Christmas Shopping Survey

Please answer the following questions below to participate in a financial survey. The responses will remain anonymous and the results will be posted on my blog. If you would like to participate send your responses to feedback@hefreemanenterprises.com. Please submit your responses no later than January 10, 2009.


1. Did you buy Christmas gifts this year? If yes, go to question 2 if no skip 5
2. Did you scale back your Christmas shopping this year because of the recession?
3. Did you buy gifts with cash or credit?
4. Do you have the money to pay the credit card bill when it arrives in January 2009?
5. Are you currently in debt?
6. Do you have a different outlook on your finances this year because of the recession?
7. Have you made a plan to improve your financial situation next year?
8. If you purchased Christmas gifts this year do you have one or more of the following: 1) savings account, 2) 401K with your employer, 3) IRA, 4) stocks

Christmas Wasn’t The Same This Year

Due to the recession, increasing food prices, previous increase in gas prices, continuing company layoffs, 4.39 million unemployed, 46 million uninsured and thousands more are homeless or at risk of experiencing a financial crisis many American cut back. Today I am happy to know that someone finally woke up. Some Americans actually cut back their Christmas shopping and faced reality. Some Americans were smart this year and didn’t spend money they didn’t have on Christmas gifts.

According to SpendingPulse, the 2008 Christmas shopping season was the worst it has been in decades. The shopping season was tracked from the day after Thanksgiving until Christmas Eve. The Christmas shopping season accounts for approximately 40-50% of retailer’s annual revenue. Sales at specialty clothing stores such as Gap and Old Navy fell 19.7%. Sales at electronics stores such as Best Buy fell 26.7%. Sales at high end department stores, jewelry stores and restaurants fell 34.5%. Online sales fell 2.3%.

This is the start of a new day. If you are feeling the sting of the recession you need to make a plan for how to survive in 2009. Experts indicate that the recession will continue through 2009 and possibly into 2010 so you need to make sure that you are able to survive and reduce your chances of losing your home to foreclosure, filing bankruptcy, having repossession or some other financial crisis. Make your plan today before it’s too late.

Keep Saving Your Pennies

The number of Americans currently unemployed has reached 4.39 million. This number is staggering and reminds Americans that now more than ever you need to have a Plan B.

No one knows what tomorrow holds so if you haven't already start savings your pennies, quarters, dollars, and more. Use coupons, only buy necessity items.

More layoffs are expected in the new few months. Bancorp will cut 1,000 jobs, Textron will cut 2,200 jobs and Unisys Corp will cut 1,300 jobs. That is an additional 4,500 Americans who will become unemployed.

You can no longer buy luxury items because you don't know if you will still have a job to pay for it. You must live within your means and that is going to hurt and hurt big but as your grandparents and parents used to say, it is better to be safe than be sorry.

Beware of Pick a Pay Loans

The next wave of loans due to reset in 2010 are the “Pick a Pay” Mortgage loans. The “Pick a Pay” mortgage loans are where homeowners can choose to pay less than the full monthly mortgage payment and the difference is added on as principal.

When the loan is reset in 5 or 10 years the homeowner is locked into a higher monthly mortgage payment. This may cause a higher increase in foreclosures or bankruptcy filing because homeowners will be unable to make their mortgage payments. Many banks and financial institutions offered this loan such as Wachovia, Golden West, Countrywide, Washington Mutual, First Federal Financial Corp, and Platinum Capital Group.

However, this type of loan neglected to tell homeowners that they could risk having negative amortization and could even up owning more on their home than it is worth because the loan principal would increase between 110 to 125% of the original loan amount when the loan resets.

Mortgage loan officers are worried that is may be harder to help homeowners modify their loans because there will be a large difference in their current mortgage payment and the new mortgage payment when the loan resets.

If you are currently a homeowner and do not have a fixed interest rate that remains the same over the life of the loan please read your mortgage loan agreement and contact your mortgage company to modify your loan to get a fixed interest rate. Contact a hud counselor hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call Hope Now at 888-995-4673 to get help.

Great Last Minute Holiday Gift

If you need a great last minute gift for a friend, relative or co-worker, purchase remaining copies of my self-help book, How to Get Out of Debt: Get "A" Credit Rating for Free for $7 with free shipping anywhere in the United States.

The regular retail price is $19.95 available at Borders, Barnes & Noble, Walden Books and B. Dalton. This sale price is available until all remaining inventory is sold.

This self-help book provides step-by-step information on how to repair your credit, create a flexible spending plan, and how to get out of debt.

The book also has sample letters to use to write to your creditors to repair your credit and fix errors, sample budget spreadsheets and resource information listed by state.

Visit my website at hefreemanenterprises.com/books.html to purchase a copy today!

Credit Card Tips for College Students

According to Nellie Mae, 56% of undergraduates get their first card at age 18 and 91% of final year students have a credit card. 56% of final year students carry four or more cards. The average outstanding balance on undergraduate credit cards was $2,169.

As parents you have to teach your children how to use a credit card. Credit card companies are waiting for your students to go to college and get in debt. If you don't teach them about proper credit card use they will end up in debt and it will take them years after getting a full-time job to pay the debt off.

The credit cards that are promoted with on-campus are the worst credit cards students can get. You have to do research to find the credit card with the best interest rate and terms. Visit websites such as bankrate.com or creditcards.com to comparison shop.

Here are some tips to help college students when selecting a credit card:

1. Explain how credit cards work, the advantages and disadvantages and all the fees associated with credit cards such as: interest rate, minimum payment, grace period, and the finance charges, late fees, etc.

2. Talk to your children about who will pay the credit card. Many times students assume their parents will pay the bill. Discuss this before your child goes to college to manage expectations.

3. Offer assistance to help your child compare credit card offers or talk to your local bank officer who can help you review terms and conditions and compare rates.

Here are 5 to help prevent overspending on credit cards:

1. Pay off your balance each month.

2. Keep track of your credit limit.

3. Use for emergencies only.

4. Know your payment due date.


5. Do not get cash advances.

Parents you can also write your state congressman and representative to complain about credit card interest rates and marketing practices used on college students.

6 Holiday Savings Tips

Most Americans spend the greatest amount of money during the December holiday season. The holidays should not be filled with anxiety, pressure or guilt about spending money during the holidays. If you don't have the money to buy gifts be honest. If you have a small amount of buy to buy gifts buy what you can and don't use your credit card to buy gifts unless you have the money to pay the debt off in two or three months. Here are 6 tips to help you save money during holiday shopping.

1. Buy Christmas or holidays gifts during store sales in October or November.
2. Visit local vendors, you can probably negotiate a good deal on the same items you find in the department stores.
3. Think of creative gifts to give that you can make yourself.
4. Visit the local dollar store to find gifts for children.
5. If you have to buy gifts for several family members try doing a "secret Santa" or "grab bag" so only one family member has to buy a gift for one family member and set a limit on the amount spent. That way everyone gets a gift and you don't have to worry about buying several gifts.
6. Shop online, some companies waive shipping and handling fees during the holiday season.

