How to Get Into Debt

According to the National Endowment for Financial Education Americans are saving less than they were 2009 are have recently started spending more. According to the Federal Reserve of Boston, the average unpaid credit card balance was $3,389. Approximately 56% of consumers carried an unpaid balance in the past 12 months in 2010. Many Americans have gone into debt and have not been able to save money because of financial crises such as unemployment, salary reduction of sickness. However, others have gone into debt simply because they do not know how to manage their money.

Money habits are usually inherited from parents or family members. If you were not taught how to manage your money while growing up or did not see good example of money managing, chances are you will have bad credit at least once in your Iifetime. Here are some ways to get in debt which increases your chances experiencing a financial crisis and having bad credit.

1. Commit a Crime
2. Spend more than you have
3. Use credit cards for everyday purchases
4. Save less than 20% of your total monthly income
5. Have little or no retirement savings
6. Paying more than 30% of your total monthly income towards debt excluding mortgage or rent
7. Making poor financial decisions
8. Not getting professional financial advice
9. Succumbing to peer pressure or impulse shopping
10. Making excuses for bad behavior or spending habits
11. Blaming others for your bad habits
12. Leasing a car
13. Upgrading a large purchase (car, home, etc.)
14. Having excess (50 pairs of shoes, multiple purse in the same color, clothing or purses that cost more than $50 each)
15. Co-signing for a loan
16. Loaning money to friends and family often
17. Gambling
18. Buying rent-to-own furniture
19. Paying bills late
20. Throwing away receipts and not balancing your checkbook
21. Not verifying your monthly financial statements
22. Repeating the same financial mistakes
23. Buy things you don’t need

Short Term Savings Options

In today’s market there are many options to save money. Due to the recession Americans have learned the hard way that you have to save no matter what your financial situation. There are tons or products available to save money at banks, financial institutions and online. Here are some benefits of using basic products to achieve your short financial goals if you are just starting out as a saver or have a low savings account balance.

Checking Accounts
• Can be used to create achieve financial goals if the account earns interest such as online checking accounts with ING, Emigrant Direct or HSBC
• Can transfer money between accounts with no fees and provide you quick access to your money when needed
• Can be used to achieve short-term goals such as paying down debt, saving for a vacation or doing home repairs
• Can be used to create an emergency fund with 9-12 months of monthly expenses
• Online checking accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Savings Accounts
• Have lower interest rates which can vary
• Can be used for short-term goals or to cover unexpected expenses such as car repairs, home maintenance, etc.
• Earn higher interest than regular checking accounts but earn less interest than bonds and CD’s
• Online savings accounts such as ING Direct of HBSC have higher interest rates
• Online savings accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Money Market Account
• Can be used as to setup an emergency fund or for short or long term goals such as saving for a down-payment for a home, purchasing a car or starting a business
• Have restrictions on how often you can access the money
• May earn higher interest rates than traditional savings accounts
• Require much higher minimum balances to avoid maintenance fees usually $2,500 and up
• Can write checks
• Interest earned by investing in the stock market so you can lose money

CDs
• Should be kept for one year or less
• Can be used to start a savings account if you don’t need to access the money for a while
• Can transfer the money later to another savings product to earn more money
• Should only be used for short-term financial goals
• Don’t lose money
• Interest rates are fixed and are higher than traditional savings accounts
• Have to keep the money until the CD matures otherwise you will pay a penalty
• Terms can range from 3 months to 5 years

Traditional Bonds
• Provide tax advantages
• Can be used for long term goals to pay for a college education
• Not the best product for saving money
• Should be used in addition to other savings products
• Interest earned may be free from federal taxes if income limits are not exceeded when the bond is cashed
• Provides a lower interest rate than other savings products
• Interest earned is exempt from state and local taxes
• Money cannot be accessed until bond matures
• Interest rates vary based on the market rate

Are You A Victim of the Instant Grati Syndrome

As a baby when you cried your mother or father came running to take care of you. As a toddler when you cried your parents hugged or talked to you until you stopped. As a teenager when you wanted something you talked really nice and sweet to your parents to get it. Throughout your life you may have received gratification instantly so as an adult it is only natural for you to believe that you should continue to receive this treatment. Unfortunately, this attitude affects every aspect of your life even your spending habits.

It can be difficult to resist the temptation of the instant gratification culture of America which I call the "instant grati factor". Advertisers make it easy for consumers to get everything instantly by creating instant cereal, instant coffee, instant meals, instant messaging, instant credit card approval, online shopping, and credit and debit card purchases at most stores and businesses. I have labeled this behavior as the "instant gratification syndrome" or "instant grati syndrome". To determine if you are a victim of "instant grati syndrome" ask yourself the following questions:

1. Do you buy a new outfit every time you go to an event or gathering?
2. Do you go shopping with money already set aside to pay a bill?
3. If you see an item online or in the store do you buy it immediately?
4. Do you buy an item even if you don't need the item or the item is not in your size?
5. Do you buy an item with your credit card even though you know you don't have the money to pay the bill when it arrives?
6. Do you get upset or defensive when someone questions your poor spending habits?
7. Do you rationalize your poor spending habits by saying things like "I work hard I deserve it", "Why can't I have it", "You are not my father, I can buy whatever I want", "I just had to have it", "I don't have to answer to you", "I want it now", or "I can buy it with my credit card"?
8. Is your home filled with unused items you purchased or items that still have the tags on them?
9. Do you hide items you have purchased from your spouse, children or significant other?

If you answered yes to any of these questions you are a victim of the "instant grati syndrome". Here are 6 ways to avoid the "Instant Grati Syndrome:"

1. Make being debt free your ultimate goal
2. Stop listening to the instant gratification messages from family, friends and advertisements
3. Live your life like an investor
4. Surround yourself with people who are investors or people who are in a better financial situation
5. Enjoy the little things in life
6. Stop being depressed
7. Live like the rich who live like the poor

Embrace the values of your grandparents or great-granparents by working hard and saving your money to buy something. So the next time you buy something with a credit card ask yourself, am I a victim of the "instant grati" syndrome?

Savings Options for Short Term Goals

In today’s market there are many options to save money. Due to the recession Americans have learned the hard way that they have to save no matter what their financial situation. There are tons or products available to save money. Here are some benefits of using basic products to achieve short goals.

Checking Accounts
• Can be used to create achieve financial goals if the account earns interest such as online checking accounts with ING, Emigrant Direct or HSBC
• Can transfer money between accounts with no fees and provide you quick access to your money when needed
• Can be used to achieve short-term goals such as paying down debt, saving for a vacation or doing home repairs
• Can be used to create an emergency fund with 9-12 months of monthly expenses
• Online checking accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Savings Accounts
• Have lower interest rates which can vary
• Can be used for short-term goals or to cover unexpected expenses such as car repairs, home maintenance, etc.
• Earn higher interest than regular checking accounts but earn less interest than bonds and CD’s
• Online savings accounts such as ING Direct of HBSC have higher interest rates
• Online savings accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Money Market Account
• Can be used as to setup an emergency fund or for short or long term goals such as saving for a down-payment for a home, purchasing a car or starting a business
• Have restrictions on how often you can access the money
• May earn higher interest rates than traditional savings accounts
• Require much higher minimum balances to avoid maintenance fees usually $2,500 and up
• Can write checks
• Interest earned by investing in the stock market so you can lose money

CDs
• Should be kept for one year or less
• Can be used to start a savings account if you don’t need to access the money for a while
• Can transfer the money later to another savings product to earn more money
• Should only be used for short-term financial goals
• Don’t lose money
• Interest rates are fixed and are higher than traditional savings accounts
• Have to keep the money until the CD matures otherwise you will pay a penalty
• Terms can range from 3 months to 5 years

Traditional Bonds
• Provide tax advantages
• Can be used for long term goals to pay for a college education
• Not the best product for saving money
• Should be used in addition to other savings products
• Interest earned may be free from federal taxes if income limits are not exceeded when the bond is cashed
• Provides a lower interest rate than other savings products
• Interest earned is exempt from state and local taxes
• Money cannot be accessed until bond matures
• Interest rates vary based on the market rate

Are Smart Phones As Safe as Computers

I must admit, I was not a supporter of smart phones. I was quite happy with my cell phone that I only used to make phone calls or send a few texts. Then, my cell phone died and I was forced to get a new one. I got a new one for personal use then decided to get a smart phone for business use. I went shopping and got excited at a sale that offered me a free phone with access to the internet, texting options, applications, fun games, video recording, a camera, the ability to access my email and more. I was hooked. Now I am a big fan of smart phones and because of that I never let my smart phone out of my sight.

