Monday, August 31, 2009

Cash for Clunkers for Babies

The "Cash for Clunkers" Program developed by the Obama administration temporarily increased sales for auto dealers by pouring 3 billion dollars into the program. It was such a hit other industries are copying the idea. If you are thinking of having a baby or have one on the way, Toys "R" Us has stated a "Cash for Cribs" program which began on August 28, 2009 and ends on September 20, 2009. The program is available at all and Toys "R" Us and Babies "R" Us stores in the U.S.

According to Consumer Reports the average cost of a baby crib ranges from $100-$450+, the average cost of a stroller ranges from $50-$700, the average cost of a car seat ranges from $30-$300, the average cost of a high chair ranges from $70-$250+. Purchasing just these items for a newborn can add up to $1,700 and bout would cost you $1,020 after using the program. If you can save money on these items why not. Many studies report that buying used baby items and furniture are a risk and used items are not as stable as new items and can cause injury to a newborn baby.

The "Cash for Cribs" program applies to cribs, strollers, car seats, high chairs, bassinets, travel systems, and play yards. All you have to do is trade in a used item and you receive 20% off on any new purchase of baby item on the store's list (only certain items qualify for the discount). Currently there appears to be no limit on how many items you can trade in. Several manufacturers are participating in the program.

Also, less than 30% of all recalled products are turned in. This is a great way for consumers to turn in recalled items or trade in used items. Visit the Consumer Product and Safety Commission website for more information on product recalls and how to sign up for email alerts.

Friday, August 28, 2009

What Ben Bernanke and I Have in Common

Ben Bernanke and I have one thing in common; we were both victims of identity theft. His wife's purse was stolen last August which contained her checkbook, id and credit card and social security card. My purse was stolen last month and contained my driver's license, credit card, checkcard, checkbook and health insurance card. If the Federal Reserve Chairman was a victim of identity theft, what hope is there for the rest of us?

As a personal finance expert and financial planner I did everything I was supposed to do to protect myself from being a victim of identity theft. I checked my balances on a weekly sometimes daily basis; I verified my receipts with my monthly bank statements; I immediately called my bank when I found an error; paid cash for most items; only shopped at one website for online shopping; shred all my personal financial information; checked my credit report twice a year; did not sign up for recurring bill payments or automatic payment deduction, and did not sign up for online banking. Unfortunately with all of that I still became a victim. What does a customer do when they play by the rules and their bank turns against them?

Due to the recession, I thought surely banks are most concerned about keeping their existing customers and would be more willing to provide exceptional customer service. Boy was I wrong! I trusted my bank which shall remain nameless. I had been a customer since 1994 and stuck with them through hundreds of management changes, mergers, etc. I followed all of their guidelines for opening and maintaining my bank accounts which consisted of one personal checking and one business checking account.

However, when I became a victim of identity theft, all of that didn't matter, instead my bank treated me like a second class citizen, like they were not concerned, I should just suck it up and deal with it. I was in shock and appalled at the poor customer service I received. I called my bank for 3 weeks trying to get the stolen money credited bank to my account which was caused by a teller who ignored my account restriction and ignored bank policies for dealing with identity theft victims. The teller processed fraudulent checks on my account which prevented me from accessing the money in my account; I was unable to write checks to pay my bills which by this time were all late including my mortgage.

I had a separate online savings account which was linked to my checking account. I took money out of that account but had to wait several days to receive a check in the mail. I had to get money orders to pay all of my bills. I had other accounts at my local credit union but rarely used those accounts and had to reactivate those account. All of these things take time. Unfortunately my bills collector didn't want to hear that. In the past 13 years I have never paid my bills late except on a few rare occasions due to traveling. My bills are usually paid on time or before the due date.

