Sunday, November 29, 2009

Think Before You Spend

The holiday season has arrived and everyone is getting ready to spend money. Department stores are luring consumers to the stores with early hour sales. Don't get caught up in the holiday shopping frenzy. Think before you spend. If you don't have the cash don't flash – don't use your credit card to buy holiday gifts.

If you have the money after the holiday season and have paid all of your bills and creditors, buy gifts the day after Christmas. Department stores have great deals the day after Christmas and you may even get better deals than those offered during the Black Friday sales.

Many people have lost sight of what the holidays are all about. The holidays are not about buying or getting gifts - it is about spending time with your family and being thankful for what you have – not for what you don't have.

January and February have the highest number of bankruptcies and divorces and finances are one of the main reasons for divorce. Ask yourself these questions before you start shopping for gifts this holiday season.

1. Do have to charge your Christmas or holiday gifts this year?

2. Did it take you 6 months or more to pay off your debts from Christmas or holiday shopping last year?

3. Did you buy too many expensive gifts or more than you should have?

4. Are you buying expensive gifts to impress someone or to "keep up with the Jones"?

5. Are you ashamed that if you buy a gift that costs $20 people will think you are cheap, poor or broke?

6. Why do you feel the need to spend money that you don't have?

7. Will buying gifts this holiday season help or hurt your financial situation?

8. Do you make your own choices to spend money or do you let others influence you, i.e. media, friends, relatives, your children, spouse, advertisements, etc.?

Thursday, November 26, 2009

Don't Become A Victim This Holiday Season

The media and nationwide police departments are warning consumers to use caution and common sense when shopping during this holiday season. The Thanksgiving, Christmas and Hanukkah holiday seasons are one of the highest crime periods of the year.

With the 10.2% unemployment rate and many Americans only working part-time or minimum wage this holiday season thieves are more desperate than ever. This may be one of the worst crime periods we have seen in a long time.

There have been reports of thieves stealing gas, stealing groceries out of the trunk or cars, snatch and grab where a purse is stolen out of a locked car, increases in shoplifting, and more. Here are 16 tips to reduce your chances of being a victim of theft this holiday season.

1. Don't carry extra credit cards in your wallet. Only carry the credit cards you know you are going to use when shopping.

2. Lock all the doors and windows at your home when you are at home and away from home.

3. Get in your car quickly, don't linger. Lock your doors as soon as you get in the car.

4. If you are a single woman and hire a professional to fix something in your home, call a friend or relative to let them know you are getting work done in your home. Put away any valuables and personally identifying information.

5. Don't discuss your salary, where you live or where you go shopping. You make spark the interest of a potential criminal or actual criminal.

6. Do not leave your child or pet alone in a locked car.

7. Don't leave anything in your car. Thieves are breaking into cars and stealing whatever they find, CD's, clothes, etc.

8. Don't use the ATM in a secluded, poorly lit area or at night.

9. Buy gas during the daytime.

10. Be on guard when riding in taxis, many drivers get robbed during the holidays.

11. If you feel someone is following you try to walk towards a lighted area or near other people. If that's not possible call a friend or family member from your cell phone. If you are attacked they can call the police and locate you. Use a headset when talking to keep your hands free.

12. Don't park near a van or truck.

13. Leave the mall before it closes. If not, get a mall security guard to walk you to your car.

14. Don't go shopping at night but if you have to go shopping with a friend or two.

15. Tear up boxes that contained expensive gifts and put them in a separate trash bag to deter thieves that may go through your trash.

16. When walking, shopping or driving use your Bluetooth for your cell phone. Talking on your cell phone without a Bluetooth is very distracting and thieves wait for the perfect opportunity to rob you while you are distracted.

Monday, November 23, 2009

6 Tips to Help Ease a Layoff

Basic life necessities seem even more expensive when you are employed. The unemployment rate is 10.2% and will probably increase before it decreases. Some experts say the worst is yet to come. For those umemployed – that is not good news.

I have been unemployed twice and it was not a good feeling. The first time I got about a three week notice that my position was being eliminated and was totally unprepared, I was in debt up to my eyeballs and was renting a room from one of my friend's parent's home. I did not have a car and had no savings. I was completely lost, embarrassed, angry and felt dejected.

I did not tell anyone that I was unemployed and kept pretending to go to work. I would return phone calls in the evening around the same time I would normally return phone calls. Luckily I was single with no children. It got so bad that I did not have even one dollar to buy groceries or catch the bus to go to an interview. I finally broke down and told my godmother that I had no food and that same day she brought my some food. I thank God for her; I probably would have starved to death because of my pride.