I don’t make transactions on my smart phone, I don’t text personal information, SSN, addresses or account numbers on my smart phones and I don’t fill out application forms, i.e. contests, event registrations, etc. on my smart phone. Some smart phones owners believe they can use their smart phone just like their computer, unfortunately you can’t. Many smart phones have high security risks such as the Android and iPhone. In addition, you don’t how the company stores the data, where the data is stored, if the data is encrypted, If the data is backed up on a regular basis, how long the data is stored, etc.

According to a Trend Micro Inc. survey in 2009, only 23% of smartphone owners use the security software installed on the devices. If a smart phone is lost or stolen, sold, repaired, recycled, or has a removable SIM card data can be quickly exposed without the previous owners’ knowledge. If you store personal information on your smart phone your life could be ruined.

Smart phones are also exposed to hackers, worms, viruses, trojans and malware just like computers. Most smart phone owners don’t bother backing up their data or downloading the latest software. Here are 9 common risks with smart phones to be aware of.

1. Password. Not creating a password for your phone allows anyone to pick up your phone and access your texts, emails, calendar, and other personal information. When entering your password make sure no one is watching you. Create a password with letters and numbers with no repeat values.
2. Inactivity/Lock. Enable the auto lock feature on your phone to prevent someone from accessing information on your phone. You can also set your phone to lock after short periods of inactivity.
3. Encryption. Contact your vendor to find out if the company uses encryption to protect customer data. Most major smart phones vendors use encryption.
4. Data. Don’t store or enter personal information on your smart phone. Don’t make purchases on your smart phones. Even if the website you are using is secure, it doesn’t mean you smart phone is secure.
5. Software. Check at least once month to ensure your smart phone has the latest version of software and patches.
6. Storage. Delete old emails and text messages at least once a week from your smart phone even if you have paid for ample storage to minimize security breaches.
7. Shut down. Cut your phone off each night to reduce exposure to security risks.
8. Downloading. Downloading applications from unknown websites increases your exposure to worms, viruses and malware.
9. Texting. Texting your smart phone number to get ring tones, advertisements, alerts or notifications or to vote also increases your exposure to security risks as well as telemarketer advertisements. Your personal information is sold to telemarketers including your smart phone number.

What to Do If Your Credit Card is Hijacked

I bank with a credit union and got a call yesterday evening from the Security Department. The representative stated that it looks like some unusual charges were on my account. He verified with me that the charges were not mine. Someone had gotten my credit card number and had a field day. My credit card is still in my possession and the last purchase I made was two ½ weeks ago.

I never shop at unknown websites and don’t make a lot of online purchases. I always shop at well-known sites such as department stores, Amazon, etc. I was shocked that someone compromised my card because I only use my card to make occasional online purchases, pay for hotel reservations or airfare. I prefer to use my credit card to make these purchases in the event that my check card is compromised I won’t lose cash. Protect your personal information as you would your life. If you are a victim of identity theft here are 8 tips to minimize damage.

1. Report identity theft immediately. You only have a limited amount of time to report the incident, usually a few days.
2. Contact Equifax, Experian and TransUnion and tell them you were a victim of identity theft. They will provide you with a free copy of your credit reports. Dispute any accounts that are not yours. Place a fraud alert on your credit reports if the fraud happened within the past 12 months. You will get an initial alert placed for 90 days then call back to ask for an extended alert which can last for up to 7 years.
3. File a police report within a few days of becoming aware of the identity theft. This will be helpful when contacting Experian, Equifax and TransUnion as proof of your claim of identity theft.
4. File a complaint with the Better Business Bureau, your state's Consumer Affairs or Attorney General's Office and Postal Service.
5. File a postal alert with the post office which can be filed online at usps.com.
6. Request a copy of the investigation findings from the police department and the company where the fraud occurred. Ask the company to send you a letter stating you were a victim of identity theft and send a copy send to Equifax, Experian and TransUnion.
7. File a fraud claim with the loss mitigation department where the fraud occurred (ask for signature verification which is a quicker way to resolve the issue). You can also contact the Customer Service department and have them put a flag on your account. Sometimes different departments do not exchange information.
8. File an identity theft complaint with the Federal Trade Commission online at ftc.gov.

Here are 6 tips to prevent identity theft.

1. Reduce usage of online banking, pay for more items with cash and use your debit/check card less often. It is easier to get money credited back to your account when using a credit card than when using a debit/check card.
2. Don't enter or store your personal information on your cell phones, blackberry, or in an unsecure place such as work, your purse or wallet. Don’t text your credit card, financial account numbers or SSN. Don't enter your personal information in contests or on the internet. Don’t make purchases using your blackberry or cell phone.
3. 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.
4. Check your bank statements and accounts online or over the phone at least once a week to make sure your account has not compromised.
5. Shred all financial statements and documents that contain your personal information.
6. Create a password on your bank checking and savings account when performing transactions in a branch and when calling the automated number or when calling customer service to verify your identity to prevent others from accessing your account.

Buying Groceries With No Money

Experiencing financial crises can make people do crazy things. Some people are in denial about the financial situation, some people go shopping to make themselves feel better, others find comfort in various activities such as eating, drinking, etc. One thing I have noticed and got additional feedback from grocery store managers is customers who try to buy groceries with no money. This seems to be a big problem that many grocery stores and other stores face – customers who pick up items and get to the checkout line with no money or not enough money to pay for the items.

Going to the grocery store and getting a basket full of groceries when you don’t have enough money is a waste of time and shows a lack of common sense. Grocery stores are in business to make money, I haven’t heard of any grocery store giving away groceries.

Getting a basket full of groceries and not having money to pay for them is a waste the store’s time, it wastes your time, causes you unnecessary frustration and embarrassment and angers the customers in line behind you. Due to your actions, the store now has several voids on their financial records and sees the voids as a loss. To make up for losses the store raises prices so when customers go to the store the next week or two, they will see higher prices.

Many stores have websites where you can go online to see how much items costs. If you don’t have access to a computer you can go to the store and write down the prices of the items you need to buy. The next time you have to get groceries take a calculator or pen and paper with you and tally up the items you put in your basket so that you know approximately how much your bill will be before you get to the checkout line. Here are 15 tips for those who don’t have enough money to buy groceries.

1. Budget. Create a budget and include groceries in your budget. This will help save money on and ensure that your money goes the furthest to buy wisely and healthy items for your family.
2. Don’t steal. Going to jail and having a criminal record will only make your situation worse.
3. Food bank. Go to a local food bank in your area if you can’t afford to buy any groceries.
4. Use coupons. Use coupons found in your local newspaper or use online sites such as groupon.com, coupons.com, couponmom.com to find coupons. Shop at stores that double coupons to save even more money.
5. Shopping List. Make a shopping list of the things you absolutely need. Make a list of things you would like. Buy all the items you need first and if you have money left over use that to buy some of the things you would like to have. This also prevents impulse shopping.
6. Hungry. Don’t go shopping when you are hungry; you tend to buy more items than you normally would or tend to buy more unhealthy items.
7. Network. Get to know your grocery store employees and managers. Ask them when they will be having sales and what days are the best to shop for sales.
8. Shopping. Comparison shop to see which stores have the best sale each week and shop at that store for the items you need. Don’t spend a lot of time and gas shopping at multiple stores to find bargains especially with the increasing gas prices.
9. Generic. Buy generic instead of name brand to save money.
10. Family. If you have a family or 3 or more buying in bulk saves you money but if you are single or a single parent with only one child buying in bulk may not always be the best option.
11. Plan Meals. Plan you meals for the week and shop according to your meals. This helps you stay focused and prevents you spending more money than you should.
12. Stay focused. Stay focused when shopping and stick to your list. Don’t go down every aisle because this can be tempting and don’t buy items just because they are on sale if they are not on your list.
13. Buy in season. Buy fruits and vegetables that are in season. Out of season items cost more.
14. Frozen. Frozen vegetables are a good option if you can’t buy in season vegetables.
15. Kids. Don’t let your kids influence you to buy items that are not on your list. Explain to them that you are at the store to buy certain items and you are not going to deviate from that.

