Don’t get us wrong. This isn’t a crusade against the lending industry. Loans, kept in proper perspective are a necessary part of living in today’s world. The problem comes when we take out loans that we can’t pay for. Lending companies will actually try to prevent you from doing this. The problem is, they have matrixes that are based on what they perceive average expenses to be, and no couple really fits into the exact molding of an “average couple.”

A budget is the best protection your marriage has from financial problems. In most cases, they are simple to make. Figure out how much income you have. Figure out an amount to give to savings (typically 10%) and how much you want to give to charity or your church of choice (believe it or not, studies have shown that those who regularly give charitably do better financially than those who don’t).

Next, figure out how much you can afford for housing. This should be no more than 25% of your income and should include your mortgage or rent, utilities, and related housing expenses. Then figure out how much you have to spend for transportation. Experts argue about what percentage you should dedicate to this and the rest of your expenses.

Truthfully, it doesn’t matter what percentage of your budget goes to each item, as long as you are agreed on a percentage, and at the end of the day your budget doesn’t equal more than 100% of your income. The next part is the hard part: sticking to your budget.

Sticking to a budget may mean saying no to the “better” car you were hoping to buy, or saving for some things instead of using personal loans to get them. In any case, it’s better to have a used car and a happy marriage than a brand new car that gets fought over in the divorce settlement.

Photo via gui.tavares

Today, however, there’s something else going on. The success of the new 3-D blockbuster films such as “Avatar” has theater owners licking their lips. Theater owners are raising their prices on 3-D tickets by as much as 25 percent. In part, this move comes to recoup higher costs. On top of that, however, the owners are trying to make the best of a booming box office and the increased demand for 3-D movies.

It is expected that the cost of regular 2-D movies will also increase, although not as dramatically. The price of a 2-D ticket is expected to go up around 5 percent.

Higher-demand tickets, however, such as a prized 3-D IMAX ticket, could rise to nearly $20 apiece. Some theaters in more densely populated areas, such as Los Angeles and New York, may begin to charge even more for tickets.

The rate changes going into effect will, of course, vary by chain. Some theater chains are raising their prices across the board, while other chains are just raising IMAX or 3-D show prices. Two of the biggest theater chains in the country, AMC and Regal, are both expected to raise prices.

Successful 3-D box office hits from the past year or two have made tons of money. Avatar broke all sorts of records in sales, even if it had lackluster performance at the Oscars. Tim Burton’s interpretation of Alice in Wonderland was at the top of the movie charts for three weeks, and took in $300 million or more. Many more 3-D movies are in the works and slated for release this year.

Photo via Alan Light

So, you turn to a payday lender, but they want to charge you 300 percent in interest or more. Fortunately, social lending sites are gaining in popularity and may have the personal loan solution that you need.

With these sites, you’re able to be matched up with someone who has money to lend. You enter into a loan contract with another person. These social lending sites are also known as “person to person” lending sites, because there isn’t generally a bank or other financial institution in the background providing the money for the loans. Actual real people are lending the money.

Here are some of the most popular social lending sites out there today:

• Lending Club. This particular social lending website is one of the toughest out there. Before you are able to ask for a loan, the site will screen your credit score. This helps to reduce some of the risk to the lenders that are on the site. This one is fairly new and not yet available everywhere.
• LendingKarma. LendingKarma is designed all around the loan agreement itself. It helps borrowers and lenders define the terms of the loan. There is a payment tracker for the loan, and there is the ability of lenders to help their borrower keep on track through the use of payment reminders.
• Loanio. This site is an auction-based lending site. It allows lenders to look at credit information provided by the borrowers. The lenders can then place a bid on a part of a loan or on the entire loan based on how much they’re willing to lend, and what interest rate they’re willing to charge.
• Prosper. This was at one time the largest of the social lending sites. However, it’s changing its platform now, and will be working only with lenders from California, but will be lending money to borrowers around the nation.
• Virgin Money. This site was one of the social lending pioneers, having lent over $300 million since they opened in 2001. They specifically help to manage loans between friends and relatives.

Did I mention that was July 4, 1956?

The baby was kidnapped by Angelo John LaMarca. LaMarca had previously been arrested by the United States treasury for bootlegging. LaMarca was working as a taxi dispatcher. He had a wife and two children, and like many people today was living in a house that he couldn’t afford.

LaMarca kidnapped the baby boy and left a ransom note that included an apology. Of course, in addition to the apology, he threatened to kill the child if the parents made “one wrong move.”

Eventually, FBI agents found and arrested LaMarca. Unfortunately, they also discovered the remains of young Peter Weinberger, whom LaMarca had killed. La Marca received the death sentence, and it was carried out at Sing Sing prison.

The Weinberger kidnapping and murder wasn’t as famous as the Lindbergh kidnapping, but it is at least as interesting. It also illustrates how far our financial system has come since those days. The kidnapper was afraid, with good reason, that the mafia boss who made him the loan would send goons to physically harm him.

Today, the kidnapper could have just walked in to any payday loan storefront and got the cash that he needed. In addition, banks are offering more diverse personal loan products, and he may have qualified for a more traditional type of personal loan.

Now, I’m not suggesting that the man was forced into kidnapping any more than someone is forced into robbing a bank because they can’t afford food. That’s an excuse, and not a very good one.

Photo via memekode

Bad Credit Loans

They’re not the only bank that wrote off bad loans. The loans the banks were hit hardest by were made to consumers with bad credit. Rather than the possibility of writing off more debt in 2010, banks aren’t approving as many bad credit loans. This means if you need a personal loan and your credit isn’t great, you may not get the loan. In fact, it may make more sense to repair your credit prior to applying for a personal loan.

