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Saturday, March 20, 2010

Personal Finance Planning - Why You Must Put Money in the Bank mo

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It is true, that by changing habits, being frugal and using personal finance planning, one can reduce their costs by quite a wide margin. Nevertheless, you must not forget that your bank balance also needs to grow. For many, saving money is not an easy exercise.

This tends to occur because many are unaware where their money is going or because they lack self-control when it comes to money. In this article, we will discuss some money saving tips to help you get your bank balance up giving you some security for a rainy day.

Nowadays, there are many people who spend their whole salary before even getting it. This typically occurs because we overspend the previous week or we purchase something that we simply had to have.

One of the first things you should do if you want to start saving a serious amount of money is withdraw a comfortable amount of money out of your account and store it away off site. The good thing about storing the money off site is that it won't be on your mind, however, you should never forget where you stored it should you need it.

If this tip is to work well, then you should only take tiny amounts of money. There isn't any point to taking more than you should to only have to spend it later. Keep in mind that even if you put away 10 dollars a week, this amounts to 520 dollars over an entire year.

Another great way to start to saving money is by checking out savings accounts with high interest rates. Believe it or not, but many banks offer these at rates up to 12 percent interest. However, before you get excited, it's vital that you understand the terms and conditions of such an account.

In order to qualify for the high interest rate, you normally are obliged to leave the money in the account for a specified amount of time, which could range from 1 to 2 years. It is essential that you use money that you know you can afford to part with for this duration.

In addition, you may be obliged to put minimum deposits on a monthly basis in your account to qualify for the high interest rate. Be sure that you completely understand the terms and conditions, otherwise this tip will backfire against you.

You may not think that saving small amounts will amount to anything. You must not forget that these small amounts will eventually add up to something significant. After a significant length of time you could find that these personal finance planning tips have paid off and you have a fairly large amount of money to your name.

Jenni Snook is the chief writer of http://www.HealthyWealthySoul.com, a website focused on providing people practical tips and resources on personal finance planning to attain both financial and spiritual happiness in their lives.

Article Source: http://EzineArticles.com/?expert=Jenni_Snook

Labels: finance planning, money in the bank, personal finance

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Small Business Finance - The Next Big Banking Problem?

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For the past year, most banks and lenders have been subject to both disastrous operating results and negative publicity. Actual commercial lending activity reported by banks conflicts with the usual attempt by politicians and bankers to portray banks as normal and healthy.

Most bank financial results have been disappointing after working hard to solve massive residential loan problems. It is reasonable to ask if commercial banking has more potential disasters about to emerge based on what has been seen and reported so far.

Based on a number of business financing statistics, commercial lending to small businesses is already on life support. In many cases, without government bailouts many commercial banks would have already failed.

As bad as that perspective might sound, this report will provide an even more negative outlook for the future of small business finance programs. Unfortunately for banks and lenders, it does appear that business loans will be the next big problem.

During the past year or so, several banking problems have received significant publicity. The largely avoidable difficulties were primarily tied to increasing home foreclosures which in turn caused various investments tied to home loans to decrease in value.

Such investments lost value so rapidly that they became known as toxic assets. When banks stopped making many loans (including small business financing), the federal government provided bailout funding to many banks to enable them to keep operating.

While most observers would argue that the bailouts were made with the implicit understanding that bank lending would resume in some normal fashion, the banks seem to be hoarding these taxpayer-provided funds for a rainy day. By almost any objective standard, commercial lending activities have all but abandoned small business finance needs.

Small business financing appears to already look like the next big problem based on commercial finance statistics recently released by many banks. The general decline in commercial real estate values during the past several years is a major factor in this conclusion.

Because many large commercial real estate owners could not make their commercial mortgage loan payments or refinance business debt, this has resulted in some significant bankruptcies.

The resulting bank losses are clearly having an impact now on commercial lending to small business owners even though these difficulties were primarily happening with large real estate owners and did not usually involve small businesses.

Bank losses on large commercial real estate loans have caused many banks to reduce or stop their small business financing activities, and this has clear similarities to the earlier situation of residential mortgage loan toxic assets causing banks to stop normal lending because of capital shortages.

The bank losses from large commercial property investors are producing a ripple effect that has caused small business financing to effectively disappear until further notice. While small business owners did not cause this problem, they are suffering the immediate consequences when banks are unable or unwilling to provide normal levels of commercial financing to them.

