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In the market for a new home? How about your FIRST home? This is both exciting and stressful. However, to elevate some of the stress and confusion, there are lots of things you can do to help make the house hunt easier and the entire process less stressful.

–        Make sure you are saving/have saved for a down payment, closing costs, taxes, and insurance.

–        Constantly work on improving your credit score

–        Calculate exactly what you can afford and don’t go over budget

–        Get pre-approved to see if it matches your budget

–        Choose a realtor

–        Make at ‘wishlist’ of what you want in a home

–        Visit homes – hopefully find your dream home and make an offer

You also want to make sure you look at safe neighborhoods. While crime happens in all areas, moving to an area that is less prone and already has a low documented crime rate will give you peace of mind.

Don’t forget to add in other costs as well – utilities, l andscaping, remodel/renovations. You might find an amazing deal on the house with a mortgage you can afford and then go WAY over your monthly budget, because of all the extras.

Take your time and don’t rush. Purchasing a new home – especially your first home – should be taken very seriously with a focus on every detail.

1st-time-hb

Critical Illness Insurance – Another Scam?

Unless you have substantial savings, even in the UK, contacting a serious illness, such as cancer, can be a very costly affair. Above all, not only do you need to consider how contracting such a critical illness will affect your savings in any medical care bills, but you also need to consider that you may well not be able to earn any income to cover you day-to-day expenditure. As a result, making sure you take out a critical illness insurance may well be one of the wisest and astute financial decisions you make.

What Is Critical Illness Insurance?

In short, a critical illness insurance policy is very much like any other insurance policy you take out. Here, however, your premiums go towards insuring that you do not contract a critical illness. In the event that you do contract a critical illness, your UK insurance provider will pay you out a tax-free lump sum to help you cover the day-to-day costs of having to live with your new medical condition.

Are There Any Limitations With Critical Illness Insurance?

Yes; it is essential that you look at the list of critical illnesses that your insurance policy covers, as these will be the only illness under which the policy will pay-out. In other words, the UK insurance provider will not pay-out on the policy simply because you have a doctor’s certificate that you have a critical illness, it needs to be one of the designated critical illness.

Moreover, if you are considered by the UK insurance provider to be a high risk – for example, if you smoke – then it is likely that either you will not be able to obtain the critical illness insurance, or your insurance premiums will be significantly higher than if this were not to the case. Importantly, you will need to disclose whether or not you have any existing conditions, in which case these will likely not be included, and whether or not your family has a history of the illnesses set out in the policy, in which case this will likely affect your premium payments.

How Will I Be Paid?

As mentioned, with a critical illness insurance your UK insurance underwriter will pay you out a lump-sum tax free amount once you contract one of the critical illnesses listed in the policy. Having paid out the lump-sum amount, your relationship with the UK insurance provider will come to an end. In other words, you will not have an ongoing relationship with the insurance provider paying you intermediate payments.

Is It Worth Having Critical Illness Insurance?

The question of whether or not there is any value in you having a critical illness insurance will depending largely on your age, expenses, and whether or not you have any other insurance. Essentially, critical illness insurance covers an area for which other types of insurance can be obtained. However, unlike other types of insurance, this is a very specific insurance policy paying out for a very specific purpose. That said, there is a strong argument that you can never really have too much insurance and will numbers seemingly showing that more and more of us contracting critical illnesses as we grow as an aging population, this type of UK insurance is always useful.

Dealing with Debt

Most everyone has, at some point in their lives, accumulated personal debt—some more than others. Whether debt is a cause for concern depends upon a number of factors, including how the economy is functioning, your particular earning and economic prospects for the short and long term, and the type of debt you incur. By being conscious of your spending habits, including credit card use and large purchase habits, you can better underst and ways to control debt—before it starts to control you.

To gain a perspective on personal debt, it is useful to distinguish between healthy and unhealthy debt. Healthy debt refers to borrowing in order to purchase assets that are likely to appreciate in value, such as a home or business. Healthy debt is especially worthwhile to assume if you are able to itemize certain repayments (e.g., home mortgage interest) on your tax return and, as a result, qualify for certain tax deductions.

