Archive for April, 2013

#10 – Ground Rules for Boomerang Kids   It’s okay to help, but don’t coddle.   By John Miley, June 2012

Suzanne Bernier is one of the lucky ones. Just before graduating from Brandeis University in 2010, she landed a job at a medical software company. Yet after graduation, the frugal 24-year-old moved back in with her parents. “I wanted to save as much money as possible,” she says.   More than one-fifth of people ages 25 to 34 live in multi-generational homes, the highest level since the 1950s, reports Pew Research. The hospitality helps boomerangers stay positive in tough times. More than three-fourths of people ages 25 to 34 who have lived at home are upbeat about their future finances, according to Pew.

Laying ground rules can help prevent a clash of the generations. “Put a game plan together with expectations,” says Linda Leitz, a certified financial planner in Colorado. Parents who open their homes should establish a time limit for the stay and get regular progress reports. The child should pay rent, save money or pay off debt. Don’t subsidize a lavish lifestyle. If kids can’t contribute money, consider requiring household chores instead.

Parents should gradually turn up the heat, Leitz says. Raise the cost of rent by a certain date, for example, even if your plan is to make a gift of the money when your child departs. The comfort of home shouldn’t be cushy enough to erode financial independence.


Top 6 Costly Mistakes to Avoid When Developing Trade Credit
By Scott Letourneau

When people start a business, it is very important for them to establish business trade lines of credit. Without doing so, they are oftentimes unable to cover their expenses until there is enough income to actually cover the overhead. As such, business people absolutely need to know about trade credit. Company owners have various forms of credit available to them.

One such form is trade credit, which is a critical component to running a successful venture. Trade credit is unique because it is an open account with other organizations that allows people to receive goods or services in advance of payment. Unlike a corporate credit card, trade credit is specific to whichever organization the business line of credit is opened with.

Most individuals are familiar with credit from their personal finances. However, unless an individual has run a business, it is unlikely that he or she will understand the intricacies of trade credit. As such, many novice business people make costly mistakes when becoming familiar with this form of credit. It would be wise to learn from the mistakes of others to avoid repeating their errors. The following summarizes some of the more common mistakes people make when dealing with trade or vendor credit:

1. People use cash lines of credit when they should be using trade or vendor credit to save on cash flow. If you are purchasing office supplies for your business use an office supply card with trade credit. Do not use your business credit card that gives you access to cash.

2. Please fail to develop a profile with Dunn & Bradstreet and have their vendors report to D & B to help build the business Paydex score.

3. Business owners fail to have a vendor to report to Corporate Experian® to build your business credit profile with them also. You are not able to pay a fee to Corporate Experian® to build a profile. It can only be triggered by a vendor.

4. People fail to make payments on time. Those who extend trade credit expect timely payments. By not making payments on time, business people not only jeopardize their ability to receive future credit, but they damage the reputation of their businesses.

5 .People forget to ask for increases in their trade or vendor lines of credit. These increases are looked upon favorably by banks when it comes to secure cash lines of credit. A business owner’s good payment history with vendor credit is a good measuring stick by the banks for when they determine how much in cash lines to grant your business!

6. People forget that vendor or trade credit still must be part of the business budget and it must be paid back. It does not mean frivolously spend on trade credit to get your business in a position to get more cash lines. Everything must be used in balance and a business budget is key to keep on track!

It is critical for individuals to keep these points in mind when dealing with trade or vendor credit. Trade or vendor credit can be very beneficial or very detrimental, depending on how the individual uses it. This applies to trade credit as well as other types of credit.

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