Military Money Might

How to Borrow Money on Peer To Peer Site, Lending Club

Hank — Mon, 08 Mar 2010 13:00:50 +0000

Lending Club is a peer to peer (P2P) lending service that helps individuals borrow money from other people without a bank getting involved. Instead of having to go through the traditional route of borrowing money from a bank, people can log on to a peer to peer lending network such as Lending Club and lend money to people or borrow money from others who are also members of the network. When borrowing money through Lending Club, you may receive a lower interest rate than you would from a traditional bank because because of low administrative costs and low overhead.

P2P lenders lend money to people who are looking for alternative means of financing than a traditional bank. Many peer to peer loans are used for small businesses looking to expand, consumers wanting to consolidate debt, students looking for educational loans, brides trying to fund their weddings, medical expenses, and a broad host of other borrowing needs. The loan requests definitely run the entire gamut of financing needs.

To request a loan through Lending Club you…

1. It is really easy to start the loan process. You begin by joining Lending Club as a member. You will create your login information like you do for most websites. Your actual identity will not be displayed to any other members of Lending Club. No one who will potentially loan to you will ever know your identity.

2. Next, click on [Borrow > Get a Loan] to prepare your loan request. Lending Club will ask for personal and financial information to verify your identity, determine the loan terms that will be available to you, and match you with suitable lenders. All loans on Lending Club are 3-year installment loans, and your interest rate will be based on the amount of funding that you request and the information on your credit report.

3. After your loan request is complete, it will be listed on Lending Club’s website for two weeks and visible to users who can bid on it. Your loan listing will not contain any personally identifying information in the site, and information from you credit report will only be shown anonymously to lenders so they can evaluate your personal loan request.

You can check out my lending criteria that I look for when I loan money to people on Lending Club! Lenders generally spread their money over several borrowers, so chances are that your loan will get funded by several lenders in $25 to $50 increments. It is not unusual for one loan to have a hundred lenders or more. Your identity will at all times remain confidential and not be disclosed to anyone. Once your loan closes, you will receive your money from Lending Club via the Automated Clearing House (ACH) System which will automatically deposit your loan into your bank account normally within one business day and repayment will begin by ACH one month later.

4. Lending Club will withdraw your loan payments each month from the bank account you verified during registration. These withdrawals will take place on the same day of the month as the date of the loan origination.

Lending Club is a great way to borrow money from other people without getting a bank involved. With consumer credit still tight, peer to peer lending is on the rise. Peer to peer lending is cheaper than regular consumer loans and credit in many cases for borrowers. Lending Club’s rate for the best credit risks is 7.88%, where the bank rate for personal loans, on average, is over 13%. And, the average credit card interest rate can be as high as 16% or more. Lending Club and peer to peer lending can be a great alternative to traditional loans.

Understanding Credit Cards Can Save You Money and Help Establish Your Credit Rating

Hank — Fri, 05 Mar 2010 13:23:46 +0000

When used wisely, credit can establish your credit rating so you can purchase the items you need in life, like a house or car. Therefore, it is good to understand the differences between the various kinds of credit and what to look for in a credit card. By doing so, you will learn how to more prudently spend your money and obtain the type of credit standing that will make your financial portfolio attractive to future lenders.

Visa and MasterCard are major types of credit cards of course. Typically, depending on your credit score and income, your credit limit can be between $500 to as much as $5,000 or more. The minimum payment is usually about $10.00 monthly for a credit limit of $500 and you can make full payment at any time.

Store credit cards, on the other hand, allow you to charge items at various retailers, permitting you to make payments monthly on said purchases. However, they’re not entirely necessary as you can charge many retail items you buy on major credit cards.

Charge cards, such as American Express, stipulate that you pay the entire balance each month and do not impose credit limits on borrowers. Still, if you do not make the monthly payment, you can be penalized by having the use of your card restricted.

Also, when choosing credit cards, besides being aware of the basic types, it is good to be apprised of the fees assessed for the cards to which you are applying. Some cards require the cardholder pay an annual fee for use of the card like American Express. In addition, card companies charge a variety of interest rates so be careful to select those cards with lower interest charges if you want to save money. Also, look for other fees that are sometimes charged to the borrower, such as any charges for processing the card, application fees, late-payment penalties, balance transfer charges, fees assessed for cash advances, and fees applied for overstepping your credit line.

