Important figures

Generally speaking, experts say that people’s monthly debt payments should not exceed 36% of their gross monthly income. This figure includes their mortgage. In other words, mortgage, car, credit card and other payments should not total more than about the third of your gross income – which is, simply put, your total income before taxes. This is crucial: beyond that level, paying for your common expenses (bills, food, gas, clothes, etc.) could become difficult and this is often where people start accumulating debt on their credit card in order to purchase goods and services that should actually be paid with their own cash… This is also where the distinction between good and bad debt can be made.

Good debt

There are some investments you could hardly make if you did not benefit from the help of a financial institution which is able to lend you substantial amounts of money. Think about purchasing a house, a condo or a car: putting tens of thousands of dollars of savings down on the table all at once is easier said than done! In these cases, getting in debt is almost inevitable. And it is not a bad idea to do it, for some of these essential goods increase your net worth and help you generate value.

A mortgage, for example, is generally considered good debt. In effect, purchasing a house often rhymes with increased value over time – given that market conditions are favourable. Therefore, getting a loan and paying interests in order to possess a house is not worthless: the moment you will want to sell your property, the profit it will yield is likely to be significant.

Although the scenario is a bit different for cars – they depreciate with time – owning one is a necessity for many people. In that sense, investing by getting a loan is not a bad thing if the car you buy allows you to go from home to work every morning in order to earn a living, which in turn enables you to pay for your bills. If you are living on a tight budget and decide to purchase a car even if you don’t really need it, then this investment could be considered “bad debt” in the eyes of many.

Bad debt 

Bad debt is not a very hard concept to understand: if you did not need something and could not afford it but still decided to borrow money in order to get it, you probably made a mistake. In effect, living on a tight budget often means living on credit. Sadly, credit card debt is probably the worst of all due to the very high interest rates they carry. Therefore, buying a new flat screen TV with your credit card, for instance, is probably not the wisest decision you can make when you do not have the capacity to reimburse it quickly.

When this happens, the products you buy end up costing you way more than their original value because of all the interests you have to pay. This is not good news, because most of the things that are sold on the market depreciate with time: if you ever sell it, the money you will receive is likely to only represent a fraction of the original price tag. But bad debt can also occur when one thinks he or she investing wisely. For instance, borrowing from a questionable institution or at a time when interest rates are too high also are kinds of bad debt, even if the good that is purchased is a house. Remember that having too much debt, no matter if you invested in goods whose value has a potential to increase with time, can put your assets in jeopardy.

About the author: Alexandre Duval is a blogger for Standard Life, a company that offers many financial services including an online annuity calculator.

When you are trying to get your financial life in order, one of the most important factors that you have to look at is your insurance situation. If you don’t have the right types of policies, it can really end up costing you a lot of money if something unexpected happens. With so much riding on insurance policies, it is important that you make sure you have the right policies in place. Here are a few tips on how to get the most out of your insurance policies.

Read the Coverage Areas 

When you are choosing an insurance policy, it is important to make sure that you read the areas that are covered. Not all policies are created exactly the same. Some of them cover everything that is not specifically named in the policy as an exclusion. Others cover only what is listed in the policy. This means that some policies could leave out a lot of additional items that you might want covered. When you are shopping for insurance on a site likeshophomeownersinsurance.net it is critical to make sure that you’re comparing apples to apples.

Get Additional Riders 

Another factor that you should look at when you are choosing an insurance policy is the types of riders that you can add on. A rider is like an add-on to a policy that gives you additional coverage in some area. For an example, most homeowners insurance policies do not cover anything for earthquake damage. You can usually add an earthquake rider for only a few extra dollars per year.

Most homeowners insurance policies also do not cover flood damage if the water comes from the outside of the house. Because of this, you might want to look into adding flood insurance to your house. If your neighborhood happens to flood and your home is damaged, it could do thousands of dollars’ worth of damage that isn’t going to be covered by the insurance company. 

Contents

When looking at your insurance policy, you should also make sure that it covers the contents inside of your house as well. Most homeowners insurance policies have some kind of provision that will cover damage to items inside the house up to a certain limit. You need to look at the coverage limit to make sure that it is within reason. If you happen to have a lot of expensive stuff inside your house, you might want to increase the coverage limit a bit. The cost to do this is usually very minimal overall.
Deductible

Another factor that you need to look at with all of your insurance policies as the deductible amount. The deductible is the amount that you’ll have to come up with out of pocket when a claim is filed. At first glance, it may seem wise to keep the deductible as low as possible because you do not want to have to come up with any money when a claim is filed. However, when you have a low deductible, it raises your premiums. Put the deductible at a level that you can afford, but still high enough that it keeps your premiums reasonable. You don’t need to give the insurance company your money in advance before any claims are filed. That’s why you should just save up and keep some money to pay the deductible if a claim needs to be filed.