After calling the President's Office of the bank I was finally able to get the money credited back to my account. I spoke with an executive assistant and began asking questions and she started getting a little snippy with me. Here I thought she would be really pleasant and would want to help me. Needless to say, the President's Office was not happy that a customer had called their office to complain and by 4pm that day I received a call from the Loss Management Department to inform me that the money was credited back to my account effective that day and the caller asked me what else I needed them to do. By this time I had already begun to file complaints against the bank with every state and federal agencies possible. I called my local news station, informed all my friends and associates, filed a complaint with the FTC, BBB and other agencies.

Here are 10 tips to follow if you are a victim of identity theft:
1. Contact your bank as soon as you become aware of the identity theft. You only have a limited amount of time to report the incident.

2. Immediately fill a police report. This will be helpful when contacting the credit bureaus, Experian, Equifax and TransUnion as well as when contacting all companies you do business with as proof of your claim of identity theft.

3. Place a fraud alert on your Experian, Equifax and TransUnion credit reports.

4. File a complaint with the Better Business Bureau, Federal Trade Commission, your state's Consumer Affairs or Attorney General's Office. If your complaint is against a particular bank branch fill a complaint with the FDIC and your state's banking authority.

5. If you SSN was stolen or comprised, contact the Social Security Administration to put a fraud alert on your SSN. Also, place an alert on your driver's license.

6. File a postal alert with the post office which can be online.

7. If you are a victim of check fraud, don't take no for an answer from your bank, demand that your bank credit the money back to your account within 24 hours. They can offer what is called a "provisional credit" until their investigation is complete. Ask to speak to a supervisor if you cannot get your requests resolved. Continue up the chain until you reach someone who will help you. If that fails write a letter to the President of your bank.

8. Reduce the usage of online banking, pay for more items with cash and use your debit/checkcard less often. It is easier to get money credited back to your account when using a credit card than when using a debit/checkcard.

9. Request a copy of the investigation findings from the police department and your bank.

I used to be a big proponent of opening a savings and/or checking account. I truly better that it was better to have your money in a bank than at home in a shoe box. I am starting to rethink that belief.

Tuesday, August 25, 2009

Common Budget Questions Answered

What's the most important thing you need to know about creating a budget?

Make your budget flexible. Some people make their budget too rigid and find it difficult to follow. Adding some wiggle room in your budget will make it easier to follow and make it easier to include savings in your budget and other financial goals, i.e. retirement planning, 529 plan, etc.

What are 3 tips for getting your budget back on track?

1. Write down the 3 reasons why you did not stick to your budget. Examining the reasons why you didn't stick to your budget will help you to resolve those issues and make it easier to begin using a budget.

2. Create a daily or weekly budget, get a receipt for everything you spend money on and log your receipts in your budget. You can use pen or paper or a software tool such as Quicken or Microsoft Money. You can keep all of your receipts in a shoebox, a plastic bag, and an envelope or desk drawer. This will help you to see quickly where your money is being spent and if you are spending too much money in one particular area, i.e. clothing, eating out, etc.

3. Use automatic paycheck deduction or free online bill payment to pay your bills. Using online bill payment helps you keep an accurate record of your spending. It can also help you to buy more needs (necessary items – food, non-designer clothing, shelter) instead of wants. It makes it easier to stick to a budget by using online bill payment or paycheck deduction because it you can't see the money it makes it less tempting to spend it.

What is one reason people don't stick to their budget?

A common reason people do not stick to their budgets is many people create a budget or spending plan but after a few weeks or a few months stop following it because you have to first admit that you need to change your spending habits. Having a budget requires discipline and provides accountability.

Saturday, August 22, 2009

Safe Banks in 2009

A total of over 77 banks have closed in 2009 and counting. According to Dick (Richard Bove), a financial analyst for Rochdale Securities who has been the securities business since 1965 another 150 to 200 banks fail. In 2008, he was ranked by Zacks as the top financial analyst in the country.

He created a list called Bove's List which I talked about in my blog on July 20, 2008 entitled, "Check to See if Your Bank is on Bove's List". Some of the banks listed in his March 2008 report have closed or are still in financial trouble. Bove has identified 8 banks that he likes. The banks are: Bank of NY Mellon, Northern Trust, State Street, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JP Chase Morgan.