More Layoffs to Come

In the past several months, many companies believed to be stable have had massive layoffs which has contributed to the 10.3 million Americans who are currently unemployed. Some of the companies that had major layoffs or will have layoffs by the end of 2008 year or early 2009 are:

Citigroup (53,000)
Bank of America (35,000)
GM (32,000)
HP (24,500 over next 3 years)
Advanced Micro Devices (AMD) (16,800)
Rio Tinto (14,000)
AT &T (12,000)
Las Vegas Sands Casino (11,000)
BT Group (10,000)
Deutsche Post AG (DHL) (9,500)
Dell (9,000)
Sony Music (8,000)
Circuit City (7,300) and will close 155 stores
Merck (7,200)
American Express (7,000)
Dow Chemical (5,000)
Sun Microsystems (5,000-6,000)
Credit Suisse (5,300)
Whirlpool (5,000)
Sprint (4,000)
National City Corp (4,000)
Pepsi (3,300)
Goldman Sachs (3,260)
Motorola (3,000)
Xerox (3,000)
Dupont (2,500)
Ford (2,260)
Office Depot (2,200) and will close 112 stores
Nortel (2,100)
Chrysler (1,825)
3M (1,800)
Siemens (1,800)
eBay (1,600)
Yahoo (1,500)
Fidelity (1,300)
GlaxoSmithKline (1,000)
Starbucks (1,000) and will close 600 stores
Market Watch (850)
Viacom (850)
Texas Instruments (650)
Adobe (600)
Nokia (600)
Level 3 (450)
Palm (200+)
Legg Mason (200)
Cisco (129)
Yum Brands (Pizza Hut, Taco Bell), (unknown)
Morgan Stanley (10% of workforce)
Mattel (Fisher Price, Barbie, HotWheels) (3% of workforce)
EA Video Games (6% of workforce)

This list equals a total of 322,724 jobs that will be lost and an increase in the number of Americans who will be unemployed.

Now is the time to show that you are an asset to your company. Take training courses or go back to school to learn a new skill. Every American worker should have at least 2 skills that can be used to get a job. Also, get a part-time job if possible and use the money to pay down debt or create an emergency savings account to cover monthly bills and household expenses for at least 6 months.

If you currently do business with a company that is closing or downsizing consider how this will affect customer service: such as wait time to reach a customer service representative, proper processing of your payments, technical assistance, and other services. Also, ask the company questions on how they will ensure that their existing customers receive exceptional customer service. If you are a good customer negotiate with them for cheaper rates or discounts.

Boost for Gavel Holders

As part of the $14 billion dollar bailout plan Federal judges will also get a pay raise. The raise was identified as a cost-of-living increase which if anyone who works in the government knows, these adjustments are automatically given every year to Federal government workers also known as COLA (cost-of-living-adjustment).

So, we ask ourselves, why do the judges need a raise from the $14 billion dollar bailout plan when they get one automatically every year? Well, supposedly the COLA does not apply to judges and Congress has to vote to give judges a raise. I don't buy that one but anyway. The Federal judges will get a 2.8% raise beginning January 1, 2009.

Well, as a taxpayer and American I am tired of everyone getting raises when our country is in a crisis. I urge you to write your state congressman and representative and express your opinion about judges getting raises and the method in which raises are given to judges. I am writing my letter today.

More Jobs Lost in November 2008

If you are still asleep or living under a rock wake up! It has been confirmed that we are in a recession and have been since December 2007. Based on this announcement by the National Bureau of Economic Research we have been in a recession for 12 months and counting. According to expert economists, the recession will last at least through the middle of 2009 and the economy is getting worse by the day.

The private sector industry eliminated 250,000 jobs in November. There will be additional private sector layoffs at least through the end of the year. Citigroup plans to layoff 50,000 employees. They have had 220,506 job cuts so far in 2008. The 3 major auto companies, GM, Ford and Chrysler are on the verge of bankruptcy or failure in addition to many stores closing or going bankrupt.

Although gas prices have gone down to below $2.00 a gallon the continued job layoffs will greatly affect this year's holiday season.

If you have not already done so, now is the time to change your spending habits and your lifestyle. Buy items on sale, in bulk, eat more casseroles, soups, ramen noodles, tuna and sandwiches, for lunch and dinner, bring your lunch to work and buy only necessities. Live at least 30% below your means to ensure you are able to survive the recession. It is going to be a long winter season.

5 Reasons to Use Debit Instead of Credit

Use Debit Instead of Credit

According to The Nilson Report, debit card purchases are expected to increase 13% in 2008 to $1.2 trillion versus a 3% increase for credit card purchases or $1.9 trillion. This year, Visa debit card transactions could exceed credit card transactions.

For banks this is not good because they are not able to collect interest on debit transactions but helps their accounting department because they don’t have to report any losses when consumers fall behind on credit card payments.

However, banks also charge overdraft fees for debit card transactions when consumers do not have enough money in their accounts to cover an item purchased. Fourteen out of fifteen of the largest banks in the U.S. charge overdraft fees for consumers who exceed their funds.

Overdraft fees ranges from $20 to $35 per occurrence. Banks are responding much quicker to consumers who exceed their funds by charging overdraft fees the same day or the next day. In the past banks would wait a few days before charging the overdraft fee.

To combat this practice the Federal Reserve has proposed rules to restrict these abusive practices by banks.

Here are 5 reasons why use should use a debit card versus a credit card:

1. You don’t pay interest or finance charges

2. You can only spend the money you have in your account, however, some banks do allow you to exceed your funds but you are charged an overdraft fee

3. You can use debit cards or Visa check cards at many of the same retailers that accept credit cards

4. Helpful for those with bad credit who are unable to get approved for a credit card

5. Can be used like a credit card by swiping the card without entering a PIN

5 Ways Save Money on Heating Costs

This winter season which begins October 1 and ends March 31, gas and oil heating bills are expected to increase. According to the Energy information Administration the average American household will pay $1,182, an increase of 19.8% from last year.

Americans who live in the Northeast and heat with oil will pay on average $2,725 this winter, an increase of 37.1% since last year. The national average price for heating with oil has increased more than 198% from 2003-2004 to 2008-2009.

Americans who live in the South who heat with propane will pay on average $1,578 this winter, an increase of 18.7% since the 2003-2004 winter season. The national average price for heating with propane has increased 100% from 2003-2004 to 2008-2009.

Americans who live in the West who heat with gas will pay on average $684 this winter, an increase of 23.8% since last year. The national average price for heating with natural gas has increased approximately 60% from 2003-2004 to 2008-2009.

Americans who live in the Midwest who heat with electricity will pay on average $1,051 this winter, an increase of 4.7% since last year. The national average price for heating with electricity has increased 34% from 2003-2004 to 2008-2009. Here are 5 tips to help reduce heating costs this year.

1. Annual check. Have annual checks on your heating system before the winter season begins. It is best to get a checkup during the summer months when business is slow.

2. Insulate. Insulate your attic and any others areas that are drafty such as your attic, ceilings, walls, crawl spaces, hot water pipes, furnaces, ducts, etc.

3. Automate. Install a programmable thermostat and keep your setting on 68% Fahrenheit or lower during the winter season. Lower the temperature setting while away from home and during the day. This can save 20% on your heating costs.

4. Seal drafts. Seal any drafts around windows, chimneys, pipes, light fixtures, doors or electrical outlets which can reduce your heating costs by 30%.

5. Use a wood burning or pellet burning stove to heat your home.

Help for the Unemployed

Due to current recession and the closing of many companies, the number of people unemployed has reached new highs. The unemployment rate is 6.5% meaning over 10.1 million Americans are out of work. Generally the November and December holidays are a time to spend with family and have fun but this year the holidays won't be like past years.

Many Americans are feeling the burden of the bailout plan. However, there is some relief. On November 21, 2008, President Bush signed the Unemployment Compensation Extension Act of 2008 which extends Emergency Unemployment Compensation to 20 weeks which will help some Americans through the holiday season. For states with high unemployment rates such as Georgia it creates a second tier of 13 weeks of compensation for individuals.

Mortgage Helps for Americans

The government and mortgage industry are launching a new program effective December 15, 2008 to help homeowners' stay in their homes by renegotiating delinquent loans held by Freddie Mac and Fannie Mae. Almost 1 out of every 6 loans held by Freddie Mac and Fannie Mae are delinquent.