Uncommon Savings Tips

1. When you receive items purchased keep the boxes and reuse them to ship gifts or other items.
2. Reuse both sides of printer or fax paper.
3. Sew clothes for yourself and your family.
4. Crochet pillows, quilts, blankets, sweaters, socks and other items to stay warm.
5. Make jewelry which you can give as gifts.
6. If you are good with arts and crafts make things such as: gloves, pottery, candles, candle holders, envelopes, etc. and give as gifts.
7. Camp out in your backyard in a tent instead of going camping.
8. Participate in clinical research trials to get free medication and earn some extra money.
9. Donate blood to get extra money.
10. Go to a training school for services: beauty school, barber school, dental school or veterinary school to save money on hair care, dental care and pet care costs.
11. Go to a training school or college in less than the normal time, i.e. finish college in 3 years, finish a graduate degree in 1 ½ years, etc.
12. Get sponsors to remodel your home, car, sponsor your family reunion, high reunion or wedding.
13. Make your own food or drinks such as ice cream, soda, bread, beer.
14. If giving flowers as a gift, use flowers from weddings, funerals or other special events.
15. Sell your sperm.
16. Sell your hair to cancer patients.
17. Donate your eggs to women who have problems conceiving.
18. Train you cat to use the toilet like in the movie the Meet the Fockers.
19. Potty train babies at age one or younger.

Rapid Refund Has a Cousin

Rapid Refunds have been called many names such as Refund Anticipation Loan, RALS and now Tax Refund Advance. The Office of Comptroller of the Currency has blocked Hallmark, H&R Block, McAnnally & Company and HSBC from offering rapid refunds because the IRS was unable to determine if a tax filer was credit worthy to receive a rapid refund loan. In the past tax filers who owed taxes were still able to get a refund. The glitch was only found after the rapid refund was received by the tax filer. Chase (JP Chase Morgan) stopped offering rapid refunds in 2010.

In place of rapid refunds, H&R Block now offers RACs, Refund Anticipation Checks that provides tax filers with a refund checks in 8 to 15 days for refund amounts up to $9,999. You don’t pay any interest but the fee is deducted from your refund. You can get the money deposited in your bank account or have a check written in the refund amount. Getting a check will cost you an additional fee. Rapid refunds have very high interest rates starting around 40% up to 500% or more. Tax preparation companies don’t guarantee that you will get your money before the normal wait time from the IRS.

You can save yourself a fee by just being patient and waiting the normal wait time. Jackson Hewitt still offers rapid refunds for refund amounts up to $1,500. Liberty Tax still offers rapid refunds in additional to several accounting firms.

The IRS is taking steps to prevent more tax filers from using rapid refunds by processing tax returns quicker in real time so refunds can be received in 2 to 3 days starting next year. Here are 5 tips to get your tax refund faster and save money.

1. File early. If you expect to get a refund file your taxes as soon as you get your W-2. Early filers receive their refund quicker.
2. Assistance. Use a tax preparation software or get professional assistance from a licensed tax preparer or accountant to prepare your taxes to minimize getting audited or having errors on your tax returns. Many tax preparation software programs now guarantee that you will not be audited and that your tax returns are correct.
3. Direct Deposit. Have your tax refund deposited in your bank account to reduce processing time.
4. File Online. File your tax online by using a free tax preparation site with the IRS or a tax preparation software such as Turbo Tax or Tax Cut that can file your taxes electronically to reduce processing time. You can get your check within 14 days from the IRS or your local state taxing agency.
5. Deposit. Deposit your tax refund check into your bank account and skip using a check cashing store or liquor store to cash your check.

Does Unrest in Other Countries Equal High Gas Prices

Gas prices are rising because of the turmoil in Libya. According to the Department of Energy Libya exports 85% of its oil to Europe and only exports about 3% of its oil to the U.S. However, since Russia provides us with oil which is obtained from Libya we are affected. Luckily Russia is only the 13th provider of oil to the U.S. The top ten countries that export oil to the U.S. are Canada, Mexico, Saudia Arabia, Nigeria, Venezuela, Iraq, Algeria, Columbia, Angola and Brazil.

The war in Libya affects the oil market and many foreign countries are nervous as well as investors and oil companies who fear that wars will erupt in other foreign countries that supply oil to the U.S. The war in Libya has stopped production of approximately 2% of the world supply. Saudia Arabia has increased production since the war began to help with demand.

Unrest in the Middle East and other African countries such as Saudia Arabia, Iraq, Algeria, Angola, and Kuwait that supply oil to the U.S. has also contributed to the increase in gas prices.

The U.S. consumes only 25% of the world oil supply. If the war in Libya continues and oil production remains halted, Europe and other countries would have to get their oil supply from other countries which will result in an increase demand which results in higher gas prices for the world.

There are other factors that contribute to higher gas prices. Some gas stations are forced contractually to raise their prices as soon as oil companies raise their prices. Some gas stations owners anticipate prices will rise and raise their prices in advance to prevent losing money in the future.

Another factor that contributes to high gas prices is the value of the U.S. dollar usually caused by a bad economy indicated by high unemployment rates and lowering of the interest rates by the federal government. When the value of the U.S. dollar decreases, foreign countries can get more for one U.S. dollar. As people in other countries buy more gas, the demand continues to increase which drives up the gas price. All we can do is hope that wars in the Middle East and African countries stops soon.

Think Twice About Transferring Credit Card Debt

Credit card companies make it so easy to transfer one credit card balance to another and at the time it may seem like the best option, but use caution. Transferring your balance from one card to another is basically the same as consolidating your debt without actually going through the process of a formal debt consolidation loan. Transferring balances may actually lower your credit score because it could be an indication that you are unable to manage your money and need to transfer your balance to make it easier to pay your debts.

The only reason you should transfer one credit card balance to another card is to save money and reduce your total debt owed. To take advantage of the low introductory you must pay off the full balance before the introductory rate special ends. If you are unable to pay off the balance before the introductory rate ends the balance transfer is not worth it. Do some comparison shopping before selecting a credit card that offers an introductory balance transfer rate. Two good sites to use when comparison shopping are bankrate.com and cardreport.com.

You may end up in more debt than you originally owed due to the guidelines of the new low interest credit card. To pay the new balance off faster you must pay more than the minimum monthly payment; try to pay at least double the minimum monthly payment. Here are 9 tips to use when considering transferring debt to another credit card.

1. Find out the APR or interest rate of the new card, if the interest rate is too high don't transfer the debt.

2. Ask if you will be charged a fee for transferring your balance, if there is a charge shop around for another credit card.

3. Find out what the guidelines are for the new card.

4. Find out how long the balance transfer will take and make sure you continue to make payments on the old account until the transfer is complete.

5. Check your monthly statement to verify that your old credit card company is reporting your balance as zero. But don't be tempted to charge on the old account.

6. Check your monthly statement on your new credit card to verify the balance is reported correctly. If not, write a letter to have your account balance updated.

7. Some companies offer transfer checks that can be used to transfer balances. Some companies charge a fee for using the transfer checks so keep this in mind when adding up all the fees that can come along with transfer of an old balance to a new credit card.

8. Ten percent of your credit score considers new accounts and your score may decrease as a result of opening the new account. If you decide to close the old account, the account was in good standing and you had the account for at least 2 years closing it could decrease your credit score.

9. If you know your credit score from each of the three major credit bureaus Equifax, Experian and TransUnion call each bureau and ask how transferring your balance to a new card will affect your score.

College or Retirement

Nowadays many parents struggle with deciding to plan for retirement or save money to pay for their child’s college education. Yearly college tuition costs can range from $5,000 to $50,000 per year.