As a comparison, in 1987, the FDIC listed 1,575 problem banks and more than 10% of the banks were on the FDIC problem list. In 1987, 184 banks failed. The FDIC reports that number of troubled banks 252, soared during the fourth quarter of 2008 to the highest level since 1994.

BankUnited FSB is the largest bank failure in 2009 in terms of the percentage loss on failed bank’s assets. The two previous largest bank failures in the history of banking, in terms of loss to the FDIC, were Indy Mac Bank in July 2008 and American S&L in September 1988.

According to a Global Finance banks across the world were ranked. In the study 50 of the world's safest banks are identified. One bank in the US was listed in the top 20, Bank of NY Mellon (BK). Wells Fargo was also listed in the top 50 and in another report was listed as the best consumer internet bank. Other banks listed in the top 50 safest banks were US Bancorp and BB&T.

Here are 4 tips to help you research your bank's health.

1. If you bank has closed check the FDIC website to see if it is FDIC insured.

2. Move at least some of your money to a credit union or a smaller bank or banks such as PNC or BB&T that did not invest in the sub-prime mortgage loans.

3. Do research on your current banks and look at the earnings over the past two to three years as well as the number of branches that have closed.

4. Put your money in more than one bank. As your grandmother used to say "never leave all your eggs in one basket."

The following banks closed in 2009.

Guaranty Bank

CapitalSouth Bank

First Coweta Bank


Community Bank of Nevada

Community Bank of Arizona

Union Bank, National Association

Colonial Bank

Dwelling House Savings and Loan Association

Community First Bank

Community National Bank of Sarasota County

First State Bank

Mutual Bank

First BankAmericano

Peoples Community Bank

Integrity Bank

First State Bank of Altus

Security Bank of Jones County

Security Bank of Houston County

Security Bank of Bibb County

Security Bank of North Metro

Security Bank of North Fulton

Security Bank of Gwinnett County

Waterford Village Bank

Temecula Valley Bank

Vineyard Bank


First Piedmont Bank

Bank of Wyoming

Founders Bank

Millennium State Bank of Texas

First National Bank of Danville

Elizabeth State Bank

Rock River Bank

First State Bank of Winchester

John Warner Bank

Mirae Bank

MetroPacific Bank

Horizon Bank

Neighborhood Community Bank

Community Bank of West Georgia

First National Bank of Anthony

Cooperative Bank

Southern Community Bank

Bank of Lincolnwood

Citizens National Bank

Strategic Capital Bank

BankUnited, FSB

Westsound Bank

America West Bank

Citizens Community Bank

Silverton Bank, NA

First Bank of Idaho

First Bank of Beverly Hills

Michigan Heritage Bank

American Southern Bank

Great Basin Bank of Nevada

American Sterling Bank

New Frontier Bank

Cape Fear Bank

Omni National Bank

TeamBank, NA

Colorado National Bank

FirstCity Bank

Freedom Bank of Georgia

Security Savings Bank

Heritage Community Bank

Silver Falls Bank

Pinnacle Bank of Oregon

Corn Belt Bank & Trust Co.

Riverside Bank of the Gulf Coast

Sherman County Bank

County Bank

Alliance Bank

FirstBank Financial Services

Ocala National Bank

Suburban FSB


1st Centennial Bank

Bank of Clark County

National Bank of Commerce

Wednesday, August 19, 2009

Another Option for Phone Service

According to White Fence Index, the average monthly landline phone bill ranges from $19.99 to $42.14 per month which equates to $239.88 to $505.68 a year. The national average for phone service is $31.80 per month. Many families spend thousands of dollars a year on utilities such as phone service.

You should always compare services with different companies to see which has the best options for you or your family. The top phone providers such as Verizon, AT&T, Comcast and Skype will now have some competition from Google. Google offers a free phone service called Google Voice which is only available by invite. This is a great way to save on phone service. You can subscribe by completing an online form and an invitation is sent to your email address.