My second unemployment we had heard rumors but weren't sure if the rumors were true. We were notified the night before that some of us would be let go. Luckily I learned from the first layoff and paid off all of my debt and the only bill I had was my mortgage. I also had an emergency fund to cover all of my bills for 4 months. I applied for unemployment which was only enough to cover my utilities but every little bit helped. I mention this because if you do not work enough years for an employer and are laid off you will not be eligible for unemployment benefits and laws vary state by state.

Here are 6 tips to ease the pain of a layoff:

1. Plan for the worst. Create "what if" scenarios and develop a plan for each, i.e. if you lose your job how will you pay your bills, if you get sick. etc.

2. Create an emergency fund. Save enough money to cover your bills for 9-12 months. Start small and work your way up if you have little or no savings.

3. Pay down debt. In the event that you are laid off and don't have any savings or have used all of your savings you can use your credit card in case of emergencies. If you credit cards are maxed you don't have this option.

4. Create a support network. Having support during a financial crisis is one of the best ways to get through it. Talk to friends, relatives, other laid off co-workers, your pastor, a counselor, social worker, or other person you trust to get advice and support.

5. Further your education. If you do not have a college degree, one option is to go back to school and obtain your degree. If you already have your degree you may consider going back to get your masters degree. If you experience a financial crisis in the future you can always go to your local college and teach a few courses as an adjunct professor.

6. Contact social agencies. Contact your county, local or state government social agencies to obtain free help for those unemployed,

Friday, November 20, 2009

A Small Victory for Identity Theft Victims

Choice Point also known as National Safety Alliance Corporation or Equi Search Services is a data collection company located in Atlanta, Georgia. Choice Point merged with LexisNexis Risk Solutions in the fall of 2008.

Choice Point combines personal data obtained from various public and private databases and sales the information to the government and the private sector industries. The company maintains over 17 billion records for individuals and businesses. It sells the data to approximately 100,000 clients which include 7,000 federal, state and local law enforcement agencies.

The company stores consumer transactions that are regulated by the Fair Credit Reporting Act (FCRA) which includes: insurance underwriting services, tenant screening, pre-employment screening, consumer record reporting and title insurance finances.

The company also provides marketing services, contracts with local and federal law enforcement agencies, data and authentication solutions, litigation and debt collection support to law firms, software and technology services and databases of personal information which contain names, addresses, SSN's, credit reports, and other personal information.

In 2000, the State of Pennsylvania terminated a contract with ChoicePoint, claiming that the company illegally sold consumers' personal information. ChoicePoint paid $1.37 million fine. In 2002, another identity theft scam resulted in $1 million in fraud. In 2005, a security breach was identified when identify thieves stole personal information of approximately 163,000 Americans. The company claimed that it would stop selling personal consumer information including SSN and driver's license number except for matters related to law enforcement.

Congress members rebuked the company for the security breaches. The company eventually reached an agreement with approximately 20 state attorneys general to notify individuals in the affected states that their data had been stolen. In January 2006 ChoicePoint was fined $15 million by the FTC, $10 million in civil penalties and another $5 million to compensate victims of the security breach. ChoicePoint was also required to implement better secure measures to protect personal information.

In 2008, the company turned off a key electronic security tool used to monitor access to one of its database and it took four months to detect the tool was turned off. The incident violated the 2006 court order maintaining that the company institute a comprehensive security program to protect consumer information. The FTC modified the court order and the company now has to report to the FTC every 2 months for the next two years on how consumer information is protected. Here are 5 tips to help ensure your personal information is protected.

1. Write your congressman and demand stronger security measures to protect consumer information and force companies to help consumers quicker when they become victims of identity theft.

2. Get a copy of your credit report from at least once a year and review each line to ensure all information is correct. Dispute any errors and provide any supporting documentation.

3. Limit the amount of information you provide. Don't enter or store your personal information on your cell phones, PDA's, or in an unsecure place such as work, your purse or wallet. Don't enter your personal information in contests or on the internet.

4. When doing business with a company ask questions about their security measures and ask what measures are in place if a security breach occurs.

5. If you become a victim of identity theft due to a company security breach, consider closing your account and take your business to another company.

