Some businesses are losing sales and are considering filing for bankruptcy or dissolving their business due to the recession. However, many businesses are thriving with increased sales and taking advantage of consumers needs. One such example is companies that provide rent-to-own merchandise.
Many of these companies are doing more advertisements to attract customers. Aaron's has 1,575 stores and had 1st Quarter 2009 sales of 474 million. Rent-A-Center also known as Rentway had 1st Quarter 2009 sales of 728.2 million. Just think if half of those customers changed their lifestyle and their spending habits and paid down their debt which helps to increase your credit score, that money could be used to start a savings account, start a retirement account, purchase a home or more importantly buy items with cash. Instead of going to a rent-a-center store to buy a tv you could go to Best Buy, comparison shop online at Amazon.com or go to a thrift store to get a good deal.
Many rent-a-center stores know how to find their customers and customize advertisements to attract the customers they are looking for. Managers sometimes attend local events with customers to help them determine if a customer has lost their jobs. Some stores also ask for references to determine if the customer will make their monthly payments. Some managers attend their customer's churches, get to know their customer's backgrounds, talk to their employers or ask about their financial status. All of this information is used to help make a sale and ensure that customers can continue to make their monthly payments.
Purchasing items from rent-a-center store can cost you 2 to 3 times the original cost of the item and in some cases the items are used or could be damaged. You can prevent all of this by only buying items that you can afford. Here are 5 ways to help find the best deal without having to lease a purchase.
1. Research. Do research on the item you wish to purchase. If you are looking for a tv, look for customer reviews or ask family or friends what brand they purchased and if they are happy with their purchase. Use that information to help find a brand the meets your requirements so you are able to make a wise purchase based on quality not merely on price.
2. Compare. Do comparison shopping at different stores – thrift stores, outlet stores, discounts stores or online. Spend at least 20 minutes comparison shopping. For every 5-10 minutes spent comparison shopping you save $1-$9. You can also buy used items to save money.
3. Buy Later. If you see something you want to buy but don't have the cash or have bad credit, save your money and then go purchase the item. If you absolutely have to have the item when you see it wait a few days, then go back to the store. See if the item is marked down or ask a sales clerk when the item will go on sale. Then compare that price with other stores to get the best deal.
4. Use competitors. Go to a store and comparison shop. Then go to a competitor store and tell them you found a cheaper price at their competitors store and ask them to match that price or offer a lower price. Some stores do this such as the Room Store, Target, Wal-Mart, etc. See which store gives you the best deal.
5. Needs vs. wants. You should buy more needs instead of wants. There should be a balance, if you are buying more items that you want then reevaluate your spending habits. Only buy items that you can pay cash for or that are within your budget. That designer purse or designer pair of jeans is not a need. The only 3 basic needs are food, clothing and shelter, and I'm adding a 4th - one prescriptions.
Used is the new "new" and "new" is the new "old".
Sunday, June 28, 2009
Thursday, June 25, 2009
6 Tips to Buy A Home
June is National Home Ownership Month. When owning a home you need to create a budget or spending plan to help manage your finances to make sure you can stay in your home for as long as you like and reduce the chances of filling for bankruptcy or foreclosure.
Your mortgage payment should be no more than 38% of your total monthly income. This will ensure that you do not live above your means and have extra cash to pay for unexpected expenses and reduce the chances of using a credit card and going into debt.
Before you buy a home you need to prepare for the home buying process. Estimate your monthly mortgage payment. Subtract the difference of the estimated monthly mortgage payment and your current rent (if you pay rent). The advantages of renting are:
1. No costs associated with maintenance except for condos
2. Easier to maintain
3. Reduced financial responsibility
The disadvantages of renting are:
1. No tax benefits
2. No equity
3. No say in rental increases
Here are 6 tips to help you buy a home.
1. Find the best loan
2. Use home buying programs
3. Find a home and make an offer
4. Get a home inspection
5. Shop for homeowners insurance
6. Prepare for settlement and closing
Your mortgage payment should be no more than 38% of your total monthly income. This will ensure that you do not live above your means and have extra cash to pay for unexpected expenses and reduce the chances of using a credit card and going into debt.