Some of the features of Google voice are:

1. You can get a phone number that routes calls to your cell phone, work phone and home phone simultaneously.
2. You can call anywhere in the U.S. for free and international calls have very low rates.
3. You can get your voicemail transcribed into email or text messages.
4. You can make free conference calls which is helpful when making personal or business calls.
5. You can get voicemail on the internet.

Some additional features are: call record, 411 directory assistance, notifications, personal greetings, call screening, call block, distinct phone rings and call forwarding. The service works by calling your voicemail and you are then transferred to a dial tone where you can call any number in the U.S.

Here are 4 tips to help when comparison shopping for phone service:

1. Call your phone company and bundle services such as: internet, voice and phone.
2. Call your phone company every two to three months and ask about special or discounts they offer to reduce your monthly bill.
3. Read the terms and conditions, agreements and all information regarding the phone service you are considering.
4. Get tough and threaten to cancel your phone service if you are not happy with the service you are receiving and feel you deserve a better deal for being a long-time loyal customer.

Sunday, August 16, 2009

An Easy Way to Receive Medical Services

Medical bills are one of the main reasons Americans file for bankruptcy. Many Americans opt out of buying health insurance due to the high premiums and co-payments. This can have a ripple effect on individuals and families.

Americans who do not have health insurance are generally not in good health, don't have a retirement account or disability insurance and can never afford to take off work to go for a doctor's visit. The U.S. spends the most on healthcare than any other country yet Americans are the most unhealthy people in the world. Forty-six million Americans are uninsured and this number continues to grow as the unemployment rate continues to soar.

Many Americans struggle for years trying to pay off high cost medical debt due to lack of health insurance or inadequate health insurance coverage. When a patient has health insurance there is a set limit that hospitals, doctors and other medical professionals can charge for services. Without medical insurance, a patient can be charged a higher amount for services and in some cases are charged multiple times for the same services.

If you do not have health insurance always ask for an itemized list of the services you received and make sure there are no duplicates. When you have health insurance many errors made in medical bills are caught by your health insurance provider and corrected before any remaining costs are submitted to the patient. Having health insurance also reduces the chances of patients receiving medical billing errors.

A unique way to pay back medical bills is to barter services. An increase in bartering for health care services has dramatically increased since the beginning of the recession. One company, ITEX Corp. has 24,000 members and promote approximately $1 million a month in health care bartering. Patients can exchange medical good and services for barter dollars but is usually limited to specific medical industries like dental or smaller doctor practices. These dollars can be used to pay for health care costs by a provider who belongs to the network.

There are approximately 400 exchanges in the United States. The site provides listing by state. The networks charge membership and transaction fees. Here are 3 ways to ensure you are using a valid medical service provider when bartering for medical services:

1. Do research. Verify the medical provider is licensed.

2. Verify the agreement. Verify the agreement you establish with the medical provider in writing and make sure you understand the terms of the agreement.

3. Give back. Refer your medical provider to others on the network or by word of mouth to friends, relatives and co-workers, this can help you negotiate future services needed by the same medical provider.

Thursday, August 13, 2009

5 Easy Ways to Protect Yourself from Mortgage Fraud

In 2008, mortgage fraud cost homeowners approximately $2.5 billion. According to the IRS, in 2008, there were 349 real estate fraud cases investigated and 136 convictions. There have been 2,268,108 foreclosures this year and counting. Over 360,000 foreclosures occurred in the month of July. Approximately 618,217 people have filed for bankruptcy so far this year.

Lawmakers are tyring to change the mortgage buying process to make it easier for homebuyers to understand the process and reduce fraud and corruption in the industry. Well, it's about time! The process would be revamped by the proposed new consumer protection agency called Consumer Financial Protection Agency.