Parents should not have to make the choice to plan for retirement or save money to pay for their child’s college education. Your child may not be financially secure enough to take care of you when you get older which is a major reason why parents should plan for retirement. You will need to save money for 30-40 years to have enough to cover your living expenses when you retire.

Planning for retirement or saving money to pay for their child’s college education is an emotional choice. The decision to do one or the other should be a rational choice. If you save money to pay for a college tuition that could total between $20,000-$200,000 that is less money that you can contribute to your retirement account.

Think about worse case scenarios, if you child drops out of college you are stuck with a bill, less money in your retirement account and will have to take care of a child who is unemployed. If your child changes their major or transfers to another school, this will extend the time they are in school and increase tuition costs. You can’t control what your child does but you can control yourself. If you take out a home equity loan you will also be stuck with another bill.

Parents should plan for retirement because college tuition can be paid for with financial aid, savings bonds, 529 plans, part-time employment from 9th through 12th grade and summer jobs during their college education put the money in a high interest savings account.

Suggest that your child apply for financial aid which can be either grants, scholarships, or loans. If a child has to participate in paying for college they will be more responsible with their money, understand the value of money and the value of a college education.

Talk to a financial advisor to get advice on how to save for both and the options available to you. A financial advisor can help you determine what age your what to retire, how much you will need during retirement, how much you need to save to pay for your child’s college tuition. You can withdraw money from your retirement account but if your child decides not to attend college, you will have to pay a penalty on the money taken out of your account. If you lose your job or quit your job you may have to pay your loan in full and pay taxes and penalties on the money that was not repaid.

You cannot plan to pay for college tuition when your child is in high school. Planning early is the key. If you save just $5 a month towards your child college tuition when they are born that equals to $260 a year. You may have to tell your child that you cannot afford to pay for their college tuition.

If your child does not get financial aid, encourage your child to go to a state college to cut down on costs. You may have to make sacrifices, live in a modest home, live below your means and buy more needs vs. wants. Ask friends and relatives instead of giving your child a gift to make a donation to their college tuition. Whatever you decide make sure you don’t go into debt and make your current or future financial situation worse.

10 Tips to Manage Your Money

Everyone fears the word budget but don't be afraid. A budget is your lifeline to financial peace. A budget helps you know how much money you earn and spend each month. A budget is called many different names but the main goal of a budget is to help you live below your means. Nothing stays the same forever which is especially true today. Here are 10 helpful tips to help you manage your money.

1. Needs vs. Wants – buy more needs vs. wants to help reduce expenses.

2. Reduce spending – buy in bulk, on sale, at discount stores, online or use coupons, buy generic brands. Try websites such as groupon.com, coupons.com, freecycle.org, ebay.com or craigslist.com to find bargains.

3. Groceries – don’t go shopping when you are hungry, buy items on the lower shelves and ask about specials, join store clubs to get alerts on discounts.

4. Banking – open accounts with little to no fees, ask about discounts and specials, and establish a relationship with the branch manager to get alerts about specials and new products and services that could save you money. Don’t use check cashing stores or cash checks at the liquor store.

5. Driving – buy gas in the morning, combine nearby trips on the same day, keep the trunk empty, keep tires at the proper pressure level, get regular maintenance on your car, look for the cheapest gas and buy a gas efficient car, ditch the gas guzzler. Drive the speed limit to also save money on gas.

6. Medical – buy at least basic medical insurance for you and your family, get a prescription card and fill prescriptions at discounts stores such as Wal-Mart or Walgreens to save money, negotiate medical services to save money and ask about programs for uninsured or low-income patients.

7. Insurance – buy insurance for health, life, disability and your home. Buy bundled services to save money, buy homeowners and car insurance with the same company and ask about discounts.

8. AAA – triple AAA offers lots of discounts with partner companies that are not advertised, ask each company you do business with if they give discounts to AAA members.

9. Compare – Comparison shop before making a purchase to get the best deal. Use sites like bizrate.com, nextag.com and pricegrabber.com.

10. Clothing – shop at discount stores, buy clothes in off-season, check out discount racks at stores and ask if stores if they honor competitor coupons. Buy a few jackets and mix and match pieces to stretch your wardrobe.

The Student Loan Dilemma

Prior to the Healthcare Reform law, private companies that offered student loans which were subsidized and guaranteed by the federal government. Under the Healthcare Reform Law the government now lends the money directly to students eliminating the need for private lenders. The money will go towards providing more grants to students. However, this has caused an increase in companies offering private student loans.

Private loans require a credit check and cannot be discharged in bankruptcy. Private loans offered through college have higher interest rates compared to federal student loans and accrue interest while students are in school. Since the Healthcare Reform, Sallie Mae which offers private loans now offers a Smart Option Student loan with an interest rate of 2.8% and allow students to lower their interest rates by paying on interest which still in school. Wells Fargo offers private loans with variable rates and student can reduce their interest rate three quarters of one percent if the student graduates.

The student loan default rate has increased to 7%. Many colleges are controlled by privately traded companies on the stock exchange and investors are always looking for ways to exploit low-income students. According to a report by the Education Trust titled “Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities”, private for-profit colleges take advantage of students by offering high interest loans.

According to the report, only 22% of students who enroll in a 4 year degree program graduate within 6 years. A U.S. Department of Education report states that Arizona has the highest rate of student loan defaults in the country. In contrast, the student loan default rate in Missouri is 5.8% which it achieves through grants to institutions and financial literacy programs. Grants are used to teach students financial literacy. Assistant Commissioner Leanne Cardwell, states that financial literacy outreach is critical to reducing default rates and student debt load.

Getting private student loans for college should be a last resort. Here are 8 ways reduce college tuition and student loan debt.

1. Apply for financial aid. Apply for at least 50-100 college scholarships and apply for the FAFSA January 1.

2. Plan for college costs early. If you will have to pay for college yourself get a part-time job as soon as you are old enough to work and put at least 50% of the money in a high interest savings account.

3. Ditch the high bill. It is nice to attend an Ivy League school but the tuition will cost you. Consider attending a less expensive school.

4. Work at school. Research getting a job which in school through the colleges’ work-study program.

5. Student loan forgiveness. Research student loan forgiveness programs before applying for a job after graduation to see which industries offer the best program for you. You may have to delay that 6 figure job until your student loan debt is paid down. Visit finaid.org for more information.

6. Apply for federal loan. Apply for federal student loans first which offer lower interest rates and multiple repayment programs.

7. Read the fine print. Read the fine print on student loan applications especially the interest rate, default penalties, repayment options, balloon payments, and prepayment options.

8. School decision. If feel strongly about attending the school of your choice with a high tuition, attend a school that offers a higher starting salary. CNBC ranked 16 schools that offer high starting salaries upon graduation. For more information visit cnbc.com/id/40703034.

How to Clean Your Financial House

Many people spend time on the weekends on during the week cleaning their house, putting things in order, throwing away things, organizing, updating, replacing and moving things around. Some people do more extensive cleaning of their house when spring arrives. Some people clean their house and donate unused items to charity. Whatever the case – everyone cleans their house or place where their live but do you clean your finances?

Many people don’t know how much money they earn, how much they spend or how much debt they owe. Organization is the key to getting your finances in order and cleaning your financial house. Approximately seventy percent of Americans are living paycheck to paycheck. In some instances people live paycheck to paycheck because they don’t know where their money is going. Here are 9 ways to help you clean your financial house.

1. Fix Credit. Get a copy of your credit report at least once a year. Get current on all late bills and dispute any errors.

2. Create a budget. Create a budget or spending plan to determine how much you earn and how much you are spending. Include savings in your budget. Ensure that everyone in your family follows the budget. Track your spending daily, weekly or monthly.

3. Reduce expenses. Reduce your expenses by determining areas where you can reduce spending by buying more needs vs. wants such as bringing your lunch to work, shopping at discount stores or buying generic brands.

4. Pay down debt. Pay down debt and keep credit card balances at 20% or less of the limit which also helps increase your credit score. Don’t open any new accounts or incur any additional debt.

