Just like a doctor can make a quick assessment of your general health by checking your blood pressure, heart rate and temperature, with just a few quick questions you can get an overview of your personal finance health.

• Housing costs: Your total monthly housing costs, including mortgage or rent, property taxes and insurance shouldn’t exceed 28% of your gross monthly income.
• Debt payments: Look at your monthly payments for housing, loans and credit card debt. You should be spending no more than 36% of your gross monthly income on these bills.
• Emergency savings: You should maintain an emergency account with a balance equal to three months of expenses. If your household includes children or is supported by only one income, double that.
• Investment portfolio: The younger you are, the more risk you can afford to take in the stock market. As you get closer to retirement age, your portfolio should be weighted more heavily toward bonds. Deduct your age from 120; that’s the percentage of your portfolio that should be invested in stocks.
• Company stock: Maintain a diversified stock portfolio. Take advantage of an opportunity to buy you employer’s stocks, but don’t go over 10% of your total stock portfolio.
• Life insurance: Multiply your annual salary by five to determine your life insurance needs. If you have several children or a lot of debt, double that. If, however, you have no young children or debts, you can do without entirely.
• Retirement savings: Apply these general rules of thumb: If your employer matches your 401(k) contributions, contribute the maximum amount. Take advantage of any tax-deferred retirement accounts you can. If you’re conflicted about whether to save more for retirement or for your child’s college education, choose retirement; there are no retirement scholarships.

There are no rock ribbed personal finance rules, but tending to these seven areas of personal finance will go a long way to ensuring your security and your family’s. For more information on retirement planning, consult with a personal finance advisor.


 

The only good news to be gleaned from the Federal Reserve’s recently released second quarter survey is that the news isn’t quite as bad as in the first quarter.

The “Senior Loan Officer Opinion Survey on Bank Lending Practices” provides a very helpful look at the availability of loans for businesses and consumers. This article provides information relevant to business borrowing now and in the future, and describes practices for the period of April, May and June 2009.

• 35.8% loan officers said their standards for commercial and industrial loans or credit lines for small firms (annual sales of less than $50 million) had tightened.
• 35.2% said the same about lending to firms with more than $50 million in annual sales.
• 25% said they tightened limits on credit lines for small firms.
• 60.3% said they raised the cost of credit lines for small firms.
• 64.1% said they increased the difference between what the bank pays for borrowed money, and what they charge for it.
• 58.5% said they tightened their standards for approving riskier loans.
• 35.8% tightened collateralization requirements.
• 46.3% said they tightened credit standards for commercial real estate loans.
• 42.8% said they decreased the limits on existing credit lines for commercial construction.
• 48.7% said they decreased the limits on existing credit lines for financial firms.

Forecasting
If your bank has tightened standards, when will your bank loosen standards for investment-grade firms’ commercial and industrial loans?

• 2.3% said by the end of 2009.
• 11.4% said in the first half of 2010.
• 36.4% said in the second half of 2010.
• 4.5% said in 2011.
• 20.5% said their standards would not be loosened in the foreseeable future.

If your bank has tightened standards, when will your bank loosen standards for commercial mortgages for investment-grade firms?

• 0% said by the end of 2009.
• 2.2% said in the first half of 2010.
• 22.2 said in the second half of 2010.
• 20% said in 2011.
• 40% said their standards would not be loosened in the foreseeable future.

If your bank has tightened standards, when do you expect to loosen them for below-investment grade commercial and industrial loans?

• 0% said by the end of 2009.
• 4.2% said in first half of 2010.
• 29.2% said in the second half of 2010.
• 31.3% said in 2011.
• 22.9% said they didn’t expect any changes in the foreseeable future.

If your bank has tightened standards on commercial mortgages, when do you expect standards to loosen?

• 0.0% said by the end of 2009.
• 0.0% said in first half of 2010.
• 10.2% said in the second half of 2010.
• 28.6% said in 2011.
• 53.1% said they wouldn’t be loosening standards for the approval of commercial loans anytime in the foreseeable future.

If you’ve been looking for a consumer loan of any kind, you know already that bank lending has changed dramatically in the past year. And, though things might not be looking that great right now, the Federal Reserve System has just released their July 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices for the period of April through June.

About bank lending for prime residential mortgages:

• Only 17.6% said their standards were tighter.
• 78.4% said their standards remained basically unchanged.

About bank lending for nontraditional residential mortgages:

• 45.8% said their standards were tighter.
• 54.2% said their standards remained basically unchanged.

(There were no figures available for sub-prime residential mortgages because so few loan officers responded to the question.)

About bank lending standards for new revolving home equity lines of credit:

• 35.9% said their standards were tighter.
• 60.4% said their standards remained basically unchanged.

About bank lending standards for existing revolving home equity lines of credit:

• 35.3% said their banks reduced limits on existing revolving home equity lines of credit.

About bank lending standards for new consumer credit cards:

• 36.3% said their standards were tighter.
• 64.7% said their standards remained basically unchanged.

About bank lending terms and conditions for existing consumer credit cards:

• 50% said their banks reduced credit limits.

The surveyed loan officers were also asked to predict if or when their lending practices would loosen up.

• Only 2.1% said bank lending for prime residential real estate loans, (including home equity lines of credit) would loosen up by the end of 2009.
• 6.3% said in the first half of 2010.
• 27.1% said in the second half of 2010.
• 12.5% said in 2011.
• 41.7% said their bank’s standards for residential real estate loans wouldn’t loosen up anytime in the foreseeable future.

Since 1999 the loan-consulting firm America One has helped more than 3 million customers find the loans they needed with the lowest interest rates and best terms. Click here to see how their partnerships with bank can help you.

Let me clear up what might be a common misconception: There’s a difference between online lenders and payday lenders, and America One Unsecured is neither of these.

An online lender is any institution that accepts loan applications online. Technically, if your local bank allows you to submit an online loan application, they’re also online lenders. Generally, online lenders cater to lower income borrowers, or borrowers with bad credit.

Payday lenders offer small, short-term loans that may also be called payday or paycheck advances. Loans are typically made for $100 to $500 and are due within two weeks. The loan includes a fee ranging from $15 to $30 per $100.

Payday lenders—whether they operate from an actually walk-in storefront, or do business only online—are roundly criticized for charging high interest rates. Example: For a $100 loan with a $15 fee and a two-week term, the interest rate amounts to 390% APR (26 x 15% = 390%).

Contributing to the confusion between online lenders and payday lenders is the name of the trade organization that represents payday lenders who operate on the Internet: The Online Lenders Alliance. The association’s name implies that any lender that accepts applications online might be among its members. In fact, the Online Lenders Alliance represents only payday lenders.

America One Unsecured is a loan-consulting firm. They’ve created relationships with a number of banks and lending institutions so that when you—as a prospective borrower—submit an application to America One Unsecured, they can quickly run it by those lenders to see who can offer you the best deal.

In fact, since its inception in 1999, America One Unsecured has consulted with more than 3 million consumers and small business owners and helped them obtain hundreds of millions of dollars in loans.