Fight High Gas Prices With a Gas Challenge

If you notice that every year during election season gas prices slowly start to increase and reach a peak in the summertime because many Americans travel during the summer. Gas prices start to decrease right before or right after November elections.

One reason for the high prices now is due to the conflict with Iran who has threatened to disrupt oil shipments due to the European Union sanctions because of Iran’s nuclear program which has caused the price of crude to drastically increase.

Another reason for the high gas prices is due to the decrease in the unemployment rate and improved housing market. Gas and oil prices have increased because the powers that be assume that since the economy is improving and people are spending more money they have more money to spend on gas and other items which is just speculation and a farce.

People are spending more money because products and services costs more than they did 1 or 2 years ago such as food, clothing, housing, college tuition and other items that are continuing to increase in price. High gas prices put more strain on Americans families and small business owner who are already struggling to make ends meet.

The European Union’s bailout adds to the worldwide demand for fuel. Alaskans are paying $4.40 per gallon, Chicago and Hawaii pay $4.50 per gallon and Tulsa and Wyoming pay $3.50 per gallon. To help ease the burden of high gas prices put yourself on a gas challenge by following these 14 tips:

1. Determine the number of miles it takes you to go everywhere you drive including infrequent trips or one-time trips even if it just down the street.
2. Calculate the number of miles per gallon your car gets
3. Calculate the cost of gas required each time you drive your car and calculate the total amount of gas needed for driving for a week including the weekends.
4. Compare the cost of taking public transportation each day versus driving each day to work and places you travel the most. Research community buses, carpool, and shared rides.
5. Compare the cost of walking a portion of the distance or walking the entire distance for a destination.
6. Map out the quickest routes when driving and alternate routes that take a little longer. Try to take the quickest routes more often when driving.
7. When driving combine trips in the same area on the same day, i.e. buy gas, go grocery shopping, cleaners, post office, convenience store in the same area to save money on gas.
8. Stop complaining about gas prices if you drive a gas guzzler and buy a more fuel efficient car.
9. Do more than just complain, take action. Contact your Congressman, local city council and other government officials, local newspapers, local radio and news stations and demand oil companies’ lower gas prices.
10. Buy a hybrid car or fuel efficient car.
11. Take public transportation.
12. Walk more often, i.e. walk to work and when shopping.
13. Buy regular gas unless otherwise noted in the manufacturers guide.
14. Compare the time it takes to drive, use public transportation, ride a bike or walk. Use all the data to determine which is most important you: convenience, cost, time, etc. and select the best transportation method.

FICO Score versus Vantage Score

Your credit score it is one of the most critical factors in your financial life. It determines if you will be approved for a loan or line of credit. A credit score is a number developed and calculated by the Fair Isaac Corporation (FICO) that lenders use to rate potential customers in determining the likelihood that a customer will pay their bills on time. Your credit score is used for employment, approval for loans and credit, insurance rates, opening bank accounts and affects critical aspects of your life.

The FICO credit score is determined by using 5 main criteria as defined by MyFico.com: your payment history which accounts for 35% of your credit score, the total amounts owed which accounts for 30% of your credit score, the length of your credit history which accounts for 15% of your credit score, new credit which accounts for 10% of your credit score, and the types of credit used which accounts for 10% of your credit score.

Payment history shows the history of how you paid your bills either on time or late. Amounts owed show the total amount of debt you owe. If your balance is near the credit limit this may lower your credit score. The length of history indicates how long you have had credit. If your credit history is 2 years or less this could lower your credit score. New credit indicates how many times you have applied for new credit.

If you open too many new accounts in a short period of time this may lower your credit score. The types of credit used indicate the types of accounts you have such as revolving or installment accounts. Revolving accounts are usually credit cards and installment accounts are usually mortgage loans, auto loans, personal loans, etc.

The higher the credit score the lower the interest rate you will receive for a loan or line of credit. Having a good credit score can save you thousands of dollars in interest over the life of the loan.

