Missouri Auto Finance Launches New Website to Serve Car Shoppers in Kansas …

Kansas City, MO (PRWEB) November 18, 2013

The team at Missouri Auto Finance is thrilled to unveil a new website designed to streamline and enhance the financing experience for people from Kansas City to Saint Louis, and everywhere in between. The website, which interested parties can visit here, hosts a wealth of information for the new or used car buyer, including a new blog that will cover both news and FAFQs, or frequently asked financing questions. The team has already published their first blog post, entitled Study Shows Auto Loan Seekers Prefer Digital Banking, which highlights the continued trend toward online auto loans by American consumers.

The heart of the website, however, is an advanced credit application platform. Now, consumers can apply for financing right from the comfort of their computer. User testing has shown that the applications can be fully completed and submitted in as little as three minutes, due to an emphasis among the team to develop a form that requires fewer fields than many competitors. Missouri Auto Finance has an extensive array of lenders and dealers in their network, and when an applicant applies, their application is shopped among participating companies. In this way, companies compete to fund the consumers loan.

Our system really takes the guesswork out of trying to get financed, said company spokesperson T. Brown. No longer does a consumer have to trudge from one bank to another, making applications and hoping for a rate thats better than the last one. With our system, they get matched to a finance specialist who can help them compare rates and get financed, then go select the car they want from an area dealership. Its that easy.

About the Company: Missouri Auto Finance is helping the people of the Show-Me State buy the cars of their dreams at interest rates they can afford.

Pension advice for the twenty-somethings: start early and save big

Todays graduates face a working life of around 50 years. Even then, theyll be lucky to get their hands on their state pension by the time theyre 70.

If governments keep on raising the retirement age as life expectancy increases, children born in 2050 could be 84 before they collect their pension, according to predictions by PricewaterhouseCoopers, and could expect to live to be 104. Given that life expectancy varies across the country, some people could be working until they die, and those in manual trades could find they receive just a few years of the state pension compared to office workers who survive much longer.

For many, the prospect of working until 70 or 80 will be unpleasant and for those with manual jobs it might be a physical impossibility, says Morten Nilsson, chief executive of Now Pensions.

Will graduates and others in their early 20s, already weighed down by debt from student loans, high rents and ever-increasing house prices, now have to work into their dotage?

Guardian Money asked pension experts how much young people will have to put aside to achieve a minimal income to bridge the gap between 65 and 70 years old when they will start receiving a state pension. We found that a 22-year-old would have to save an extra £39,000 if they want to match the £7,800 a year state pension for five years, allowing them to retire earlier.

Tom McPhail of advisers Hargreaves Lansdown reckons that todays young adults will have to find an extra £33 a month all the way through to the age of 65 just to bridge the gap. And even that figure assumes their savings grow by 6% a year in a well-managed investment fund and that the monthly savings increase by 2.5% every year.

The important thing is to start saving as soon as you possibly can, he says. Even a modest monthly saving now can make a real difference to your financial freedom in the future. Delay five years and youll slash your eventual payout by as much as 30%, he says.

The Society of Pensions Consultants says someone under 25 would have to save an extra 30-40% to bridge the gap. So if you were paying 5% of your salary into a pension it would need to increase to at least 6.5%.

Even that isnt enough. Experts recommend putting aside at least 12% of your salary to save for a comfortable retirement, Nilsson says.

Insurer NFU Mutuals research shows most people dont start thinking about their retirement prospects until the age of 48, by which time its too late to catch up unless you can save huge amounts.

Hopefully the newspaper headlines saying work until youre 70 will shock a few people into taking some action sooner rather than later, says Sean McCann of NFU Mutual.

Fortunately for employees, firms will now have to sign workers up to their pension scheme. Auto-enrolment is gradually being introduced across all sizes of companies and has already started at large firms.

Your firm will contribute to your pension – say 4% of your salary – and you can match it. Although employees can choose to opt out, its like having a tax-free pay rise, as payments into a pension qualify for tax relief.

The default retirement age in workplace schemes will match the state pension age, but you can choose to take your pension from the age of 55.