To qualify for the new program homeowners will have to be at least 3 months behind of their mortgage and have to owe 90% or more of their home's current value. Homeowners who filed for bankruptcy are not eligible for the program. In addition, homeowners' interest rates would be reduced so their mortgage payment is no more than 38% of their monthly income (similar to a plan IndyMac introduced in October 2008), loans can be extended for 30 to 40 years or some of the principal can be deferred interest free. Contact Freddie Mac or Fannie Mae to get more information or contact a HUD counselor at 888-995-4673.

So far, 2,795,920 people have filed for foreclosure this year. Millions of Americans need help and the government and other banks have begun implementing plans to help homeowners but in some cases it is too late. There should be a fine charged for those banks that did not help customers before the bailout plan and before these new programs have been or will be implemented.

Why are banks allowed to behave in any manner they choose and nothing is done about it. Banks should also develop programs for homeowners who lost their homes because they were unable to get help to save their homes. Is anyone concerned about the Americans who lost their homes because the banks refused to help them? We should be. I applaud the government and banks for developing plans but I fear it will not be enough. If the government can help bailout airlines and loan money to foreign countries surely they can help all Americans stay in their homes. Write your state house of representatives and congressman and express your concerns.

A Unique Option to Survive the Bailout

There are several conventional ways to save money that we hear about over and over again such as using coupons, buying things on sale, shopping at discount stores, buying online, reducing your expenses, and living below your means. All of these are great ways to save money and survive a financial crisis in normal times. Unfortunately, we are not living in normal times and it will take some creative thinking to survive the current recession.

We, as Americans will have to change the way we think about money and how we spend it. We must change our bad spending habits to ensure we have a decent life in case an unexpected expense occurs such as a medical condition, job layoff or death of a loved one. We must also position ourselves for retirement so if social security is not available we can still survive and have enough money to cover our basic living expenses.

More than 2.6 million Americans have foreclosed on their homes this year and over 960,000 Americans have filed for personal bankruptcy. These statistics are alarming. One way to prevent being one of those statistics is using a radical approach called the Voluntary Simplicity Movement or simply living.

The Voluntary Simplicity Movement started in the 1960s and has grown widely with approximately 20 million people following all or some aspects of the phenomenon. Simply living is examining every aspect of your life to determine what is most important and eliminating the rest. Simple living has various aspects such as ecological, technological, financial, etc. Many Americans cannot embrace this concept out of fear, embarrassment, and reactions by family and friends. Living below your means is how many entrepreneurs got their start and became successful. They understood the sacrifice that needed to be made to achieve their goals.

The Frugal Simplicity aspect of the Voluntary Simplicity Movement means spending in terms of needs vs. wants, cutting back in various areas of your life – reducing expenses, and being responsible with your spending. Shopping frugally and living below your means reduces stress related to debt and helps to move towards a debt free life and financial independence.

Many Americans have tried creating a budget or spending plan, use coupons or cutting back on some expenses. Unfortunately many have started with the right intentions but failed to continue performing those actions as a lifestyle choice and reverted back to their old bad spending habits.

If you have tried everything else or felt like no other option would work – don't file bankruptcy or foreclosure. Try the voluntarily simplicity movement for 30 days and track the following: your stress level after the 30 days, how much money you saved, how much debt you were able to pay down, how you felt after the 30 days. Even if you don't continue the Voluntary Simplicity Movement, hopefully you will have made a great change in your life about the purpose of money and how you can use it to create a better life for yourself. For more information visit www.simpleliving.net.

How IndyMac is Helping Consumers

Due to the current economic crisis and high number of foreclosures, approximately 2.66 million as of October 2008, many banks and financial institutions are helping consumers on a case-by-case basis. The process is very slow, resource intensive and frustrating.

IndyMac services more than 60,000 loans that are either more than 60 days past due, in bankruptcy or in foreclosure. Approximately 40,000 customers are eligible for the IndyMac program to help consumers with their mortgages. More than 3,500 IndyMac customers have had their loans modified reducing their mortgage payments on average by $380.

Establishing standard rules that a lender can apply can speed up the process and the lender will be able to help thousands of customers and restore the housing market at a faster rate.

Using IndyMac's program lenders modify a loan so that the borrower's new mortgage payment, including insurance and taxes, is no more than 38% of their pre-tax income as known as the debt-to-income ratio which was as high as 50% during the housing boom.

IndyMac can achieve this by lowering the interest rate, extending the life of the loan, deferring some principal to the latter years of the loan, or a using a combination of these methods to help customers.

To simplify the process for customers IndyMac sends loan paperwork overnight with a signature required upon receipt. The paperwork explains the customer's new loan terms, the interest rate and monthly payments over the life of the loan. The customer signs and returns the documents along with the initial lower monthly payment. The IndyMac program does not forgive debt.

IndyMac's program is now being applied to many delinquent loans owned by Fannie Mae and Freddie Mac. Bank of America has also developed a similar program that will launch in December 2008. The Bank of America plan was instituted as part of a settlement with state attorney general offices that sued Countrywide for predatory lending practices, which was acquired by Bank of America.

Bank of America hopes the program will help approximately 400,000 customers. The Bank of America plan will use a 34% debt-to-income ratio to calculate an affordable monthly payment for its customers, and may write down the principal balance of some negative amortizing loans.

Some housing economists warn that lenders should look at a borrower's other assets in addition to their debt-to-income ratio before restructuring a loan because "they will include people who shouldn't really qualify, and might exclude people who do".
"A customer with substantial additional assets and no other debt may have taken out a big mortgage that accounts for 45% of his income. The program will help this customer and not someone with a smaller mortgage and no other assets who also have student and car loans".

FDIC Chairwoman Bair thinks this foreclosure prevention program can also work for other banks.

Greenspan Takes Some Blame

On October 23, 2008, former Fed Chairman Alan Greenspan testified before a Congressional committee to discuss the current economic crisis in the country. He admitted that mistakes during his appointment worsened the current economic crisis. A quote from his testimony stated "those of us who have looked to the self-interest of lending institutions to protect shareholders' equity... are in a state of shocked disbelief."

Once appointed to his position in 1987, Greenspan immediately began pushing Congress to repeal the law implemented during the Depression that prevented banks from competing with investment banks in underwriting stocks and bonds. When Congress hesitated, Greenspan used the Federal Reserve's authority to allow banks to circumvent the law. Greenspan also opposed efforts by the Securities and Exchange Commission (SEC) to initiate modest regulation of the $1 trillion hedge fund industry.

Greenspan instituted the deregulation of the banking and financial system and the institution of mortgage ARMs in 2004. Greenspan admitted during his testimony that deregulation didn't really work and that it was flawed. Greenspan admitted that he put too much faith in the power of the free market and failed to foresee the self-destructive power of reckless mortgage lending.

However, Greenspan also placed blame on Wall Street companies that bundled subprime mortgages into 100 million dollar packages and sold them as mortgage backed securities. Global demand for the mortgage securities was so high, Greenspan said, that Wall Street companies pressured lenders to lower their standards and produce more "paper".

Greenspan also explained during his testimony that he did not anticipate the massive housing bust because we (he and other top economists) cannot see events that far in advance. "Greenspan explained that even after he realized there was a bubble, he never expected housing prices to decline so dramatically, because we had never had a nationwide decline in housing prices in the past.

Well Mr. Greenspan, if you are in disbelief how do you think the rest of the country feels.

How the Federal Rate Cut Affects You

The Federal Reserve cut the federal funds rate on October 29, 2008 by 1%, its 9th reduction in 13 months. The federal funds rate is the target interest rate for banks borrowing reserves (deposits in accounts with the Federal Reserve plus cash that is held in bank vaults) among themselves.

Changes in the federal funds rate influence the borrowing cost of banks and the returns offered on bank deposit products such as CDs, savings accounts, and money market accounts. Changes in the federal funds rate also dictate changes in the prime rate or Wall Street Journal Prime Rate.

