Those of us who are old enough to have watched the television series "Lost In Space" will recall the robot who would issue a warning when danger was sensed. I heard on the local news that Hurricane Katrina evacuees who are temprarily housed in our area can receive free birth certifcates. This sent up my red warning flag.
While I am all in favor of Hurrcane Katrina evacuees receiving all the help we can give, I am concerned about opportuinities created by the loosening of the usual requirements for unscrupulous characters. Identity theft comes to mind.
While volunteering at the local Red Cross Service Center, I did hear about a local individual who came into the center and signed in three different times in an effort to receive services and aid to which he was not entitled. He was not an evacuee. The staff were on to him which is good, but I do feel the opportunity for increased fraud is present.
Be encouraged to check your credit card statements for errors. Notify the complany of errors immediately. Also, get the three copies of your credit report that you now are legally entitled to recieve for free during time span of a year (one copy from each of the three credit reporting companies). Space your requests every 4 months to allow periodic monitoring for identity theft and fraud.
Follow this link to read an article about how now is a good time to break the chains of debt. Some tips are given: http://www.sanluisobispo.com/mld/sanluisobispo/business/12678097.htm
Monday, September 19, 2005
Thursday, September 15, 2005
Wolf in Sheep's Clothing
I had an interesting conversation today with a gentleman from a credit counseling company. I saw the listing in the local phone book and decided to explore what services they offered. The company was listed under Credit and Debt Counseling Services. A very friendly gentleman answered the call on the 800 number. He indicated that they provided budget counseling, education, and a debt management program. It's all done by phone and fax. They have 1100 clients nationwide. They do not have any classes. They are a non-profit organization. They only handle unsecured debt. They will not help you with your mortgage payment or any other type of secured debt.
When pressed as to fees for service I was told there was a $75 set up fee that would be a tax deductible donation to the non-profit organization. Then there would be a set fee of $25 to $50 per month depending on the number of debt accounts they managed for me. This fee, and the amount of money needed to cover the actual monthly debt payments, would be electronically debited from my checking account each month. He emphasized that the fee was tax deductible.
I questioned how payment for a service could be tax deductible. I did not get a clear answer. "All I know is that it is tax deductible." I stated that if I went to the Mental Health Center (also a non-profit) and received a service, my payment would not be tax deductible. He responded that he did not write the laws, he just knew it was tax deductible.
I have two major concerns about this type of "credit counseling service." First, I think they are trying to hide their fees under the category of tax deductible donations and therefore cheating Joe taxpayer and Uncle Sam. Secondly, I do not believe they put much energy into teaching their clients the skills needed to handle their own finances and debt payments. They are not about empowering people to learn to do for themselves, or turning bad financial habits into good financial habits. I do believe they are about making money.
If they empower their clients to properly manage their own accounts then the debt management program, as it exists, would not be needed. There would be no collection of the monthly "tax deductible donation" for the 3 to 5 years required to payoff the debts. Do the math, that is a lot of donation. A mid-range fee of $35 for 5 years is $2100. At 1100 clients that adds up to be $2,320,000 in tax deductible donations ($464,000 annually). This is just an estimate as there is a fee range and all accounts do not continue for 5 years. However, I think I am in the wrong type of debt reduction business!
As a consumer, I would rather make arrangements myself for the automatic debt payments to go directly to the creditors, negotiate my own lowered interest rates, and then automatically deposit the $35 per month into my own tax deferred retirement account. I would much prefer the fee amount go toward building my retirement nest egg.
On the flip side, if you are late with a credit card payment, just once, they will hit you with a high interest rate, as high as 29% and a late fee as high as $39. It would be worth it to pay the credit counseling service their tax deductible donation if you are unable to arrange automatic payment for your revolving credit accounts to ensure you are never late with a payment. However, I would feel much more comfortable dealing with a company that was up front and honest about their fees.