Another credit score that is used is called the Vantage Score which ranges from 501 to 990 and correspond to letter grades with “A” credit ranging from 901–990 and “F” credit ranging from 501–600. The Vantage score is currently available to customers for a nominal fee and can be ordered by calling the three major credit reporting agencies, Experian, TransUnion and Equifax. The scale for the Vantage credit score is: 901-990 A score, 801-900 B score, 701-800 C score, 601-699 D score and 501-599 F score.

Benefits of FICO Scores
1. Starts credit history as soon as a person starts using credit
2. Over half your score consists of payment history and total amount owed
3. Used for approval of loans and credit cards
4. Helps those with established credit history
5. Helps those with at least 2 years of credit history
6. Helps those aged 30-65

Disadvantages of FICO Scores
1. Doesn’t offer credit grades to coincide with credit scores
2. Scores range from 300-850 – a span of 550 points
3. Credit scores may not be the same with each credit bureau
4. Doesn’t consider rental payment history

Benefits of using the Vantage Score
1. Provides consumers with little to no credit or bad credit with more accurate scores
2. Starts credit history as soon as a person starts using credit
3. Uses rental information
4. Helps young adults aged 18-25 and college students
5. Helps those who are recently divorced or widowed
6. Helps those with bad credit or who previously filed bankruptcy

Disadvantages of the Vantage Score
1. You score could decrease, if your FICO score was 720 your score may remain in the 700s using a Vantage score which would give a C grade.
2. Scores range from 501-990 – a span of 489 points.
3. Over half your score consists of payment history and recent credit so you are penalized heavily for having any new credit. The length of credit history weighs less. Available credit only consists of 1% of the credit grade so you can have a credit card maxed out or with high balances and still have a good credit grade.
4. Credit scores may not be the same with each credit bureau.

However, it is up to the lender or company to decide which score they want to use to consider approving you for a loan or credit card.

10 Ways to Reduce Your Cable Bill

One expense that people don’t seem to complain about anymore is paying for cable television service. Cable prices have increased over the years so why do we pay it without complaint.

Over 100 million people have cable or satellite service. The average cable bill is $75 a month. The average cable bill increases 5% every year. The average cost for cable service has tripled over the past ten years.

The top two cable providers are Comcast and Time Warner. There are different prices for internet and cable service. Comcast has promotions available on a quarterly basis that are not publicized.

According to the New York Times, cable subscribers on average pay approximately y $100 a year for sports programming and it doesn’t matter how many games you watch or if you don’t watch any at all. You pay for just having the channel. Most of the money is paid to the NFL. As costs increase for the NFL, those costs will be passed on to the cable companies and then passed on to customers.

As cable company fees increase, the increase is passed on to customers. However, many customers have found alternatives by renting movies, using rental services such as Netflix or Redbox or watching shows on the internet for free.

Cable companies are able to raise prices due to the lack of competition in some areas. The ability of cable companies to raise rates and increase revenues, even with rising programming costs stems from their market power. Cable companies would not be able to raise prices if they did not have monopoly power.

Some cable companies claim the increase in prices is due to system upgrades and better quality. I am still waiting for the better quality. I had better service when television was analog. If you are tired of paying high cable costs here are 10 tips to lower your cable bill:

1. Ask. Asking to reduce my bill worked. I was amazed at how easy it was to get my bill lowered. If you are unable to get it lowered, ask for the cancelation department.
2. Be pleasant. Be pleasant, don’t argue, don’t be rude or raise your voice.
3. Refer to the competition. Refer to specials and discounts offered by competitors.
4. State the facts. Don’t get emotional, just state the facts.
5. Do your research. Do research on discounts and promotions the company may be offering through advertisements or on their website.
6. Look for loopholes. Try negotiating a lower bill by talking to an online representative through chat.
7. Don’t make the first move. Let the company start negotiations and then decide it you will accept the offer or want to negotiate further.
8. Read your contract. Read your cable contract. You may have to give 30 days’ notice before canceling your service.
9. Cancel. If you watch television 10 hours or less a week you should consider canceling your cable service since you have found other ways to spend your time.
10. Write. Write your congressman and demand competition among cable companies in your area to reduce monopolies, lower cable prices and provide quality cable service.

