Improve Your Debt Management Skills

If you are struggling with debts, and would like to feel in full control of your finances, you should consider improving your debt management skills.
Why?

Improving your debt management skills could allow you to:

• See exactly how many debts you have.

• See exactly how much you owe, and who you owe it to.

• See exactly how much you are required to pay towards your debts each month.

• See if you can actually afford to service your debts each month.

• Get a rough idea of when you should be debt free.

How?
Improving your debt management skills can actually be pretty easy.

The first you thing you should do is create a budget. This should help you see exactly how much money you are earning / receiving each month, along with exactly how much money you need to spend each month. Knowing these two figures should give you a rough idea of whether or not you will be able to afford to service your debts each month (providing you know how much they will cost you).

To find out the exact amount of money you have available to pay towards your debts each month, you should do the following:

Total monthly income minus total monthly essential expenditure (mortgage/rent payments, secured debt payments, utility bills, food, etc.).

The amount you are left with is called your 'disposable income' - and as mentioned, this is the money you will have available each month to pay towards your unsecured debts, as well as spending on non-essentials and saving for the future, if you can afford it.

Creating a budget is just one of the ways you could improve your debt management skills.

When?
In general, the sooner you take action to improve your debt management skills, the better. The earlier you address your problems, the easier they should be to tackle. If you simply leave your debts to grow and don't take action against them, they will probably get worse.

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Bankruptcies Hit Retirement Communities

The recession is hitting elderly people where they live, literally. Financial problems have been mounting at a number of assisted-living and continuing-care communities, forcing some facilities into bankruptcies and inflicting new worries on residents and their families who thought their life plans were comfortably set. In recent weeks, Erickson Retirement Communities, which manages 19 continuing-care retirement communities in 11 states, declared bankruptcy. Sunrise Senior Living Inc. posted a quarterly loss of $82 million and announced plans to sell off 21 of its assisted-living communities. Nationally, smaller retirement communities are raising their prices, changing the way they operate, selling themselves off to bigger chains, or getting out of the business altogether. Many companies say they can't make a profit—or even succeed on a nonprofit basis—in an environment that combines the high cost of caring for elderly residents, restrictive Medicaid budgets, tight credit markets and fewer residents willing and able to pay top dollar for their care.

When a facility fails, it can have myriad effects on the residents. The good news is that no one gets kicked to the curb–at least not right away. "Nobody has ended up on the street, which is a primal fear when you're dealing with these places," says Jason Frank, an elder-law attorney in Baltimore. "But their fees can skyrocket, and they can become unaffordable. Then they can kick you out for nonpayment." In some cases, residents may find that the sizeable deposits they made to get their apartments in the first place have disappeared. (Continuing-care communities like Erickson's typically charge deposits of $150,000 or more, and assure residents that they can stay on the campus for the rest of their lives regardless of how their needs change, and that the deposits will be refundable to themselves or their heirs when they leave or die. But residents typically also have to pay monthly fees for care, and those fees can continue to increase. Assisted-living facilities like Sunrise generally require no deposits but charge a monthly pay-as-you-go-plan.) That's what happened to the 170 people who lived in Covenant at South Hills in Lebanon, Pa. Their deposits went up in smoke when their facility was sold in bankruptcy to Concordia Lutheran Ministries, which did not take on that liability. Several are now suing B'nai Brith Housing, the original operator of Covenant.

Erickson executives say that their bankruptcy filing will have no impact on residents. "We've refunded every single deposit in our 26-year history," says Tom Neubauer, the firm's executive vice president of sales. "People moving in are completely unaffected by all this." Erickson's corporate organization is complex, with each community (and that community's deposits) owned by a separate nonprofit entity that is not part of the bankruptcy filing.

But residents could face disruptions. Newer communities that haven't been completely built out yet may not have their assisted-living and nursing-home wings, so residents who need higher levels of care may end up being transferred to other facilities. Should various nonprofits not be able to resell units at the same price as the original buyers paid, those original buyers might not get their deposits back. And residents who run through their personal savings and their deposits paying for ever-higher levels of care will have to depend on an optional "benevolent fund" to cover their expenses.

Erickson has a solid reputation and good track record for keeping residents for the rest of their lives, but anyone shopping for retirement housing now should think thrice about the financial risks of their arrangements. "You've got to keep your eyes open," says Eric Carlson, director of the long-term-care project for the National Senior Citizens Law Center. "If you look at the agreements, sometimes what you're being promised is not that much. The provider may be reserving the right to force you to leave for various reasons." Often there's a generic "can't meet your needs" clause in the contract.

He recommends that refundable deposits be set aside in escrow accounts, and that anyone signing a long-term-care contract run it by an elderlaw attorney first. (They can be found at the National Academy of Elderlaw Attorneys.) His organization also has an online checklist of questions that should be asked before moving into a retirement or assisted-living community.