Automatic bill pay is becoming an everyday occurrence. Most utilities and credit card companies have automatic payment options available from their websites. In my opinion, only if you are unable to automate your own debt payments should you consider one of these agencies. Even then, do your homework to make sure you are dealing with a reputable company.
When pressed as to fees for service I was told there was a $75 set up fee that would be a tax deductible donation to the non-profit organization. Then there would be a set fee of $25 to $50 per month depending on the number of debt accounts they managed for me. This fee, and the amount of money needed to cover the actual monthly debt payments, would be electronically debited from my checking account each month. He emphasized that the fee was tax deductible.
I questioned how payment for a service could be tax deductible. I did not get a clear answer. "All I know is that it is tax deductible." I stated that if I went to the Mental Health Center (also a non-profit) and received a service, my payment would not be tax deductible. He responded that he did not write the laws, he just knew it was tax deductible.
I have two major concerns about this type of "credit counseling service." First, I think they are trying to hide their fees under the category of tax deductible donations and therefore cheating Joe taxpayer and Uncle Sam. Secondly, I do not believe they put much energy into teaching their clients the skills needed to handle their own finances and debt payments. They are not about empowering people to learn to do for themselves, or turning bad financial habits into good financial habits. I do believe they are about making money.
If they empower their clients to properly manage their own accounts then the debt management program, as it exists, would not be needed. There would be no collection of the monthly "tax deductible donation" for the 3 to 5 years required to payoff the debts. Do the math, that is a lot of donation. A mid-range fee of $35 for 5 years is $2100. At 1100 clients that adds up to be $2,320,000 in tax deductible donations ($464,000 annually). This is just an estimate as there is a fee range and all accounts do not continue for 5 years. However, I think I am in the wrong type of debt reduction business!
As a consumer, I would rather make arrangements myself for the automatic debt payments to go directly to the creditors, negotiate my own lowered interest rates, and then automatically deposit the $35 per month into my own tax deferred retirement account. I would much prefer the fee amount go toward building my retirement nest egg.
On the flip side, if you are late with a credit card payment, just once, they will hit you with a high interest rate, as high as 29% and a late fee as high as $39. It would be worth it to pay the credit counseling service their tax deductible donation if you are unable to arrange automatic payment for your revolving credit accounts to ensure you are never late with a payment. However, I would feel much more comfortable dealing with a company that was up front and honest about their fees.
Automatic bill pay is becoming an everyday occurrence. Most utilities and credit card companies have automatic payment options available from their websites. In my opinion, only if you are unable to automate your own debt payments should you consider one of these agencies. Even then, do your homework to make sure you are dealing with a reputable company.
Tuesday, September 06, 2005
Is It Time to Trade the SUV
My father and I were discussing the rising gas cost. He recalled the last time there was a gas shortage some years ago. He and a friend were partners in a high end used car lot. He recalled the soars of people who traded their Cadillac and large luxury vehicles for more fuel efficient Mercedes coups and diesel engines. He recalled that he and his partner made a lot of money from those trades. He said they stopped to figure how much the people were saving in gas costs by making the trade. They computed it was about $200 per year. They were glad to make the money but remarked how foolish the people were to trade the vehicles for the purpose of saving on gas.
Do not assume the best course of action is to trade the SUV for a vehicle that gets better gas mileage. If your SUV is paid for, it is best to keep it. In many other instances, it is better to keep the SUV than to trade it in for a car that gets better gas mileage. If you can make an even trade, go for it. If you do decide to trade, pay cash and make certain you will save more per year in gas costs than you are losing by spending the money. Calculate carefully. In most instances, it is better to keep the car you have.
The better plan is to make sure you are getting the best possible gas mileage from your vehicle. My friend who builds race car engines for a living offered these tips:
Do not assume the best course of action is to trade the SUV for a vehicle that gets better gas mileage. If your SUV is paid for, it is best to keep it. In many other instances, it is better to keep the SUV than to trade it in for a car that gets better gas mileage. If you can make an even trade, go for it. If you do decide to trade, pay cash and make certain you will save more per year in gas costs than you are losing by spending the money. Calculate carefully. In most instances, it is better to keep the car you have.