The Federal Reserve began cutting rates to deal with the current economic recession in September 2007. Since September 2007 the rate has been reduced from 5.25% to 2%. The current rate cut is the lowest it has been in the last 4 years. The prime rate is now 4%. The prime rate is based on the federal funds rate and is a benchmark used to set home equity lines of credit, credit card rates, lines of credit, auto loans, personal loans, and some small business loans.

Rate cuts usually take several months before consumers can see the impact. The rate cut helps bank because it reduces their borrowing costs and they pay lower rates on deposits.

Consumers who benefit from the current rate cut are homeowners who are looking for fixed rate mortgages which are still low. Also, consumers who plan to stay in their homes for less than 10 years can still get ARMs to get a lower interest rate on their mortgages. All ARMs are not the same so make sure you do your homework to find the deal that right for you. Some homeowner's with existing ARMs may see lower mortgage payments the next time their mortgage resets. Contact your lender to get more information.

1929 vs 2008

Here is a quick comparison of The Great Depression in 1929 vs. The Financial Crisis (Recession) in 2008. You can voice your opinion about the conditions we are experiencing in 2008 on election day November 4, 2008.

1929 October 29, 1929 (Great Depression - Black Thursday)
1. Crisis called a Depression
2. 13 million people unemployed
3. Industrial production fell 45% between 1929 and 1932
4. Home building dropped by 80% between 1929 and 1932
5. 5000 banks went out of business between 1929 and 1932
6. Massive layoffs, unemployment rates over 25% in 1933
7. Home prices and income fell by 20-50%
8. Depositors lost $140 billion in bank deposits by 1933
9. Took 10 years to cure

2008
1. Crisis called a Recession
2. 3,720,000 people unemployed
3. Industrial production in September was 4.5% below last year’s figures
4. 16 banks went out of business and counting
5. Under 20 financial institutions have gone out of business and counting
6. Massive layoffs, unemployment rates of 6.1%
7. Home prices fell 16.6% since 2007
8. Depositors lost $2 trillion in bank deposits and counting
9. Estimated that 28 million people will use food assistance programs an increase in 26.5 million from 2007
10. Federal Reserve has dropped interest rates by more than 2.5 percentage points since August 2007
11. 2.5 million foreclosures and counting
12. 967,000 personal bankruptcies as of Aug 2008 and counting
13. Food prices rose more than 4% since last year

Another Chance for Bankruptcy Filers

Due to the financial crisis which resulted in a credit freeze and implementation of the $700 billion dollar bailout many Americans will feel the burden regarding their existing credit card accounts or when applying for new lines of credit or credit cards.

Well, thanks to several Americans who were fed up with the inaccuracies reported by the credit bureaus a recent court ruling which occurred due to a class action lawsuit that was filed against the 3 major credit bureaus, Experian, Equifax and TransUnion stated that Experian, Equifax and TransUnion violated the Fair Credit Reporting Act (FCRA) by failing to maintain accurate records related to Chapter 7 bankruptcies.

The court ruling required the 3 major credit bureaus, Experian, Equifax and TransUnion to change their reporting system by October 1, 2008 and remove old debts that were included in bankruptcies. This is a HUGE victory for many Americans who had low credit scores and were unable to get approved for loans or credit cards due to: old debts still being reported as open, old debt reported with balances, reported with an "active" status or as a collection account. Accounts included in a Chapter 7 bankruptcy will now be reported with a zero balance and with a closed status.

Based on the credit ruling the 3 credit bureaus will have to clean up credit files for approximately 6-10 million consumers who have filed for Chapter 7 bankruptcy.

Many consumers have been impacted because late accounts were reported to collection agencies that ignored the fact that the accounts were included in a Chapter 7 bankruptcy. As a result, the accounts are reported multiple times as delinquent. Each occurrence of the delinquent or unpaid account lowers a consumer's credit score.

Consumers who filed Chapter 7 bankruptcy that has already been discharged will have to request a new credit report after October 1, 2008 to see if their credit report has been updated by going to the annualcreditreport.com website or by calling 877-322-8228.

If you still find errors on your credit report due to a bankruptcy, file a dispute with the credit bureau reporting the inaccurate information. You can file a dispute online which is faster and usually takes 2 weeks for a response or you can file by mail which takes 30 to 45 days for a response.

Government Bailout Plan Funding Continues

On Friday, the U.S. government started to inject capital into some banks by helping to finance a $5.2 billion takeover of National City Corp bank by PNC valued at $2.33 per share.

The Treasury Department plans to provide funds for 20-22 additional lenders as part of its next phase of a $250 billion bank recapitalization program. The Treasury Department has already committed approximately $125 million to 9 of the country's largest banks in exchange for preferred bank shares.

The Treasury Department has also decided to let banks announce the government assistance plans which will be staggered instead of the Treasury providing a complete list of bank recipients to ease investors.

Regions Financial Corp, First Horizon National Corp, PNC, Valley National Bancorp Capital One Financial Corp and SunTrust Banks will also receive government funding.

The Treasury Department is also determining how to give assistance to insurers under its Troubled Asset Relief Program (TARP) also known as the Paulson Proposal which became law on October 3, 2008. The program is run by the Treasury Department's newly formed Office of Financial Stability Department. The TARP has 7 components:
1) Mortgage-backed securities purchase program which identifies which troubled assets to purchase, who to buy them from and how to buy them.

2) Whole loan purchase program which will work with bank regulators to identify which types of loans to purchase first, how to determine their value and how to buy them.

3) Insurance program which will determine how to insure mortgage-backed securities and whole loans (residential mortgage loan that is owed by one company sold to one or more investors who pays the seller a servicing fee).

4) Equity purchase program is a standardized voluntary program to purchase equity in a various financial institutions to encourage participation from healthy financial institutions.

5) Homeownership preservation consists of programs that purchase mortgages and mortgage-backed securities to help homeowners stay in their homes.

6) Executive compensation is a law defined requirements regarding executive compensation for firms that participate in the TARP.

7) Compliance is a law that establishes oversight and compliance structures, including establishing an Oversight Board, on-site participation of the General Accounting Office and the creation of a Special Inspector General, with strict reporting requirements.

The Power Players in the Financial Crisis

A total of fifteen banks have closed across the country this year not including other financial institutions such as AIG, Merrill Lynch and others. Americans are frantic about the safety of their money in banks and investment accounts. Many Americans have closed their bank accounts due to the current financial crisis and bank failures.

Luckily for the rest of the country all Americans have not taken their money out of the banks because the entire banking system would fail. In life there are always ups and downs. Right now individuals and the country are experiencing a huge down. Several people, companies and other entities had a role in the current financial crisis the country is experiencing. No one person or entity is to blame; however several entities can be identified as contributing or having a role in the current financial crisis. The following is a list of the power players in the current financial crisis.

1. AIG – bailed out by the Federal Government who will get an 80% stake in the company
2. Bank of America – bought Merrill Lynch in September 2008 and purchased Countrywide
3. Bear Sterns – bought by JP Morgan
4. Citigroup – tried to buy Wachovia
5. Countrywide – bought by Bank of America
6. Fannie Mae – taken over by the government
7. Freddie Mac - taken over by the government
8. Federal Reserve – passed 700 billion dollar bailout plan to boost the economy
9. Goldman Sachs – now regulated by the Federal Reserve and is able to access the it's emergency loan program
10. IndyMac – seized by the FDIC in July 2008
11. Lehman Brothers – filed for bankruptcy in 2008
12. Merrill Lynch – bought by Bank of America
13. Morgan Stanley – Federal Reserve allowed the bank to change its status to allow it to provide commercial banking products and services
14. Wachovia – purchased by Wells Fargo
15. Wells Fargo – bought Wachovia after Citigroup announced it would buy Wachovia's banking business

To ensure you make it through the current financial crisis which will probably continue until the end of 2009 or early 2010 - follow these 3 tips:

1. Keep your money in the bank. It not the timing of the market, it's the time in the market. Although you may have lost money in your savings or investment account, if you wait it out, you will gain back the money lost, however, it will take time. You can consult a financial advisor to see what options are available to you to protect your remaining money from additional losses.

