Category Archives: Personal Finance

Is Debt Consolidation Right for Me?

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If you have outstanding debt, you may have heard of debt consolidation. Designed to take multiple debts and roll them into a single, manageable monthly payment, debt consolidation can help people save money on interest and pay their debt off faster. It’s not right for everyone, though. Here’s what you need to know.

How Debt Consolidation Works

Say you have three credit cards. Each has a different high interest rate and a separate monthly payment. Each month, you make the minimum payments on each card, but you notice that you’re not making much progress. What are your options? If you have a manageable amount of debt and want to restructure it, debt consolidation may be worth considering.

Because debt consolidation takes multiple forms of debt with varying interest rates, due dates, and payments and rolls them into a single package, it’s an excellent option for people who want to reduce their overall debt burden and work smarter (not harder) to pay it off.

Popular Debt Consolidation Methods

When it comes to consolidating debt, there are two standard methods people can choose from. Both debt consolidation method work to concentrate debt payments and offer a single monthly bill:

  • Open a 0% Interest Card. If the debt load is minimal, one of the fastest ways to pay it off can be to open a 0% interest, balance-transfer credit card. Once you’ve opened the card, you can transfer your debt onto the card and pay the full balance before the promotional period ends. If you’re going to take this option, though, be aware of balance transfer fees. Save yourself money by getting a card with no balance transfer fee.
  • Get a Personal Loan. If you have a more substantial amount of debt, you can look into getting a personal debt consolidation loan. These loans typically offer low, fixed rates, and can help you get a handle on your debt.

If you own a home, you can also look into a home equity loan or 401(k) loan to help you consolidate your debt. These options should be used as a last resort, however, since they involve risk to your investments, namely retirement and your home. If you’re interested in taking one of these options, consult with a financial planner first.

When Debt Consolidation is Right for You

While debt consolidation can be a good option, it’s not right for everyone. Here are a few indications that you’re a good candidate for consolidation:

  • Your total debt load isn’t over 40% of your gross income. If you have a higher debt load than this, you may want to explore other repayment options.
  • You can get a 0% interest card. If your credit is not good enough to qualify for a 0% card or low-interest loan, you may pay more throughout your loan in interest.
  • You are confident you will not run up debt again. If you consolidate credit card debt only to run up credit card debt again, you’ll have two high payments to deal with. Don’t consolidate unless you’re confident you won’t do this.

If you meet the above criteria, debt consolidation may be an excellent option for you. Enjoy your newfound life of financial freedom!

Credit card security: Fraudulent scams to look out for

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These days, many people rely on credit cards to make significant purchases. Electronic payments are quick and simple, but you must protect your account from fraudulent activity. There are many scams out there designed to steal your details and money, so here are a few to look out for.

Card not present fraud

Believe it or not, your card doesn’t have to be physically stolen for criminal activity to take place. That’s right, crooks can access confidential information from receipts and use it to buy high value items over the internet or on the phone. This is called card not present fraud and can leave a big dent in your bank balance. Fortunately, the UK’s Serious Organised Crime Agency is one the case and recently teamed up with the FBI and US Department of Justice to shut down over 30 websites selling stolen card details.

To protect yourself: Always dispose of personal details carefully (preferably by shredding) and never throw receipts into a public bin. If you do hold onto them, keep all paperwork in a safe place.

Cash machine (ATM) fraud

According to the UK Cards Association there are three main ways in which cards and card details are stolen at cash machines. Firstly, a trapping device is used to retain the card inside the cash machine. The criminal then offers to help and encourages the victim to retype their PIN. When they give up and walk away, the thief releases the card and reuses it at a late date. Secondly, a skimming device is used to copy electronic details and transfer them onto a fake card. The PIN is stolen using a secret camera. Thirdly, criminals shoulder surf and watch people typing in their PIN. They then steal the card using distraction techniques.

To protect yourself: Cash machines often contain a picture of what they should look like. Use this for reference and go somewhere else if there are signs of interference.

Counterfeit fraud

Some criminals manufacture fake credit cards. The details of genuine cards are then duplicated onto the counterfeit card via the magnetic stripe. They then enter circulation making it very hard for shop owners and sales assistants to spot if anything’s wrong. Cash machine fraud tends to fuel this kind of activity, as personal details can be easily stolen. Luckily, this type of fraud has dropped by 79 per cent over the past couple of years (as reported by the UK Cards Association), thanks to Chip and PIN technology and sophisticated fraud protection software.

To protect yourself: While counterfeit fraud appears to be decreasing, you must always apply for a credit card from a reputable banking group. If you work in a store, always double check with other staff members or contact the police, if you suspect anything suspicious.

A wallet wouldn’t be complete without a low interest credit card, but try to protect your privacy and banking details whenever possible.

 

How Savings Accounts Can Help You

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A savings account isn’t just a place to park your money, but it is also a tool that can help you meet your money needs.  Whether you need to put your money into a savings account for the short term, or if it is an integral part of your retirement plan, a savings account can help you manage and plan for your money needs.

 

 

Easy Access

 

The first thing that is great about a savings account is access.  20 years ago, having a savings account meant that you had to go to the bank to transfer or withdraw your funds.  It was harder to use than a checking account (where you could just write a check), but it was safe and obviously cheaper than a www.paydayloansonline.com.  However, now with online banking, you can access your savings anywhere, and transfer funds as needed.  This gives you the benefits of a savings account (earning interest), while still maintaining easy access.

 

 

Safety and Security

 

Savings accounts also provide safety and security for your money.  When you apply for a savings account, you do so at a bank or credit union, which is FDIC insured.  This means that as long as your balance is under the FDIC minimum, you will never lose money by keeping your account at the bank.

 

Keeping your money at a bank is also infinitely more secure than storing large sums of money at your home.