The better plan is to make sure you are getting the best possible gas mileage from your vehicle. My friend who builds race car engines for a living offered these tips:
- make sure your tires are properly inflated
- rotate your tires on schedule
- keep your engine oil and oil filters changed
- maintain recommended vehicle maintenance schedules
- change air and fuel filters as recommended by the manufacturer
- avoid revving the engine and making accelerated starts
- make sure the engine is properly tuned
- turn off the air conditioning when feasible
- maintain a modest speed limit, 55 mph uses much less gas than 75 mph
- unload the vehicle, extra cargo means fewer miles per gallon
- make sure your car has the correct coil and spark plugs, and the ignition wires are in proper operating condition
- change the engine coolant annually and check it periodically
- use a hose and a medium pressure nozzle to spray the radiator and condenser from the engine side out to remove dirt, debris, and bugs that can hinder the effectiveness of the cooling system
My friend changes the oil filter in his truck in between oil changes. He claims it extends the life of the engine. When he changes the filter he also adds a quart of oil because the old filter holds a quart of oil. He strongly recommends Mobil Drive Clean Oil for older vehicles. Use the oil type that corresponds with the mileage on the vehicle (75,000 mile oil for a vehicle with 75,000 miles showing on the odometer, and 100,000 mile oil for an odometer reading of 100,000 miles, etc). He says it comes in all grades.
Never, never run your engine with a low oil level. Check the oil each time you fill up with gas. The oil is the lifeblood of the engine, keep it clean and at the proper level for a healthy engine that performs at its best.
Wednesday, August 31, 2005
How to Get Your Free Credit Report
As of September 1, 2005 everyone in the United States, U. S. Territories and Puerto Rico is entitled to receive a free copy of their credit report. Basically there are three credit reporting companies: Equifax, Experian, and TransUnion. They have come together to create one easy way for consumers to request a copy of their credit report. You are entitled to a free copy of your report annually from each credit reporting company. This means you can actually receive three free copies of your credit report per year. The three versions of your report may not contain the same information. If you would like to check to make sure they all have the same correct information, you can request a copy of all three at once. However, if you would like to monitor your credit report over time, you can request a copy from a different company over time, for example every 4 months. This way you can easily monitor your credit report for fraud and accuracy.
The website set up for requesting a copy of your report is www.annualcreditreport.com. You may also obtain a report by calling 877-322-8228. The mailing address is: Annual Credit Report Service, PO Box 105281, Atlanta, GA 30348-5281. When submitting the request online, results are instantaneous. You can easily view and print your report as well as dispute any discrepancies. For a fee of $5, you can receive your credit score along with an explanation of how the information on the credit report was used to calculate the score. Suggestions are also offered on how to improve your score.
Be wary of anyone who tells you they can quickly repair your credit. They can give you tips on how to improve your credit score; like dispute any errors, or make sure you have more available credit than you use. However, the only thing that is truly going to repair your credit is time. It took time to lower your score and it will take time to better your score.
The best way to improve your credit score is to consistently make payments on time. Consider using an automatic online bill paying service to help if you have trouble remembering to pay your bills. This service of usually free. The credit repair agency can make payments for you, but they will charge a fee. I recommend setting up the automated service yourself and using the money you would have paid to the credit repair agency to accelerate your debt pay-off.
The website set up for requesting a copy of your report is www.annualcreditreport.com. You may also obtain a report by calling 877-322-8228. The mailing address is: Annual Credit Report Service, PO Box 105281, Atlanta, GA 30348-5281. When submitting the request online, results are instantaneous. You can easily view and print your report as well as dispute any discrepancies. For a fee of $5, you can receive your credit score along with an explanation of how the information on the credit report was used to calculate the score. Suggestions are also offered on how to improve your score.
