Needs vs. Wants

By Sandy Botkin

What are the key factors that incur a lot of debt for many of us? Not understanding the difference between a "need" versus a "want" - the need for instant gratification - and the fact that people are in denial about their financial problems, which must be addressed head on and discussed with their spouse or domestic partner.

Another factor which increases debt is failing to plan for large unanticipated expenses - a phenomenon known as "crisis spending." Usually something breaks down and brings with it a burdensome expense. If you don't set up a savings account for these large, unanticipated expenses, it causes overwhelming debt. Huge unanticipated dental and medical expenses are the biggest culprits, but many other factors can also cause this problem.

Solution: You should have a reserve account set up for these expenses. This is one of the first things you must do even before opening any other type of savings account. Everyone reading this post will at some time in their life experience these sudden unplanned-for expenses. Planning for them is the only way to avoid incurring consumer debt or even worse, credit card debt. 

How much should you save for these large unanticipated expenses? I suggest at least $10,000-$20,000. Moreover, these funds need to be in a risk-free, liquid account. Don't worry about the interest earned on this. The key is risk-free. From my latest book: Achieve Financial Freedom – Big Time!

Is the American Economy Close to a "Slipping Point?"

By Gerard Francis Lameiro

Is the American Economy ready to slip back into a major recession in the next 12 months?  What are the signs of potential problems? Obviously, the shockingly anemic GDP Q1 growth rate of 0.1% stands out as a red flag.  Some observers think such growth is only temporary and Q2 will be better.  But what about the reality of the jobs picture?

Some see the drop in unemployment to 6.3% and the creation of 288,000 new jobs in April as good signs.  But, an Investor’s Business Daily editorial paints a more complete picture.  They point out that the 288,000 new jobs came from surveys of businesses.  However, if you look at the broader household survey, 73,000 jobs were lost in April.  Possibly, the most informative numbers come from the labor participation rate.  It dropped to 62.8% – an all time low.  In fact, 806,000 people left the work force in April.  That's not good news for the economy. [more...]

Reinvention: A Business Facelift

By Michelle Seiler-Tucker

For businesses, the meaning of reinvention is looked upon as a facelift of a company. In order to stay competitive, companies must be able to reinvent themselves. Business reinventions can range from rebranding to creating an entirely new business model.

Many companies I consult with share the need to transport their business into the 21st century. A business owner must first improve the quality of the services or products being offered to compete in a world of “faster is better (with a high gloss finish).” One mustn’t be afraid to embrace technology to move their endeavors forward. Branding has evolved in a way that puts you and what you’re selling in front of the world’s eyes.

Retool outdated logos, graphics and marketing; dated material is consumer repellant in the marketplace. A business owner should target their marketing budget intently, placing ads on sites frequented by their desired clientele and using search-engine optimization to ensure easy access to consumers. But the oldest tool in the shed still holds steady: word-of-mouth. [more...]

The Top Reasons People Have Too Much Debt

By Sandy Botkin

* The average person can go 17 days without a paycheck.
* One in five people have over $10,000 in consumer debt alone.
* 41% paid nothing on their principal balance of their debts.
* 43% of American families spend more than they earn (in many cases, more than 20%).

* Sadly, young people aren't showing any signs of improvement. For example, the average amount of credit card debt for people between ages 20-29 is $1,800 and total debt for 20-somethings averaged $45,000.

* Only 13 states require students to take finance class yet most require gym classes.

* 60% of people ages 18-34 don't keep a budget.
* Educational debt is the fastest growing debt in the US. In fact, average student loan debt for 2010 (when I researched this) was $25,000, yet they had an unemployment rate of 12.4%. In fact, it is estimated that almost 50% of recent college graduates are either unemployed or underemployed.

From my latest book: Achieve Financial Freedom – Big Time!