Typically, the grace period for a credit card is 25 days, which covers the span of time from the billing date to the due date. Normally, if you pay off your balance before the due date or before the grace period ends, you won’t be charged additional interest. However, be forewarned, as some cards will assess you interest from the date of purchase so, in effect, you do not really have a grace period as you are charged interest even if you pay off what you owe.

As a result, credit can be a good thing or a bad thing. It is up to you. Check out the fees on the credit cards you are considering before you make a commitment. It can save you a lot of money in the long run. Get rid of any cards with excessive fees and look for no–fee credit cards with low interest charges. Be discriminating in your selection of credit so you can realize the benefits and privileges that credit provides. Or, you can go the super smart route and just not use credit cards at all.

If you want to go a different route, you can choose a secured credit card. A secured card requires a cash deposit that acts as collateral for your card and becomes the credit line for that account. For example, if you put $500 in an account with that credit card company, you can charge up to $500. You may be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and increase your credit line without requesting additional deposits. Secured credit cards are a great way to build credit if you do not have a solid credit score or are building a new credit report with the credit bureaus. One such prepaid credit card is the Vision Prepaid Visa Card which has no credit checks, a quick approval, and allows you to shop online, pay bills, use ATMs around the world.

Five Great Ways To Use Your Income Tax Refund This Year

Hank — Mon, 22 Feb 2010 13:00:54 +0000

If you get an income tax refund every year, what should you do with that money? Here are five great uses for your income tax refund this year…

Save It. Consider using whatever money you get back from the government to boost your emergency fund. You should have three to six months of expenses saved for a rainy day.
Invest It. Your income tax refund might be the money you need to boost your Roth IRA investing up to the annual limit of $5,000. So, if you are not maxing out a Roth IRA, an income tax refund can help. You can also invest money for “last year” if you did not max out in 2009. You can credit money for last year up until April 15^th.
Pay Off Debt. Your refund might be just what the doctor ordered to help you get out of debt once and for all. Consider using your refund to pay off your high interest rate credit cards.
Upgrade Your Home. I am personally planning on stimulating the economy this Spring by buying granite countertops for our house. If you pick your home improvement projects well, you may still be able to recoup a lot of your investment costs when you sell (but probably not 100%). But, you do get the satisfaction of enjoying your renovations while you live in the house too. Also, consider using your refund to make any much needed repairs that you have been putting off instead of going into debt when you absolutely have to make them.
Extra House Payment. Did you know that if you made one extra mortgage payment every year, you could pay off your 30 year mortgage in a few as 22 years? That one extra payment can sae you over $100,000 in interest payments. So, consider putting your refund to work for you with respect to your mortgage.

These are just a few examples of what you can do with your refund. But, remember, instead of giving the government what equates into essentially a tax free loan, you could just adjust your withholdings.

Download Your W-2 From MyPay – File Your Taxes Soon

Hank — Fri, 29 Jan 2010 13:00:00 +0000

The W-2 Form, which is also called the “Wage and Tax Statement”, is used in the United States as an information return to report wages paid to employees and the taxes withheld from them. The form is also used to report FICA taxes to the Social Security Administration. Relevant amounts on Form W-2 are reported by the Social Security Administration to the Internal Revenue Service.

Employers are instructed by the IRS to send copies of the W-2 to their employees by January 31 each year.

The military is no different. Be sure to download your W-2 starting on January 31st, 2010 from the myPay website. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. An employer must deliver the Form W-2 to employees on or before January 31 of the calendar year. The Form W-2 reports income on a calendar year (January 1 through December 31) basis, regardless of the fiscal year used by the employer or employee for other Federal tax purposes. However, this refers to the time period in which an employee has been compensated, not necessarily the actual dates of employment. After the final payroll in December, employment is normally compensated and subject to tax in the following year.

The form consists of six copies…

Copy A – Submitted by the employer to the Social Security Administration. (In addition, the employer must also submit Form W-3, which is a summary of all Forms W-2 completed, along with all Copies A submitted. The Form W-3 must be signed by the employer.)
Copy B – To be sent to the employee and filed by the employee with the employee’s federal income tax returns.
Copy C – To be sent to the employee, to be retained by the employee for the employee’s records.
Copy D – To be retained by the employer, for the employer’s records.
Copy 1 – To be filed with the employee’s state or local income tax returns (if any).
Copy 2 – To be filed with the employee’s state or local income tax returns (if any).