Join a workplace pension as soon as you possibly can to enjoy the benefit of the extras contributions your employer will make to your retirement fund, McPhail says. Even if you dont want to commit to a pension early on, at least start saving into a tax-free Isa, you can always move the money across to a pension later on.

Can I Rebuild My Credit After My Chapter 13 Bankruptcy?

WRAL Reader Question

Dear Steve,

I filed Chapter 13 in April of 2009 and confirmed June of 2009 and will be completed at the end of December this year. I had decent credit when I filed, no collections, repossessions or delinquent accounts. I did have a couple of late payments in my past credit history but otherwise my credit was in good shape.

My debt to income ratio after my husband and I separated unfortunately was not in my favor and rather than deal with collections I filed. I have always rented, (been in current lease for almost 8 years) never owned a house so did not lose one in my bankruptcy.

All of my debt was credit card based, no loan defaults. My current car is paid off. Monthly expenses include rent, insurance (car/renter), utilities, two medical bills ($150 total), IRS repayment plan ($75 a month on $1400 tax bill incurred when I changed positions in 2012 from private sector to state) and other day to day expenses.

I check my credit report each year with the free reports and report any issues I see. When I checked last month my credit score was 520. I have worked for the same Enterprise (in different positions) since 2004 and have a very stable work history. I have 2 bank accounts, neither with a credit union, with excellent histories. The only loans I have ever had were for vehicles and those are paid off before my bankruptcy. I currently do not have any built-up savings but I am part of the Teachers Retirement system with my employer.

My question is how long after my discharge is confirmed would I be able to possible look into purchasing a house?? I do know I will need to take steps to establish new good credit. I would like to stop renting and have a home of my own as I need 8 more years to be vested in retirement in my current position and would hope to find a house with a lower monthly payment to help with monthly expenses.


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Dear Kristina,

By far the biggest mistake people make after a bankruptcy is to avoid credit. Your credit score only improves when there is new good credit being reported about you. Otherwise your credit history just falls off the cliff with your bankruptcy.

Rebuilding your credit is just stupid easy to do. Follow this guide.

Its not credit that should be avoided but excessive debt. Your credit score will begin to rise if you get the right type of credit, use it responsibly, never pay late, and dont default. I have no worries or concerns my guide wont do the trick for you.

My bigger concern here is your statement about not having any savings. That is going to be the bigger issue in rebuilding your credit. Its not that the savings will help your credit score but you will absolutely need to have a growing savings account that you can draw upon when you run into an unexpected situation and cash available to keep making regular payments on your new credit.

You have no potential for a safer financial future unless you can save money each month.

The goal needs to be to fit your lifestyle inside your income where you meet your monthly obligations and save each month.

If you follow my guide, start rebuilding a great credit score, and build savings and a downpayment for your new home, I wold expect you to be able to get a good mortgage within a couple of years.

Steve Rhode
WRAL Get Out of Debt Guy

If you have a credit or debt question youd like to ask about, how to get out of debt, just click here and ask away.

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Many Veterans Missing Out on Benefits

America is going through a new era of appreciation for our military veterans — and there are plenty of veterans out there to receive both our gratitude, and some important financial benefits. There are roughly 23 million living veterans of the American military. Younger veterans who have served since the Gulf Wars comprise about 25 percent of the veteran population.

But it appears that many veterans — of all ages — arent aware of, or taking advantage of the benefits available to them. Here are a few that are being overlooked — and a reminder that if you know of a vet who is eligible and could use these deals, you should send them to the Department of Veterans Affairs website, which allow them to explore all the possibilities.

VA Mortgages

These special mortgages are perhaps one of the best deals around. But more than 70 percent of our younger veterans have yet to take advantage of this low, fixed-rate 30-year mortgage — currently 4 percent (4.273 percent APR) with a ZERO down payment. That good deal exists because the VA guarantees the loan for the full amount, removing all risk from the banks that make the loan.

(For more information, contact the VA mortgage loans help desk at 800-983-0937, Monday-Friday, 8 am to 8 pm EST. Or contact VA mortgage loan specialist and military chaplain, Daniel Chookaszian at dchookaszian@perlmortgage.com.)