Before you buy a home you need to prepare for the home buying process. Estimate your monthly mortgage payment. Subtract the difference of the estimated monthly mortgage payment and your current rent (if you pay rent). The advantages of renting are:
1. No costs associated with maintenance except for condos
2. Easier to maintain
3. Reduced financial responsibility
The disadvantages of renting are:
1. No tax benefits
2. No equity
3. No say in rental increases
Here are 6 tips to help you buy a home.
1. Find the best loan
2. Use home buying programs
3. Find a home and make an offer
4. Get a home inspection
5. Shop for homeowners insurance
6. Prepare for settlement and closing
Monday, June 22, 2009
What Did You Buy Today - A Need or a Want
Advertisers make consumers believe anything can be bought instantly with the swipe of a credit card and lure consumers into store with false advertisements, sales and other gimmicks to buy things they can't afford or simply don't need. Most Americans buy more of things they want instead of more of things they need which leads to bad credit, late fees, bad spending habits, maxed out credit cards and filing for bankruptcy.
A need is something you have to have to survive – food, clothing (non-designer and shelter). A want is everything else, something you would like to have but don't really need. Create a list of things you buy and identify each item as a need or want. If you have more wants in your list then you need to change your spending habits and buy less of the items in the want column. Here are 5 tips to consider when shopping to help think in terms of needs vs. wants.
1. Do you convince yourself that the item you purchased is a need when it really is something you want?
2. Do you rationalize that you work hard everyday and deserve nice things and you should be able to buy whatever you want?
3. Do you buy an item with your credit card even though you know you don't have the money to pay the credit card bill when it arrives?
4. Do you go shopping with a credit card or with cash?
5. Do you buy more of things you want instead of things you need?
Buying more wants than needs can cause you to live above your means and leads to bad spending habits. Now is the time to develop good spending habits and reduce money spent on things you want. Buying wants should be done in moderation and only when you have the cash to buy the item. This will also help you to have a balanced budget. So, the next time you go into a store and pick up an item to buy ask yourself – is this a need or a want?
A need is something you have to have to survive – food, clothing (non-designer and shelter). A want is everything else, something you would like to have but don't really need. Create a list of things you buy and identify each item as a need or want. If you have more wants in your list then you need to change your spending habits and buy less of the items in the want column. Here are 5 tips to consider when shopping to help think in terms of needs vs. wants.
1. Do you convince yourself that the item you purchased is a need when it really is something you want?
2. Do you rationalize that you work hard everyday and deserve nice things and you should be able to buy whatever you want?
3. Do you buy an item with your credit card even though you know you don't have the money to pay the credit card bill when it arrives?
4. Do you go shopping with a credit card or with cash?
5. Do you buy more of things you want instead of things you need?
Buying more wants than needs can cause you to live above your means and leads to bad spending habits. Now is the time to develop good spending habits and reduce money spent on things you want. Buying wants should be done in moderation and only when you have the cash to buy the item. This will also help you to have a balanced budget. So, the next time you go into a store and pick up an item to buy ask yourself – is this a need or a want?