Some of the things that would be eliminated are the use of fine print and the thousands of papers to read and sign. This would provide complete visibility for homebuyers into the mortgage process and ensure that homeowners purchase homes with no hidden fees, gimmicks or mortgages that they can't afford. Other things that would be eliminated under the revamped process are: complex mortgages that make mortgage companies the most money would be offered last, simpler less expensive mortgage would be offered to potential homebuyers first; prepayment penalties would be banned or restricted; mortgage brokers will be held accountable for accurately determining if a homeowner can afford to purchase a home; and better disclosures which includes identification of all fees associated with a mortgage loan.

This also sounds good but there is always a catch. Home buyers might have to pay more for their mortgage to ensure that mortgage companies don't lose any money by changing their processes. Previous proposals by some members of Congress for one-page mortgage forms have not been successful.

If you would like to see a change to the mortgage process contact your state congressman and depend easier, fairer mortgage loan processes. Here are 5 ways to protect yourself from mortgage fraud:

1. Go with your gut. Go with your gut instinct, if you feel like the deal is too good to be true or if you feel like something is not right with the loan, don't sign it.

2. Ask questions. Ask lots of questions; have everything explained to you prior or during settlement.

3. You can change your mind. If you sign the settlement papers and feel like you made a bad decision, you have 3 days to notify the mortgage company that you wish to cancel the loan.

4. Do research. Do lots of research on the home buying process before you go to settlement so that you are an educated homebuyer which also minimizes chances of fraud during your settlement. Visit the website for great tips on the home buying process.

5. Take your time. This is one of the most important decisions of your life. Don't rush through the process. Don't let your emotions cause you to make a bad decision. Talk to family or friends who have bought a home and get advice which will help you learn from them their mistakes.

Monday, August 10, 2009

Should You Help A Relative

Due to the recession many Americans have exhausted all formal resources to borrow money and are looking to relatives for a bailout. Some relatives are able to help out my loaning money to needy families. The probability of a relative being able to pay back the money they borrowed from you is a lot lower than the probability that they will ask you for money again so decide if you want to be their personal bank or if you want to make them stand on their own two feet.

Here are some questions to consider before loaning money to a relative:
1. Decide if it will be a loan or a gift
2. Will you charge interest?
3. What are the consequences if they don't pay the money back?
4. Will the loan you give put your relative in a financial bid?
5. Is the loan for a legitimate reason?

Here are 11 tips when loaning money to relatives.

1. Keep your head above water. Don't go further into debt to help a relative, not even your mother. If you go into debt and lose your job, your mother can no longer get help and may are jobless and in mounds of debt with no one to help you

2. Ration out help. You can occasionally help relatives for emergency purposes but don't make it a habit because you will only hinder them instead of help them. Give a man a fish and he eats for a day, teach a man to fish and he eats for a lifetime.

3. Give advice. Give advice on how you got out of a financial crisis and become financially stable. Encourage them to develop better spending habits or seeking professional help.

4. Don't be a sucker. Don't fall for the tears, sobs and emotional pleas for help for relatives who do not manage their money wisely.

5. Ask for the address. If a relative asks for money to pay a bill and you want to help, ask them to give you the bill and you can send the money to pay the bill. If they refuse, they you know they wanted the money for something frivolous and didn't really need help.

6. Agree with your spouse. Work with your spouse to discuss the situation. If it is her family, then be sensitive to her needs. Take a stand. If your spouse advises you not to help a his/her relative listen to your spouse. They know their relatives better than you do.

7. Don't co-sign for relatives. You can’t control how other people spend their money. If they don't pay the bill, you are responsible for the debt and risk the chance of ruining your credit.

8. Direct them to social programs. Tell your relatives to seek help from their local church, American Red Cross. Visit

9. Assume you won't get the money back. Always assume that you won't get the money back. If makes it easier to loan the money.

10. Draw up a loan agreement. You can have your relatives sign a contract if you want to feel better about ensuring you will get your money back.

11. Consider other relatives. If you loan money to a relative and your other relatives find out they will want a loan too, be prepared to deal with the backlash if you don't lend money to all your relatives who ask for a loan.