The VA has issued more than 20 million of these special loans since the program began in 1944. But currently there are only 1.7 million VA loans outstanding. With about 5.75 million younger Gulf War era veterans in America today, more than 4 million veterans have yet to benefit from using their VA loan eligibility.

I wrote about the details of these VA loans in a Huffington Post blog for Memorial Day on VA mortgage loans. So if you know a veteran who served a minimum of 90 days service active duty in wartime, or 181 continuous days of service during peacetime, and was honorably discharged, you should encourage them to look into getting a VA loan — either for a purchase, or a refinance.

The GI Bill

The original GI bill, which provides assistance or free education to qualifying vets, was started after World War II, and it helped a generation of young Americans rise into the middle class. Today, the largest program is the Post-911 GI Bill, which provides up to 36 months of education benefits — including full tuition and fees for in-state students, paid directly to the accredited college. Veterans may also qualify for a housing allowance and a stipend to pay for books.

Qualifying veterans are eligible to apply for this assistance for up to 15 years after they are discharged, yet many fail to apply — perhaps because they lack information about this program.

Medical Benefits

With all the discussion about the Affordable Care Act (Obamacare), the VA healthcare benefits for veterans remain unchanged. There is no need for veterans to change their insurance. And veterans may enroll at any time after leaving service. Heres a link to both explore the benefits program, and to apply for enrollment.

The VA operates the nations largest healthcare system, with more than 1700 hospitals and clinics, caring for more than 6.3 million veterans annually. Those who qualify based on household income and assets, receive free care. Others use their VA benefits to supplement private health insurance and cover copayments required with private policies.

In recent years, mental health benefits for veterans have also been expanded. While the system is not perfect, and its failings have been widely discussed in the media, the VA does provide a significant healthcare benefit that should not be overlooked — even if a veteran is discharged without needing immediate care.

Death Benefits

Family members of veterans should keep track of their military separation papers, which may have been issued long ago, after WWII or the Korean War. But those documents will be needed to qualify for a number of benefits available to families of deceased veterans — including a free headstone offered to veterans, and a free gravesite and burial services at any of 131 national cemeteries.

On Veterans Day, lets salute those — young and older — who have kept our country safe. And lets remind them of the many benefits they should access. Thats the way our truly thank them for their service. And thats The Savage Truth.

State Supreme Court disbars bankruptcy lawyer Sean Cooper

In just four years of practice, Milwaukee bankruptcy lawyer Sean D. Cooper racked up so many ethics violations that the state Supreme Court disbarred him on Tuesday.

In revoking Coopers license for five years — the harshest penalty the Supreme Court is able to impose — the court endorsed the findings of the state Office of Lawyer Regulation, which charged Cooper with 78 counts of wrongdoing involving 18 different cases.

Regulators charged that Cooper repeatedly collected fees from clients, but then failed to do any legal work or did the work improperly. Then, the regulators said, Cooper frequently did not return repeated calls from irate clients.

Richard C. Ninneman, a Milwaukee lawyer who as the court-appointed referee heard the case and recommended disbarment, told the court the case was one of the worst he has seen.

Ninneman could not recall a prior disciplinary proceeding in which the respondent attorney demonstrated such a complete disregard of clients rights in multiple matters and a total lack of respect for the legal profession as (Attorney) Cooper has in this proceeding, the court wrote in its unanimous disbarment order.

The court also ordered Cooper to pay restitution of $3,495 to six clients and the Wisconsin Lawyers Fund for Client Protection. He also was ordered to pay $7,401 to cover the costs of the disbarment action.

He can apply to be reinstated to the state bar in five years.

Cooper is generally known as a bankruptcy lawyer, although he also was hired by clients to handle a variety of other legal issues.

The Tuesday action was the first time Cooper was disciplined by the Supreme Court. He had, however, been suspended twice by bankruptcy judges in the Eastern District of Milwaukee. Those actions do appear on the public websites maintained by the court and the State Bar that show an attorneys disciplinary history.

In 2011, Cooper was banned for six months from practicing in the Milwaukee bankruptcy court because he mishandled multiple bankruptcy matters, including failing to respond to communications from the bankruptcy court and trustee, failing to communicate with clients regarding court appearances, filing schedules in bankruptcy proceedings without prior client review, and filing bankruptcy petitions during times he was barred from doing so, the Supreme Court wrote, quoting Chief Bankruptcy Judge Pamela Pepper.