5. Establish an emergency fund. Create an emergency fund to cover bills and monthly expenses for 9-12 months to prevent using a credit card for unexpected expenses.

6. Plan for retirement. Plan for retirement and contribute 10-20% towards a retirement fund each month. Contribute to a retirement account through your employer or make automatic contributions to an IRA if you are self-employed or if your employer doesn’t offer a retirement plan.

7. Pay bills. Pay bills on time or before the due date to maintain good credit or increase your credit score. Pay bills online or through automatic deduction to save money.

8. Assess needs. Determine your needs for insurance such as life, health, disability and long-term care. Make adjustments as needed on a yearly basis or when a life event change occurs such as death, long-term illness or childbirth. Bundle services with the same company to save money.

9. Organize. Organize all bills, financial statements, debt, and loans in separate folders. Create a bill calendar to identify when each bill is due or create a list of keep track of bills. Get a file cabinet, cash box or accordion folder to store receipts. Tally receipts daily, weekly or monthly and track in your budget.

Help for Delinquent Tax Payers

If you are delinquent on your IRS tax bill now there is help. The IRS is trying to help taxpayers who are delinquent on their tax bills. They are reducing the number of property tax liens and loosening the rules for small businesses to allow small businesses to setup installment agreements to pay back taxes. Tax liens are notices that are filed on land to ensure the government will collect back taxes when a property is sold, i.e. real estate, boat, etc.

The new IRS guidelines increases the amount of taxes owed before a lien is placed. Liens are automatically placed when the limit is reached. If you owe $10,000 or more a lien is placed on your property, previously the minimum amount was $5,000. If you meet certain income or debt requirements you can settle your debt for less than the original amount owed.

Small businesses that owe up to $25,000 will now be eligible to setup 24 month payment plans. This is great for small businesses that are not struggling financially but for small businesses that are still recovering from the recession, this will cause many to go out of business. This may cause another recession for small businesses which greatly contribute to the health of the economy and provide jobs for millions of Americans.

Once a tax lien is placed on your property it remains on your credit report for 7 years from the date the lien is paid. Unpaid tax liens can remain on your credit report for up to 15 years. Tax liens also lower your credit score and are considered public records which may affect your employment and the ability to get hired for a job.

What To Do If You Are Audited

Every year during tax time someone gets audited and we all hope it's now us. If you have never gotten audited you are lucky. However, if you get a letter from the IRS notifying you that you will be audited don’t panic. Stay calm. All audits are not bad and may not result in you owing money.

If you prepare your taxes yourself with tax preparation software like Tax Cut or Turbo Tax the software provides audit checks on your return before sending them to the IRS and alerts you about possible items that could trigger an audit. If you go to a tax preparation company find out what the process is if a customer is audited. Here are 7 tips to handle an IRS audit.

1. Notice. If you receive a notice in the mail from the IRS stating that you will be audited read the notice carefully to fully understand what is required. An audit can be for one year or for multiple years. An audit can simply be resolved by sending documentation via postal mail or may require a meeting with an IRS agent.

2. Act Promptly. You must act promptly when you receive an audit notice to ensure your chances of the audit going smoothly. Gather all of your financial statements including canceled checks, bank statements, 401K statements, charity donations, credit card statements, monthly debt statements, taxes for the past 3 years, W-2’s/W-4’s, previous tax refund statements, your 1098 statements if you are a homeowner, etc. If you do not have a copy of past tax returns complete a Form 4506 to request an official copy.

3. Document. Make a list of all documents that you currently have in your possession that are required in the audit letter. Make a list of all documents that you don’t have and the status of obtaining those documents, i.e. you requested a copy with an estimated receipt date, you will request a copy or you are unable to get a copy.

4. Professional Assistance. Contact a tax accountant or tax lawyer to get advice on how to prepare for the tax audit and how they can help you successfully get through the audit including fees, services provided, years of experience, worse cast scenario, etc.

5. Response. If you are required to respond by mail, work with a tax lawyer or tax accountant to ensure you have all the required documentation. Send copies of all required documentation and responses to any questions via certified mail and return receipt. If you are required to respond in person, you can attend the meeting with your tax lawyer or tax accountant or they can represent you on your behalf. I recommend you attend the meeting with your tax lawyer or tax accountant to ensure you fully understand the information provided and to minimize chances of misunderstanding the information presented.

6. Resolution. After the audit the IRS may require you to pay additional money or you may receive a refund. If you have to pay work with your tax lawyer or tax accountant to setup a payment plan.

7. Dispute. If you are not happy with the findings of the audit, you can appeal the findings to the IRS agent’s supervisor or the IRS Appeal Division. You also have the option of taking your case to your state tax clinic or filing a petition with the U.S. Tax Court.

How Green Technology Can Save You Money

Green technology is using tools and methods to do things that are environmentally friendly and that also conserves natural resources and the environment. Green technology does not damage or deplete the earth’s natural resources. Green technology is used so products can be re- used and recycled. It is an alternative source of technology that reduces fossil fuels and creates less damage to people, animals, and plants. Green technology also reduces the amount of waste and pollution that is created during the production and consumption of goods.

A large part of managing your finances is saving money. Using green technology is a great way to help you save money and save the environment. In some instances it may cost more money with the initial purchase but over time you will see the savings. Green technology can be used in all areas of our life – cooling, heating, driving, electricity, computers, and more. Here are 14 ways to save money using green technology.


1. Pay bills online. Pay your bills online which saves you money on stamp, envelopes, writing checks, late fees or convenience fees. It also helps you budget your money quickly and easily. You can also setup automatic bill payment through your bank.

2. Drive less. Use public transportation, car pool, ride a bicycle or walk. With the increasing price of gas this will save you lots of money. Consider moving closer to your employer or moving near a train station or metro station.

3. Showering. Install a low-flow shower head to save money on water consumption. Limit the time you take a shower to 10-15 minutes.

4. Hot Water Heater. Trade in your gas or electric hot water heater for a solar water heater. It uses the sun’s energy to preheat the water which can save 50-80% on your utility bill.

5. Water. Drink tap water instead of bottled water. Use a filter like Pur or Brita for your kitchen faucet or water pitcher. This way you are not paying twice for water (your water bill and drinking bottled water).

6. Lighting. Use fluorescent light bulbs for lighting which will help you save money on lighting. Also make sure you turn off the lights if you are out of a room for more than 20 minutes. Use night lights to light dim areas if needed.

7. Electricity. Unplug large appliances and electronic devices when not in use. Set your computer to standby or sleep mode when not in use. It takes more energy to restart your computer every time you turn it on it than it does to wake it up from sleep mode.

8. Recycled. Buy recycled products which usually cost 10-15% less than non-recycled products.

9. Power Strip It. Use power strips to plug in your appliances and electronic devices. Most energy is consumed when devices are turned off but not unplugged. To save money, turn the power strip switch to off when you are not using the devices.

10. Energy Star. Energy Star has been around for a long time but now it is even cheaper to use energy efficient products which use 70-80% less energy.

11. Insulate. Insulate your home, attic, windows and door to save money on heating and cooling.

12. Solar window film. Switch your plastic window film to solar window film to help keep you home cooler by reducing utility costs. The film prevents the sun’s rays from entering your home and reduces the need for air conditioning. This is most effective in areas where the temperatures don’t get too cold.

13. Recharge batteries. Buy rechargeable batteries to charge your electronic devices, toys, games and more. The electricity you use to recharge a battery is much cheaper than buying a 4 or 8 pack of batteries.

14. Re-manufactured Supplies. Buy re-manufactured supplies such as printer ink and toner cartridges from Office Depot which can cost up to 15% less.

Has America Lost Its Common Sense

Webster’s defines common sense as “sound practical sense, good judgment.” Waiting until the last minute to solve a problem is an example of not using common sense. Common sense is used in all aspects of one’s life including finances.

Unless you became sick, lost your job or received a reduction in pay and were previously able to pay your bills but then filed bankruptcy or foreclosed on your home, your lack of common sense prevented you from making good decisions managing your finances. Instead of filing for bankruptcy you could develop better spending habits which takes hard work and sacrifice. However, if you want something badly enough, you will do whatever it takes to accomplish it – this includes managing your finances, saving money and getting out of debt.