Friday, June 19, 2009
Upcoming Events
June 2009
June 10, 2009, Michael Baisden Radio Show, Affordable Education for College Students, 4:05pm CST/5:05PM EST
June 17, 2009, Maverick Media Radio Show with S.B. Redd, 10pm
June 22, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 2009
July 6, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 8, 2009, Financial Panelist, Cathy Hill Show
July 20, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 31, 2009, National Black Book Club Conference, Financial Seminar and Booksigning, Atlanta Marriott Marquis, Atlanta, GA
August 2009
August 1-2, 2009, National Black Book Club Conference, Financial Seminar and Booksigning, Atlanta Marriott Marquis, Atlanta, GA
August 3, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
August 4, 2009, Credit Seminar, CAAB, 1801 K Street, NW, Washington, DC, 6:30-8:00pm
August 17, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
August 31, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
September 2009
September 12, 2009, Booksigning, Borders, 921A Capital Center Boulevard, Largo, MD, 4-6pm
September 14, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
September 19, 2009, Panelist, Wisdom, Wealth and Wellness Program, Reginald Lewis Museum, Baltimore, MD
June 10, 2009, Michael Baisden Radio Show, Affordable Education for College Students, 4:05pm CST/5:05PM EST
June 17, 2009, Maverick Media Radio Show with S.B. Redd, 10pm
June 22, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 2009
July 6, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 8, 2009, Financial Panelist, Cathy Hill Show
July 20, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
July 31, 2009, National Black Book Club Conference, Financial Seminar and Booksigning, Atlanta Marriott Marquis, Atlanta, GA
August 2009
August 1-2, 2009, National Black Book Club Conference, Financial Seminar and Booksigning, Atlanta Marriott Marquis, Atlanta, GA
August 3, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
August 4, 2009, Credit Seminar, CAAB, 1801 K Street, NW, Washington, DC, 6:30-8:00pm
August 17, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
August 31, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
September 2009
September 12, 2009, Booksigning, Borders, 921A Capital Center Boulevard, Largo, MD, 4-6pm
September 14, 2009, Financial Contributor, Sheena Caroll Show, GEMS Bahamas, 6:30am
September 19, 2009, Panelist, Wisdom, Wealth and Wellness Program, Reginald Lewis Museum, Baltimore, MD
Tuesday, June 16, 2009
What the CARD ACT Means For Consumers
The Credit Card Accountability, Responsibility, and Disclosure Act (CARD) has been floating around Congress for several years. In 2005 it was called S499 but died, in 2007 it was called HR1461, in 2008 it was called S3252 and it was finally approved on May 22, 2009 by President Obama as S414.
The Act provides the most significant changes to the credit card industry since 1969. President Obama stated the act will "restrict practices he says contributed to consumers' financial problems during the recession. We're not going to be giving people a free pass and we expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives."
The Act is a huge win for consumers and college students who have been victims of the unfair practices of credit card companies. A few highlights of the Act are:
1. Banning unfair rate increases
2. Prevents fee traps
3. Requires easy explanation of disclosures
4. Statements will tell consumers how long it will take to pay off a balance by making only the
minimum monthly payment
5. Eliminate credit card rate hikes
6. Provide credit card agreements online
7. Consumers will be mailed statements 21 days before the due date
8. Payment dates will no longer be shifted
9. Consumer approval required for over-the-limit transactions
10. Restrictions on interest rates and credit cards offered to college students under age 21 without
verifying employment or getting parent's permission
Unfortunately the Act does not put a cap on credit card interest rates so interest rates can still increase but consumers will have to be notified before the rate increase becomes effective.
This Act will provide a more level playing field allowing consumers to shop around for the best deal and hopefully offer a more competitive market instead of the market being dominated by a few top banks and credit card companies.
Make sure you read everything that comes in the envelope with your statement each month and if you don't understand something contact the credit card company right away. If you feel you are being a victim of unfair practices notify the company and file a complaint with the Federal Trade Commission or your state Consumer Affairs Office.
The credit card companies are waiting for you to mess up or throw away something that you should have read, don't let them win.
The Act provides the most significant changes to the credit card industry since 1969. President Obama stated the act will "restrict practices he says contributed to consumers' financial problems during the recession. We're not going to be giving people a free pass and we expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives."
The Act is a huge win for consumers and college students who have been victims of the unfair practices of credit card companies. A few highlights of the Act are:
1. Banning unfair rate increases
2. Prevents fee traps
3. Requires easy explanation of disclosures
4. Statements will tell consumers how long it will take to pay off a balance by making only the
minimum monthly payment
5. Eliminate credit card rate hikes
6. Provide credit card agreements online
7. Consumers will be mailed statements 21 days before the due date
8. Payment dates will no longer be shifted
9. Consumer approval required for over-the-limit transactions
10. Restrictions on interest rates and credit cards offered to college students under age 21 without
verifying employment or getting parent's permission
Unfortunately the Act does not put a cap on credit card interest rates so interest rates can still increase but consumers will have to be notified before the rate increase becomes effective.