 

 

Budgeting

 

Finally, a savings account can help you budget.  Many people use a savings account as a place to store their emergency funds, which is their savings in case something unexpected comes up.  A savings account is a great tool for that, since the money is safe, and it earns interest over time.  Also, since it is separate from your checking account, there is less incentive to spend the money.

 

Many people also open multiple savings accounts for multiple goals.  For example, there could be a college savings account, a vacation savings account, and more.  This allows you to set aside specific amounts for specific goals, all while having the safety, security, and access of a savings account.

Post by Robert

Buy a Mac to save money over time

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As a computer geek since a young age, I’ve spent literally hundreds of thousands if not millions of yen over the years on computer equipment. I’ve spent the majority of my life dealing with Windows based Intel-PCs, from brand name pre-built laptops and tablets to custom built servers for myself; and more recently a lot of Apple Mac stuff. Anyone, even non-geeks, will know how quickly computer equipment depreciates over the course of just one year – that Windows computer you bought for ¥200,000 yen last year can’t even be bought new this year it’s so out of date, and if you try to sell it second hand you’ll likely to get less than ¥20,000 for it if you’re lucky – but then that’s the cost of cutting edge computing, we understand that. But the curious thing is, Apple computers don’t depreciate / devalue at the same rate of Windows PCs. Any of your standard windows PCs are going to be worth about 10-15% of the purchase price after 2 years; while Apple computers have historically still been valued at 35-50%, a huge difference in rate of depreciation.

Oh, really?
Yes. I suspect the main reason is a superior design – my Macbook Pro is now 3 years old, but it still runs fast due to less clutter over time than a Windows machine, and frankly it still looks damn nice. I paid ¥220,000 for it at the time, and a quick check on yahoo auctions shows the same model, used, selling for between ¥100,000 – ¥150,000. That’s after 3 years! For comparison, we recently tried to get rid of my fiance’s NEC laptop (built in TV, fantastic speakers, but just a little slow for my tastes and unneeded in our house) – ¥150,000 at the time, again about 3 years ago, but now selling for ¥20,000 on auctions! Shocking! It was probably an ugly computer at the time she bought it too, but can’t blame her for having a lack of style choice I guess. (I do blame her though)

The fact is that Macs depreciate slower than Windows PCs (regardless of the brand), so when the time comes to upgrade you’re going to have lost less of your investment if you purchased a Mac.

There’s also a product cycle guide for Apple products over at Mac Rumors – it gives you advice on whether to buy a Mac based on how into the product cycle it currently is, and how likely it is to be updated soon.

Disclaimer: I guess you could call me a Mac fanboy. I was a bona-fide Apple bashing Windows fan-boy until about 5 years ago, but then Apple released this little thing called OsX and it blew my mind away. Just saying. I’ve played with every OS out there from Irix to Windows Tablet Edition (bet you didn’t know either of those even existed), and Mac OsX is the best.

Getting Unemployment Benefit in Japan

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My contract with the university I was working at wasn’t extended last month, but there’s no chance in hell I’m going home. I’m getting married next month, and my future wife is a student here until March so that’s just not an option. My Visa problems aside, I planning on using this and the next few months to perform a major career change operation, so I need to receive unemployment benefits in the meantime.

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Claim back tax on UK accounts

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If you’ve been living in Japan a long time now, chances are you’re still paying tax on interest you earn back home in the UK. Well, you needn’t be, if you’ve been out of the UK for more 90 days during each tax year – at which point you are classed as a non-resident.

Firstly, you’ll want to download and fill in this R105 form which says you shouldn’t pay tax from now on – and mail that to your bank or building society. Note that not all banks will allow you to not pay tax.

Next, find your financial records for all the years past that you’ve been living here in Japan and still paying tax back home. You can claim for up to 5 years of past tax deductions. You’ll need to fill out a separate R43 Tax Repayment Claim for each year, and the forms vary slightly by year. You can find them all here though. Send this to the inland revenue.

Easy 2 or 3 man in your pocket, and gross (no tax) interest on your savings in the UK from now on! What are you waiting for?

Oh, and if you’re wondering about the cheapest way to send money to the UK to earn that interest (with an infiinitely better rate than the 0.2% or whatever chump-change you’re offered here in Japan), then I suggest you check out GoLloyds. They charge a maximum of 2000 yen fee no matter how much you send back! And if you wouldn’t mind when you’re signing up please write “JAMES ANDREW BRUCE” in the referrer box, which will give me 2000 yen credit towards my next money transfer! Thanks!

Investing for Beginners

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After lots of requests for information on investing while in Japan, I’ve decided to write a very basic introduction. This time I’ll be looking at managed funds, which is probably the easiest way to get a good return on your spare income with minimum of effort over a long term. Of course, there are other investment options – stocks, foreign exchange trading – but they require far too much effort and you’re just as likely to lose money unless you really know what you’re doing.

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Forget Budgeting – Do Conscious Spending

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For this months blog matsuri on living on a budget in Japan, I knew I had to write something. I mean, would the frugalista ever be forgiven if he didn’t write something about budgeting? I can make my excuses about a favourite places in Japan perhaps, having only made it as far as Tokyo last week despite having lived here for 6 years! Surely, Billy of Tune in Tokyo is expecting something of me this month. But dammit, I hate budgeting. Writing down everything I spend and totaling up everything each day? Thanks, but I have a life. Limiting myself to spending less each month on something I love? Err, screw you, hippy. Saving 5 yen by going to a different 100 yen store that absorbs the cost of consumption tax themselves? Whatever, if you really enjoy counting pennies then go ahead, I will not be wasting my time accompanying you on your epic adventure to the ancient realm of scroogedom. I do, however, spend consciously.

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