Friday, August 07, 2009

Upcoming Events

If you live in any of the areas stop by to say hello. Visit my website for more up-to-date information on upcoming events.

August 2009
August 17, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
August 29, 2009, Booksigning, Urban Knowledge, Security Square Mall, 6901 Security Blvd., Baltimore, MD, 3-5pm
August 31, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am

September 2009
September 12, 2009, Booksigning, Borders, 921A Capital Center Boulevard, Largo, MD, 4-6pm
September 14, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
September 19, 2009, Panelist, Wisdom, Wealth and Wellness Program, Reginald Lewis Museum, Baltimore, MD

Tuesday, August 04, 2009

Is Your Car a Clunker

The Cash for Clunkers, Clunkers or the official name Cash Allowance Rebate System (CARS) program was signed by President Obama in June and began on July 27, 2009. Vehicles purchased after July 1, 2009 are eligible for refund vouchers worth $3,500 to $4,500 on traded-in cars with a fuel economy rating of 18 miles per gallon or less (fuel-efficient). The program will expire on Nov. 1, 2009.

Details of the program were mapped out by the National Highway Traffic Safety Administration (NHTSA). Unfortunately, interest in the Clunkers program peaked on July 29, 2009, and demand has stalled according to a report from The report which discussed internet shopping data said if current trends continue auto purchases will fall back to pre-Cash for Clunker levels by August 20, 2009. The report also predicted auto sales will improve over the summer as customers shop for bargains before the new car models hit the showroom.

Many people are show interest in purchasing a new car but do not qualify for the rebates which are affecting car sales. The White House hopes the rebates will increase vehicle sales which are down 3-6 million from 2007 and 2008 sales.

Approximately 16,000 auto dealers signed up to participate in the program. A government hotline was setup and has handled over 45,000 calls from people seeking information. A website for the program has registered 1.5 million hits since August 7, 2009.

Some dealers said junkyards in their area are not prepared to handle the inventory of older cars expected to be scrapped. Other dealers said the 136-page instruction manual provided by the government is confusing. Some car buyers have been disappointed that their cars don't qualify for the program.

Saturday, August 01, 2009

Reduce Spending or Downsize

Due to the recession many people have been forced to or voluntarily made adjustments to their lifestyle due to loss of income, unemployment, reduced hours, reduced benefits, etc. However, many others are still struggling with making changes to their lifestyle. Many Americans are stubborn and want a different result but refuse to make the necessary sacrifices required to survive the recession.

If you don't much money left over after you get paid you may need to reduce expenses and spending. Everyone should reduce spending no matter what your situation to ensure you live well below your means so that if a financial crisis occurs you can overcome it without having to make drastic changes.

It is better to reduce spending because it is much easier to scale back by making small adjustments to your life than to make drastic changes. People are better able to adjust to small changes than having to make drastic changes to their lifestyles.

You don't have to sacrifice quality just because you reduced spending. There are many discount and outlets stores that sell the same things that department stores sell at a much lower price. Also, you can shop at discount or wholesale stores to purchase groceries instead of the regular grocery stores. This can save you tons of money and you can still enjoy the same quality of life.

You should downsize:
1) if you were previously a two-income household and you are now a one-income and you have been unemployed for 2 months or more

2)if you are behind 2 months or more on your mortgage, car payment, utilities

3)if you owe late fees on all of your credit cards

4) if you owe so much in late fees or over-the-limit fees on your credit cards that you will never get caught up by just sending in the minimum monthly payment or are unable to make the minimum monthly payments

You should save at least 10% of your monthly income towards savings. If you are not currently saving you can start by saving at least $1 a day or $1 a week. If you can save more than do so. It may take a while and you may not feel it is worth the effort but after a few months you will have a savings account which helps to provide motivation for you to continue to save.

Put your money in a high interest online savings account and you will earn interest at a faster rate than putting your money in a traditional bank. You can then move your money to more long-term savings products.