This Act will provide a more level playing field allowing consumers to shop around for the best deal and hopefully offer a more competitive market instead of the market being dominated by a few top banks and credit card companies.
Make sure you read everything that comes in the envelope with your statement each month and if you don't understand something contact the credit card company right away. If you feel you are being a victim of unfair practices notify the company and file a complaint with the Federal Trade Commission or your state Consumer Affairs Office.
The credit card companies are waiting for you to mess up or throw away something that you should have read, don't let them win.
Saturday, June 13, 2009
Your New Best Friend - A Budget
Many people don't know how to create a budget or spending plan and don’t know where to start. The first step to getting out of debt is by creating a budget. Creating a budget shows accountability for your spending and shows you how much you have coming in and how much you have going out. It identifies your SEO – what you spend, what you earn, and what you owe.
Make your budget flexible so you have "wiggle" room for unexpected expenses. If you don't have an emergency fund or savings to cover those unexpected expenses you can see right away what areas in your budget you need to reduce spending instead of using a credit card to pay for those unexpected expenses. Most people don't think about how much money they spend per week or per month but when you see all of your expenses written down it provides greater insight into your spending habits.
The first step is to determine if there are some areas where you are spending too much money, you want to have a balanced budget and make sure you don't spend too much money in any one area of your budget. Develop financial goals for yourself when creating your budget. Financial goals encourage you to work towards reaching that goal and provides a sense of accomplishment when the goal is met. Some examples of financial goals are: pay off a credit card, buy a home, take a vacation, etc.
Being debt free is hard work, requires discipline and reduces your anxiety and stress about your financial situation. Many things are possible when you are debt free and live on a budget. Determine if you want to live the rest of your life as a borrower or as a lender. It's up to you!
Make your budget flexible so you have "wiggle" room for unexpected expenses. If you don't have an emergency fund or savings to cover those unexpected expenses you can see right away what areas in your budget you need to reduce spending instead of using a credit card to pay for those unexpected expenses. Most people don't think about how much money they spend per week or per month but when you see all of your expenses written down it provides greater insight into your spending habits.
The first step is to determine if there are some areas where you are spending too much money, you want to have a balanced budget and make sure you don't spend too much money in any one area of your budget. Develop financial goals for yourself when creating your budget. Financial goals encourage you to work towards reaching that goal and provides a sense of accomplishment when the goal is met. Some examples of financial goals are: pay off a credit card, buy a home, take a vacation, etc.
Being debt free is hard work, requires discipline and reduces your anxiety and stress about your financial situation. Many things are possible when you are debt free and live on a budget. Determine if you want to live the rest of your life as a borrower or as a lender. It's up to you!
Wednesday, June 10, 2009
Another Reason to Use Cash
Over the Memorial Day Weekend, one million Starbucks customers were overcharged. Those overcharged used their debit cards were charged twice. Their receipts were correct but the money was taken out of customers bank accounts twice. Starbucks has since reimbursed most customers but some customers have not yet been reimbursed.
This event is even more reason why it is so important to verify your bank accounts. The fee for an overdrawn bank account ranges from $29-$35 depending on the bank. Also, you risk the chance of having the overdrawn account reported on your credit report which can lower your credit score. It is better to pay for items with cash instead of using a debit or credit card for everyday purchases. Here are 4 ways to ensure you are not overcharged when using a debit card.
1. Read the agreement. Read the policy agreement for your debit card to determine the course of action if you are overcharged on your account.
2. Reconcile. Verify your bank accounts weekly if not daily. Keep all of your receipts and verify them with your monthly statements to check for errors.