Many people work hard to try to get a handle on their finances but continue to be unsuccessful and in some cases repeatedly make the same poor decisions. It may seem like everyone is in debt or that everyone has bad spending habits, but that is just you trying to convince yourself that you behavior is normal. Well – it’s not. Being in debt and having bad credit is not normal.

You cannot do what everyone else does, even if they make the same amount of money as you do, live in the same neighborhood, send their kids to the same school and activities. Everyone’s situation is different and you can’t judge a book by its cover. Lack of financial common sense can cause you to:

1. Pay your bills late
2. Spend money you don’t have
3. Have no savings account
4. Don’t know how much debt you owe
5. Have bad credit
6. Buy basic necessities such as food and gas for your car with a credit card because you don’t have the cash
7. Get denied for credit
8. Hide from your creditors
9. Avoid paying your debt
10. Make a large purchase with upfront fees, hidden fees or unfavorable terms
11. Continue to apply for credit hoping that eventually a company will approve you

If you financial life is out of balance, your entire life will be out of balance. If you don’t think you have common sense, you can read books and read articles on how to develop your common sense. Common sense increases your confidence and self-esteem. Common sense can prevent you from buying a large flat screen television with your credit card and taking all year to pay it off.

Having financial common sense will cause you to:
1. Create a budget
2. Manage your money
3. Live below your means
4. Prevent you from buying something if you don’t have the cash to pay for it
5. Know how much debt you owe
6. Downsize or downgrade your lifestyle
7. Have a savings account
8. Have good credit or continuously work to improve your credit

Common sense is being able to think for yourself and being open-minded to different views and opinions. Financial common sense helps you to plan ahead which can be effective when using a budget or spending plan. Creating a budget makes you accountable for your spending.

Financial common sense also shows you more about yourself. If you spend money you don’t have, it shows your true character –what you believe in, what makes you happy, what you are good at, and what you are not good at. The lack of financial common sense can cause you to be an impulsive spender, have an emotional attachment to things, have the need to show everyone how much money you make or cause you to live in a fantasy land and live a lifestyle you truly cannot afford.

Financial common sense will minimize your chances of making bad financial decisions that will affect your future. Financial common sense can ensure you have an emergency savings fund and buy more needs versus wants. Financial common sense will help you to know how to get the most value for your money when making purchases. Financial common sense will help you to know how much you spend, how much you earn and how much you owe.

Establishing Credit Overseas is Not as Easy As You Think

Most foreign countries do not have access to run your credit report from your previous country of residence. Visit a bank in your new country of residence or ask around for a local financial advisor to get help to establish a credit history overseas.

Most foreign countries allow you to use your American credit card but the transaction history will not be reported on your foreign credit report. If you plan on moving back to the United States keep at least one American credit card account open.

American Express (Amex) stated that foreign customers may qualify for a U.S. AmEx card provided they have a U.S. address that AmEx can use to send the card or contact the cardholder if necessary. If you don’t have a credit score or a current copy of your credit reports, your income will be used to verify your creditworthiness.

If a customer lived in a foreign country and had a foreign AmEx card, that information can be used to consider credit approval. Once approved, you will incur foreign transaction fees for using a U.S. credit card in a foreign country. Here are 11 tips to help you establish credit in a foreign country.

1. You cannot use US credit history to establish credit history overseas, it cannot be transferred.

2. Foreign countries may not use SSN as a unique identifier.

3. Provide a hard copy of your US credit reports and letters of references from your bank and credit card companies.

4. Obtain a secured card.

5. Purchase overdraft protection which is treated as a credit product.

6. Open a foreign bank account.

7. UK and Canada use the same or similar type of credit reporting system as the US which may make it easier to obtain your credit report.

8. If your bank has an office overseas they can look at your US credit history and use that to approve you for an overseas credit account.

9. You can establish a credit rating within a year overseas. Open a charge card account like American Express and pay the balance in full each month.

10. Each country has their own credit scoring system: Austria uses Equifax and South Africa uses Experian.

11. Use a prepaid credit card.

Financial Planning for the Elderly

Many elderly Americans struggle to make ends meet due to their limited fixed income, increasing prices and inflation. Some elderly Americans file for bankruptcy, have to downsize their home, move in with family or friends or get a roommate to stretch their income.

According to Alliance to End Homelessness, in 2008, 43,000 elderly age 65 and over relied on the shelter system. According to AARP, an excessive amount of debt and increasing medical bills have caused bankruptcies among the elderly to increase by 150 percent from 1991 to 2007. The percentage is even higher for those aged 75 to 84 years of age. The highest costs for the elderly are medical bills, medical services, prescriptions, food and housing costs. Here are some tips on how to save money on a fixed income.

Utilities
1. Invest in energy efficient light bulbs to save money on power bills
2. Improve home insulation to reduce heating and cooling bills
3. Use coupons when they truly represent a saving opportunity
4. Insulate hot water heater
5. Rinse clothes in cold water
6. Take luke warm baths or showers
7. Keep heat at 68 degrees Fahrenheit, keep a/c at 78 degrees Fahrenheit
8. Keep hot water heater at 120 degrees Fahrenheit

Household goods
1. Watch for the items you use to go on sale and stock up when prices are at their lowest
2. Submit available rebate offers for products you use regularly
3. Buy generic vs. name brand
4. Bulk items on sale or “day old” items
5. Use coupons or shop at discount stores such as Sam’s Club, BJ’s, Costco, Wal-Mart or Target

Electronics
1. Craigslist
2. eBay
3. freecycle.org

Healthcare
1. Free Dental Clinics www.freemedicalcamps.com
2. Operation Blessing International, 800-730-2537
3. Ask about discounted Dental programs www.dentalplans.com, www.choiceplusdentalplans.com, AmeriPlan, Aetna, Avia
4. Flat Fee clinics or sliding fee scale – search for “flat free clinic and the state you x”, x is the state you live in to find a clinic near you
5. Medicare supplement, 877-494-9296 Code: TIG
6. Prescriptions – buy generic, fill prescriptions at discount stores – Wal-Mart, Target, Walgreens

Food
1. Plan meals around items that go on sale or that are in season
2. Look for the items you use to go on sale and stock up
3. Comparison Shop
4. Don’t go shopping when you’re hungry
5. Generic vs. name brand
6. Shop at the dollar store for household products, spices, packaged foods and other foods
7. Feeding America Food bank - 800.771.2303 (nationwide)
8. Meals on Wheels 703.548.5558 (nationwide)

Finances
1. Create an emergency fund – with enough money to cover expenses for 6-9 months
2. Downsize – downsize to a smaller home, trade in a luxury car for a cheaper model
3. Get Tax Preparation Assistance – VITA Volunteer Income Tax Assistance 1-800-906-9887
4. Needs vs. wants - buy more needs vs. wants
5. Reduce spending – don’t buy things you don’t need or just because something is on sale
6. Budget - Create a budget and track spending daily or weekly
7. Reduce expenses – use coupons, buy in bulk, buy on sale, coupons.com
8. Debt – pay rent/mortgage, car payment first, then setup payment plans for collection accounts, judgments, tax liens, then everything else
9. Transportation costs – do you need a car, can you carpool or take public transportation
10. Insurance – do you have adequate health, life and disability

Housing
1. Reverse mortgage, 800-569-4287
2. Co-elderly housing, 812-618-2646 (nationwide)
3. Housing Information - www.seniorliving.com, www.SeniorsForLiving.com, www.aplaceformom.com, SeniorLivingSource.org/Housing, SeniorOutlook.com, www.seniorresource.com/ageinpl.htm#other
6. Low income apartments – www.rent.com, section8-help.com

Other
1. Aging Services Network - 202-872-0888 (nationwide)
2. Discounts - www.seniordiscounts.com/newsletter.aspx, seniors.lovetoknow.com/Are_There_Any_Discounts_Senior_Citizens_Receive
3. Aging Services - www.seniorresource.com/ageinpl.htm

Freebies
1. seniors.lovetoknow.com/Freebies_for_Senior_Citizens

Celebrate Saving

Are you saver? Many Americans today don't have a savings account. Start by creating an emergency fund. Your emergency fund is your safety net, in case you get sick or lose your job you can use your emergency savings to hold you for a few months until you can find a new job.