Be wary of anyone who tells you they can quickly repair your credit. They can give you tips on how to improve your credit score; like dispute any errors, or make sure you have more available credit than you use. However, the only thing that is truly going to repair your credit is time. It took time to lower your score and it will take time to better your score.
The best way to improve your credit score is to consistently make payments on time. Consider using an automatic online bill paying service to help if you have trouble remembering to pay your bills. This service of usually free. The credit repair agency can make payments for you, but they will charge a fee. I recommend setting up the automated service yourself and using the money you would have paid to the credit repair agency to accelerate your debt pay-off.
Tuesday, August 30, 2005
Bankruptcy Deadline Coming Soon
The deadline is approaching. On October 17, the new bankruptcy law comes into effect. If you are considering filing for Chapter 7, you had best beat the deadline. Not that I am a proponent of bankruptcy filing, but according to a leading bankruptcy attorney most who file have undergone tramatic life events like divorce, job loss, or major illness. If you need to file, it is best to beat the deadline.
The new law brings costly new requirements. People will be required to seek credit counseling before they can file. The counseling will be at their expense. People will also have to complete required classes before receiving the bankruptcy discharge. There is some sort of means testing which calculates and tests for elligibility. If it turns out you do not qualify, you may have to pay creditors back. Auditors will visit your property and verify your assests. The total cost to file Chapter 7 after October 17 is estimated to be between $1500 and $2000. How is someone who cannot pay their bills supposed to come up with that amount of money.....put it on a card?
This is all the more reason to make sure you spend less than you make and have something set aside for emergencies. If you live pay check to pay check with no cushion, an emergency could push you over the edge. In today's world of corporate downsizing and lack of company loyalty to the long term empoyee, job loss could easily happen, and without warning. Many people have not only lost their job, but their pension as well.
Many couples have difficulty discussing financial matters much less agreeing to a plan. They argue so they avoid the discussion. This is a mistake. If you fail to plan, you plan to fail. If you and your spouse have difficulty discussing and agreeing on financial matters, find a coach or a planner and buffer your discussion with the wisdom of the impartial third party. If you are single, have a financial plan. Get help making one if you need it. In this case, ignorance is not bliss.
The new law brings costly new requirements. People will be required to seek credit counseling before they can file. The counseling will be at their expense. People will also have to complete required classes before receiving the bankruptcy discharge. There is some sort of means testing which calculates and tests for elligibility. If it turns out you do not qualify, you may have to pay creditors back. Auditors will visit your property and verify your assests. The total cost to file Chapter 7 after October 17 is estimated to be between $1500 and $2000. How is someone who cannot pay their bills supposed to come up with that amount of money.....put it on a card?
This is all the more reason to make sure you spend less than you make and have something set aside for emergencies. If you live pay check to pay check with no cushion, an emergency could push you over the edge. In today's world of corporate downsizing and lack of company loyalty to the long term empoyee, job loss could easily happen, and without warning. Many people have not only lost their job, but their pension as well.
Many couples have difficulty discussing financial matters much less agreeing to a plan. They argue so they avoid the discussion. This is a mistake. If you fail to plan, you plan to fail. If you and your spouse have difficulty discussing and agreeing on financial matters, find a coach or a planner and buffer your discussion with the wisdom of the impartial third party. If you are single, have a financial plan. Get help making one if you need it. In this case, ignorance is not bliss.
Friday, August 19, 2005
Website on a Budget
I discovered Go Daddy a couple of years ago when I could not decide which domain name to purchase. I wanted to lock-in several options, but did not want to spend a lot of money. Go Daddy sold domain names for less than other competitors like Network Solutions and Register.com. Today, a .com domain name at Go Daddy will set you back $8.95. The same purchase at Network Solutions will cost you $34.99. At first I wondered if there was a catch, the cost was so much less.