3. Use like a credit card. Use your debit card for occasional purchases or for unexpected expenses.
4. Pay with Cash. Pay for items with cash. You don't have to worry about having an overdrawn account. This also helps you to be more accountable and spend less frequently. There is something about a swiping a card that makes consumers want to spend.
This event is even more reason why it is so important to verify your bank accounts. The fee for an overdrawn bank account ranges from $29-$35 depending on the bank. Also, you risk the chance of having the overdrawn account reported on your credit report which can lower your credit score. It is better to pay for items with cash instead of using a debit or credit card for everyday purchases. Here are 4 ways to ensure you are not overcharged when using a debit card.
1. Read the agreement. Read the policy agreement for your debit card to determine the course of action if you are overcharged on your account.
2. Reconcile. Verify your bank accounts weekly if not daily. Keep all of your receipts and verify them with your monthly statements to check for errors.
3. Use like a credit card. Use your debit card for occasional purchases or for unexpected expenses.
4. Pay with Cash. Pay for items with cash. You don't have to worry about having an overdrawn account. This also helps you to be more accountable and spend less frequently. There is something about a swiping a card that makes consumers want to spend.
Sunday, June 07, 2009
7 Reasons to Pay On Time
The recession has caused many Americans to become unemployed; the current unemployment rate is 9.4%. Being unemployed has a domino effect, many Americans lost their homes, their health insurance coverage, cars, stability, spouses, their pride and more.
Loss of a job also causes Americans to make late payments, overdraw on their accounts and search for unconventional ways to make ends meet. For those Americans who had not made late payments, you may be rewarded.
I have one credit card with my credit union and have been a member for over 10 years. I recently lost my credit card and while reporting my lost credit card I was asked if I wanted a credit limit increase. This was done without a credit check my limit was increased $1,000. I have not made a late payment in over 10 years that may be a rare thing in this economy. I was happy to be rewarded for being a good customer and my credit limit is still under $10,000. Here are 7 benefits of paying your credit card bills on time.
1. Fees. If you pay your credit card balances in full each month you don't have to pay finance charges or late fees which saves you money.
2. Credit score. If you pay your credit card bills on time this helps to increase your credit score over time.
3. Bank relationship. Paying your credit card bills on time helps to maintain a good relationship with your credit card company and they will be more willing to work with you if you have a financial crisis in the future.
4. Discounts. Paying your credit card bills on time will afford you rewards such as: credit limit increases, a decrease in interest rates, discounts, incentives, promotions, and other offers.
5. Options. Paying your credit card bill on time allows you to choose from various payment options: online, automatic deduction, by mail, or over the phone. When making late payments you have to send your payment overnight or pay over the phone which will cost you more money.
6. Future. Paying your credit card bills on time makes you look more favorable if you wish to buy a home in the future.
7. Reduces stress. Paying your credit card bills on time prevents creditors calling you asking for a payment and reduces the stress or worry about how you will make your payments.
Loss of a job also causes Americans to make late payments, overdraw on their accounts and search for unconventional ways to make ends meet. For those Americans who had not made late payments, you may be rewarded.
I have one credit card with my credit union and have been a member for over 10 years. I recently lost my credit card and while reporting my lost credit card I was asked if I wanted a credit limit increase. This was done without a credit check my limit was increased $1,000. I have not made a late payment in over 10 years that may be a rare thing in this economy. I was happy to be rewarded for being a good customer and my credit limit is still under $10,000. Here are 7 benefits of paying your credit card bills on time.
1. Fees. If you pay your credit card balances in full each month you don't have to pay finance charges or late fees which saves you money.
2. Credit score. If you pay your credit card bills on time this helps to increase your credit score over time.
3. Bank relationship. Paying your credit card bills on time helps to maintain a good relationship with your credit card company and they will be more willing to work with you if you have a financial crisis in the future.
4. Discounts. Paying your credit card bills on time will afford you rewards such as: credit limit increases, a decrease in interest rates, discounts, incentives, promotions, and other offers.