8 Crucial Steps to Filing Your Taxes

Every year Americans have to file their taxes unless they don't earn enough income to qualify having taxes taken out of their income. There are heaps of free tools available to help you prepare your taxes and determine if you will get a refund or owe money.

Some of the most widely used tax preparation tools are Turbo Tax, Tax Cut and Tax Act and tax calculators available on top sites like Bankrate.com, MSN.com or CNN.com/money.

One of the reasons many Americans miss out on claiming deductions or end up owing taxes or is because their financial documents are not in order. Many throw away, misplace receipts or falsify documents because the original documents cannot be located.

Using tax preparation software has all the tax laws imbedded in the tool which makes it easier for you to see what deductions you are eligible to claim. Here are 7 crucial steps to help you get organized and file your taxes.

1. Gather. Gather all receipts, gather monthly, quarterly and yearly statements, medical bills, student loans, credit card statements, prescriptions, financial statements, etc. and place in one easy to find location.
2. Categorize. Categorize all receipts such as medical, loans, financial statements, purchases, business expenses, income, etc.
3. Plan ahead. Avoid waiting until the last minute. You can use an automated tool to track your spending and deductions or use a piece of paper, or Word or software such as Excel or Access to enter your data electronically.
4. Automate. Use a software package like Quicken or Quick Books to record all of your deductions. Use basic column headings: Item, Date Purchased or Sold, Cost, Quantity, Total Cost.
5. Deductions. Identify all items that can be used as itemized deductions and put them in one folder. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. If not, calculate your itemized deductions.
6. Go Green. File your taxes electronically. You will receive your refund in approximately two weeks from the date of filing and you help save the environment.
7. Be Patient. Don't get a tax refund anticipation check or refund anticipation loan. You are charged a fee to get your refund faster than waiting the normal waiting period due to a high interest rate charged for the loan. Save yourself some money.
8. Free Filing. If you salary is less than $57,000 or less you can file your taxes electronically for free.

An Unconscious Expense That Can Be Costly

There are many expenses people have to pay but one expense that is frequently overlooked or not thought about is car repairs due to road conditions. In many states when it snows or rains the conditions of the roads get worse and it seems to take forever for them to be repaired. According to the Federal Highway Administration in 2010, 45% or 150,000 miles of the roads in the US were were not in good condition and 12% or 71,000 of the bridges were in poor condition.

Deficient road conditions cost U.S. drivers $67 billion a year in car repairs and operating costs or an average cost of $335 per driver. The federal gas tax has remained unchanged at 18.4 cents per gallon since 1993 and has not been adjusted for inflation. Revenue from the federal gas tax is used to pay for road repairs. Studies show the damage being done to roads from lack of maintenance is costing drivers more than actually paying a slightly higher tax for gas. The states with the worst road conditions are: Kentucky, Alabama, Pennsylvania, New Jersey, Hawaii, Arkansas, West Virginia, Oklahoma, North Carolina and Louisiana. Some cities with the worst roads are Houtson, Philadelphia, Atlanta, Detroit, Queens, and Washington DC.

According to the annual CarMD Car Health Index if you live in the West from Alaska to Wyoming you will pay more per year for car maintenance. The states with the highest car repair costs are: Alaska, Oregon, Colorado, California and Idaho. The states with the lowest car repair costs Mississippi, DC, Vermont, Indiana and Montana.

According to Consumer Report.org average car maintenance and repair costs are 4% of ownership costs over five years. According to a study by the Automotive Aftermarket Industry Association (AAIA) car repairs cost an average 34% more at car dealerships than at independent repair shops. Car repairs for parts and labor averaged 34.3% more at dealerships, foreign repairs averaged 36.8% more at dealerships and domestic repairs averaged 31.5% dealerships.