This bad situation is made even worse when we learn that many banks are hoarding cash and approving fewer commercial loans to allow them to quickly pay bailout funds back to the federal government. The primary logic for this approach is that it will allow banks to resume excessive bonuses and compensation to their executives.

Unfortunately one problem will lead to another, as is common with complex circumstances. The failure to obtain normal business financing will most likely lead to an increasing number of commercial loan defaults by small businesses.

Prudent business owners should begin to take action now in a timely manner to avoid such negative consequences. The most serious small business finance problems can be anticipated and avoided with appropriate action.

Even if they do nothing else, business owners should have a straightforward conversation with a small business finance expert to assess how exposed their business might be to the brewing commercial banking problems.

If recent events are any indication, the banks themselves will not be very forthcoming about problems with their commercial lending practices. For many small businesses, the most objective business financing expert is not likely to be their current banker.

To increase the chances that they receive sufficient small business loans in the face of ongoing lending problems, a healthy amount of skepticism and caution will be helpful for business owners.

Stephen Bush is Chief Executive Officer of AEX Commercial Financing Group and works with small business owners throughout the United States to provide effective small business financing options Please contact Steve for candid and practical advice about working capital loans and commercial real estate financing.

Article Source: http://EzineArticles.com/?expert=Stephen_Bush

Labels: finance banks, small business banks, small business finance

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Commercial Finance Funding and Identifying Zombie Banks

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In the world of business finance funding, the colorful terms "Zombie Banks" and "Dead Banks Walking" have been applied recently to a number of commercial lenders. Although these discussions have an element of humor and entertainment, there is a practical aspect to them as well.

Ultimately it is not likely to be in the best interest of a business owner to have extensive involvement with any of the banks which these terms describe accurately. In any case it should be beneficial for commercial borrowers to understand what constitutes a zombie bank and what they should do if they are working with a dead bank walking.

For any business owner currently needing a commercial loan or working capital financing, the concept of "Dead Banks Walking" is likely to be an essential part of their decision. This description has been used by several sources recently, all with a similar reference point of banks which have already gone broke.

This critical but apparently accurate assessment is largely derived from a straightforward net worth approach. Such an analysis recognizes that many banks have substantial assets which are either worthless or at least worth well below the values reflected on their books, with the resulting real current value being less than the current debts of many banks.

Based on the evaluation of many observers who have realistically reviewed current asset values, most of the largest banks in the United States been shown to be worth even less than Lehman Brothers (which is already in bankruptcy).

Many banks have compounded their public relations nightmare by demonstrating very little common sense in how they make commercial loans and spend money. If a bank is already worthless, it certainly calls into question how businesses and commercial borrowers will benefit by the government throwing money at these "zombie banks" in the first place.

This controversy has been fueled by the failure of most banks to increase their commercial lending to business owners after receiving government bailout funds. Banks who have received bailout funds appear to be determined to hoard the money in order to preserve their own solvency rather than providing commercial finance funding to commercial borrowers.

This raises several questions. The emerging consensus is that giving otherwise bankrupt companies (the dead banks walking) more cash does little more than cover the internal operating expenses for the zombie banks.

First, should we really believe that a bank should be "saved" simply because it is so large? There appears to be a growing majority of the public which would suggest that these banks have already lost too much good faith to ever recover in response to some arguments that the largest banks cannot be taken over even if they are already insolvent.

Second, is there a better way to solve the problem than giving insolvent banks more money? George Soros and others have recently described in detail how other banking systems have successfully handled mortgage financing. Even though residential and commercial real estate loans are thought to be at the heart of the current crisis, there is no real effort underway to revise this approach.

Third, can business owners really afford to wait for the government to solve this problem? Although waiting a few weeks or even several months might be viable for a practical solution which results in needed commercial loans, the current logjam impacting business finance funding shows little evidence of subsiding that quickly.

Prudent commercial borrowers should seek alternative sources for essential working capital financing such as business cash advances. In case it is not obvious from the discussion above, dead banks walking and zombie banks can be avoided when seeking new commercial financing.

Obtain effective strategies for business cash advances and commercial loans - Steve Bush is a business finance funding expert => AEX Working Capital Finance and Commercial Real Estate Loans

Article Source: http://EzineArticles.com/?expert=Stephen_Bush

Labels: commercial banks, commercial finance, finance banks

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