Credit

Your three digit FICO (credit) score is viewed as possibly the most important factor regarding whether or not a bank will underwrite a loan for you. That’s because it gives lenders an instant idea of how well you’ve managed your money over the past several years.

If you made your payments late or missed them entirely, your score will plummet. If you have a bankruptcy or foreclosure in your financial past, your score will really drop. At some point you’ll have to apply for a bad credit loan.

If you are able to get one (in the face of the information above), you’ll pay higher interest rates and higher origination fees.

If your score is below 620 you’re considered a credit risk. If you’re score is 720 or higher, you will generally qualify for the best loan products and the most favorable interest rates.

Personal Loans

Many banks have ramped up their personal loan operations in 2010.  So loans may be available. However, your personal loan options will be limited if you have poor credit.

Photo via Lel4nd

We’re talking about women in small business. While it’s challenging enough in the United States to be a woman in small business, in some parts of the world it’s nearly impossible. In developing nations especially, women often have a hard time even getting a small personal loan to help jettison their small business idea.

Many banks and investment firms are more interested in larger corporations, or in businesspeople that already have a large amount of assets. They aren’t interested in making small loans to poor people in developing nations, no matter how good their business idea might be.

In some places around the world, women are denied even the most basic access to financial service altogether.

It’s this global environment that’s lead to the development of microfinance. Microfinance is, in the most basic sense, the supply of financial services, savings and loans to poor people. Microfinance usually involves small amounts, perhaps of just a few hundred dollars. The size of these loans, as well as the makeup of the borrowing population, make them different from traditional loans.

These loans are necessary because individuals in developing nations often don’t have access to traditional banks. They can’t go in and get a loan because they don’t have a credit report, they don’t have collateral and they may not even be able to fill out loan paperwork.

In many cases, these personal loans are relatively small. A woman in Malaysia might need $500 to get a gardening business started, or a woman in the Philippines might need $200 for materials to start a clothing business.

Microfinance personal loans gives a way for poor households to meet their basic needs. They add the stability of a business to a household that needs stability. They enable poor people with good ideas to make money on those ideas.

Websites like Kiva.org (http://www.kiva.org) and others are set up so as to allow people to make these kinds of personal loans. You can actually page through and choose a business you want to invest in, make the loan and watch to see what happens.

Microfinance personal loans aren’t charity, as the money is paid back. They are charitable, however, in that they help a struggling family or individual to help themselves.

Photo via egor.gribanov

If you’re like most folks, you can’t stand the jingles from those free credit report ads on TV and radio. However, if you’re like most folks, the reason you can’t stand them is that you can’t get them out of your head. It’s proven to be an effective, if annoying, marketing campaign, as the website offering credit reports has seen a huge influx of business due to the ads.

The problem is, however, that the credit reports aren’t exactly free. At least, not at the advertised websites.

Federal law requires the three consumer credit reporting agencies to offer a free copy of your credit report once every 12 months. There is a website set up to get them: annualcreditreport.com. The site usually advertised on television and radio, freecreditreport.com, is actually a company that requires you to purchase other services, such as a copy of your credit score, in order to get your “free” credit report.

The Attorney General of the State of Illinois, Lisa Madigan, has had enough of those commercials. Along with 42 other state attorneys general, she is petitioning the FTC to tighten up advertising restrictions on the company and others like it.

The reason Madigan and the other AGs are so concerned is that the ads can be confusing for customers. Customers call a phone number or log onto a website, thinking that they’re going to get a free credit report. These customers have probably heard about the fact that they’re entitled to an annual copy of their credit report, so they’re likely to believe the advertisement.

When the customer calls, however, the company requires them to purchase something else – such as a copy of their credit score – before they will send the credit report. The customers incur costs that they don’t expect to access information that’s otherwise available free of charge.

Madigan is hoping that the FTC will require companies that offer credit reporting services to add specific disclosures to their advertisements that let customers know that there are potential charges involved. In addition, she is asking that the commercials also offer their customers the option to get the official free copy of the credit reports.

Whether or not the effort will be successful or effective remains to be seen. In the meantime, the lesson for consumers is that it’s important to listen carefully to everything you hear, and that if you call and ask for something that’s supposed to be free be wary of providing a credit card number or banking information.

Photo via An Nguyen

September’s drop, as well, is not as bad as it was thought to be. The estimate for September was originally down by nearly $15 billion. The revision puts the fall at around $9 billion for that month.

When you combine the tremendously better than expected news for October with the positive revision of the data from September, there is reason for optimism. It suggests that the demand by consumers for additional funding wasn’t completely destroyed during the consumer deleveraging process.

If things keep going like they are, it’s likely that we’ll see even more and more growth in the consumer credit area before 2009 is up. This increase in the level of consumer credit could be a very good thing for the markets, and could serve as something of a motivator for investors. In addition, it will signify to investors that consumers are willing to do what it is going to take to get their own economy out of the recession.

Specific details of the trends are encouraging, too. This is especially true in the area of durable goods. There was a decline of just under $7 million in the area of revolving credit, which represents a drop of less than a percent. The interest rates on credit cards and on personal loans stayed at the levels of the previous month.

Nonrevolving credit, such as that credit which makes up car loans and home loans, was helped by a significant boost in car sales during the month. Nonrevolving credit rose by about $3 million from the September numbers. This comes, at least in part, from a drop in car loan rates. The rate dropped to an average of 3.42 percent in October compared with 3.5 percent during the month of September.

Photo via  OakleyOriginals