The cost to repair a car after hitting a pot hole, a bump, a water sewer cover, unlevel roads, debris, etc. can be as high as thousands of dollars. According to The Road Information Program the annual average repair cost per car due to potholes and bad pavement is estimated at $402. According to the Post-Journal wheel balancing: $10-$20 per wheel. Wheel replacement can range from $50-$500, suspension from range from $1230-$2,000, shock/strut replacement can range from $150 to $1,200 and a wheel alignment can range from $90 - $150 per wheel. The average cost to fix an axle is $350.

Hitting a pothole can result in suspension, wheel , undercarraige and tire damage. Check to see if pothole damage is covered under car insurance before paying out of pocket for the repairs because the deductible which in some cases may be less than the cost of the repair. Here are some tips for AA Insurance regarding potholes:

1. If you hit a pothole stop as soon as possible for a quick check of your car including tires and wheels.
2. If you hit a pothole, document where it is, size and depth if known and take a picture.
3. Report potholes to the county, local or state highway authority.
4. Listen for sounds of damage such as “clonking sounds from the steering and suspension, a slight pull to the left or right in the steering, the steering wheel not centring properly when the car is travelling in a straight line or braking feeling'uneven or the steering wheel or entire car vibrating.
5. If you hit a pothole take your car to a repair shop as soon as possible to verify if there is any damage.
6. Keep all receipts from damage repair to support a car insurance claim.
7. Stay alert for potholes or other road damage and conditions. Use extra caution during rain, snow and road construction. Debris in the roads such as gravel and stones on the road might indicate the presence of a pothole.

Warning: Paying Bills Online

Warning: If you pay your bills online with a debit or credit card the company can automatically setup the payment as a recurring payment even if you never setup it up yourself or you only made a one-time payment.

Before you do business with a company verify their processes and procedures for using a debit or credit card. This also occurs when paying a bill directly from your checking account, i.e. providing your checking account number. This recently happened to me. I closed my online accounts with those companies.

A Messy Purse Equals Messy Finances

Does it take you forever to find something in your purse? Does your shoulder ache from all the stuff you carry in your purse every day? Do you have to pull everything out of your purse to find something? If this sounds like you, you are not alone. I recently just organized my purse which reduces the time it takes for me to find something and I no longer have to pull everything out of my purse to find an item. It never occurred to me to organize my purse even though I organize everything else, my home, my car, my office, etc.

The way you organize your purse is an indication of how you manage your finances. If your purse is organized neatly it shows that you organize your money and your finances as well as your life.
If you keep all of your receipts in your book along with your checkbook but don’t balance your checkbook on a regular basis you risk the chance of having an overdrawn account.

If you keep everything in your purse including receipts from 2 years ago indicates that you are not organized with your money, your finances or your life. Carrying a designer purse may show that you value image and appearance but usually doesn’t provide a lot features to help you keep your purse organized.

If you never have cash or never have enough cash that is a red flag that you need to adjust your spending habits quickly to prevent a financial crisis such as filing for bankruptcy or foreclosure or getting a judgment or tax lien.

If you have purse money in your purse but never know how much or have your money balled up or crinkled up you probably don’t know how much you spend either. This is a warning that you need to create a budget. If you don’t manage the money you have now when you have the ability to earn more you will not be able to manage it which can result in financial problems. Here are 10 ways to organize your purse:

1. Sort your purse as you would sort your bills and financial paperwork
2. Leave unnecessary items out of your purse such as: mail, water bottles, receipts, multiple credit cards, shoes, hats, gloves, hair products, trash, snacks, umbrella, etc.
3. Keep smaller items in a separate bag that you can carry or leave in the trunk of your car.
4. If you have children keep their snacks, toys, etc. in a separate bag.
5. Clean and organize your purse at least once a week.
6. Leave your checkbook, credit cards and debit card at home unless you know you are going to use it. You can keep one credit in your wallet for emergencies.
7. Organization is a trait that carries over into all aspects of your life. If you have a messy purse you probably have a messy home or messy room in your home or a messy car or work area.
8. Keeping your purse organized is a tedious task but it can help you to organize other areas of your life such as: keeping your house clean, organizing your finances, organizing your time, etc.
9. If you can’t manage your purse you can’t manage your finances which make it difficult for you to achieve financial success.