My January 2010 Lending Club Performance Update – Earning a 15% Annual Rate of Return

Hank — Mon, 25 Jan 2010 13:00:35 +0000

As of today, I’m enjoying a 15.39% annualized return on my investments with Lending Club. Lending Club is the awesome peer to peer lending investment website where you can lend money without a bank straight to individuals who need it the most. The beauty of the service for investors is that you can earn a great interest rate on your investments.

For those of you who are not familiar with Lending Club, there are usually about 180 loans on the website at any given time waiting for lenders like you and me to come along and fund them. And, you can search through them all by several criteria.

Check out my review of Peer-to-Peer Lending, what it is, and how to get started.

My portfolio of loans primarily contains a mix of Grade C, D, and Grade E loans. I do not waste my time with conservative A or B class loans which do not pay very much interest. One of the most important things is picking out which loans to invest in. Here are some of my lending criteria that I use when choosing loans with great returns. While savings accounts, money market funds, and certificates of deposit are paying minuscule rates of return, I continue to be quite happy with my Lending Club experience and the excellent return that I have been earning.

Roth IRA Contribution Limits For 2010

Hank — Fri, 08 Jan 2010 13:00:56 +0000

The IRA contribution limits will stay the same in 2010 as they were in 2009 and 2009. Investors under the age of 50 can contribute up to $5,000 per year. Those investors who are over the age of 50 can make additional catch up contributions for a total investment of $6,000 per year.

Year	Under Age 50	Age 50+
2002-2004	$3,000/year	$3,500/year
2005	$4,000/year	$4,500/year
2006-2007	$4,000/year	$5,000/year
2008	$5,000/year	$6,000/year
2009	$5,000/year	$6,000/year
2010	$5,000/year	$6,000/year

You can make your 2009 contributions until April 15^th, 2010. A lot of people forget that seldom talked about fact, but it is a great way to spend any extra money that you have received at the end of the year or beginning of the new year. Finishing off your Roth IRA contributions up to 100 days after the year is over can be a great use of extra income, a year end bonus, or even your income tax refund. As for your 2010 contributions, you can start investing in a Roth IRA immediately on January 1^st through the next deadline of April 15^th, 2011.

My 2010 Financial New Year’s Resolution – Less Eating Out At Restaurants

Hank — Wed, 06 Jan 2010 13:00:37 +0000

This would not be a personal finance blog if I did not include a posting about New Year’s resolutions. I always try to make several personal New Year’s resolutions every year including a few about money and my finances. But, I don’t try and make too many resolutions. I do not think that I would be able to keep up with more than about three or four.

Last year, I vowed to beef up my emergency fund. That of course did not happen as well as I would have liked. This year, my resolution is to once again fully fund my emergency fund with three months of expenses or $10,000 in my family’s case. My family and I also want to stop eating out as much. It is definitely one of our vices. We go out to eat a lot, a couple times a week. So, we have decided to try and limit ourselves to once a week.

2010 New Year’s Resolutions:

1) Fully Fund Emergency Fund ($10,000)

2) Go Out To Eat Less (4 Times A Month)

Are you making any financial New Year’s Resolutions this year? What are they?

Five Signs That You Have An Addiction To The Internet

Hank — Mon, 04 Jan 2010 13:00:11 +0000

Addiction to the internet, surfing the web, and checking our e-mail is no longer a condition of the young gamer generation. According to Greenfield Online, a consumer and marketing research firm, “out of approximately 83 million internet users in the United States, 11 million suffer from addiction.” Trust me, I understand how you can get lost looking at things on the internet, but sometimes we do not know when to say, “Enough is enough.”

Five Signs That You May Have A Problem…

You have mixed feelings of pleasure and guilt while at the computer.
You make unsuccessful efforts to quit or limit your computer use.
You lose track of time while on the computer.
You neglect friends, family and/or responsibilities in order to be online.
You find yourself lying to your boss and family about the amount of time spent on the computer and what you do while on it.

A Few Extra Signs…

You feel anxious, depressed, or irritable when your computer time is shortened or interrupted.
You develop problems in school or on the job as a result of the time spent and the type of activities accessed on the computer.
When you are not on the computer, you think about it frequently and anticipate when you will use it again.

Source: The University of Texas at Dallas

A person who is “addicted” to the computer is likely to have several of the experiences and feelings on the list above.

Now that you know if you have a problem, what are can you do about it?