5. Options. Paying your credit card bill on time allows you to choose from various payment options: online, automatic deduction, by mail, or over the phone. When making late payments you have to send your payment overnight or pay over the phone which will cost you more money.
6. Future. Paying your credit card bills on time makes you look more favorable if you wish to buy a home in the future.
7. Reduces stress. Paying your credit card bills on time prevents creditors calling you asking for a payment and reduces the stress or worry about how you will make your payments.
Thursday, June 04, 2009
5 Ways to Keep Debt Manageable
Many people live above their means, shop on impulse or have no idea how much debt they owe. We are a debt loving society and because of our bad spending habits many Americans haven't gotten into so much debt they do see any way out. The first step to getting out of debt is to admit that you have a problem. Then you need to make some sacrifices. Change doesn't happen overnight and getting out of debt won't happen overnight either. Here are 5 ways to keep your debt manageable.
1. Create a spending plan or budget
2. Pay balances in full each month
3. Use automatic deduction or online bill payment
4. Use your credit card like a debit card
5. Pay loans off in 3 years or less
6. Pay mortgage loans off early
1. Create a spending plan or budget
2. Pay balances in full each month
3. Use automatic deduction or online bill payment
4. Use your credit card like a debit card
5. Pay loans off in 3 years or less
6. Pay mortgage loans off early
Monday, June 01, 2009
If You Can't Pay Ask for Forgiveness
Many college students are struggling to pay back student loan debt due to lower paying jobs and difficulty in finding a job in this economy. The average college student graduates with over $20,000 in student loan debt and many also have credit card debt.
It can take an entire lifetime to pay back student loan and credit card debt if you just send in the minimum monthly payment. Some common solution are to live below your means, work multiple jobs, work overtime or live at home with your parents for as long as possible. However, there is another alternative, student loan forgiveness programs.
High school math and science teachers, and elementary and high school special education teachers who agree to work in low-economic areas for five years can get up to $17,500 forgiven in Stafford loans. The teachers have to teach full time for five consecutive years.
Visit the U.S. Department of Education website and complete the Cancellation and Deferment Option for Teachers form to see if you qualify.
The Office of Personnel Management (OPM) offers a Federal Student Loan Repayment Program the allows any federal agency to forgive up to $10,000 annually for your federal student loans up to a maximum amount of $60,000. For further details call OPM at 202-606-1800 or visit their website.
You can do volunteer work by joining the AmeriCorps, Peacecorps, or Vista. You can also get a job in a public service industry such as military service, public health, social work, emergency management, government, public safety, law enforcement, public interest law services, or child care.
If you have a Perkins loan you can have the loans discharged if you served in the U.S. Armed Forces. If you served in a hostile area or war area you can get fifty percent of your Perkins loans forgiven. More information about student loan forgiveness programs can be found at the FinAid website.
It can take an entire lifetime to pay back student loan and credit card debt if you just send in the minimum monthly payment. Some common solution are to live below your means, work multiple jobs, work overtime or live at home with your parents for as long as possible. However, there is another alternative, student loan forgiveness programs.
High school math and science teachers, and elementary and high school special education teachers who agree to work in low-economic areas for five years can get up to $17,500 forgiven in Stafford loans. The teachers have to teach full time for five consecutive years.
Visit the U.S. Department of Education website and complete the Cancellation and Deferment Option for Teachers form to see if you qualify.
The Office of Personnel Management (OPM) offers a Federal Student Loan Repayment Program the allows any federal agency to forgive up to $10,000 annually for your federal student loans up to a maximum amount of $60,000. For further details call OPM at 202-606-1800 or visit their website.
You can do volunteer work by joining the AmeriCorps, Peacecorps, or Vista. You can also get a job in a public service industry such as military service, public health, social work, emergency management, government, public safety, law enforcement, public interest law services, or child care.
If you have a Perkins loan you can have the loans discharged if you served in the U.S. Armed Forces. If you served in a hostile area or war area you can get fifty percent of your Perkins loans forgiven. More information about student loan forgiveness programs can be found at the FinAid website.
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