He was fined $2,500 and suspended from practicing in the Milwaukee bankruptcy courts for another six months last year when Bankruptcy Judge James Shapiro found that Cooper had ghostwritten a bankruptcy filing while under suspension.

The Tuesday disbarment order stemmed from charges filed last year by the Office of Lawyer Regulation, the policing arm of the Supreme Court. In the complaint, regulators cited repeated cases where Cooper failed to perform promised legal work.

In one of the cases cited by the court, the justices wrote that a client identified as TM paid Cooper $5,000 to defend him in several criminal matters in March 2010.

But the court wrote that the client said he fired Cooper in June 2010, but Attorney Cooper refused to withdraw. TM also claimed that Attorney Cooper failed to return his telephone calls and did nothing to defend him.

Cooper could not be reached for comment Tuesday.

Initially Cooper denied the charges brought against him, but later failed to defend himself against the charges. In March he wrote a letter to the court saying he was giving up his law license due to personal reasons.

Can I Walk Away From Home in Bankruptcy?

Dear Bankruptcy Adviser,

I am currently three years into a Chapter 13 bankruptcy. As far as I know, my home is included in the bankruptcy. I make my mortgage payment to the bankruptcy department of the loan company.

Is there any way to walk away from my house and let it go into foreclosure with it being in bankruptcy? I have already had a loan modification to help financially, but I can no longer afford any mortgage.


Dear Jason,

Sorry to hear that you may need to walk away from your home. Yes, you can walk away from the home while inside an active Chapter 13 bankruptcy. Just make sure to consider the following before making this decision.

Why did you file a Chapter 13 bankruptcy?

You may have filed the Chapter 13 to save your home and get caught up on delinquent mortgage payments. You state that you were approved for a loan modification, which means your delinquent mortgage payments were absorbed into the loan and the mortgage is now current.

Compare Mortgage Rates in Your Area

This leads me to believe that you make too much money to qualify for a Chapter 7 bankruptcy. Most people who are current on the mortgage would file a Chapter 7 bankruptcy over a Chapter 13.

The Chapter 7 wipes out unsecured debt like credit cards and personal loans while allowing you to keep your home and other assets like vehicles. The Chapter 13 is a repayment plan of some or all of your debt over a three- to five-year repayment plan. You make one payment to the bankruptcy trustee who then administers payments to your creditors.

People who are current on their mortgage, yet file a Chapter 13 over a Chapter 7, do so for a few reasons: One of the reasons is that their household income is too high to qualify for Chapter 7 bankruptcy.

If this is the case, you will have to either stay in your Chapter 13 to pay back your creditors or dismiss the case to deal with your creditors directly.

Are you currently eligible for a Chapter 7?

If you are eligible to file a Chapter 7 bankruptcy, you could convert from a Chapter 13 to a Chapter 7. That allows you to walk away from the property and other unsecured debts. A bankruptcy attorney can review your income versus expenses along with assets to see whether you are eligible for Chapter 7 bankruptcy relief.

Can you walk away from the property, but continue with the Chapter 13?

Once you determine that you arent eligible for Chapter 7, you can simply stop making your mortgage payment. The lender eventually will file a motion with the court to take the property out of bankruptcy protection and then begin or continue with the foreclosure process.

I cant say how long that process would take, as there are many factors to consider, including:

  • The state in which you live could have a long foreclosure process.
  • The lender could take a long time to take the property out of bankruptcy protection.
  • The lender could offer another loan modification while trying to keep you in the home.

I will say you should be able to stay in the house for some time without paying the mortgage until the property is sold.

The key is to be able to live with any decision you make.

Good luck.

Ask the adviser

To ask a question of the Bankruptcy Adviser, go to the Ask the Experts page and select Bankruptcy as the topic. Read more Bankruptcy Adviser columns and more stories about debt management.

Bankrates content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrates Terms of Use.

Copyright 2013, Bankrate Inc.