Overall, there are a lot of different variables that go into crafting an insurance policy. Take the time to read over your policy carefully and make sure that everything is to your liking. Otherwise, you might end up with a policy that doesn’t work like you expect.

That figure could change, as could the 88k monthly rise in US nonfarm payrolls announced on Friday. But the initial effect is always greater than that of any subsequent adjustment. Investors had been expecting an increase of around 191k for March and their disappointment was not alleviated by the 61k upward adjustment to the figures for January and February. As has once again become the norm, the weaker than expected economic statistic sent the US dollar lower. Compared with Friday’s opening levels it is down by a cent against the pound and by half a cent against the euro.

And there was even greater disappointment at the Canadian numbers. The net monthly change in employment there was -54.5k, the fall more than wiping out the previous month’s 50.7k increase. The news overshadowed a healthy ten point improvement in the Ivey purchasing managers’ index (PMI) to 61.6 and cost the Loonie half a US cent. It fell by a cent and a quarter against the pound so maybe not the ideal time to start sending money abroad.

The only figure sterling had to contend with was the Halifax house price index. It showed a monthly rise of 0.2% and an annual increase of 1.2%. The press release referred to “modest improvement” in the housing market and looked forward to “a modest increase” in house prices this year. It was all terribly modest and had no effect on the pound. As well as its gains against the Canadian and US dollars the pound went up by one NZ cent and one and a half Australian cents. It managed to pick up a quarter of a euro cent and was unchanged against the Swiss franc.

Sterling derived some benefit from a speech by Spencer Dale, the Bank of England’s chief economist. Talking to Asian business leaders he said that the idea of shifting the Bank’s monetary focus from inflation to growth was “dangerous talk”. His sentiments did not come as a surprise but were nevertheless reassuring to investors.

Figures released earlier today showed a six point decline in Australia’s construction sector PMI and a narrowing of Japan’s trade deficit. The Japanese figure had no effect on the yen, which has fallen by 7% against the pound since Easter as a result of the Bank of Japan’s more aggressive asset purchase programme.

A statistically quiet day lies ahead. From Europe come Swiss and German industrial production and Euroland investor confidence. After lunch the Bank of Canada publishes the results of its business outlook survey. Tonight brings the BRC retail sales monitor and the RICS housing price balance as well as Chinese inflation and Australian business confidence. Price movements in the Far East this morning were small and there is no reason to expect increased volatility during the London session.

Debt consolidation leaves you with one payment to make every month, instead of many. So some people do it just because they want to simplify their payments and their budget.

Here’s a look at three different kinds of debt consolidation, provided by 4ukdebtconsolidation.

1. Debt consolidation loan

A debt consolidation loan is large enough to cover your existing unsecured debts, and leaves you with one repayment. Spreading a loan out over a longer repayment period will lower your monthly repayments, but can work out more expensive overall because you’ll be paying interest for longer.

However, if you can comfortably afford your repayments, and you have a good credit history, then you could might be able to find a debt consolidation loan with a lower interest rate than you’re paying on your current unsecured debts.

2. Debt consolidation plan

A debt consolidation plan is more commonly known as a debt management plan. It can help people who cannot afford their existing unsecured debt repayments, and would like to consolidate those payments into one manageable payment per month.

Repayments are lowered by spreading them over a longer period, and it is often possible to freeze interest and charges on these repayments. However, lowering repayments is recorded on your credit record for six years, making it more difficult to borrow more money, or get the best deals on financial products, during that time.

3. Remortgage

Homeowners with enough equity in their home might have the option of securing other debts (like credit cards and loans) against their home. This increases their mortgage and spreads the repayments over a longer period, which will cost them more in interest overall – but it can bring their overall monthly costs down.

Before securing debts against their home – with a secured loan or a remortgage – homeowners should make sure they can afford the payments, because they risk repossession if they fall behind with their payments.

Written by: Lucy Bower

This isn’t as easy as it seems, but it can be done. There’s the registration of the business and the preparation for opening the business itself to contend with. That’s assuming you want to make a serious go of it.