Your emergency account should be separate from your checking or savings accounts and should only be used for emergencies such as an unexpected expense, unemployment, medical bills, etc.

An emergency fund should be enough savings to pay your bills for at least 6 to 9 months. Money for an emergency fund should be readily accessible and stored in a checking or savings account, preferably a high interest savings account such as Emigrant Direct or ING or a money market account where you can make money while saving money.

To determine how much money is needed to pay 3 to 6 months worth of your bills do an inventory and write down all your bills and expenses and the monthly amount spent for each. Calculate the total. Use this amount and multiple by 3 or 6 to determine the total amount you need to save in your emergency fund.

Make sure you do some comparison shopping before opening an account for your emergency fund to ensure that they are no minimum or other fees for accessing your account. A good source to use is Bankrate.com.

Start by contributing small amounts to your emergency fund until you are able to contribute more even if it is just $5. Once you are able to contribute more to the fund do so. Make several short-term goals for your emergency fund. Once you have saved enough money to pay one bill pat yourself on the back. Then keep saving until you have enough to pay three bills and so on until you have enough saved to pay your bills and expenses for 3 to 6 months.

Once you have reached your emergency fund goal it is time to start developing some long-term goals such as an additional savings account and to start planning for retirement. A great site to learn about retirement planning is Morningstar.com and look under the Personal Finance section.

Having an emergency fund will ensure that you are on the road to becoming financially secure and will prevent you from going into debt when an unexpected tragedy happens or unexpected expenses arises. An emergency fund is the first step to getting out of and staying out of debt.

You have to prepare for the future and a critical component of that is having a savings account. You may not know what the future holds but if you prepare your finances now, it will ease the burden of what tomorrow holds.

How to Verify Your Credit Score is Accurate

A credit score ranges from 300-850 with 850 being the higest score. Your credit score is obtained when applying for credit, a loan or a job. Your credit score is viewed as an indication of your trustworthiness and your ability to pay your bills on time. The three major credit bureaus, Equifax, Experian and TransUnion use different evaluation systems and criteria to determine your credit score. Each credit bureau may provide a different credit score for the same individual.

A good credit score ensures you get the best terms possible which can include lower interest rates, discounts, little to no downpayment, no hidden or extra fees, no upfront costs and more. Seventy-five percent of Americans have at least one mistake on their credit report and seventy percent have at least one major mistake on their credit report. These statistics show how important it is to view your credit report and make sure that you dispute any errors and get them corrected immediately. Here are 7 steps to help check your credit report and ensure your credit score is accurate.

1. Order. Order a copy of your credit report from www.annualcreditreport.com or call 877-322-8228.

2. Annually. Check your credit report at least once a year especially before a big purchase or if you suspect identity theft.

3. Verify. Verify all information on your credit report is accurate including personal information such as SSN, address, date or birth, name spelling and suffixes, account balances, history, statuses, open and closed dates, etc.

4. Dispute. Dispute errors as soon as you notice them. Dispute online or by mail. Disputing online takes two weeks, disputing my mail takes four weeks from the time of receipt of your dispute.

5. Consistency. Information will not be the same on all 3 major credit reports. TransUnion only reports information for the past 2 years. Experian and Equifax may have different information for the same account and may list different accounts on each report.

6. Negative accounts. Ensure negative accounts that are 7 years old or older are removed. Inquiries that are 2 years old or older should be removed.

7. Get current. Get current on any late accounts. Judgments, tax liens, repossessions and collection accounts lower your score the most, then mortgage and credit cards payments.

How to Save on Cell Phone Costs

There are over 292 million cell phone users in the country. Cell phones have difference pricing depending on the company and features offered. Most cell phones only last 2-3 years and after that time the features of the phone stop working or start to diminish in quality. The average cost for basic cell phone service can range anywhere from $19.95 to $100 a month. The average cost of an actual cell phone can range from $19.95 to $1,000.

Most cell phones offer additional features for a cost such as ring tones, unlimited texting, unlimited nights and weekends, roaming and more. Prepaid cell phones charge by the minute and/or charge a daily fee. Most cell phone plans included caller id, voicemail and call forwarding. Some also include long distance. Here are 8 tips to help you save money when buying a cell phone.


1. Basic plan. Get a basic plan with basic features. Comparison shop shop online or by calling different cell phone companies to see what company provides the best value for your money.

2. Discounts. Ask about discounts and specials. Some discounts are provided through employers and certain organization memberships.

3. Bundle services. If you have multiple services with the same company get your cell phone service with the same company to save money.

4. Features. Eliminate unused or unnecessary service features such as: caller id, caller ring tones, conference call, detailed billing, etc. to save money.

5. Same plan. Use the same provider as your family and friends.

6. Calls. Don’t make calls during times when you will be charged, i.e. out of service areas, after 7:00pm, on holidays, etc.

7. Prepaid. Get a prepaid phone and keep track of your talk time to help determine how much you spend monthly.

8. Contract. When your contact ends contact the company to negotiate a lower price or a new phone. Ask for free activation, a free phone or other discounts.

Help for Upside Down Homeowners

There are approximately 2,172,099 foreclosed homes in the country. Many people are frustrated with trying to find options to remain in their homes and or simply walking away from their homes and moving in with friends or relatives. Others are buying smaller second homes and walking away from their first home before it goes into foreclosure. To avoid doing this and to remain in your home, here are some options that lenders can offer to help you.

Lender Options:
1. Loan modification. Your lender modifies your current loan to make your payments more affordable by lowering the interest rate and/or extending the mortgage term and adding the default amount to the back end of your loan or forgiving it. Provide documentation to show you are experiencing a hardship.
2. Reinstatement. Your loan is reinstated to current status after you pay the default amount and any other costs or fees.
3. Forbearance. Your lender works out a short term payment plan for you to get caught up on your payments. After you are caught up, you go back to paying your regular mortgage payments. Occasionally, the lender will reduce the principal amount on your loan as well.
4. Short Sale. If you cannot afford to keep your home and you are upside down on your mortgage, then a short sale might work for you. Your lender must approve the sale because you would have to sell your home for less than what you owe your lender. As part of your negotiations, you need to make sure that the lender agrees to accept the sold proceeds as satisfying your loan debt.
5. Deed in lieu of Foreclosure. Signing the deed back to the lender, handing them the keys, and walking away owing the lender nothing.
6. Refinancing. If you have equity, you can refinance by obtaining a new loan with a lower interest rate, at a fixed term with a lower monthly payment and pay off your existing mortgage.
7. Gradual interest rate
8. Repayment. Pay the past due amount over a period of months. Read the terms carefully to be sure you can afford the payment.

Here are some programs that can assist you with staying in your home.
1. FHA Secure Loan Program - http://portal.hud.gov
2. Hope Now Program – www.hopenow.com, 888-995-4673
3. Home Affordable Refinance Mortgage Program (HARP) -www.makinghomeaffordable.gov/refinance_yes.html
4. Home Affordable Modification Program (HAMP) - https://www.hmpadmin.com/portal/programs/fha_hamp.jsp
5. Second Lien Modification Program (2MP) –https://www.hmpadmin.com/portal/programs/second_lien.jsp
6. FHA Second Loan (FHA2LP) – https://www.hmpadmin.com/portal/programs/fha2lp.jsp
7. HAFA (Home Affordable Foreclosure Alternatives) Program - https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.jsp
8. FHA HAMP (FHA Home Affordable Modification Program) –https://www.hmpadmin.com/portal/programs/fha2lp.jsp
9. UP (Unpaid Principal) – https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.jsp
10. Retired Veteran Program - www.va.gov

Here are some companies that offer loan modifications:
Debt Stoppers, www.debtstoppersusa.com, 800-440-7235
NACA, www.naca.com/refinance/refinanceTenStep.jsp, 888-404-6222 option 5

If you are behind on other bills such as debt consider working with a financial planner or financial advisor. Bankruptcy should be your last resort.