Carlson also says he generally prefers the financial advantages of the pay-as-you-go models, but even consumers who choose facilities that only charge rent on a monthly basis may not be saving their nest eggs for long. Sunrise has raised prices as it has gone through several quarters of financial trouble. It can cost $6,000 or more a month for quality assisted living, and $9,000 for nursing-home care. At those rates, it's not hard to run through life savings in a hurry, and then not every assisted-living facility will keep you. Many don't take Medicaid or other subsidies, and some facilities that had taken Medicaid have switched to no-Medicaid policies. That leaves those residents who have no assets with no place to live. Nationally, discharge-related complaints about nursing homes and assisted-living facilities have doubled in a decade—to 12,237 in 2008, according to the U.S. Administration on Aging. It's now the second-most-common complaint at nursing homes, behind "failure to respond to requests for assistance." And it's the third-most-common complaint at assisted-living facilities, behind problems with medication administration and disappointment with the food.

Complicated state rules can then force newly impoverished residents to go into nursing homes for at least a month so they can qualify for Medicaid, and then back out into another assisted-living facility, says Beverley Laubert, the long-term-care ombudsman for Ohio and president of the National Association of State Long-Term Care Ombudsman Programs. She and her colleagues are called in when facilities declare bankruptcy or force residents to relocate because of policy changes, but usually they can't force facilities to keep residents. Instead, they spend much of their time helping residents who thought they'd found their final homes look for new places to live in a market where, now, nothing is certain.

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Gear Up for the Holidays

You can't claim to have lived in New England until you've gotten through a winter. The same could be said for e-commerce sites. Whatever track record you've had the rest of the year, the real proof that your online business is viable comes some time after the holiday crunch. Did you handle the high volumes without sacrificing customer care? Did you not only deliver the goods for current customers but also attract new ones? Did you, your staff and website emerge intact? Is your accountant smiling?

If the answer to these questions is generally "yes," then you should be smiling, too. But here's my advice: Think of the holidays as a stress test for your organization. You won't always be dealing with these kinds of volumes, but the best practices you embrace now will pay dividends the rest of the year.

In that spirit, here are some tips for the holiday season.


Use incentives to keep a steady flow
One of the most important safeguards against getting overwhelmed is to level out the volume spikes that can catch your organization off guard. The steadier the flow of traffic to your site, the better. Conversely, if 90 percent of your customers place their orders on Dec. 22, you're going to look unprepared no matter how much preparation you've made.

Begin by working out a set of incentives that will get your customers buying early. Possibilities include free gift wrapping, free shipping, two-for-one offers, coupon codes for later purchases, and, especially popular in today's economy, merchandise discounts and promotions. Then make sure your customers are aware of the offers by highlighting them on your home page. You can also e-mail your most valued customers, as long as you don't wear out your welcome. Finally, monitor the results to see what your customers are responding to. That knowledge will help you rev up sales during slow periods throughout the year.

Clearly communicate the true cost
The trend in e-commerce sites is to eliminate as many hidden costs as possible. Transparency is especially important during the holiday season, when customers have even less patience for unhappy surprises. Customers report that hidden shipping costs are the most frequent irritant--especially when those costs are unexpectedly high and only appear at the final stages of checkout. That ploy can lead to shopping cart abandonment--the merchandise is at the "register," but the customer has departed.

Instead, let customers know as soon as possible in the process what shipping will cost. Most of us know what it costs to mail a package, so keep those costs in line with customer expectations--or go one better and offer free shipping as an option. Some customers will always want more expedited shipping, but all will appreciate the opportunity to get standard shipping for free. And again, that's true not only during the holidays, but throughout the year.

Take customer support seriously--but let's chat
The time has long passed since the days when an e-commerce site could hide from its customers by not responding to queries. Phone calls are usually best, but not every online company has the resources to handle them, especially during the holiday crunch.

What to do? Resist the urge to bring in people who can answer the phone, but lack the expertise to truly represent your store. A badly handled call is worse than an unanswered one. Instead, consider online chat. The medium isn't as personal as the phone, but skilled representatives can conduct five or 10 chats at once--and customers will quickly recognize whether the people at the other end know what they're doing. Of course, e-mail can also be effective as long as you're diligent about responding quickly--an e-mail black hole is worse than no e-mail at all. And what if you're truly underwater from customer queries? Apologize, get a number and a good time to call--and call back.

Use "heat map" technology to track what clicks
Here's another place the holiday stress test can serve you well in the coming year: tracking what people actually do on your site. Companies like CrazyEgg, and Clickdensity offer services that can show you how people are navigating your website, with the ability to experiment with new designs that are more effective. While the holiday season is no time for a major redesign, you can make quick fixes, and then use this invaluable data to make bigger changes later on.

