Thursday, 14 January 2016

How people can get into debt

One excuse many people give for being in debt is that they have never been good with money. Personal finance has a lot more to do with discipline than how much money you have. There are some cases that even smart people can get into trouble with debt and become insolvent.

At most retail stores, you will likely be asked if you have a store credit card, or if you want to apply for one if you don’t have one. You need to consider if the discount offered is worth it in the end. If you do apply for a store credit card and charge your purchases to it, then you need to be sure to pay the bill on time. Store credit cards typically have a higher interest rates than other credit cards. If you don’t pay off your balance in full the first month or so, then you may end up paying more than you would have without the discount. If you open several cards like this, it could have an affect on your credit score. Part of your credit score is figured by taking into consideration the total amount of credit you have available and how much you have charged.

As another example of this, many people may charge more on their credit cards than they normally would to receive reward points or dividends. Again, if you are not able to pay off your balance within a month or two, you may negate the value of the rewards you received.

A home equity loan or second mortgage is one way to use the equity in your home to pay for expenses such as home improvements, college expenses and other expenses. People may get into trouble with these financial vehicles if the value of their home decreases significantly, in turn reducing the amount of equity in your home. Also, if you experience a job loss or decrease in income, you may be unable to make the additional payments on these loans.

Many purchases such as cars, electronics, furniture and appliances can be made with a certain amount down and monthly payments for a specific amount of time. You need to keep track of how much these payments add up to each month. It may be easy to spend more than you can afford to pay each month. This is because the payments may not seem very large, but a number of them do add up.
If you make purchases on a 60 or 90 days same as cash program or interest free program, make sure you pay the balance before the time period is over. If the balance is not paid in full by the end of the period, the interest that was waived will be charged from the beginning of the agreement and continue to grow until the balance is paid in full. It may seem like a good deal to get a certain amount of time of not having to make payments, but if you incur the interest payments,then  you may pay many times of the original price of the items.

Friday, 8 January 2016

How to sign a cheque properly

Signing over a check to someone else is a way to transfer money to another individual. Despite the fact a good percentage of the population has converted to electronic banking, statistics published by Pew Research on August 2013 indicate 51 percent of adults in the United States bank online, so there is still a demand for paper checks. With this demand, comes a need to understand how to sign these documents when the circumstance arises.

Endorsing a check simply means you acknowledge receipt of the check, and your signature is evidence of legal transfer of the amount noted on the check. When you sign your name, this is tangible proof you received the check should any questions arise.

People use checks for an assortment of reasons. They write checks as monetary gifts, to pay bills, give donations or to fulfill other financial obligations. Additionally, in this day and age, many employers may still offer the option of paper checks to their employees when doing payroll as opposed to direct deposit.

You might be wondering why you would want to sign over a check you received to someone else. Wouldn't you want to simply cash or deposit the check yourself? That depends, believe it or not there are lots of good reasons why you'd want to endorse a check to someone else.

Here are a few reasons:
You have a check and need cash, but there is no local bank branch nearby and you don't want to pay the fees at a check cashing store. If you sign the check over to a friend or family member, they can cash it at their own bank and hand you the cash.
You owe money and don't want the hassle of cashing the check and then writing another one. Simply sign your name on the check you do have and then your recipient can cash the check and get their repayment back.
A check was sent to you in error. If you inadvertently receive a check that was not meant for you, then you can sign the money over to the rightful recipient. This is much easier than cancelling a check and then reissuing.

Basically, endorsing a check to someone else eliminates extra steps in some situations.

If you need to sign over a check to someone else, here's all you need to do:
Flip over the check and you'll see the lines where you can sign your name.
Add your signature by signing your name clearly and legibly.

If you want to add a level of security to your endorsement, then make a notation as a restrictive endorsement so only the person you identify by name can cash the document. This means that if the check is lost, misplaced or stolen, anyone who comes across the check cannot cash it since there is a specified recipient notated on the back. Anyone else who attempts to cash it is committing an illegal act.

Here is how you add a restrictive endorsement as you sign your check over to someone else:
Sign the check with your name
Directly underneath your signature write the phrase "Pay to the Order Of" and add the recipient's name you've chosen along with these words.
Observe the "Do not write below this line" portion of the check and do not make any markings.

After you've signed your name to the back of the check, you have legally authorized another person to cash the check. If no notation has been made, anyone can cash the check and receive the money specified on the front of the check, but if you did specify who you want to further endorse the check, no one else but that individual can cash it.

Despite the heightened popularity of electronic banking, understanding the validity, importance and need to signing over a check to someone else is still useful information to know in today's digital age.