Remember a messy purse equals messy finances so don’t be messy.

17 Ways to Save on Medical Expenses

Each year many Americans file for bankruptcy due to medical debt. Over 40 million Americans do not have health insurance coverage. Many people are uninsured due to the high costs of medical coverage. Many employers only pay a small portion of healthcare costs leaving the remaining expense for the employee.

When a patient has health insurance there is a set limit that hospitals, doctors and other medical professionals can charge for services. Without medical insurance, a patient can be charged whatever fee the doctor or hospital chooses t for services and in some cases may be charged multiple times for the same services. The continual rising high school of medical season is due to the lack of mandated regulations in the health care industry, industry fraud and billing errors.

The United States has the highest incidents of high blood pressure, diabetes, heart attacks, stroke, and cancer. If you do not have health insurance always request an itemized list of the services you received to ensure there are no errors. Here are 17 ways to save on medical expenses.

1. Do research. Verify the medical provider is licensed.
2. Verify the agreement. Verify the agreement you establish with the medical provider in writing and make sure you understand the terms of the agreement.
3. Barter Services. Barter medic al services and goods. ITEX Corp. has 24,000 members where patients can exchange medical good and services for barter dollars but is usually limited to dental or smaller doctor practices. Visit barternews.com site for listings by state.
4. Negotiate with the service provider (doctor or hospital) to get fees reduced or eliminated in exchange for paying the debt.
5. Go to free dental clinics or free medical clinics for free or reduced dental services.
6. Go to a training school for services: dental school, barber school, cosmetology school, etc.
7. Participate in discounted dental programs.
8. Use Flat Fee clinics or sliding fee scale clinics.
9. Use Free or Reduced Healthcare.
10. Receive a Medicare supplement.
11. Buy generic prescriptions and get them filled at discount stores such as Wal-Mart, Target or Walgreens.
12. Manage medical expenses in a Healthcare Savings Account and order your own medical services (blood work, urine sample, etc.). Order test directly from the lab instead of your doctor ordering it for you.
13. HSA for America has a contract with Direct Labs to offer low prices to the HSA for America readers. It is free to join and members can order x-rays, lab tests, MRIs or CT scans.
14. Setup your own Health Savings Account if you employer does not offer one.
15. Participate in clinical trials that provide medication or services for medical issues you are experiencing.
16. Order blood test online and get results in 48 hours.
17. Give back. Refer your medical provider to others on the network or by word of mouth to friends, relatives and co-workers, this can help you negotiate future services needed by the same medical provider.

5 Ways to Replace a Lost Card

One day you realize you lost your credit or debit card and you start to panic. You don’t know what to do. Luckily there are no strict requirements on getting an emergency replacement credit card. Simply call the credit card company and say your credit card was stolen or lost and they will send you a new one. The credit card company or bank immediately blocks the card from future use.

If the card was stolen you are not liable for any future charges provided you reported the loss or theft within 3 business days. The credit card company or bank will inform you that if you find your lost card cut it up and throw it away.

The average time to receive an emergency replacement credit card is 5-7 business days from the date you make the request. If you need money before your card arrives some companies provide you with an emergency cash advance and will work with you to arrange a convenient location to pickup the cash.

The average fee to replace a lost credit or debit card is $5 but not all banks charge a fee. Bank of America may charge a fee for ordering a replacement credit card. PNC charges $7.50 to replace a credit or debit card. Credit unions may charge a fee for a replacement credit card usually $5 to $10. Bank of America charges a fee for requesting a replacement debit card or requesting a rush order for a replacement card.