Unhealthy debt, on the other h and, refers to borrowing in order to purchase consumables or assets that are likely to depreciate in value, such as a vacation or an automobile. Unhealthy debt has taken an even more negative turn since the government stopped allowing tax deductions for most consumer debts, such as personal loans and credit cards.

Debt Management Basics

For most people, managing debt effectively is a learned skill. The following pointers may help you get your debt under control:

Categorize debts. To gain control of personal debt, you might start by developing an overall picture of your current debt situation. Debts should be categorized as healthy or unhealthy. Then, they should be scheduled according to whether they are short-term (e.g., credit cards), intermediate-term (e.g., auto loans), or long-term (e.g., mortgages and home equity lines of credit). The interest rate for each type of debt should be noted.

Pay off the “right” debt first. It usually makes the most sense to pay off high interest rate debt first, especially if the interest is not tax deductible (e.g., credit cards). Ideally, you should have enough in savings to pay off short-term debt, if needed. Because credit cards are typically used to purchase consumables, rather than assets that appreciate, they can easily tempt consumers to live beyond their means. Thus, it is best to develop the habit of paying off this type of debt on a monthly basis.

Avoid the minimum payment trap. Interest that accumulates by stretching out payments can make even a “bargain” costly in the long run. To underst and the impact of making only minimum monthly payments, you may want to ask your credit card company how long it would take to pay off your current balance at that rate, and how much total interest you will ultimately pay. This information prompts many individuals to adopt a “pay-as-they-go” strategy.

Curb impulse spending. If you are prone to impulse spending, you may find it best to avoid shopping when you don’t have a specific purpose in mind. Or, you could try to delay impulse purchases for 24 hours. Once you have had a chance to “sleep on it,” you may discover the impulse has passed.

Benefits in Good Times and Bad

If you are like many people, spending may not be based solely on financial considerations. Emotional factors may sometimes cause confusion between what you think you need, and what you actually do need. Still, the reality of living in the twenty-first century may leave you with little choice but to amass at least some debt. However, with discipline and planned spending, you can most likely manage your debt and live within your means.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this article is not intended to ( and cannot) be used by anyone to avoid IRS penalties. This article does not support the promotion and marketing of any particular product. You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife [New Engl and Financial] representatives do not provide tax or legal advice. Please consult your tax advisor or attorney for such guidance.

Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.

L0510106050(exp0511)(All States)(DC)

This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116

Money Management Tips for Young Adults

Young adults today face a variety of challenges in their quest for financial security. Some of these obstacles are similar to those faced by previous generations, while others are unique to the times. If you are a young adult, here are five financial tips to help you manage your money and prepare for your future.

1) Invest in your future. Ongoing technological changes in various fields may require continuing education. You may wish to make ongoing career education a priority to enhance your skills and increase your professional potential. The more varied and flexible your skills, the more attractive you may be to prospective employers.

2) Open an emergency savings account. The uncertainty of the workplace may mean that your professional life will be interrupted by career changes. If you need to return to school full-time to change career paths, you may face periods of time without stable income. Creating an emergency fund to cover several months’ worth of living expenses can help you manage work-related transitions. This savings fund can also be used for opportunities, such as starting your own business.

3) Save early and continuously for retirement. Saving for your retirement is your responsibility—so apply discipline and diligence to this ongoing objective. You cannot necessarily depend on the government to provide future Social Security benefits. With employer-sponsored 401(k) plans, the responsibility of saving rests on your shoulders. Although you may be years away from retirement, the key is to make time and compound interest your allies.

4) Let retirement funds accumulate. If you change jobs early or often in your working years, consider rolling over your account into an Individual Retirement Account (IRA) or new company retirement plan. It may be tempting to cash in the account, especially if you have accumulated only a small amount, but doing so would make it immediately taxable and you may also incur an early withdrawal penalty. Perhaps a greater concern, however, is that you may be unable to make up for time already spent to accrue these savings.