2. Don't make decisions based on emotions. Don't make any drastic changes based on the recent news story, an article in the newspaper or something you heard someone say. Write down your concerns and do research, try to find and talk to others who have been through financial crises such as the Depression or a war. Wait a few days and develop some if-then scenarios and develop a plan to deal with those situations. Talk to a financial counselor or advisor about your concerns and options on how to implement your plan.

3. Change your spending habits. Now is the time to make changes in your spending habits. Find small ways to cut back on spending and reduce expenses. Start saving or save more than usual to create an emergency fund to cover bills for at least 3 to 6 months which will help when unexpected situations or expenses arise.

Financial Predictions

Here is a list of my predictions for 2008 and 2009. These are just for fun. Let's see if any of them come true.

2008/2009 Predictions

1. Gas prices will fail below $2.50 by election day and rise again after the election
2. Housing prices will continue to fall through the middle of 2009
3. The Federal Reserve will reduce interest rates at least once more by the end of the year
4. Americans will continue to fight back and express their concerns about high gas prices, health care, and the war in Iraq
5. In the coming weeks more Americans will voice their support for one candidate or the other
6. More laws will be passed in favor of same sex couples
7. The war in Iraq will continue until 2010
8. Brittany Spears will get married again
9. The number of jobless claims will continue to rise through the end of 2008
10. Mortgage companies and other financial institutions will begin to place calls requesting a payment from customers in good standing who usually make payments on time but make a payment after the due date
11. Halloween, Black Friday and Christmas sales will be less than expected
12. Many small business will file bankruptcy or go out of business by the end of 2008
13. More scandals and fraud cases will be exposed to Americans by the end of 2009
14. The current financial crisis will end in 2010

America's Woes Spread to Other Countries

The current financial crisis began in the United States when lax lending standards on certain home mortgages came were allowed. Foreclosure rates began increasing as of 2000 and financial companies began reporting huge losses.

Many other parts of the world funded America’s consumer spending boom by lending America money. Many banks and investment funds outside America are holding large amounts of American debt paper and are now very upset and unhappy with bank and financial institution assets that no longer have any value.

Leaders of the world's top countries, the Group of Eight, are scheduling a meeting to meet in the near future to discuss solutions for the financial crisis. The Group of Eight consists of the United States, Japan, Germany, France, Britain, Italy, Canada and Russia.

European financial and political leaders agreed to pump billions of euros into their banks to help with declining economy. To deal with their failing economy Iceland's central bank dropped interest rates by 3.5 percentage points. Greece has pledged up to 28 billion euros or $38.5 billion to help its banks through the current financial crisis. Germany is proposing a plan to provide 400 billion euros or $536.7 billion to their banks.

How the Bailout Affects Your Credit

Due to the failure of many banks and financial institutions, lenders and other companies that extend credit to consumers are implementing stricter requirements for approval. Many people who received benefits of having a 700 credit score will now feel the affects of the new bailout plan.

The bailout plan will affect approval for credit cards and loans. This will also affect consumers in their personal and business life. Many small businesses that rely on business credit to purchase business equipment and supplies will also be greatly affected when trying to get approval for credit.

A year ago, a consumer could be approved with a credit score of 700 for any type of loan or credit card with a good interest rate. One year later things have changed.

According to a Yahoo article consumers will now have to have a higher credit score to get approved for a loan or credit card and to get good interest rates. For credit cards you need a 720-750. According to CNW, it will be even harder to get approved for an auto loan; you will need the minimum credit score of 786 to get the very best rate.

To get approved for a mortgage you will need a credit score of 740 to get the best rate. Previously you could get approved for a credit score of 700.

If you have bad credit follow these 5 tips to increase your credit score:

1. Get current on late bills
2. Setup payment plans with your creditors
3. Keep credit card balances at 30% or below the credit limit
4. Don't open a new account more than once every 2 years
5. Don't use credit cards for everyday purchases

It may be difficult to change your spending habits but you will be in a better position to ensure you get approved for credit when needed and this advice will help you maintain a good credit score.

How the 700 Billion Dollar Bailout Affects You

A credit freeze is currently in place because of the current economic crisis. President Bush signed a 451 page bill to implement a 700 billion dollar plan buy bad mortgages and other low valued assets currently held by distressed financial institutions which would allow them lend credit again to businesses and consumers.

The bill will also temporarily expands federal insurance for bank and credit union deposits of up to $250,000 which will help small businesses and many Americans including those will retirement accounts and 401Ks.

The bill will also allow mortgage lenders and banks to restructure home loans, reduce mortgage interest rates or change mortgage loan terms. However, with the bailout, it may be harder to get approved for credit or a loan because banks and financial institutions will no longer be willing to work with customers with bad credit because they don't want to take any more risks.

Approvals will require higher credit scores and possibly larger down payments. Credit card limits may be reduced or credit card accounts may be closed if accounts are maxed out or delinquent. Many small businesses that use credit to make purchases will also be affected which may reduce their revenue or possibly force some businesses to close.

Since this is an election year remind your congressmen of the issues that affect you the most and make your voice heard.

Tips for AIG Customers

AIG got a loan from the FDIC for 85 billion dollars because they lost money due to the sub-prime market. AIG is the parent company of many insurance holders.

If AIG has to file for bankruptcy they would pay off as many policyholder claims as they can. For the remaining unpaid claims they would be paid by the state because the state has guaranteed the policies.

If you have property or auto insurance, the state will also cover these, but usually have a cap. The level of coverage may vary by state, but every state association provides withdrawal and cash-value coverage for annuities of at least $100,000. Life-insurance policies are backed up with at least $300,000 in life insurance death benefits and $100,000 in cash surrender or withdrawal value. States offer at least $100,000 in health insurance policy benefits.

Every state including the District of Columbia, Puerto Rico and the Virgin Islands have established guarantee funds to protect homeowner's or car-insurance policies. Most state guarantee funds to pay all of their state's workers' compensation benefits.

Don't take money out of your AIG account. Your AIG insurance and annuity policies are safe because they are still insured. The Insurance Commissioner’s Office will continue to closely monitor the status of AIG to ensure that policyholders are protected and that assets remain to pay claims. If you do decide to cash in your policies check to see if your policy contains a surrender charge or cancellation penalty. Continue to pay your insurance premium bills for you AIG coverage. If decide not pay your policy may be canceled.

If you are unable to contact an AIG representative you can call the Insurance Consumer Hotline at 1-800-562-6900.

Be aware of scams. If someone tells you to replace your AIG policy because "may not be able to pay your claim" this is a scam. Call the Insurance Consumer Hotline at 1-800-562-6900 to report the incident.

To see if your insurer is owned by AIG, visit the state Insurance Commissioner's Web site at insurance.wa.gov and click on latest news or call 800-562-6900.

Advice for Wamu Customers

Here are answers to some of your questions regarding your WaMu accounts.


1. All Wasington Mutual and Henderson, NV accounts have been transferred to JPMorgan Chase Bank. No money was lost in any account during the transfer.

2. If you had a loan with Washington Mutual your loan has been transferred to JPMorgan Chase Bank. Continue to send payments to the same address and make checks payable to Washington Mutual Bank. Your payment due dates, balances and interest rates still remain the same.

3. Your debit and ATM cards will still work. Your direct deposits, automatic deductions and automatic bill paying will still work.