Of course you do, and here is how you should go about it.

Before opening for business you’ll need to:

• Place the initial amount of money legally required to start up a business in Oman. This must be an Omani account. International banks like HSBC offer good business banking services and have branches throughout the Middle East, especially helpful if you expand or move your business.
• Register with the Ministry of Commerce and Industry. You must renew this registration every five years. Registration fees start at 40 Omani Rials.
• Register at the Chamber of Commerce. The fee starts at 128 Omani Rials, plus a further 12.50 or more for registering with the Municipality of Muscat.
• Register with the Department of Taxation in the Ministry of Finance. They’ll ask you to fill in a declaration of your business particulars.
• Register your employees with the Public Authority for Social Security. You’ll need to provide a copy of their contracts for this.
• With all these steps out of the way, the registered signatory can then apply for a company seal for 50 Omani Rials.

What should you consider when starting a language teaching business?

Qualifications

Many people think that teaching English in Oman and other Middle Eastern countries is a question of walking into the classroom and just speaking the language. However, to teach English in Oman you need to prove you can teach. This means holding a degree, a qualification in teaching English as a foreign language, and at least two years of teaching experience. Besides, if you want to present your business as a serious English academy, you should definitely have both.

Your niche

You need to think about who you plan to teach. Do you find working with children more rewarding, or do you prefer to work with adults? What type of English do you plan to teach — holiday English, business English, technical English? Remember that this is your business venture, so as well as following demand you must find a niche that you love working in.

Your own language skills

Proficiency in English is a must, of course. At some point, though, you’ll be working with Omanis who only know Arabic. Show your students you respect them by learning their language. You’ll make your own job easier into the bargain, and it will also become more fun.

Language teaching is a serious business. Not just anybody can start up a language school. If you’re doing so in the Middle East you should prepare thoroughly, by studying language teaching itself and the language of your students. Don’t forget it’s a business, so approach your bank for any business banking advice you might need. You might even get some free Arabic language tips!

If you’re thinking of starting up a language school or other type of business in Oman, you can visit the Omani Chamber of Commerce website at http://www.chamberoman.com/index.aspx for more information.

Teaching English as a Second Language

One of the most common jobs for expats and avid travellers is teaching English as a second language (ESL). While it’s possible to find opportunities abroad without prior training, you’ll have an easier time being placed at a job and the opportunity to earn more money from the start by obtaining your TEFL certification. Certification requires 120 hours of interactive training, but once you have it, you can browse the listings on sites like TEFL.com, TEFL.net, and FreeTEFLJobplacement.com. If you don’t plan on obtaining certification, check out the listings on Dave’s ESL Café for some decent opportunities in Korea or Japan.

Writing

If you’re a talented wordsmith, there are a number of opportunities to get paid for your writing as you travel. Those who are interested in full-time work can apply for positions at local English-speaking newspapers or magazines, while those who want something part-time may try their hand at freelance work. The high-end of the pay scale is to land a gig with an in-flight magazine or a magazine with a large distribution, but novice writers will have better luck pitching their stories to their hometown magazines and newspapers or indie travel websites like BootsnAll, Transitions Abroad, Big World, or Matador. You may consider starting up your own blog as well; you may not make any money from it at first, but once you’ve built a steady base of followers you might be able to take advantage of pay-per-click advertising or make an agreement for companies to advertise or do sponsored posts on your blog.

Seasonal Jobs

If you’re looking for a temporary work arrangement in a foreign country, a seasonal job might be the right choice for you. This term encompasses a wide range of service job opportunities, from jobs at summer camps and holiday parks to winter jobs at ski resorts. You may have some luck in landing a position as an au pair, waiter, or barmaid as well. Check the listings at SeasonWorkers.com and SeasonalJobs365 to line up your next job abroad.

Ready to forge a new career path abroad? Make sure you have enough money to purchase your plane ticket and cover your basic living expenses until you receive your first paycheck. Sell your unwanted DVDs, CDs, and other electronics through an online buyback programme to start raising funds for your travels.

What is PPI? 

A lot of people may have heard of PPI in the last few years without having any idea what it is. Quite simply, it is a type of insurance which covers your repayments on loans, credit cards and other forms of lending if you can’t make them for certain reasons. These reasons include serious illness or injury, as well as some other reasons (depending on the PPI provider) why you aren’t able to work and earn money to pay your debts.

