who may read it.
4. Include an appropriate salutation to the recipient. Double-space after the recipient's address and type the salutation "Dear" followed by the recipient's personal title and last name. End the salutation with a colon, not a comma: “Dear Ms. Amy Watson:”
If you do not know the recipient's preferred personal title and prefer not to assume either “Mr.” or “Ms.”, skip the personal title and use the recipient's full name: “Dear Amy Watson:”
Double space after the salutation as well.
5. Write the body of your letter using single-spaced block paragraphs. The exact content and length of your proposal letter will of course vary depending on the type of proposal you’re writing. The format of the letter should remain the same for each type, though.
Single space and left justify each paragraph.
Do not indent the first line of your paragraphs.
Double space between paragraphs.
6. Use an appropriate closing and signature. Double-space after the final body paragraph and include a formal closing, followed by a comma. Hit the "Enter" key four times before typing your full name and personal title—this blank space is for your signature.
Capitalize only the first word of your formal closing—That is, “Thank you” instead of “Thank You.”
Common closing options include “Thank you,” “Sincerely,” “Regards,” “Best regards,” and “Best wishes.”
Add a comma after the formal closing.
7. Mention any enclosures below your signature and name and title line. If you send any enclosures with your proposal letter, like a resume with an employment proposal or financial information with a business proposal, indicate this by double-spacing after your typed name and title and typing "Enclosure” or “Enclosures.”
You also have the option of listing each document you are enclosing. Use the following format: “Enclosures: resume, writing sample, 3 letters of reference.”
8. Review the letter for spelling, grammar, and formatting errors. Run your finished letter through a spell-check program, but don't stop there. Read it out loud to check for any awkward phrasing or grammar errors. If possible, have someone else read through it as well, since they may spot errors that you've missed.
Don't let a silly spelling error or misplaced comma reduce the impact of an otherwise carefully-crafted letter. Proofreading is important!

FAQ.

Question : How do I write a proposal for a musical tour?
Answer : dentify the potential donors and outline your plans for the tour, including the bands involved, the venues where you will be playing, and an estimate of the upfront costs and potential profit. If this will be for charity, clearly identify the cause.
Question : How do I write a proposal letter to the ministry of safety, wanting to supply them with stop signs and police gear?
Answer : A proposal is generally understood to mean something the receiver has not yet thought of. "Dear city council, after reading your urban planning blueprints, I propose to plant more trees" rather than "I see you're looking for trees and I want to sell you some." Governments are typically bound by public tenders when they buy equipment, so if you want to sell signs and gear, you have to submit your offer when they issue a tender and hope yours is the best of all offers received.

Tips.
If someone else typed the letter for you, double space after the enclosures line and include their initials. For example, add “HU” if Hilary Underwood typed the letter for you.
April 07, 2020


How to Stop Being Broke.

If you're sick of being broke, it's time to take control of your finances! Whether you need to work on your spending habits, learn how to save, or find ways to earn more money, you can find a way to stop being broke. Follow these steps to start working towards financial freedom and better peace of mind.

Part 1 Getting into the Right Mindset.
1. Set goals. If you want to change your financial situation, you need to get specific about want you want to accomplish. Think about exactly what you want your finances to look like and what you can do to achieve those goals.
Setting short-term goals in addition to long-term goals can help keep you motivated by providing you with a sense of accomplishment.
Create a budget for non-essential items and hold yourself accountable for it each month. If you go over-budget one month, tell yourself that your budget for the next month is reduced as a result.
2. Stop comparing yourself to others. If you're spending beyond your means because you feel that you need to keep up with your friends or show others that you can afford a certain lifestyle, you're not doing yourself any favors. Stop worrying about what others can afford and think about how you can live within your means.
Stop equating your self-worth with your ability to buy things. This kind of thinking will make you extremely unhappy in the long run and will probably get you stuck in debt forever.
3. Track your expenses. To understand exactly where all your money is going, keep careful track of every dollar you spend. You can do this with a pen and paper or electronically if you use a card for everything, but make sure to account for everything. This simple habit will help you spend more wisely.
Try categorizing your expenses and adding them up on a monthly basis. For example, you could create categories for food, housing, transportation, utilities, insurance, entertainment, and clothing. Then calculate what percentage of your income you are spending on each category. You might realize that your expenses in some of these categories are way too high.
To understand how much you can afford to spend each day, subtract your fixed expenses from your monthly income and divide the remaining amount by 31.
4. Make a plan for getting out of debt. If you are broke because you have credit card debt, a car payment, or student loans, think about what you can do to pay off these debts faster.
Making even a few extra payments each year can help you pay off your debts much faster.
5. Start saving. This may seem impossible if you are always broke, but planning for the future will help you get out of this cycle. Start small by just putting $50 in an emergency fund each month.
Don't forget to save for retirement! Take advantage of the 401k offerings at your company or open an IRA account.