Improve checkout
One reason people have flocked online for their holiday shopping is that when they're ready to check out, they're always first in line. So make sure you've exceeded customer expectations during those final, crucial mouse clicks. The key is to reduce the number of hoops customers must jump through, while giving them different options to pay. For example, the checkout process should securely retain customer data so that people don't have to re-enter their information with each purchase. You should also offer a variety of payment options so that shoppers can use their preferred payment method, including a buy now, pay later plan, which is especially important in these cash-strapped times.

When your customers check out, they should also feel safe. Over the past few years, many people became online shoppers only after they overcame their fear of making online transactions. Once they had a good experience, they returned online for more. In that sense, every successful online transaction is a win for our industry as a whole. So do your part: Make sure your customers are feeling safe by giving them a truly secure method of paying.

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What is a Debt Management Plan

The economic downturn has led to debt taking centre stage in the media and news coverage. But debt certainly is nothing new. Consumers often depend on their credit cards, purchase household items with a credit line and take out loans and mortgages. So debt is, for many, simply a part of life.

Traditionally, when debt becomes too difficult to manage, individuals find themselves bankrupt. And while most of us know what bankruptcy is, far fewer of us are fully aware of other alternatives, such as debt management plans.

A debt management plan is, effectively, an informal agreement made between the debtor and the creditors. More of than not, this is negotiated with the assistance of a Debt Management company. The way it works is for the company to establish what you can realistically afford to pay off your debts each month. You must have some form of income and be able to pay at least something. They will take into account your income and living expenses to work out what you can afford to pay off your debts each month and then approach your creditors. Often, the debt management company will attempt to negotiate your outstanding balances down one way or another or to freeze interest. However, because the approach is informal in nature, the creditors are in no way obliged to accept any offer. If your creditors do agree to the offer, you will simply make one monthly payment to your debt management company. They will then divide this accordingly between your creditors for the duration of the debt management plan. This is often five years, at the end of which time your debts are considered to be settled.

Because of this effective timeline of being out of debt, the debt management plan is proving particularly popular. However, if you debts exceed £15000, you’re unlikely to be eligible and may instead have to look into the more formal, legal alternative of the IVA.

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Effective Ways During Tight Economy

Tipping in a recession is a dilemma. Do you stick with the 18 to 20 percent formula or retreat to 15 percent? Do you skip an appetizer, a glass of wine or a dessert to lower your dining bill and thus your tip?

It's a subject that millions of diners and travelers are wrestling with.

A lot of people whose income has vanished or shrunk because of layoffs, salary cuts and shrinking fixed incomes have cut back. Instead of going out to dinner every week, they settle for once a month. If they take a trip, they trade down, choosing less-expensive accommodations and restaurants.

As a result, minimum-wage wait staff, bellhops and hotel housekeepers have taken a huge hit, if they're not among the nearly 10 percent of workers who are jobless. There is nothing wrong with cutting back, but give pause when you think about stiffing your waiter or hotel maid to save a few dollars.

"I believe that customers are tipping a smaller percentage of the bill," said Michael Lynn, a professor at Cornell University's School of Hotel Administration. "I base that on anecdotal encounters, lots of things on the Internet - servers say they are making less money." A server quoted in The New York Times put it this way: "In New York, the average tip is 20 percent, though some tip as low as 15 percent and some as high as 30 percent. These days our tips are closer to 17 percent, with a range of 10 to 25 percent.

"This drop in tips registers to $60 less a night. Over five shifts a week that is $300 less per week! But we are working just as hard as we used to, perhaps even harder, trying to get people to forget their troubles for a few hours. ... It's not fair for people to take out their economic troubles on the server. If one cannot afford to tip, then perhaps that person should be ordering less." Lynn, who has done extensive research on tipping, said that "during bad economic times, people become more price-sensitive."

At hotels, Lynn said, only two-thirds of guests normally tip maids, who should get $1 to $2 a night.

In bad times and good, Lynn said, servers can increase their tips by using tested techniques found in Mega Tips, published by Cornell's Center for Hospitality Research and available for free on the Internet (Google "mega tips").

Among Lynn's 14 points (most effective in casual-dining restaurants): Wear something unusual, introduce yourself by name, smile, squat next to the table, repeat customers' orders and write "thank you" on the check.

At hotels, it's hard to miss the bellhop, who usually gets $1 to $2 a bag, unless you are traveling light and politely wave him off. But there is little a housekeeper can do to earn a few extra bucks except to hope that guests remember.

If you are traveling abroad, where there also is a recession, keep in mind that tipping customs vary by country, so consult with your travel agent, a government tourist office or the worldwide tipping chart.

In Europe, many hotels and restaurants add a service charge to your bill, so additional tipping isn't necessary. In Japan, tipping is considered an insult. That feeling is changing, but it's best to inquire about the proper way to reward someone.

Even in a recession, there are no hard and fast rules for tipping. And whether at home or abroad, tipping is a personal matter. But however you feel about tipping, keep in mind that workers at the service end of the business are getting hit as hard as if not harder than anybody. Why not give 'em a break?

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