5) Use credit wisely. Credit card companies frequently target young adults with the lure of “easy money.” While credit cards offer convenience (it’s virtually impossible to conduct some transactions, such as reserving airline tickets, without one), they also have the potential to create debt problems. Because payments can be stretched far into the future, overspending on credit can create an illusion of wealth. Paying off the full balance each month is the best way to control your use of credit.

Plan Now for the Future

Remember, the funds you accumulate during your working years may be your primary source of retirement income. Although inflation may threaten your nest egg, a little discipline and common sense over time may help you better manage your current and future financial affairs.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this brochure is not intended to ( and cannot) be used by anyone to avoid IRS penalties.You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife and its representatives do not provide tax or legal advice. Please consult your tax advisor or attorney for such guidance.

Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.

L0910131096(exp1211)(All States)(DC)

This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116

Guidelines for Keeping Credit in Check

Imagine you are at an auction and an antique lamp you love is about to come on the block. When you viewed the auction items earlier, you placed a value of $100 on the lamp. It is late in the auction, you have planned your bidding carefully, and you have exactly $100 in cash left in your pocket.

Price Equals Value

When the bidding reaches $90, you and one other bidder are still in the game. So, what is the likely outcome? If the bidding goes to $100, you will either get the lamp or drop out of the game. In this case, the amount of cash you have left equals the value you assigned to the lamp and effectively limits the amount you can pay. Assuming you are alone and cannot borrow some money from a friend, what you are willing and able to pay is controlled by how much money you have in your pocket. In this example, we might say the price of the lamp equals its value.

Exp anding Value

Let’s now modify the scenario slightly and see how the outcome might change. Instead of it being late in the auction, this is one of the early items to go on the block, and it will be the first item on which you will bid. You have $500 in your pocket, the total amount you have allotted for the entire auction. The bidding has reached $90. What should you do? What are you likely to do?

Since you originally placed a value of $100 on the lamp, you should be prepared to drop out if a $100 bid does not secure the lamp. However, unlike the first scenario, in which you only had $100 left, you have a full pocket. Depending on how much you want the lamp, it is possible that you would exceed your initial limit and continue bidding, particularly if you thought that a bid slightly over $100 might be successful. What’s the big deal about going over a little? After all, you may not even be successful on some other items of interest.

Although in this case it’s probably not a “big deal,” you have exp anded your definition of value. What was originally a $100 value has been exp anded to, perhaps, a $110 value. Notice how easy it is to lose one’s sense of value and have something that you want become something that you feel you need.

The “Value” of Increased Buying Power

Okay, now let’s change the scene once more. This time, in addition to cash, the auction house will accept payment by credit card. What can happen to your sense of value when your buying power has been increased?

It appears that people may be less quality conscious in their buying behavior, may not negotiate as skillfully, and may pay more when buying by credit card than when making an identical purchase by cash. If the bidding were to surpass $100, it is quite likely that you would be willing to pay far more than your original assessment of what the lamp was worth.

This possibility suggests that “hard money” and “plastic money” carry different meanings. Hard money (i.e., actual dollars in your pocket or checking account) tends to be perceived as finite—when you run out of dollars, you’ve exhausted your buying power until you obtain more dollars. On the other h and, credit cards can exp and your buying power up to the credit limit of the account.

The alluring aspect of being able to buy on credit can become transformed into an exp anded sense of value. In the process, it is easy to lose track of the relationship between price and value, and to pay more than we know an object is worth. It is this changed sense of value that is, perhaps, the most concerning aspect of credit card purchases. We simply lose our sense of what a good deal is all about, and we become less smart about our shopping.

Buying on credit can be a great convenience, and it can make sense when we are temporarily short of cash. However, when buying on credit becomes our st andard way of doing business, it can have some highly undesirable consequences. One way to guard against credit card abuse is to ask two questions when making a credit card purchase. First, would I still purchase the item if I were paying cash? Second, would I pay the same price if paying by cash?

By keeping the focus on value, you can better distinguish between things you would like to get and things you absolutely must have. Making this distinction can help you avoid the major pitfalls of buying on credit—overpaying on individual items and spending beyond your means.

Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.

L0410100933(exp0411)(All States)(DC)

This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116

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