Part 2 Avoiding Money Traps.
1. Avoid lending to others. While you may want to help out your loved ones who are in need, you really shouldn't be lending money if you can't afford to pay your own bills.
2. Avoid payday loans. While they may seem like a good solution if you're strapped for cash, the interest rates are ridiculously high, so they will only get you further into debt.
3. Understand how much it will really cost. Before you take out any kind of loan or finance any purchase, be sure to calculate what your monthly payments will be, how long it will take you to repay the debt, and how much you will be paying in interest.
In some cases, paying interest may be worth it. For example, most people cannot afford to purchase a house without taking out a mortgage, but depending on the price of the house and the average cost of rent in your area, you might still be saving a significant amount of money by choosing to buy with a mortgage instead of renting.
Be especially wary of high interest rates for depreciating assets like vehicles. If you decide to sell your vehicle after you have owned it for several years, it may be worth less than what you owe on it. This can also happen with real estate when the market conditions are poor.
4. Avoid impulse buys. If you always have a plan for what you will buy, you will have a much easier time managing your finances.
If you have a hard time controlling your purchases when you go to the mall, try to avoid going to the mall at all.
Write out a list when you go shopping so you will always know exactly what you need to buy.
5. Use credit cards wisely. If you have a harder time keeping track of your expenses and sticking to your budget when you use a credit card, stop using it.
Paying with cash instead of a credit card will allow you to visualize how much of your available funds you are spending on a given purchase.
If you are able to stick to your budget when using a credit card, look for one that has no annual fee and will reward you with cash back or other incentives. Just make sure you always pay your bill on time or these incentives will not be worth the price you are paying in interest.

Part 3 Spending Less.
1. Assess your daily or weekly spending habits. Once you have a solid grasp on what you are spending your money on, you can start cutting out expensive habits.
2. Buy used items. You can save on everything from your next car to furnishings for your home by buying gently used items.
You can sometimes find really great clothes that have barely been worn at thrift shops for a fraction of the price.
3. Look for monthly expenses that can be cut. If you pay for monthly memberships or subscriptions, carefully assess how much they cost, how much you use them, and whether you could give them up.
Make sure you're not paying for services that you never use. For example, if you have premium cable channels that you never watch, you can cancel them without feeling like you are making any sacrifices. The same goes for your cell phone bill if you are paying for more data than you ever use.
4. Compare items or brands when shopping. If you're on a tight budget, you want to make sure you're always getting the best deal on absolutely everything. Take some time to compare prices for items you purchase regularly and for large purchases.
If you've had the same auto insurance carrier or cable company for a long time, there might be better deals out there, so be sure to comparison shop regularly.
Shopping for necessities online can be cheaper in some instances, but make sure you take shipping charges into account.
Use coupons to save some extra cash. Keep in mind that many retailers accept competitors' coupons.
5. Ask for a better deal. You can always ask your service providers for better deals, especially if you've been a loyal customer. The worst they can say is no.
Try this with your cable and internet providers, insurance companies, and cell phone carriers.
6. Spend less on entertainment or at restaurants. Whether it's dining out or going to amusement parks, entertainment can eat up a big chunk of your budget. Look for less expensive ways to have fun.
Learn to cook at home and keep the fridge well stocked with ingredients for things that you know you can cook from scratch when you come home late and don't have much time to whip up a grand meal.
Instead of going out to eat with friends, invite them over for a potluck.
7. Do more yourself. It may be convenient to use a laundry service or to have someone else shovel your driveway, but if you're physically capable of doing these things yourself. Think about the money you can save.
If you're not very handy, try to teach yourself to do more around the house. If you need a simple repair done, you may be able to watch a video online or take a class at a local home improvement store to learn how to do it yourself.
8. Save money on energy. Go green around the house to save money on your utility bills each month.
Sealing up air gaps can reduce your heating and cooling bills. If you own your home, investing in a properly insulated attic can make a huge difference.
Turning your heat down just a few degrees in the winter can make a big difference in your energy bills as well. A programmable thermostat will let you automate the temperature of your house so you won't spend money on heating the place to a comfortable level when you're not at home.
9. Avoid bank and credit card fees. Choose your bank and credit card providers wisely in order to avoid unnecessary fees.
Make sure to only use the ATM at your bank if you will get charged for using outside ATMs.
10. Aim to have a few no-spend days a month. After a while, it becomes a game: "How can I run my life today without writing anything down in my little blue book?" "How ingenious can I be to make do with the things, food, and resources I already have at my disposal?" See how often you can turn this into a habit.

Part 4 Earning More.
1. Get a better job. If spending less is just not enough, it may be time to get a better job that will allow you to make more money. Start by updating your resume, searching for listings online, and networking with other professionals in your field.
Don't forget to look for advancement opportunities within your company.
2. Do something else on the side. Using your skills to provide freelance or consulting services is a great way to earn additional income. If this won't work with your profession, get a part-time job or find creative ways to make some extra cash on the side.
You can make some extra money by performing jobs like mowing lawns, cleaning houses, or even walking dogs for people in your neighborhood.
3. Sell stuff you don't need. You probably have at least a few possessions that you no longer need or want, and you can turn those items into extra cash by selling them to people who do want them.
If you have lots of unwanted items, try having a yard sale.

Community Q&A.

Question : My family barely has any money. My dad has his own company, but it hasn't gotten any business in a long time. I have some money saved up, and I was think of leaving a little in my dad's wallet. What do you think?
Answer : Definitely do. Work as much as you can and give and much as you can. Also putting your family's money in a good, interest-bearing account can help a lot.

Tips.

To always have money in the bank to pay regular bills, add them up for the past year and divide by 52. Round up to the next 25, 50, or 100 dollars. Remember to add in quarterly or annual bills, too.
Buy clothes that can be used for several different occasions instead of only one-time events.
Use coupons on items whenever you can.
Start a Christmas Club account, but put in more than you expect to spend on gifts. The excess is great for a mini-vacation or special purchase.
Get a jar to collect your spare change. When it's full, take it to the bank. (Don't take it to one of those coin counters, as they charge for counting your change.)
Take it a day at a time. Start small, set goals, reward yourself (not with any type of shopping, of course) and enjoy playing the game.
July 02, 2020