Here are 5 Ways to replace a lost credit card or debit card

1. Contact the bank or credit card company within 24 hours or as soon as you realize the card is lost. Some companies require you to follow up your emergency replacement card request with a confirmation letter.
2. Go to your local bank and request an emergency replacement debit card which may be quicker than calling the customer service department of the bank.
3. If your address is not updated you will not be unable to quickly receive a replacement card.
4. The credit card company or bank will tell you that if you lost your credit card and find it to cut the old card up and throw it away.
5. Submit a request online however it is probably quicker to make the request by phone.

Prevention

1. Use a virtual wallet or online banking to keep track of purchases with sites such as PlasticJungle.com.
2. Register your credit or debit card for added protection.
3. Store your credit or debit card in a secure location. Shred financial documents.
4. Reconcile financial statements daily or weekly.
5. Know the location of your credit or debit card at all times.
6. Keep your address up-to-date. If you card is lost the company needs to have a current address.
7. Avoid putting your credit or debit card in a loose location such as a coat pocket or outside pocket of a purse where it can easily fall out.
8. Keep a log of all of your credit and debit cards with the account number, toll free number and after hours. If you are traveling out of town carry a copy with you.

Emergency Card Replacement Telephone Numbers

1. Bank of America (800) 732-9194
2. Visa (800) 847-2911 (410) 581-9994
3. Citibank (800) 950-5114 (605) 335-2222
4. Wells Fargo (800) 642-4720
5. Chase (800) 432-3117
6. American Express (800) 964-8542
7. Capital One (800) 955-7070
8. Discover (800) 902-3100
9. MasterCard (800) 627-8372

The Importance of Insurance

According to the Cover the Insured website one of the highest age groups that are uninsured range from ages 21-44. Sixty-one point nine percent (61.9%) of full-time workers are uninsured.

If an unexpected event occurs that causes you to lose your job or become ill you could end up homeless. You should have some type of insurance no matter what your salary. Here are 3 benefits to having insurance:

1. Can be used to reimburse for a loss that occurs
2. Protects against harm to something or someone
3. Saves you money in the future

There are several types of insurance available: life, health, dental, home, auto, fire, flood, credit card insurance, disability (short term and long term), and many more. The basic types of insurance everyone should have are: health, life and disability. All three actually work together. Health insurance is needed if you develop a health condition or need to go to the emergency room.

Disability insurance is used if you have a short-term or long-term medical condition that prevents you from working and ensures that you still continue to receive a paycheck, usually at least 60% of your salary. Life insurance is used in the event a family member dies.

When buying insurance it is best to comparison shop. A website you can use to comparison shop for insurance is www.bankrate.com and www.ehealthinsurance.com. You can visit the Better Business Bureau's website at www.bbb.org to search for companies and view their reliability report. If your employer does not provide health insurance, life or disability insurance you can purchase insurance on your own. Go to ushealthcare.port5.com or ehealthinsurance.com to find information on affordable health insurance.

If you need health insurance for your children visit www.insurekidsnow.gov. For information on disability insurance visit www.about-disability-insurance.com or www.assurity.com. If you cannot afford to purchase insurance make sure you get enough rest, eat well and exercise. Try to get a part-time job to pay for insurance costs.

If you are able to purchase additional types of insurance such as home owner's insurance, auto or fire insurance, it is best to purchase bundled packages or similar insurance policies with the same company (such as insuring multiple cars with the same insurance company). Many companies give you a discount if you purchase multiple products but you have to ask for it. Purchasing bundled packages or multi-line policies can result in a savings of 1% to 20% depending on the company versus buying home owner's insurance with one company and auto insurance with another company.

How to Save Money During the Spring Season

Spring is a time for renewal, getting a fresh start and making changes. Spring is also a great time to catch bargains and save money. Retail stores begin to mark up their prices, gas prices start to increase and consumers start to venture outdoors more.

