Below are some figures from the Bureau of Labor Statistics (BLS) that describe general cash flow patterns for the average American household.  These statistics were printed by the BLS in 2006 and is called the “Average annual expenditures and characteristics, Consumer Expenditure Survey”.  Check the figures below to see how you stack up against the average American family.

The average family in 2006 made approximately $58,101 after taxes, which varied from $28,535 for 28 years and under to over $77,000 in the 45-55 year old category.  To make this easier to read, from here on I will stay consistent by only providing averages, and you can make the adjustments according to your specific situation.

The average household is made up of 2.5 persons and approximately 67% are homeowners with 33% renting.  Total average expenditures are $48,398, which would mean the average household should have around 16% left over for wealth creation and retirement savings; however, statistics show this is not the case but rather 30% of total households have less than $50,000 saved up for retirement, including their home.

The average family spends around 10% on food or just over $6,000, 15% on a car or other transportation and approximately 28% on housing.  Healthcare and entertainment each take around 5% and insurance or pensions cost approximately 10% of total household income.  This leaves phone and utilities of around 8% and the remaining 5% I lumped together as miscellaneous. 

Always remember: cash flow is king.  Approximately 15% of Americans households have a zero or negative net worth and according to bankrate.com only 3 in 10 workers expect to have enough cash savings to retire in comfort and 19% are worried they may never be able to retire.

Author

Chad Sunyich

Today, a growing number of American families are finding it more and more difficult to make ends meet, with estimates as high as 50% of families now spending more than they earn.  According to the Mortgage Bankers Association, 1 in every 200 homes will be foreclosed upon and an average of 250,000 new families enter into foreclosure every three months, with many receiving absolutely zero financial training on how to handle a financial hardship.   

The most important thing to remember when experiencing a cash flow crunch is DON’T PANIC!  In America you cannot go to jail for failure to pay your bills, so relax and keep a clear head.  Remaining calm during a financial hardship is one of the biggest challenges you will face, so take a few deep breaths and have faith that everything will work out fine.

If you lose your job or experience a major financial or health crisis, the steps required may be somewhat different than a temporary cash shortage.  For those of you who are running a few bucks short, check out my blog GENERATE EXTRA CASH FLOW BY DONATING for some ideas on how to get some quick cash without paying high interest costs.  After experiencing a life changing event, when you know that you may not have the money to cover your expenses for a long or unknown period of time, the very first step is to identify which of your bills must be paid and which can wait until the current hardship situation has passed.

Determining which bills to pay and which to let go generally comes down to two questions; does the debt carry equity and is the debt secured by a physical asset.  Your home is one of the few assets that is both secured and has most likely built up some equity.  If you have an emergency savings fund, enough income to cover the mortgage payment or at least $20,000 or more in equity, then saving your home is likely the best first step.  Next, make a list of the debts that are either secured or have built-in equity, which usually consists of autos, boats, furniture or other recreation vehicles.

Unsecured debts such as credit cards, signature loans and other lines of credit are the last debts to be considered in a cash shortage as they generally are not secured by a physical asset and cannot build equity.  Unsecured creditors will hire attorneys, send threatening letters, make threatening phone calls to your work and family, and do just about anything to get your attention.  The truth is, they have no tangible asset attached to the debt and can do nothing but file with a judgment and attempt to scare you into paying.

Again, pay the debts that have equity or are secured by an asset.  The rest of your unsecured debts can wait until you decide on your best course of action.

Author

Chad Sunyich

The other day while driving, I heard a spot on the radio about ways to save a few dollars or make a little extra cash flow during these hard times, which I think is an excellent idea and should be adopted by all forms of local media.  The spot discussed selling your plasma as a way to supplement your income or make a few extra dollars to carry you over during trying times.  What a great idea!  You can make extra cash while helping save lives.    

In talking to a friend that donates twice a week and checking the internet, I found that you can make between $20 and $30 per visit for donating plasma.  I know that does not seem like much, but you can give plasma twice in a 7 day period, which equals around $200 per month in extra cash flow.  Not a bad way to cover your extra cell phone minutes, added fuel costs or even payoff high interest debt. 

Most families need an extra $200 per month to carry them over during a financial hardship, and many must rely on title loans, payday loans, signature loans and other types of interest bearing notes to make ends meet, often paying a minimum of 24% interest on the borrowed money.  Donating plasma is a quick, safe and free way to get a few hundred dollars when you need it most.  Donating can also be used to create additional margin to help accelerate the debt elimination process. 

As an added benefit, not only are you making money by donating plasma but you are helping fill the huge shortages at our plasma banks where plasma is used primarily for research; however, your plasma is also needed as life-saving fluid for burn victims, premature babies and leukemia patients.  The catch, you may not get paid for donating plasma that is used as a life saving fluid but the need is even more urgent, giving you an opportunity to both make money and save a life.  Below are some sites that include additional information on donating plasma and how to find the nearest donation center. 

http://www.plasmazentrum.at/en/donating-plasma/find.html

http://www.redcross.org/services/biomed/0,1082,0_20_,00.html

As a sidenote, it will take about 3 hours on your first visit where you will receive a full physical, blood work and general health related screening.  After your first visit, you can plan on about one hour per visit and you will likely have access to free wi-fi, cable TV and snacks.  If possible, I would recommend that you donate one out of every four visits to giving plasma strictly for health related issues, not research, cosmetics, etc. 