How to Get Your VA Purchase Offer Declined

For the first-time VA home buyer to the veteran using the VA home loan benefit to buy yet another property, theres plenty of advice on how to get approved, what documents to gather and how to overcome certain speed bumps along the way. Yet you can get very good advice from the other direction, from circumstances under which your VA offer or VA loan might get turned down. Thats not your goal, but these situations provide some useful tips on what you need to avoid in order to secure an easy approval.

AVOID: Using an Inexperienced VA Lender

Most every mortgage loan officer in the country has the ability to take a VA loan application from a prospective borrower. However, that doesnt necessarily mean the loan officer works for a lender that approves VA loans. There are very few restrictions for accepting a VA home loan application but plenty of them for lenders who aspire to become VA-approved mortgage companies.

While VA loans are similar to other mortgages in terms of monthly payments and term options, there are a few guidelines unique to VA loans. If a loan officer isnt familiar with the various quirks in VA lending, it can turn out to be quite the disaster.

For example, the VA mortgage program has specific residual income requirements that other loans do not have. Residual income is the amount of money left over each month after all the bills are paid. VA loans require the borrower cash flow by a specific number each month in order to receive an approval.

This residual income varies based upon the location of the property, the loan amount and the number of individuals in the household. Not knowing about this one requirement can mean a loan application being turned down well into the application process. And there are other VA-specific guidelines as well.

AVOID: Using an Inexperienced VA Agent

When making an offer with a VA loan, unless your real estate agent is experienced with the VA process, your loan approval may never make it past the sales contract. Historically, VA loans restrict certain closing costs the veteran is allowed to pay. In the past, it was typically the seller of the property that paid the VA costs in many instances.

As well, it was widely known that the VA could take weeks or even months to issue an approval. Sellers were reluctant to accept a VA offer knowing the property could be tied up for an extended period of time. Thats certainly not the case today but the notion is still around.

If your agent is unaware of how to properly prepare a VA offer with closing costs and timeliness in mind, your offer could be declined at the outset.

AVOID: Buying a Distressed Property

This one takes a bit more scrutiny but does require some discussion. First, VA loans may be used to purchase a foreclosed property or make a short sale offer, as with any other loan. However, with regards to the propertys condition, you have to be aware that the VA appraisal has minimum property standards the home must meet. As well, the seller of the property may offer the home as is and will not make any requested repairs. Say that you make an offer that is accepted then your property inspector finds that the stair railing is missing and steps need replacing. Under an as is agreement, it is you, not the seller, that will be required to fix the problems before the loan can be approved, hardly a likely event.

Foreclosed properties may also limit your access to the home for an inspection. Property owners who are foreclosed upon were obviously under some very serious financial circumstances and home maintenance might have been an issue with appliances and physical defects in need of repair. Foreclosed homes may be listed well under market, just go with your eyes wide open and consider paying for two inspections and not just one.

Dont Provide a Preapproval Letter with the Offer

Finally, one of the best ways to thwart a purchase is to fail to provide a preapproval letter to the seller along with your offer. Your preapproval letter tells the sellers that you mean business and you have already applied for a VA mortgage.

Your preapproval letter will list the items the lender has reviewed when issuing the letter including your credit, your income and your cash to close on the transaction. Besides, shopping with a preapproval is so much more fun knowing that all you need to do is find a property to buy.

A seven-step plan for financial freedom

Christmas isnt the only thing thats fast approaching. So is indigestion, and not just because you had to eat Aunt Ruths lumpy mashed potatoes. Its because after Christmas comes all the credit card bills, and those can cast a pallor over the whole season.

So I thought today Id share seven quick tidbits that, if properly followed, can help us avoid financial stress.

One: only go into debt for four things: a house, a car, education, or to start a business. Even some of those are debatable: its usually not worth $40,000 in debt for a Philosophy

degree, and many people can save and buy a used car without debt. Nevertheless, these are the four things where debt may be necessary. Notice that Christmas isnt on the list! Two: Know your financial situation. If you dont know your income and expenses. you cant budget and you cant plan, and that means debt is almost inevitable. So add up all of your assets (like a house, a car, savings) and all of your debts (credit cards, lines of credit), and the difference is your net worth. Then figure out your income and your expenses. If you own a business and dont have a regular income, check your net income on your tax returns for the last three years. The average of that is likely pretty close to your income. Divide that by twelve, and now you have your monthly income.

