How Life Insurance Works Premiums on term life insurance are usually paid (monthly, quarterly or annually) for between 10 and 30 years, depending on the particular policy you've chosen. One of the ways that life insurance works is that you pay a fixed rate for the length of the policy and the value of the insurance does not change. Whether you die tomorrow or 20 years from now, your beneficiaries would still receive the same dollar amount of insurance settlement. Therefore, if you have a $500,000 term life insurance policy, as long as the premiums are paid it provides $500,000 worth of coverage from the day you buy it until the day the term ends or it is paid out. The Effects of Inflation … [Read more...]
Inflation and Commodity Prices
It is critical to understand the correlation between inflation and commodity prices and the effects of inflation on commodity prices themselves. In recent years, the global financial markets have been in flux as they've gone up and down repeatedly. The commodities market has been especially volatile with items like gold and oil going up significantly. While a number of different factors contribute to the prices of commodities, inflation is one aspect that has a direct impact on the price of commodities. Inflation and Commodity Prices Inflation is a process that occurs when the purchasing value of a currency is lowered. This is usually determined by comparing the prices of a good or … [Read more...]
The Effects of the Increasing Cost of Healthcare on Real People
Healthcare Costs in the U.K. Individuals She is a single female who is self-employed and self-insured. Until this year, the only doctor’s visits she made in the last decade were for annual physicals. Her insurance covered the cost of that preventative care. However, the thought has occurred to her that she might be better off putting her monthly premium in an interest bearing account and paying for those annual visits with money from that account. As a healthy individual, she pays £130 each month only to have a deductible of £3200. In essence, she would have to pay £3330 each year before her insurance would cover any non-preventative claim. Even if the annual office visit cost me £130, she … [Read more...]
UK Economic Outlook Uncertain Despite Falling Inflation
The June economic outlook once again proved to be disappointing for the average household. Lower wages, higher prices and higher debt. Survey compiler Markit announced that its headline Household Finance Index (for the UK) for June rose to 37.0 from a four-month low of 36.6 in May, but remained well below the 50 level necessary for no change in finances compared the previous month. It has remained negative ever since February 2009 with the effect that June saw the worsening of the financial situation of around one third of the respondents as compared to the improvement of only one tenth. Over the next 12 months, the index measuring households' expectations for their finances rose to … [Read more...]
Inflation-Busting Tips To Help You Get The Most from Your Money
Rising inflation has been a major concern over the past few years. The real value of your money can be quickly eroded if the interest on your accounts fails to keep pace with the rising cost of goods and services. So what can you do about it? Here are some Inflation-Busting Tips to help with your investments: Inflation "The Silent Thief" Price Inflation is the measure of the rising costs of goods and services across a period of time, also described as the “rising cost of living”. Sometimes described as ‘the silent thief’, savers are often left unaware of the effect that inflation is having on their savings. While you may not physically lose money as a result of rising inflation, the … [Read more...]
How Inflation Affects Your Savings- Reduced Buying Power
Inflation and Savings When the average person thinks about inflation, the first thing that comes to mind an increase in the Cost of Living i.e. that items they purchase regularly keep getting more and more expensive. While this is true, an even greater concern regarding inflation is its impact on savings and financial planning. Inflation Hurts Savings Buying Power Inflation hurts consumer buying power, because increased costs mean spending more to purchase the same items. What you put into a savings account today, at current interest rates (which are approximately 1% APR at the time of this writing), will only buy half as much in 20 years as it does now if you figure the inflation … [Read more...]
Cost of Living: How Much of Your Budget Goes to Food?
Cost of Living: Food Knowing what percentage of our cost of living is spent on food is always a good thing to know. We recently published an article by Lynn Carpenter on her Cost of Living- Real Basket of Goods in it she compares the cost of several ordinary food items over the decades. Her weekend meal basket included "one loaf of bread, one pound of coffee, one dozen eggs, three pounds of mid-price beef, one box of Corn Flakes or Cheerios, five pounds of potatoes and one Hershey bar." In this article she determined that over the years a minimum wage earner would have to work 9.25 hours in 1938 to buy this food. But by 1961 a minimum wage earner only had to work 3.75 hours to buy the same … [Read more...]
How Inflation Affects Personal Debt Consolidation
What is the effect of inflation? As a result of inflation, the value of tomorrow’s money decreases with regards to today’s money. In other words, you can purchase less with the same amount of money. This is commonly seen as prices having increased. This can make the situation appear more appealing for borrowers because they can buy today and pay back with less valuable dollars. But lenders and creditors don't appreciate receiving less valuable dollars. So, in order to offset the declining value lenders and creditors increase the interest rates they charge. Thus inflation in general results in increased financial problems all around. It not only results in rising commodity prices but … [Read more...]
How Does Inflation Affect You?
When people go the the grocery store and see ever higher prices they know how inflation affects them. But when they are feeling more philosophical they might reason that if all wages and prices increased at the same rate it would all balance out in the end right? Well theoretically yes but in reality it never works that way. Prices of various items all increase at different rates so some people are benefiting while others suffer. Those on fixed incomes suffer the most because the cost of things they are buying increases but their income stays the same. This is where COLA or "Cost Of Living Allowance" comes in it is an adjustment that is made to compensate for the increase in prices due … [Read more...]
Can You Really Get a Free Credit Report?
Anyone who has surfed the web long enough has probably seen offers for "Free Credit Reports" but when you go there you usually find that it is just a scam that requires you to register or buy something first. Well, I recently found the one true source of free credit reports and actually was able to verify it with the Federal Trade Commission! I strongly recommend that before you sign up for any free credit report that you check it with the FTC. (See the end of this article for a link to the FTC). -- editorIn the United States, there are three main credit reporting companies they are Equifax, Experian, and Trans Union. They are strictly monitored by the Federal Government and are required … [Read more...]