Two years of experience as a Go Daddy customer has shown there is no catch, not in the cost of the domain name. The lower pricing is simply their competitive edge, a way to attract a good chunk of the target market. They have now matched, if not surpassed, a prime competitor in the number of domain names registered. Read an interesting blog post by Go Daddy founder, Bob Parsons, at http://www.bobparsons.com where he responds to statements made by Network Solutions' Champ Mitchell.
I have since learned that Go Daddy builds every product they sell. I have found them to be an inexpensive way to build and publish a website with advanced features. In fact the reason my postings have been scarce lately is that my creative time has been spent developing a new website using Go Daddy's Website Complete.
Website Complete is a website building software sold by Go Daddy for $14.95. It offers plug in features like an event calendar, auto responders, flash animation, background music, forms, a guest book, and a directory. You can even add a page hit counter to track the number of visitors to your site. There are other options like a quick shopping cart and special fonts that require an additional purchase.
Everything Go Daddy sells, including hosting, seems affordable. Their customer service and technical support is available 24/7. They have walked me through specific functions many times. The technical support representatives have been courteous and successful in problem solving.
When the time comes to take the site live, there are a few catches. There is a $35 licensing fee that must be paid before a Website Complete built website can be published. Also, some of the advanced features like the event calendar will not work unless the site is published on Go Daddy's server. Still, I was able to build and publish an advanced website for far less than the hundreds or thousands of dollars it would have cost me to have someone else build it for me. I can make changes myself, whenever I want. I added a store and a shopping cart for a small monthly fee of $9.95. I can accept credit or debit card payments for no additional up front costs using PayPal. The capability is already built into my shopping cart. All in all I have been very satisfied with the hosting service, the domain names, and the products that I have purchased through Go Daddy.
There is a learning curve associated with Website Complete, unless one of the templates totally meets your needs. There are many pre-designed templates from which to choose. If you would like to see what a Website Complete finished product looks like, visit http://www.thedebtstopper.com, my new website. I am very interested in what you think, so please leave comments. Comments can be made here or on the website.
Two years of experience as a Go Daddy customer has shown there is no catch, not in the cost of the domain name. The lower pricing is simply their competitive edge, a way to attract a good chunk of the target market. They have now matched, if not surpassed, a prime competitor in the number of domain names registered. Read an interesting blog post by Go Daddy founder, Bob Parsons, at http://www.bobparsons.com where he responds to statements made by Network Solutions' Champ Mitchell.
I have since learned that Go Daddy builds every product they sell. I have found them to be an inexpensive way to build and publish a website with advanced features. In fact the reason my postings have been scarce lately is that my creative time has been spent developing a new website using Go Daddy's Website Complete.
Website Complete is a website building software sold by Go Daddy for $14.95. It offers plug in features like an event calendar, auto responders, flash animation, background music, forms, a guest book, and a directory. You can even add a page hit counter to track the number of visitors to your site. There are other options like a quick shopping cart and special fonts that require an additional purchase.
Everything Go Daddy sells, including hosting, seems affordable. Their customer service and technical support is available 24/7. They have walked me through specific functions many times. The technical support representatives have been courteous and successful in problem solving.
When the time comes to take the site live, there are a few catches. There is a $35 licensing fee that must be paid before a Website Complete built website can be published. Also, some of the advanced features like the event calendar will not work unless the site is published on Go Daddy's server. Still, I was able to build and publish an advanced website for far less than the hundreds or thousands of dollars it would have cost me to have someone else build it for me. I can make changes myself, whenever I want. I added a store and a shopping cart for a small monthly fee of $9.95. I can accept credit or debit card payments for no additional up front costs using PayPal. The capability is already built into my shopping cart. All in all I have been very satisfied with the hosting service, the domain names, and the products that I have purchased through Go Daddy.