Three: Make a budget. Know how much youre going to spend in each category on a monthly basis. Then spend cash, not credit. Stash cash in envelopes for food, entertainment, miscellaneous, etc. Include in that budget money for debt repayment, and repay debt, starting with the highest interest debt, as fast as you can.

Four: Create an emergency savings fund. Once your debt is paid off, save the equivalent of three months income and put it in a savings account or money market account where its easy to access. That way, if you ever are out of work for a time, due to a layoff, an accident, or a family emergency, you wont have to borrow money.

Five: Start saving for the long term. Now that you have your safety net, take at least 10% off the top of your income and invest it in an RRSP. Pay yourself first through an automatic monthly contribution so that youre not waiting until the end of the month to save whatevers left.

Six: Budget for upcoming big expenses. Lets say you want to send your kids to camp next summer, but that will cost $1000. Youre unlikely to have $1000 in July, so budget for it throughout the year. Similarly, if you need $1000 for Christmas, dont think that will magically appear in December. Lets say you also want to take a cruise next year thats $3000, and you want to buy clothes over the course of the year for the family for about $1000. Add that up and you need $6000, or $500 a month in savings.

If you will need another car in three years, and you want to spend about $15,000, you need to save $5000 a year. So add another $417 in savings every month, for a total of $917. Set up an automatic payment into a savings account for that amount on a monthly basis. If that price tag sounds too steep, remember: If you cant afford to pay for it beforehand, you certainly cant afford to pay for it after the fact, when youll end up doling out interest, too! Seven: Finally, heres the clincher. Dont buy stuff you cant afford. The stress isnt worth it. And the freedom that comes from being out of debt and having a financial plan? Thats something money cant buy.

Photo gallery: Cat Deeley visits Barclays’ and UNICEF Building Young Futures …

UNICEF UK/ Sharron Lovell/2013

In September 2013 UNICEF UK Ambassador and global TV personality, Cat Deeley travelled to India to witness how young women’s futures are being transformed by the Barclays and UNICEF Building Young Futures programme, locally known as Deepshikha.  The programme teaches young women that they are equal to men, whilst providing them with the skills they need to overcome the daily challenges and become strong, financially independent women.

Almost a quarter of the world’s youth are unemployed; and this is clearly seen in India with rising youth unemployment figures significantly higher than those of adults.  Life can be particularly hard for young women as they face the significant challenge of limited opportunities of employment teemed with discrimination, early marriage, violence and poverty.

Cat at a training workshop in Mumbai
UNICEF UK/ Sharron Lovell/ September 2013

Building Young Futures, a Barclays and UNICEF programme, is empowering young people to fulfil their potential by equipping them with the confidence and financial and business skills they need to build a stable future for themselves and their families.

UNICEF UK/ Sharron Lovell/2013

The Building Young Futures (Deepshikha) programme, which has so far reached 65,000 young women in India, is a partnership between UNICEF and Barclays. Barclays funds and helps manage the programme.

Cat at a Barclays run Financial Literacy Session in Mumbai
UNICEF UK/ Sharron Lovell/2013

Barclays staff help train young women in business and financial skills. These young women, known as prerikas, are equipped with the knowledge they need to run their own training programmes with other girls in their communities, empowering even more young women with the skills and confidence to become financially independent.

Cat with Building Young Futures participant, Sunita Bhadru Badava in Chandrapour
UNICEF UK/ Sharron Lovell/2013

Cat Deeley met Sunita a 27-year-old with two children. Sunita was married at 16 years old and her husband then abandoned her. Through Building Young Futures (Deepshikha) Sunita learnt business skills, and now has her own tailoring company, she is earning money and providing for her family.  She has just been made president of the cleanliness and water committee in her village, a huge feat for a girl who was once looked down upon because she was left by her husband.