Tuesday, November 17, 2009

President Obama Gives Hope for Homebuyers and Unemployed

On November 6, 2009, President Obama signed a $24 billion economic stimulus bill which will provide additional unemployment benefits and give tax credits to prospective homebuyers. The bill also includes tax cuts for struggling businesses. The bill was implemented because of the 10.2% unemployment rate which is the highest since 1983. This results in the 4th unemployment benefit extension in the past 18 months.

According to House Majority Leader Steny Hoyer, approximately one third of the 15 million people unemployment have been out of work for at least six months.

The bill will provide another 14 weeks of benefits to those unemployed who have exhausted their benefits or will exhaust them by the end of the year. Unemployed residents who live in states where the jobless rate is 8.5% or higher will get an additional six weeks including Idaho, Pennsylvania, New York, West Virginia, Arizona, Mississippi, Ohio, Illinois, Tennessee, Alabama, Kentucky, South Carolina, Nevada, Rhode Island, California, Florida, and Georgia.

Presidential spokesman Robert Gibbs stated "But I believe -- I think most would tell you -- that the (unemployment) rate is more likely than not to get a little worse before it gets better".

The additional 20 weeks (14 plus six for high states) could provide a maximum of 99 weeks to those residents who live in high unemployment rate states.

The bill will extend the $8,000 first-time homebuyer tax credit which was going to expire at the end of November 2009 but has been extended to June 2010 provided a homebuyer signs a contract by the end of April 2010. The program will also provide a $6,500 tax credit for existing homeowners who buy a new home after living in their current residence for at least five years.

Saturday, November 14, 2009

Fannie Mae Still Asking for Help

The latest request from Fannie Mae is for an additional $15 billion from the government because of losses in the third quarter which it claims is due to homeowners falling behind on their mortgage payments and the ever increasing unemployment rate. The default rate increased to 4.7% and is even higher in Florida and Nevada, with over 11% of the mortgage loans in default.

"There is significant uncertainty regarding the future of our business, including whether we will continue to exist, and we expect this uncertainty to continue," Fannie Mae said.

Fannie Mae and Freddie Mac guarantee approximately 31 million mortgage loans or about half of the mortgages in the U.S.

Fannie Mae lowered the requirements for borrowers prior to the recession by offering high risk loans which are now defaulting including homeowners with good credit.
This is the fourth request by Fannie Mae for government aid which now totals $60 billion in aid so far.

Fannie Mae stated that it would allow some homeowners who are facing foreclosure to rent their homes for a year to help reduce the number of homeowners losing their homes.

This new program is called the "Deed for Lease" program and will allow homeowners to transfer their deed title to Fannie Mae by signing a one-year lease which includes potential month-to-month extensions after the one year period.

Wednesday, November 11, 2009

What the CIT Bankruptcy Means for You

CIT, the 100 year old and 5th largest bank in the U.S. filed for Chapter 11 bankruptcy Nov. 1, blaming losses on subprime mortgages and decreasing credit markets. CIT listed $71 billion in assets and $64.9 billion in liabilities.

CIT funds approximately 1 million businesses such as Dunkin’ Brands Inc. didn’t include CIT Bank in bankruptcy filing. The CIT bankruptcy is the one of largest bankruptcies in the U.S.

The government has input billions of dollars into CIT including giving $2.3 billion last fall. Citigroup received $45 billion in loans from the government, which now owns a 34% interest in the bank. Citigroup plans to sell some of its assets including its interest in Smith Barney.

CIT customers should be nervous because as a customer you don't know what the future holds for CIT. The company assures its customers that it will be business as usual and that customers should not take their business elsewhere because of the bankruptcy. Unfortunately, if most of their customers leave CIT will not be able to survive.

CIT 2,000 vendors that supply merchandise to 300,000 stores. According to analysts approximately 60% of the apparel industry depends on CIT for financing so the bankruptcy will cause a domino effect for businesses and customers who shop at their stores.

As my grandmother used to say "never have all your eggs in one basket". If you have all of your money in CIT I recommend moving at least some of it to a more stable bank like PNC, BB&T or a credit union.

No one knows the future of CIT but my guess is it will collapse like the other companies such as Lehman Brother and Washington Mutual.

Sunday, November 08, 2009

Unemployment Jumps to 10.2%

Although expert state the recession has ended Americans are still feeling the effects in a bad way. The current unemployment rate has reaches 10.2% and hasn't reached above 10% since September 1982 and June 1983. Part-time workers increased the figure to 17.5%.