4. Any outstanding checks will clear with no problem. You can still write checks on any checks that you have.

5. If you have a loan that is currently being processed or line is credit that has not been approved yet contact your loan officer or processing agent for more information.

6. If you account balance is over $100,000 is will still be insured for up to 6 months after the merger. After that time you will need to move your money around to other accounts so the balance is below $100,000.

7. Contact your financial advisor regarding any Washington Mutual stock that you own.

Wachoiva : Another Bank Failure and How it Affects You

Wachovia was seized by the government and on September 29, 2008, and was bought by Citigroup. Wachovia has 3,300 retail offices in 21 states with 40 international offices. Citigroup will pay Wachovia $2.1 billion to pay for its subordinated debt (a debt obligation whose holder is placed in precedence below secured and general creditors) which basically means the debts bought by Citigroup will be paid after Wachovia's secured debt and debt owed to their creditors is paid. It will also assume $53 billion of Wachovia senior and subordinated debt. The buy will make Citigroup the largest bank in the US. The buy should be complete by the end of 2008.

Wachovia states that "Customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual."

To down play the severity of the buy of Wachovia by Citigroup they use terms that the average consumer may not understand. When you visit the Wachovia website a blurb states "Wachovia announces bank subsidiary divestitures to Citigroup."

What does this mean? I am a customer of Wachovia and it saddens me that messages like this appear. Press releases and other messages should be explained in a manner so that all customers of Wachovia understand exactly what the buy by Citigroup means to them.
Divestitures are the sales of business holdings of a company. Citigroup purchased the retail bank, corporate and investment bank and wealth management businesses (divestitures) of Wachovia.

Wachovia investors will receive approximately $1 of Citigroup stock for each of their Wachovia shares of stock. For now, it appears that it is business as usual at Wachovia so don't take your money out of the bank.

Some Wachovia bank branches may close within the next year when Citigroup takes over the 3,300 retail offices. This will have a devasting effect on the Charlotte area where Wachovia is headquartered.

I advise all Wachovia customers to keep an eye on their account balances and monitor the behavior of your local branch staff to see if they started acting differently or see if you can pick up on hints about the health of the company.

Get Your Equifax Credit Score for Free

Get a free Equifax credit score for a limited time. Visit equifax.com/freeficoscore for more information.

How the Merrill Lynch Buy Affects You

The recent buy of Merrill Lynch by Bank of America over a week ago supposedly kept Merrill from failing and filing for bankruptcy. Merrill Lynch has billions of dollars in bad debts from the sub-prime market. Merrill Lynch posted loses for the past 4 quarters and has wrote down $40 billion in loses.

The buy of Merrill Lynch was originally valued at $50 billion but reduced to a final purchase price of $40 billion.

It is shocking how the deal occurred in just 2 short days. It makes one wonder how can a deal be that sound if it occurred in that short amount of time. Bank of America’s interest in Merrill was due to Merrill Lynch’s investment banking services. Both companies offer different products and services to their customers which could cause a potential problem in the future.

For investors, Bank of America would exchange 0.8595 shares of Bank of America stock for each Merrill Lynch share of stock. If you currently have investments in Merrill Lynch now is the time to diversify your portfolio to protect yourself from severe market losses. However, don’t make any drastic changes.

The Securities Investor Protection Corporation protects cash and securities, such as stocks and bonds held by customer at a financially troubled brokerage firm but does not protect you the same as the FDIC. Check with your financial advisor to see what options are available to you.

Remember, it’s now what happens day to day, it’s how long you stay in the game. Your money double every 72 months so just ride it out.

How the Fannie Mae and Freddie Mac Bail Out Affects You

The collapse of Freddie Mac and Fannie Mae that occurred on September 7, 2008 occurred because of company greed and consumer responsibility. Company greed led mortgage industry professionals to lure unsuspecting consumers into loans they could not afford and would not be able to maintain. Greed and responsibility led consumers to believe they could afford a home out of their price range and still be able to pay all their other bills. Consumers are partly to blame for the following reasons:

1. Believing everything a mortgage professional tells you without verifying the information
2. Buying a house you know you could not afford
3. Not reading the fine print on the mortgage documents
4. Lack of education about the home buying process
5. Forging documents (income, number of years on a job etc.)

Fannie Mae and Freddie Mac are partly to blame:
1. Allowing illegal mortgage loans to be approved
2. Approving consumers for homes they could not afford
3. Not developing plans to help consumers stay in their homes
4. Not being truthful with consumers during the home buying process
5. Not being truthful with consumers about the company's financial problems
6. Forging documents

Many of you may have considered or already purchased Fannie Mae and Freddie Mac stock. Don't. For each share of stock you buy, you will only get $.20 on the dollar, so if you buy 100 shares, you really only have 20 shares. Preferred investors with hundreds and thousands of shares will get $.50 on the dollar for each share owned.

Although the government is providing $200 billion to help Fannie Mae and Freddie Mac recover, it will take both companies several years to pay off the government loan. Share prices will not begin to rise a significant amount until the company begins to make a profit which could take years if at all.

Many of the mortgages Fannie Mae and Freddie Mac own will never be repaid which would have caused them to file bankruptcy if the government had not taken over both companies.

If you currently have a high mortgage interest rate or your ARM will expire within the next 6 months or year now is a good time to try to refinance. If you have bad credit, spend the next few months paying off debt and repairing your credit so you can refinance your home to ensure you remain a homeowner.

Since the government doesn't have the $200 billion on hand to bailout out Fannie Mae and Freddie Mac, someone has to come up with the money, who you ask? Us, the taxpayers by paying higher taxes. Show your frustruation, anger, disappointment and resentment during this year's election by demanding a change in how the government is run and how companies are run. One vote can make a difference.

There is one bright star as a result of the Fannie Mae and Freddie Mac collapse, executives of both companies will not get paid their the combined total $24 million severance pay.

Downpayment Assistance Ends 10/1/08

Please contact your state congressmen to demand that Down Payment Assistance programs do not end on October 1, 2008. Tell them to pass H.R. 6694.

Research by Zelman & Associates reports that 10-25% of potential homebuyers will have no way of securing homeownership without down payment assistance. Since 1997, downpayment assistance has helped more than one million families become homeowners. Between 1997 and 2005, $12.3 billion has been generated in taxes for state and local governments through the purchases of 150,000 homes.

A quote from Scott Syphax, President and CEO of Nehemiah Corporation of America praised some members of congress.

“Maxine Waters, Gary Miller, Al Green and Christopher Shays have demonstrated the willingness to understand all sides of this issue and the courage and leadership to follow their conscience. All those who understand the importance of working class American’s having their shot at homeownership, need to work together to encourage our elected officials to pass this bill.”

“There are dire consequences to America waking up on October 1st without downpayment assistance. In fact, 300,000 working class families will be locked out of homeownership in the next year alone.”

You can contact the following House Committee on Financial Services committee members to show your support for down payment assistance programs which have helped thousands of Americans achieve the dream of owning a home.

Chairman Barney Frank represents Massachusetts' Fourth Congressional District of the House Committee on Financial Services which oversees the country's housing and financial services including real estate, public and assisted housing. The Committee reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, Fannie Mae and Freddie Mac.