Cat with Supriya Ramteke and Jaymala Shende, in Chandrapur
UNICEF UK/ Sharron Lovell/2013

Cat trying out Supriya and Jaymala’s wedding hire business in Chandrapur. I met with two incredibly strong young women who have set up a seasonal business to ensure that they are able to create a sustainable income for themselves and their families all year round. It was incredible to listen to them talk about their newfound business.  I heard about how they rented out wedding outfits during the marriage seasons, and then sold paint during the Diwali festival to residents of their village, and the surrounding area.  The financial skills they had gained from the Building Young Futures training enabled them to set up a group savings account at a local bank in order for them to save and invest their money in new business endeavours, slowly, but surely, building up their income.

UNICEF UK/ Sharron Lovell/2013

Cat Deeley visiting a market place of small businesses set up by Building Young Futures (Deepshikha) trainees.  The business element is great, it gives them financial freedom, and money buys you freedom and a future. With this hope and support, these women will achieve great things.

UNICEF UK/ Sharron Lovell/2013

Cat Deeley in a Building Young Futures (Deepshikha) training session, commenting on the programme’s aim to create more equal opportunity for girls across Maharashtra. To create change, you must take on the future, and that is exactly what UNICEF and Barclays are doing. With UNICEF and Barclays sharing their expertise, the impact Building Young Futures is making is clear to see.

Read more stories from Building Young Futures

Your bonus could buy you freedom

Salary earners who are lucky enough to receive an end-of-year bonus should stop and think that this money, or even half of it, could help you achieve financial freedom, an actuary says.

Niel Fourie, public policy actuary at the Actuarial Society of South Africa, says you may already have set your heart on something that will bring instant gratification, such as Christmas gifts, new clothing or something for your home.

But, he says, salary earners can achieve financial freedom, with the far greater rewards that come with that, if they delay gratification that is, if they are disciplined enough to spend in line with a budget and use windfall money such as an annual bonus to whittle down debt rather than buy items of little long-term value.

I dont want to sound like the Grinch who stole Christmas, but if, instead, you used your bonus money to reduce debt or to save, you could become debt-free much earlier than you think, Fourie says.

Imagine being free of home loan repayments every month? Fourie says paying your bonus into your home loan could cut the term of you bond by almost half, depending on your circumstances.

And if you can’t face not spending any of your bonus on yourself and your family, spending half of it and paying the other half into your home loan could mean your bond term being much reduced.

Fourie says using your bonus in this way would not only save you thousands of rands in interest, but it would also free up a significant amount of money in future, which could then be used for other long-term goals, such as a child’s education or your retirement.

Fourie uses the example of a 30-year-old earning a net income of R24 000 a month and receiving a R24 000 net bonus at the end of November each year.

Assume you are this person and have just bought a house with a bond of R1 million, on which you have monthly repayments of R8 000 over 20 years.

Fourie also assumes your income and bonus increase with salary inflation of eight percent every year.

He says if you pay half of your annual R24 000 bonus towards your bond each year, you will reduce your home loan term by six year to 14 years in total.

If you pay your full bonus into your home loan account every year, you would reduce your term from 20 years to 11 years, and be the owner of a bond-free house by the age of 41.

Fourie says the same is true for a mortgage bond that you have had for a number of years. Using the same assumptions, Fourie found that a five-year-old bond could be paid off in 10 years if you put half of your bonus in your home loan account and in eight years if you put your entire bonus in your home loan.

A bond taken out 10 years ago could be paid off in seven years if you paid in half of your bonus each year, and in five years if you paid your full bonus into the account.

Fourie says there is nothing wrong with using some of your bonus money to spoil yourself and your family. However, if you are servicing debt, your first priority should be to settle this.

Short-term debt, with the highest interest rates, such as credit card debt and clothing accounts, should be at the top of your list, followed by your car repayments and then long-term debt such as your bond.

He says if you are paying school fees, you could use your bonus to pay your school fees upfront and benefit from the five to ten percent discount often offered by schools.

If you then paid the money you saved on school fees into your bond, you would benefit twice: once from the discount and then from the interest saved on the outstanding amount of your home loan.

Fourie says that if you are not servicing a home loan, it would be wise to invest a portion of your annual bonus for your retirement.

If you invest from your annual bonus the same percentage as from your salary, you are likely to end up with an eight percent bigger pension at retirement. If you decide to contribute your entire bonus towards your retirement savings every year, you are likely to end up with a pension of between 30 and 80 percent more at retirement, depending on your contribution percentage and salary.