In Michigan the unemployment rate is 15.3%, in Nevada 13.3%, in Rhode Island 13.3%, in California 12.2%, in Florida 11% and in Georgia 10.1%. In the depression of 1929, 13 million people were unemployed. In 2009, 15.7 million Americans are unemployed.

Today, unfortunately more Americans lack health insurance due to the high costs of medical care and unemployment.

If you work in an unstable economy consider going back to school or moving to a more profitable sector like Information Technology, Healthcare, Government or the Military. If you work as a consultant or contractor and find difficulty getting employment consider applying for a local, state or federal government job which provides more stability and decent benefits including health insurance.
Today more people are in debt because of the economy, unemployment and lack of health care.

On average Americans have approximately $45,000 in debt including credit cards, loan and mortgages. Americans are also saving less which resulted in accumulating more debt and a continual increase in bankruptcy and foreclosure filings.

According to a government surveys suggest that if you get laid off, it's more likely to be for good. On average, those currently unemployed have been out of work about half a year.

Thursday, November 05, 2009

A Sad Day for Book Lovers

Borders Group Inc. which is the second largest U.S. bookstore chain announced that it will close more of its Waldenbooks stores in January to focus more on its profitable stores. The chain plans to close 200 Waldenbooks and Borders Express stores and slash 1,500 jobs in January 2010. The closing will any Borders superstores or any of its mall kiosks or mall stores.

In 2008, Borders closed 112 stores in 2008. Borders is trying to catch up to competitor Barnes & Noble who has already closed some of its small stores. Barnes & Noble also announced that it will close its remaining 50 B. Dalton stores by the end of January 2010.

Borders gift cards purchased are valid as long as the stores remain open and can be used at any Borders, Waldenbooks or

I have visited many bookstores and also prefer Borders as my first choice when shopping for book because there promise to keep you in line for no more than 3 minutes. I love the cafes and cozy feel where you can browse books and decide on which selection you wish to purchase. My second choice is Barnes & Noble but unfortunately the closes bookstore to my residence is Borders.

Whatever bookstore you favor the future of their success depends on you - so if you are a lover of books and have extra money in your budget buy a book at Borders or Barnes & Noble either at the store on online through their website.

Reading a book is much cheaper than going to a movie, concert or show or going out to eat. The key is to do everything in moderation.

Monday, November 02, 2009

7 Tips to Help Parents During the Holidays

It's the thought that counts - not how much you spend. Many people have lost site of what the holidays are all about. The holidays are about spending time with your family and friends, reflecting on the past year, and thinking about things you would like to change in the New Year. Here are 7 tips on how to navigate your finances during the holidays.

1. Lower expectations. Many times children's expectations for holiday gifts are obtained from friends, classmates or from watching television. Be realistic - let your children know your financial situation and their price limit for holidays gifts. If they can only get one big gift or one toy let them know as soon as possible. Teach your children that receiving several gifts doesn't mean a better holiday experience; spending time with family is more important than the number of gifts they receive. If your children still believe in Santa, buy several small gifts from the dollar store (gifts that actually cost a dollar). That way they will still believe in Santa and save you money.

2. Be Strong. Don't give in to "puppy dog eyes", whining or complaining from your children. Stay firm with your decision about gifts for the holidays. Giving in to your children sets unrealistic expectations and does not prepare them for the disappointments that occur in the real world.

3. Set a spending limit. Set a spending limit for your holiday shopping including groceries, gifts, etc. This will reduce your chances of going into debt and relieve the stress of having to buying things that are not in your budget. Don't go into debt trying to buy gifts for your children. Do they really need a new desktop or laptop or can they use the one they have until next year.

4. Volunteer. If you children refuse to accept that they cannot get the gifts they want for the holidays take them to a shelter or sign them up to volunteer to help the homeless or sick children to help them change their perspective about life and what's really important. Other children and families have less than they do and they should be appreciative of whatever they have.

5. Follow Traditions. If you family has inexpensive traditions follow them this year to save money such as baking cookies, donating used toys, or going through the neighborhood caroling. This will get your children in the holiday spirit, keep them active and distract them from spending time thinking about all the gifts they want for the holidays.

6. Unexpected Gifts. If you children decide to give gifts to their babysitter, teachers or new friends - don't be alarmed. Be creative and bake deserts or make gifts if you are good with arts and crafts.

7. Consult with your ex. Talk with your ex-spouse to make sure your children are not asking for the same gifts and are not trying to use guilt and as a way to get more gifts from both parents because you are divorced.