Democratic Members of the Committee are:
Rep. Paul E. Kanjorski, PA
Rep. Maxine Waters, CA
Rep. Carolyn B. Maloney, NY
Rep. Luis V. Gutierrez, IL
Rep. Nydia M. Velázquez, NY
Rep. Melvin L. Watt, NC
Rep. Gary L. Ackerman, NY
Rep. Brad Sherman, CA
Rep. Gregory W. Meeks, NY
Rep. Dennis Moore, KS
Rep. Michael E. Capuano, MA
Rep. Rubén Hinojosa, TX
Rep. William Lacy Clay, MO
Rep. Carolyn McCarthy, NY
Rep. Joe Baca, CA
Rep. Stephen F. Lynch, MA
Rep. Brad Miller, NC
Rep. David Scott, GA
Rep. Al Green, TX
Rep. Emanuel Cleaver, MO
Rep. Melissa L. Bean, IL
Rep. Gwen Moore, WI
Rep. Lincoln Davis, TN
Rep. Paul W. Hodes, NH
Rep. Keith Ellison, MN
Rep. Ron Klein, FL
Rep. Tim Mahoney, FL
Rep. Charles Wilson, OH
Rep. Ed Perlmutter, CO
Rep. Christopher S. Murphy, CT
Rep. Joe Donnelly, IN
Rep. Bill Foster, IL
Rep. Andre Carson, IN
Rep. Jackie Speier, CA
Rep. Don Cazayoux, LA
Rep. Travis Childers, MS

Republican Members of the Committee are:
Rep. Spencer Bachus, AL
Rep. Deborah Pryce, OH
Rep. Michael N. Castle, DE
Rep. Peter King, NY
Rep. Edward R. Royce, CA
Rep. Frank D. Lucas, OK
Rep. Ron Paul, TX
Rep. Steven C. LaTourette, OH
Rep. Donald A. Manzullo, IL
Rep. Walter B. Jones , NC
Rep. Judy Biggert, IL
Rep. Christopher Shays, CT
Rep. Gary G. Miller, CA
Rep. Shelley Moore Capito, WV
Rep. Tom Feeney, FL
Rep. Jeb Hensarling, TX
Rep. Scott Garrett, NJ
Rep. Ginny Brown-Waite, FL
Rep. J. Gresham Barrett, SC
Rep. Jim Gerlach, PA
Rep. Stevan Pearce, NM
Rep. Randy Neugebauer, TX
Rep. Tom Price, GA
Rep. Geoff Davis, KY
Rep. Patrick T. McHenry, NC
Rep. John Campbell, CA
Rep. Adam Putnam, FL
Rep. Michele Bachmann, MN
Rep. Peter J. Roskam, IL
Rep. Kenny Marchant, TX
Rep. Thaddeus McCotter, MI
Rep. Kevin McCarthy, CA
Rep. Dean Heller, NV

You can visit the Get Down Payment Assistance.com website to get more information.

6 Ways to Recession Proof Your Income

The Federal Reserve has dropped interest rates 2.25% points since August 2007. There were approximately 700,000 foreclosure filings in 2008. Congress is trying to combat the recession by giving Americans tax rebates. Oil prices are over $120 a barrel and gas is $4 or more a gallon. Food prices rose more than 4% from last year. With the high cost of gas, food, housing, utilities and travel costs you have to develop a plan to ensure you can sustain yourself through the current recession. Here are 6 ways to ensure you survive the recession.

1. Find stable employment – Many companies are having layoffs or reducing salaries or employee hours. To protect yourself, if you are a contractor or a seasonal employee try to find a stable job or get a part-time job to get additional income. Do research on a company to see their annual finance report, see what the company's plans are for the future and ask others if they have heard about the company to ensure you are working with a stable company. If you hear rumors of layoffs dust off that resume and start looking for a new job.

2. Reevaluate your finances – If you don't have health, life or disability insurance consider getting at least basic health insurance. Health costs are one of the biggest reasons for filing for bankruptcy and bad credit ratings. Get life insurance to at least cover funeral costs and cover bills for a few months.

3. Pay down debt – A balanced budget should consist of no more than 15% of your monthly income to pay monthly debt such as credit cards or student loan (this can vary based on your income and does not include rent or mortgage). Start small and pay off small bills first then work your way up to pay off larger debts. Double the minimum monthly payments when you can to pay down debt faster.

4. Create a budget or spending plan – create a budget and write down all of your monthly expenses and bills and your total monthly income to quickly see what you are spending your money on. Find ways to reduce expenses. Include savings goal in your budget and save enough money to cover at least 3 to 6 months worth of expenses.

5. Reduce Expenses – reduce your expenses one step at a time. Start small by taking your lunch to work, skipping that Starbucks Latte and bringing your coffee from home, use coupons or buy items on sale to save money. All these little things add up and will give you extra money to pay bills or pay down debt.

6. Don't avoid overdue bills. Many companies are desperate for money and may not follow the proper procedures to collect on a debt. They may file for judgment against you without ever notifying you. Call your creditors right away to setup payment plans to get current on old bills and prevent harassing calls or letters and damage to your credit report

Following these 6 tips will ensure you survive the current recession.

Check Out My Interview in the September Issue of Essence Magazine

Check Out My Interview in the September Issue of Essence Magazine page 108.

Harrine Freeman

Speaking to a Customer Service Rep May Cost You

Many people have complained over the years about dealing with a computer generated voice to answer questions or direct you to a customer service agent. Many companies opted to transfer calls to India or to other countries overseas to supposedly "save the company money". Other customers opted to use the http://gethuman.com/ website to find ways around the continual maze to reach a customer service agent for customers living in the US, England and Canada.

Well, now companies are fighting back. Some companies will now start charging a $5 fee if a customer would like to speak to a customer service representative or go to a customer service center to pay a bill or ask a question.

Some utility companies have eliminated the option of paying bills in person and have opted to use third party payment centers that will charge a fee that could be more than $5.

TMobile, Cablevision Systems and Cox Commmunications charges customers a $5 fee to speak to a customer service representative to pay a bill by phone. AT&T Wireless charges customers a $5 fee if they prefer to use a store clerk to make a bill payment instead of using a self-service kiosk. Comcast, Charter, Verizon Wireless and Verizon Telecommunications charge a smaller fee to pay a bill in person.

This election year is a critical year. This is the time to complain about issues that affect you, besides the main issues such as healthcare, the Iraq war, the housing crisis and the economy you can also complain about smaller issues such as how companies are taking advantages of customers charging outrageous fees to pay a bill by phone, if a bill is paid late, etc.

Write the company and complain, write your city council representative and write your congressman and let your voice be heard. You can also file a complaint against the cell phone and telephone companies with the Federal Trade Commission.

To avoid the fees you can pay your bill online but find out the security measures in place before signing up. Find out if your personal information will be encrypted, where it is stored and what happens if a security breach occurs - how are customers protected, etc.

You also have the option of switching companies and doing business with a company that doesn't show outrageous fees.

Decide on the option that is best for you.

Looking for People in Debt Aged 18-34 For Documentary

Taken from Peter Shankman

Current TV's (www.current.com) news department is producing a
half-hour documentary on young people in debt, how the economy
crisis is affecting us, and what our futures look like. The show
will be a look at various 18-34 year-olds around the U.S. who talk
about their experiences with moneywhether they are in debt or
trying to change their lifestyle so that they dont fall into debt.

We are trying to cover all ages and most major regions of the
country, and we are looking for someone who 1/lives in one of the
southern states, 2/ is between the ages of 27-34, 3/ is female, 4/
is not white, and 5/ in debt.