Author Chad Sunyich

There is a wrong and a right way to pull your credit, helping avoid the possibly of damaging your credit score. If you need review your credit report to evaluate a potential new loan, check for inaccurate items or just a biannual checkup, make sure that YOU pull your credit report, not the creditor or bank. When you pull your credit personally, there are no negative consequences in the form of ‘credit inquiries’ applied to your credit profile. If a creditor, bank or any other type of lender pulls your credit, then it will show up as a credit inquiry on your credit report.

Currently, inquiries show up on your credit for two years and are difficult to get removed without the proper documentation. If you are applying for a new loan, the general rule is that you can apply for up to 6 loans in a 30 day period before your score will take a hit. As a general rule, always pull your credit personally and do your homework before venturing out to purchase your next automobile.

If attempting to repair your credit quickly, the quickest and easiest way to get your credit report is online, but make sure you order your reports directly from the three main credit bureaus, as many credit reporting companies provide a summary or approximation of your credit scores and don’t include a confirmation number for quick repairs. Below is contact information to the three main credit bureaus:

Equifax Credit Information Services Inc.
https://www.econsumer.equifax.com/consumer/forward.ehtml?forward=home
P.O. Box 740241
Atlanta, GA 30374

TransUnion LLC

http://www.transunion.com/corporate/personal/personal.page
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022

Experian

http://www.experian.com/consumer/index.html
National Consumer Assistance Center
P.O. Box 2002
Allen, TX 75013

Your rights, including what steps you can take to correct your credit, can be found by reviewing the Fair Credit Reporting Act at:

· www.ftc.gov/os/statutes/fcra.htm

· Toll free (877) FTC-HELP (382-4357)

Author: Chad Sunyich

Below are five debt elimination techniques that you can begin today and are absolutely free. 

Technique #1 – Debt Roll Up

A debt roll up plan is the foundation of any solid debt elimination program.  It is also one of the quickest and easiest ways to rapidly eliminate debt.  A debt roll up plan can be accomplished by ranking each of your debts according to the interest rates they charge.  Say you have the following debts, which debt would you pay off second?

1.    Capital One with 18.9% interest

2.    Medical bill with 18% interest

3.    MBNA with 24% interest

4.    Auto payment with 10.9% interest

With a simple debt roll up plan, you put all extra money towards the debt with the highest interest rate, which would be #3 in the example above.  After the first debt has been paid off, apply the payment from the first debt to the debt with the second highest interest rate.  The second highest interest debt from the example above is #1 with an interest rate that is .9% greater than #2, so any extra cash flow, including the payment from the previously eliminated debt, will go towards eliminating Capital One next.  Continue with your plan until you have eliminated all non tax-deductible debt, taking every precaution that the roll up process is carefully followed and tracked.

Technique #2 – Create more cash flow

The fastest way to eliminate any debt is to increase your payments towards the principle on the account, and this usually requires finding more monthly cash flow.  We call this additional cash flow ‘margin’ and the strategic application of margin is called a power payment.  When it comes to debt elimination, the power payment principle works whether you are making one extra payment per year or following a comprehensive cash flow management program.  Although the results will vary, the principle remains the same: The more money that is paid directly to principal, the more powerful is the effect of lowering the total amount of interest you’ll pay.

Technique #3 – Discipline

After nearly 10 years in the debt elimination and management industry, I would say the number one reason why people fail at achieving their financial goals is a lack of discipline.  In my experience less than 10% succeed when they have to depend on themselves for complete administration of a cash flow management program, whereas over 70% succeed when they include automated tools.  Think about it.

Technique #4 – Budget

The last technique deals not only with the management of your money but also includes your overall relationship to money and how you plan to use it to accomplish your desires, both long and short-term.  Deciding how much money you can spend on snacks every week or day is also deciding whether you are willing to give up long-term wealth potential for short-term satisfaction.  It does not have a right or wrong answer but it is a decision we all must make at some point.

Author: Chad Sunyich

I have been researching some possible credit report options for people who have recently experienced foreclosure on a home or may be considering the possibility of foreclosure. I found very little new information about removing foreclosures from your credit report; however, I did find a variety of the normal credit repair options available, with many boasting several hundreds of foreclosure removals over just a few months time. Very impressive numbers, although the statistics are a little confusing because they don’t tell you if these items have been removed from 1 out of 10 credit reports or 8 in 10.

Another question that comes to mind is that if traditional credit repair strategies are still working to remove these items, then each of us already have the tools to accomplish the same results for very little out of pocket expense.

I also found some great information for those who sold their home but still have a foreclosure showing on their credit report. There is a difference between foreclosure suits and an actual foreclosed home. If you managed to sell your home before the foreclosure judgment was made final in court, then your foreclosure is not valid and can be removed from your credit file with the proper documentation. The first step is to get a copy of your case dismissal from your county courthouse. If you find that a dismissal was not filed by your old mortgage company, contact your mortgage company and request an immediate dismissal of the mortgage. It is their obligation to file the dismissal after receiving payment, so request it as soon as possible.

After obtaining a copy of the dismissal, contact all three major credit reporting agencies and dispute your credit profile by reporting the negative entries on your credit report as inaccurate. The credit repositories will check the information with your old lender and inform you of the outcome within 30 days. If the old lean holder does not respond or modify the information, then the negative items must be permanently removed from your credit report. Be sure to send copies of the dismissal to the credit reporting agencies with a return receipt, and they will be able to make changes directly to your report.

Author: Chad Sunyich