Tips From Cupid

Valentine's Day gifts should be a bonus to a healthy relationship not a chore or ultimatum. Gifts should not be an indication of how much someone loves and you should not fall in love with someone because of the gifts they give you.

If you know your significant other is financially strapped don't be selfish and ask for or expect an expensive gift. Be realistic and understanding and know that sometimes men need a little help with gift ideas and be appreciative of whatever you get. You could be with someone who didn't get you anything. Remember to give love and you will get love in return. Here are 9 tips to celebrate Valentine's Day and save money.

1. If you suspect your date feels uncomfortable or is short on cash offer to split the bill and don't get upset about it. Things happen. At least he was thoughtful enough to want to spend time with you. He may just be afraid to admit he is having financial problems.

2. Be honest. If you don't have money or your funds are limited be honest, she/he will understand and if she/he is not understanding she/he may not be the one for you.

3. Write a love letter or love note. If you aren't in love yet, write a note expressing how you feel and what you like about your significant other.

4. Be creative with flowers. Everyone buys roses on Valentine's Day. Find out what her favorite flower is and buy that instead of roses. It will show her that you really care about her.

5. Give something from the heart. If you get a balloon or chocolate get a balloon with your significant other's name on it or get personalized chocolates or baked goods.

6. Make a quick getaway. Check online for specials for bed and breakfast inns that are inexpensive or stay overnight in a local hotel room.

7. Be romantic. Give each other massages with scented massage oils. Read love poetry. Watch romantic movies. Cook a romantic dinner, slow dance, gaze into each other's eyes, and then have "desert".

8. Free entertainment. Check your local newspaper for free events during Valentine's Day weekend.

9. Cook. If your significant other likes baked goods. Bake their favorite baked good and feed it to them or fix them breakfast in bed.

Are Your Business Skills Costing You Money

Many people have the passion and background knowledge to become business owners but do not take time to educate themselves about how to start and sustain a business. Many business owners cannot generate increased revenues to produce consistent cash flows due to lack of business skills or business knowledge. Lack of business skills can cause lost revenue.

Some of the most common mistakes business owners make are: having no website or using a free website, no business bank account, using a free email address, no physical mailing address, using a cell phone number as a business phone number, limited or no use of social networking, manual business processes, not accepting multiple forms or payments, credibility - what makes you different from your competition, having bad credit, limited use of technology and lack of creativity. Here are 7 tips on how to increase your business skills and your revenue.

1. Appearance. First impressions are critical to turning prospective clients into potential clients. Word of mouth is the cheapest and best way to generate business. If your physical and/or office appearance are low quality you may be missing out on potential clients. Create a budget for your business and stick to it. Always look and speak in a professional manner. Surround yourself with at least three successful business owners and ask them for advice on how they achieved their success.

2. SSN. Using your social security number as your tax id can cause problems in the future when filing taxes. It is best to obtain an employee identification number when first starting your business or obtain one as soon as possible. This ensures that you keep your personal life separate from your business. It has helped those who had to file bankruptcy for their business and were able to retain the personal assets and credit score.

3. Tax Filing. There are several options when filing your business status with the IRS such as sole proprietorship, limited liability corporation, corporation, partnership, non-profit, etc. Make sure you file the correct status for your business.

4. Social Networking. Social networking is the easiest and cheapest way to get new clients and increase revenue. Everyone is on the internet. Employers are seeking employees and companies are selling products and offering discounts every day. If you are not connected you are missing out on a big market. Ensure you social network profile remains professional. Don’t allow others to post negative or inappropriate comments on your profile. Keep your profile neutral on all subjects. Ask trusted friends and clients to recommend your product or service.

5. Website. Free websites may scare away potential customers who may feel that you are inexperienced, not serious about your business or that you cannot be trusted. Free websites also have advertisements that may distract potential customers from your website. Take the time to hire a professional web designer and make continual updates.

6. Cash flow. Before starting your business determine the startup costs if any and set aside at least 3 months reserve for any expenses that you may incur. After you get your business up and running work hard to maintain at least 3 months reserve because there will be a vendor who doesn’t pay on time, a client whose check bounces or a provider who prices increase. It is easier to run a business without worrying about how to pay business costs each month. If you need additional funding visit the Small Business Administration or get a line or credit.

7. Protection. Get the right amount of business and health insurance coverage. Hire experienced professionals to help support your business such as a financial advisor, lawyer, accountant, business coach/mentor, office support staff and website designer.

Don’t let your lack of business skills cost you revenue. Educate yourself about being a business owner and take your business to the next level.

What is a 1099 and Do You Need One

A 1099 also known as an information return is a tax document businesses are required to file to report certain business transactions to the IRS. The form is required by the IRS and other government regulations for businesses to file.

If you never received a 1099 form, don’t be alarmed. At some point in your life you will receive one. However, if you were told you were going to receive a 1099 wait until you receive the 1099 before filing your federal and state taxes. If you did not receive the 1099 by January 31st of the current year, contact the company and ask to be sent a duplicate copy.

If you receive a 1099 you are required to file it along with your income to the IRS because a copy has already been sent to the IRS in your name from the specified company.

There are over a dozen 1099 forms that you may receive during tax time. The most common 1099 forms are:

A. 1099-R – sent to tax filers for: annuities, charitable gift annuities, direct rollovers, excess deferrals/contributions, IRA distributions, military retirement, Roth IRA distributions, SEP distributions, SIMPLE distributions

B. 1099- sent to tax filers for: distributions

C. 1099-MISC – sent to tax filers for: non-employee bonuses/commissions, health care services, non-employee nonqualified deferred compensation, royalties

D. 1099-C – sent to tax filers who had debt canceled - charged off, written-off or settled

E. 1099-DIV – sent to tax filers for: capital gain distributions, dividends

F. 1099-Q – sent to tax filers for: Coverdell ESA distributions, direct rollovers

G. 1099-A – sent to tax filers for: foreclosures

H. 1099-H – sent to tax filers: health insurance advance payments

I. 1099-G – sent to tax filers: state and local income tax refunds, unemployment benefits

J. 1099-INT – sent to tax filers: interest income, tax-exempt income

K. 1099-LTC – sent to tax filers: life insurance contract distributions

L. 1099-Q – sent to tax filers: qualified tuition program payments

M. 1099-S – sent to tax filers: real estate sales


For more information on the different types of 1099 forms visit the IRS website.

Make Money During Unemployment

Since the recession many Americans have become unemployed and have experienced financial crises. Other Americans have taken the opportunity to start businesses or go back to school to improve their financial life. If you are currently unemployed take time to reflect on your life and develop short and long term goals you want to achieve. Develop an action plan to ensure that you achieve those goals.

The days when a recruiter or head hunter finds you to hire you for a job are over. If you want to get employed you have to make opportunities happen. If lack of finances are a major factor in your life you will have to think outside of the box and think of creative ways to make money. Here are a few tips to help you earn money while you are unemployed.

1. Cleaning. Become a maid or janitor by cleaning houses or office buildings.
2. Dog walker. Walk dogs and/or groom pets. Offer to bathe dogs or cats.
3. Part-time. Look for part-time opportunities including those not in your field. Some companies hire part-time employees as full-time employees or offer benefits.
4. Volunteer. Offer to become a volunteer at a company that is in the same field or a similar field you want to work in. Some companies hire volunteers as permanent employees.
5. Babysitter. Offer to watch children during the week or on weekends when parents need to run errands or go for a night out.
6. Seasonal Work. Get hire during seasonal employment recruiting periods such as Christmas and the summer time.
7. Temp Agency. Sign up with 5-10 temporary or staffing agencies that find part-time or full-time temporary jobs. Some jobs are converted to permanent employment after 90 days.
8. Service Industry. If you have good customer service skills you can work as a customer service representative answering phone calls, serve as a hostess, waitress or receptionist.
9. Secret Shopper. You can become a secret shopper for a company or go shopping for elderly or sick individuals.
10. Sell Items. Sell new or unused items on eBay or Craigslist.
11. Network. Network with neighborhood workers to see if they need assistance with doing odd jobs such as lawn care, snow removal, tree removal, washing cars, etc.