Encourage Other Interests. Internet addiction focuses on many people, young and old. Get your loved one out from behind the glow of the computer screen. Encouraging the affected person to pursue other hobbies and activities may help curb the cravings of a computer.

Set Clear Limits & Monitor. Moving the computer into a common area of the house instead of a bedroom can help you monitor how much computer usage is actually occurring. If the addicted person is a child, limiting time online will definitely help. It becomes more of a challenge when the person is older such as a spouse.

Talk About Underlying Issues. Compulsive computer use can be the sign of deeper problems. Is your loved one having problems fitting in? Has there been a recent major change, like a move or divorce, which is causing stress?

Seek Professional Help. If all else fails, do not be afraid to seek professional counseling if you are concerned about your child or adult loved one. There may also be support groups available in your area as well.

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There Are New Restrictions On Stop Loss Pay For The US Army

Hank — Wed, 30 Dec 2009 13:00:26 +0000

A section of the 2010 Defense Authorization Act which was signed into law on December 19th, 2009 by President Obama prohibits the military from paying retroactive stop loss payments to any retired or former members of the military who extended or re-enlisted and collected a bonus while they were on stop loss status between September 11th, 2001 through September 30th, 2008.

The $534 million retroactive stop loss payment program was set up to pay eligible members of the military $500 for every month that they were involuntarily retained on active duty beyond their contracted term of service. A similar program that targets members who have been involuntarily extended on active duty after October 1st, 2008 also pays $500 per month and is funded through fiscal 2010 under the same appropriations act that imposes new restrictions on the retroactive program. Those who were stop lossed after October 1st, 2008 should not be affected by the bill signed by the president.

Because of the new restrictions, the Army and Air Force have temporarily stopped issuing the retroactive payments until they can clarify who received retention bonuses while under a stop loss status. The Army alone estimates that 120,000 veterans may be eligible for retroactive stop loss payments that it began approving this past December.

You Should Adjust Your Withholdings On Your W-4 To Save Your Tax Money

Hank — Sun, 20 Dec 2009 13:00:53 +0000

My wife and I get back over $3,000 every February when I file my family’s annual income tax return. My wife loves getting that money back from the federal government every year. It is kind of like a yearly bonus. I just wish that it would come before Christmas. Conventional personal finance advice would tell you though that you need to adjust your withholdings so that you don’t have too much tax withheld from your paycheck. A large income tax refund means that the government is taking too much of your money every month out of your paycheck. You are essentially giving the government an interest free loan.

You can adjust your withholding by submitting a new W-4 to your company’s HR or payroll department with an updated number of exemptions. While most employers do not advertise the fact, you have the right to change or updated your W-4 anytime you want to. To determine how many exemptions you should put down, I would use the IRS Withholding Calculator because some recent laws have made numerous “rules of thumb” obsolete.

To decrease the amount of money being withheld on your paycheck, you can increase the number of withholding allowances. A withholding allowance is used in the formula when figuring the amount of income tax to be withheld from your paycheck. The more allowances you claim, the less money that will be withheld for taxes. The maximum number of withholding allowances is ten. Be careful though, if you underpay your tax liability, you will end up owing more taxes at the end of the year when you file your income tax return. Your withholding allowance can be increased or decreased by completing a new W-4.

I personally over pay the government about $3,000 a year (the size of my average income tax refund). There are so many other things that you can do with that extra money that you give the federal government.

Pay Off Debt. The immediate benefit of adjusting your withholding is that you’ll have more money in your paycheck every month. If you’re in debt, especially high interest credit card debt, you can use this new found money to increase the amount of money you contribute to paying off that debt faster than you had originally planned.

For example, if you have $5,000 in credit card debt with an average interest rate of 15% APR, it would take you over 22 years if you paid the monthly minimum of $111 towards the debt (with no other spending). If you were to increase that monthly payment by the extra $200 you overpay the federal government in taxes every month ($3,000 refund divided by 12 months = $250), you would be done in only 19 months (1½ years). You will also pay less total interest over the life of the debt (approximately $5,000 versus $600) by paying more than the minimum payments.

Invest The Difference. You can also invest the extra money you will be saving by changing your W-4 withholdings. $200 extra dollars invested every month in a good growth stock mutual fund earning an average of 6% per year will grow to $32,775 in ten years and $92,400 in twenty years.

Save The Difference. Do you have six to twelve months of your living expenses saved in an emergency fund? You can save the extra money every month that will show up in your paycheck after you change your W-4 withholdings in a high yield savings account.