Food prices have also increased. Prices on corn, wheat, soybeans and sugar have increased 40% or more in the past few months. According to CNN food prices are 2.9% higher than they were a year ago. You can still go shopping but look for ways to save money while making your purchases. Here are 15 tips on how to save money during the spring season.

1. Shopping. If you must go shopping during the spring season wait until retail stores offer sales on off-season items. You can save up to 50% off the regular price. The best items to buy in the spring are linen and handbags.
2. Outdoor. If you like doing activities outdoors shop for off-season items for fall or winter sports such as skis, ski suits, hats, gloves, boots or other items.
3. Free Events. Participate in free activities in your local community by viewing local newspapers and magazines for events that occur during the spring season.
4. Food. Buy in-season items or visit local farmers to get deals on foods. Buy in-season fruits and vegetables such as: mango, pineapple, strawberries, carrots, asparagus, collard greens, mustard greens, spinach, and artichokes.
5. Online. View website such as Groupon or Living Social for discounts and specials. Also visit social media websites for spring season deals.
6. Local. Visit local vendors to get deals on items and help support local businesses in your area.
7. Consignment. Visit consignment shops for clothes brought in by those who have done spring cleaning in their closets.
8. Specials. Setup alerts, subscribe to newsletters or visit websites to purchase gift certificates or gift cards which can be used in the future.
9. Groceries. Use the oven less and prepare meals ahead of time. Pull out the George Forman grill or your gas grill and prepare meat and vegetables on the grill to save on electricity.
10. Utilities. Open the blinds during the day to let heat in if it is cool at night where you live to save on heating costs. If you live in a warm climate open the windows before you go to bed or in the morning to cool off your home. Keep the blinds closed during the day to keep the heat out.
11. Insulate. Make sure you home is properly insulated to prevent heat from escaping through windows and doors and to save money on utility costs. Seal any cracks that appear in your home.
12. Thermostat. Set your thermoset at 78°F when at home and increase the temperature while you are away from home to save money on cooling costs.
13. Use Fans. Use ceiling fans to help circulate air.
14. Maintenance. Schedule regular maintenance for your heating and cooling units.
15. Water Heat. As spring approaches turn down the temperature of your hot water heater and set it to 120°F to lower your heating costs.

Why You Need an Unexpected Fund

Many Americans today don't have an emergency fund or unexpected fund. If you don’t have a savings account you will have to use a credit card or get a payday loan to pay any unexpected expenses.

Your emergency fund is your safety net, in case you get sick or lose your job you can use your emergency savings to hold you for a few months until you can find a new job or to help get over a financial crisis. Your emergency account should be separate from your checking or savings accounts and should only be used for emergencies such as an unexpected expense, unemployment, reduction in pay, sickness, major car or home repairs, medical bills, etc.

An emergency fund should be enough savings to pay your bills for at least 9 to 12 months. Money for an emergency fund should be readily accessible and stored in a checking or savings account, preferably a high interest savings account such as Emigrant Direct or ING or a money market account where you can make money while saving money.

To determine how much money is needed to pay 9 to 12 months worth of your bills do an inventory and write down all your bills and expenses and the monthly amount spent for each. Calculate the total. Use this amount and multiple by 9 or 12 to determine the total amount you need to save in your emergency fund.

You can start off by contributing small amounts to your emergency fund until you are able to contribute more. Start off with a contribution of at least $20 a month to your emergency fund. Once you are able to contribute more to the fund do so.

Once you have reached your emergency fund goal start developing some long-term savings goals such as purchasing a home, paying for your children’s college education, starting a business or planning for retirement. A great site to learn about retirement planning is www.morningstar.com and click on the Investing Classroom link morningstar.com/Cover/Classroom.html.

There are many organizations that provide emergency services for people such as the American Red Cross Emergency Assistance, Salvation Army Emergency Assistance Program and the United Way. The utility companies provide funds for people in need. These funds can be used to pay basic necessities and any other bills.