You can send all responses to:

Tracey Chang
Producer, Current TV
tchang@currentmedia.com

Or feel free to call:

office: (323) 308-4957
cell: (310) 980-5711

Current TV is a new cable network that airs in 50 million homes
around the U.S. and 12 million homes in the U.K. We also just
recently launched in Italy. Our network airs mostly news and
non-fiction programming for a target audience of 18-34 year olds.
You can learn more about our network at www.current.com

Upcoming Events

August 2008
August 23, 2008, Meet & Greet, Borders, 3304 Crain Hwy, #A, Waldorf, MD, 2-4pm

August 30, 2008, Interview with United Black Writers, Borders, Bowie, MD, 10am

September 2008
September 15, 2008, Financial Contributor, Heaven 1580AM, Todd B./The Breakdown, Lanham, MD 7am

September 16, 2008, Budgeting Basics Seminar, CAAB, 1801 K Street NW, Suite M100, Washington, DC

September 17, 2008, Credit Basics Seminars, Jin Lounge, 2014 14 Street NW, Washington, DC 6-9pm

September 20, 2008, Northern Virginia Community College, Fall Festival, Alexandria, VA, 11-3pm

September 26, 2008, CBC Author's Pavilion, Meet, Greet & Booksigning, Washington Convention Center, Exhibit Hall A Washington, DC, 1-3pm

September 27, 2008, Women's Empowerment Conference, Morgan State University, noon-1:15pm

September 27, 2008, Baltimore Book Festival, Booksigning, Baltimore, MD, 5-6pm

5 Ways to Keep Your Job

The number of unemployment claims of Americans laid off rose to 455,000 last week. This is the highest number of claims received since March 2002. Due to the recession, many companies are reducing benefits, work hours and laying off employees to cut back. Economists expect another series of layoffs by the end of this year. Here are 5 ways to keep your job and protect yourself from being laid off.


1. Update Your Resume. Update your resume and be sure to include all accomplishments you have achieved so far. Recruiters look for results so be sure to highlight yours.

2. Take a class. Take training classes related to your specific job to further your education. Keep your certificates in a file and provide a copy to your supervisor and Human Resources Department.

3. Volunteer. Volunteer for extra work assignments or to stay late to assist co-workers or your supervisor with high priority tasks. Ensure you supervisor is made aware of your hard work.

4. Feedback. Ask your co-workers and supervisor on feedback about your personality, strengths, weaknesses, and suggestions for improvement. Develop a personalized improvement plan and set deadlines to achieve each goal. Every 6 months provide a copy to your supervisor. This will be helpful if you receive annual performance reviews.

5. Work Ethic. Don't "borrow" or steal office supplies from work. Don't talk negatively about co-workers or your supervisor; you never know who may overhear you. Always arrive to work on-time and don't take regular extended lunch breaks or frequent days off. Limit internet use at work and use your cell phone for personal calls. Familiarize yourself with your Human Resources Manual or policies and ensure you are following them.

5 Inexpensive Foods To Slash Your Grocery Bill

During this recessions, Americans have been battling money issues and struggling to find money to pay for basic necessities. Gas for your car, housing and food are the major factors that have caused Americans to struggle.

If you are on a tight grocery budget, you know that you have to find creative ways to make you dollar stretch. Since last year, the price of dairy, bread and other products have increased. You can use coupons, buy items on sale, buy in bulk or shop at wholesale or discount stores like Costco, Food Lion or Sam’s Club to help save on grocery costs. If you eat out every day or multiple times a week, reduce that by 30-50% to save money. Try bringing your lunch to work or bringing your coffee from home and skipping the Starbucks. You can also purchase some inexpensive foods to cut grocery costs. Here are 5 foods that will help you save money.

1. Breakfast. Instead of buying sugar-coated cereal, replace with oat cereal or oatmeal along with a piece or fruit or toast.

2. Potatoes. Buy whole potatoes instead of instant potatoes. You can use the potatoes to make potato salad, mashed potatoes, baked potatoes, french fries, chips, sweet potatoes, pies, and more.

3. Nuts. Nuts can be used as a great snack instead of candy or junk food. Nuts are also healthy for you and are cheaper when bought still in their shell.

4. Fruit. Inexpensive fruits depending on the store can include watermelon, bananas and apples. They are also healthy for you and can help you lose weight.

5. Vegetables. Instead of buying packaged vegetables or pre-cooked vegetables buy raw vegetables and steam them or stir-fry them for a healthy alternative. Inexpensive vegetables include broccoli, greens, spinach and carrots.

4 Unusual Ways to Get Extra Cash

There are many ways to generate extra cash to: save for an emergency fund, pay down debt, pay for gas for your car or to just pay for basic necessities. Well, here are 4 unusual ways to get extra cash.

1. Hair. If you are a woman with long hair that has never been processed and you plan to get a shorter hairdo, you can donate your hair to Hairtrader.

2. Advertising. You can place an ad on a part of your body such as your face, neck, head or arms to help promote a business with companies such as eBay or Globat.

3. Donate Your Eggs. You can donate your healthy eggs for up to $2,500. Contact the Society for Assisted Reproductive Technology (SART) for more information. If you are up to it, you can become a surrogate mother for up to $25,000. Contact the Center for Surrogate Parenting for more information.

4. Participate in Studies. You can participate in studies for extra cash or donate your blood for science research. Contact Biotrax International for more information.

Bad Decisions to Eliminate Debt

Risky Solutions to Debt Elimination
Taking short cuts can lead to compounding woes

Taken from blackenterprise.com

By Zakiyyah El-Amin
August 1, 2008 -- If you are like most people, managing your finances isn't easy in today’s volatile market. As talk of recession threatens the U.S. economy, consumers are burdened with incomes that fail to keep up with inflation and expenses that continue to mount. Desperate for alternative ways to pay down debt, many rely on quick-fix solutions that often cause more harm than good.

Harrine Freeman, founder of H.E. Freeman Enterprises, believes that most people are simply trading one form of debt for another. “If you are already irresponsible with spending money, resorting to fast ways to get money is only a band-aid over the sore.”

The Bethesda, Maryland-based firm helps clients achieve their financial goals and educates them on how to prevent from falling trap to pricey habits. Freeman highlights a few common mistakes that can lead to further debt.

Use of Home Equity Loans
Many rationalize that this is effective because most home equity loans carry lower interest rates than credit cards and have interest that’s generally tax deductable. Understand that unsecured debt, such as credit cards, becomes tied to your home once this type of loan is used to pay it off. If you experience difficulties in making payments, you could default on the loan and risk losing your home. Since the amount that you can borrow is based upon your home’s value, as the value of your home decreases, so does your equity.

“Most people get a false sense of security once the debt is paid and end up accumulating more unsecured debt and putting themselves further in the whole,” Freeman adds.

Withdrawal from Retirement Plans
Tapping into your 401(k) jeopardizes your financial future. When you take money out of your retirement plan, you no longer benefit from tax-deferred compounding on the money withdrawn. Consequently, you have less money in your account working for you, which can lead to a smaller nest egg upon retirement. In addition, if you leave your job, you’re obligated to pay back the entire borrowed amount generally within 30-60 days. If you don’t, the unpaid balance will be treated like a distribution and you’ll owe taxes on the money and be charged a penalty.

Credit Card Cash Advances
Owning plastic comes with many bells and whistles. Credit card companies entice consumers with added features such as fraud protection, rewards, even cash. However, the likelihood of falling deeper into debt when using cash advances far outweighs the convenience of fast cash. If you pay off your balance in full at the end of the cycle, there’s no problem. Few understand that payments made to the credit card will first go toward regular purchases. Since cash advances carry higher interest rates than credit cards, problems arise when balances are carried over and both interest and fees compound.

Use of Debt Consolidation Loans

Debt consolidation is usually regarded as a credit cure-all that replaces multiple loans with a single loan resulting in lower monthly payments. However, the majority of consolidation loans only extend the pay-off period and do not carry lower rates. Since interest on consolidation loans is often higher than personal loans, mortgages and home equity loans, you actually owe more in the long run.

If you consolidate your loans, Freeman advises to use caution. “Many [debt consolidation agencies] are flooded with scams, and lenders who charge exorbitant fees and offer no real solutions to your debt,” she says. Some consolidators add fees directly to your monthly debt payments, without notifying borrowers of the charges. To help deal with debt, Freeman recommends that consumers establish a budget, develop a debt management plan, and consider credit counseling. Most importantly, use common sense by not spending money you do not have.