If you do your research into PPI and make sure you know exactly what type of cover you are getting when you take out a loan or credit card, there is no danger that you will be a victim of PPI mis-selling. Companies are also not allowed to bundle PPI in with financial products anymore, at least not without telling you first.

When can PPI be useful?

There are many things to think about before taking out payment protection insurance. For example:

• If you have no other cover. You should find out if you have any other cover for loan and credit card repayments in the event that you can’t work. Life insurance, critical illness insurance and income protection insurance can all cover loan repayments, as can sickness or redundancy benefits offered by your employer. If you don’t have any cover, PPI could be the right choice for you the next time you apply for a credit card.

• If you only have insurance for illness. Even if you have illness insurance, this is not likely to cover employment as well. This is when PPI really comes into its own, as it covers many different types of unemployment. However, you should check whether a particular policy covers dismissal or self-employment before taking it out.

• You don’t have any savings to fall back on. Those without savings can really benefit from PPI, as it will act as a safety net in case the worst happens. Even if you have small sum in savings, this won’t be enough to cover you in the long-term, and you could be left without a penny for emergencies.

1. We Seek Advice

Did you start your business without talking to others about legal issues, purchasing and shipping challenges, and whether a business incorporation or a sole proprietorship is the way to go? Probably not. The same goes for buying products and services. When we are unsure about our purchases, we look to others for confirmation. What are my friends and family members doing? What have they done in the past? Your customers are asking themselves these subconscious questions to overcome insecurities about a purchase. You can take advantage of this by allowing shoppers to share their purchases on social media sites.

2. We Trust Specialists

Authority has a massive amount of power in social commerce. Product reviews on YouTube, blogs, Twitter, and other social media sites feature in more than 75% of purchase decisions online. When experts create these reviews, they are even more persuasive for your potential customers. Linking to reviews for your products and store on other web platforms will help you use this psychological trait.

3. Less is more

When shoppers think a product or offer is scarce, the fear of missing out on a deal makes them assign a higher value to that product. This is the psychological principle that makes one-time offers and exclusive deals so enticing. Try a sale that shoppers can only redeem through Facebook to take advantage of this principle.

4. The Power of the Network

Consumers tend to copy the actions of the people they like or follow. The implicit trust and affinity that we share with our connections on social networks makes us more likely to mimic their purchases. We are also more likely to share the deals we have found with our own followers.

5. Shoppers are Loyal

Do not underestimate the power of loyalty. Consumers tend to choose products or providers that align with our past actions whenever we are unsure about purchase decisions. People love consistency. Our online satisfaction makes us loyal to certain brands, and this fuels our future shopping patterns. You can take advantage of this by creating a distinct brand with ecommerce software and pleasing your customers. You can also align your brand with another provider that has pleased your customers in the past. If you do this, chances are that shoppers will come back for more.

6. We Love Fairness

Shoppers love to pay it forward. They have an innate drive to repay favors that have been done for us and to balance the scales of fairness in our day to day lives. This means that online customers will want to share the deals they find in your store with shoppers they know. You can leverage this by sharing updates and exclusive deals within your social network and allowing your customers share them as well.

However, especially in the beginning, you may have times where your freelance clients aren’t timely with their payments.  If you haven’t yet had time to build up an ample emergency fund, a large late payment can put you in a tight position.  Here’s what to do in that case:

1.  Skimp through on what you have.  Put off buying groceries or visiting attractions.  Put off all non-essential spending.  Eat what you have in your house, even if it isn’t what you would prefer.  See if you have kind friends who will invite you over for a bite to eat.

2.  Pick up an extra job.  If you’re able, pick up a quick freelance job to help you earn money to tide you over until you get the money you’re waiting on.

3.  Get a short term loan.  If you have rent or bills that are coming due and you can’t put them off, consider getting a cash loan until your income comes in.  Thanks to responsible lending, you can learn all the terms of your loan.   Make sure you pay it off as quickly as possible so you don’t have to pay a large amount in interest.

4.  Borrow from friends or family.  If you feel comfortable doing this, you can also borrow from friends or family.  Just make sure to pay back the money as soon as you get your payment.

Being short on cash thanks to a slow paying client is no fun.  Once you make it through this bump in your freelance career, make sure to lower your expenses so you can increase your emergency fund.  Then, the next time a client pays slowly (and it will happen again), you’ll have your own built in cushion to see you through until you receive payment.