There is a learning curve associated with Website Complete, unless one of the templates totally meets your needs. There are many pre-designed templates from which to choose. If you would like to see what a Website Complete finished product looks like, visit http://www.thedebtstopper.com, my new website. I am very interested in what you think, so please leave comments. Comments can be made here or on the website.
Tuesday, August 09, 2005
Call to Action
A new bankruptcy law was passed last April and will take effect in October. It makes it much more difficult for borrowers to wipe their slate clean of debt during bankruptcy proceedings. Instead, an increasing number of debtors will be required to liquidate assets to pay off their debt, or negotiate with lenders for new tems of repayment.
Two bills are being proposed in an attempt to increase consumer protection. The first addresses something referred to as automatic overdraft protection programs. An increasing number of banks have begun to cover overdrafts for a flat fee of $25 to $35. The overdraft is covered irregardless of its source. It could be caused by a check written on your account, an ATM withdrawal, or a debit card transaction. The banks claim to be doing the consumer a favor; saving them from paying the bank fee and the bad check fee charged by the retailer. Supporters of the bill, Consumer Overdraft Protection Fair Practices Act, object to the service being rendered without the informed consent of the consumer. The bill supports the practice of informing the consumer and obtaining their written consent before applying the service.
The second bill addresses something called universal default. If you have ever experienced a sudden hike in your credit card interest rate and if you have made every payment to that credit card account on time, you have most likely been a victim of universal default. You see the credit card companies reserve the right to adjust interest rates if they discover you have been late paying other creditors. These other creditors can be your telephone company, cable service, or utility company. Sometimes your interest rate can sky-rocket from 8.99% to 28.99% overnight. The Consumer Credit Card Protection Act of 2005 would stop this practice, as well as attempt to limit the rate increase to new charges only, rather than to the entire outstanding balance.
Of course the best practice is not to use a credit card, and most definitely not to carry a balance from month to month. But if you have a balance, or are just inclined to support consumer protection, contact your US Senator(s) and US House of Representative(s), the legislative coalition for your area. You can be sure the lobbyists for the credit card companies will be.
Speak now or forever hold your peace!
Two bills are being proposed in an attempt to increase consumer protection. The first addresses something referred to as automatic overdraft protection programs. An increasing number of banks have begun to cover overdrafts for a flat fee of $25 to $35. The overdraft is covered irregardless of its source. It could be caused by a check written on your account, an ATM withdrawal, or a debit card transaction. The banks claim to be doing the consumer a favor; saving them from paying the bank fee and the bad check fee charged by the retailer. Supporters of the bill, Consumer Overdraft Protection Fair Practices Act, object to the service being rendered without the informed consent of the consumer. The bill supports the practice of informing the consumer and obtaining their written consent before applying the service.
The second bill addresses something called universal default. If you have ever experienced a sudden hike in your credit card interest rate and if you have made every payment to that credit card account on time, you have most likely been a victim of universal default. You see the credit card companies reserve the right to adjust interest rates if they discover you have been late paying other creditors. These other creditors can be your telephone company, cable service, or utility company. Sometimes your interest rate can sky-rocket from 8.99% to 28.99% overnight. The Consumer Credit Card Protection Act of 2005 would stop this practice, as well as attempt to limit the rate increase to new charges only, rather than to the entire outstanding balance.
Of course the best practice is not to use a credit card, and most definitely not to carry a balance from month to month. But if you have a balance, or are just inclined to support consumer protection, contact your US Senator(s) and US House of Representative(s), the legislative coalition for your area. You can be sure the lobbyists for the credit card companies will be.
Speak now or forever hold your peace!
Tuesday, July 05, 2005
Loans On Car Titles
I recently saw a commercial on television featuring a young woman coming out of a place of business and getting into her car with a huge smile on her face. She said. "I got the money I need and I get to keep the car, too." Well, yes, you do get to keep the car as long as you make the payments on the money you borrowed plus the interest imposed.
I see these businesses along the road that boast CAR TITLE LOANS. I think, who in their right mind would go and take a loan out on a car title when they are most likely already upside down on the car payment anyway, meaning that they owe more on the car than the car is worth. Don't these people realize that the business would not be in business if it did not make money? They are making money off of you. In today's world, in most places, except New York City, a car is needed to get to work and take care of many basic needs. Why risk your car? If you do not make the payments, they will come and take your car. And you will still have to repay any outstanding loan amount on the vehicle. Practice budeting and smart shopping instead.
If you truly have an emergency, find another source for the money you need. In my opinion, these car title loan businesses are the new "loan sharks". They feed off of your distress; they cripple and destroy; they will devour you.
Written by Sandy Davidson, The Debt Stopper Coach
I see these businesses along the road that boast CAR TITLE LOANS. I think, who in their right mind would go and take a loan out on a car title when they are most likely already upside down on the car payment anyway, meaning that they owe more on the car than the car is worth. Don't these people realize that the business would not be in business if it did not make money? They are making money off of you. In today's world, in most places, except New York City, a car is needed to get to work and take care of many basic needs. Why risk your car? If you do not make the payments, they will come and take your car. And you will still have to repay any outstanding loan amount on the vehicle. Practice budeting and smart shopping instead.
If you truly have an emergency, find another source for the money you need. In my opinion, these car title loan businesses are the new "loan sharks". They feed off of your distress; they cripple and destroy; they will devour you.
Written by Sandy Davidson, The Debt Stopper Coach
Saturday, July 02, 2005
Minimum Monthly Payments On The Rise
Americans have gotten themselves so far into debt that the federal government has stepped up to the rescue. I heard on the local news a few weeks ago that South Carolinians can soon expect to see the minimum monthly payment on their credit card accounts go up. The Comptroller of the Currency recently set new guidelines for minimum monthly payments. The new guidelines require that minimum monthly payments on credit card accounts cover the interest and fees accumulated during the month as well as at least some of the outstanding balance. So brace yourself, ye who have become comfortable with the 2% of the total balance minimum payment requirement; your minimum monthly payment is about to double.
The up side is, someone is looking out for you and has hope that you will actually pay off your credit card balance(s) within your lifetime. The downside is that the new, higher minimums could put you in a financial bind if you are already stretched to the limit.
To read a press release about this new requirement go to: http://www.cccs.net/media and click on the press release dated 6/13/2005.
"I place economy among the first and most important virtues, and public debt as the greatest of the dangers to be feared." - Thomas Jefferson
Written by Sandy Davidson, The Debt Stopper Coach
The up side is, someone is looking out for you and has hope that you will actually pay off your credit card balance(s) within your lifetime. The downside is that the new, higher minimums could put you in a financial bind if you are already stretched to the limit.
To read a press release about this new requirement go to: http://www.cccs.net/media and click on the press release dated 6/13/2005.
"I place economy among the first and most important virtues, and public debt as the greatest of the dangers to be feared." - Thomas Jefferson
Written by Sandy Davidson, The Debt Stopper Coach
Thursday, June 16, 2005
Top 10 Signs You're Broke
My friend forwarded this to me. I thought it delightful enough to bring us all a humorous moment.
TOP 10 SIGNS YOU'RE BROKE
1. American Express calls and says: "Leave home without it!"
2. You're formulating a plan to rob the food bank.
3. You've rolled so many pennies, you've formed a psychic bond with Abe
Lincoln.
4. Long distance companies don't call you to switch.
5. You finally clean your house, just hoping to find change.
6. You think of a lottery ticket as an investment.
7. Your bologna has no first name.
8. You give blood everyday...just for the free orange juice.
9. McDonalds supplies you with all your kitchen condiments.
10. At communion you go back for seconds.
Jan Zillinger
Senior Systems Analyst, Claims
Information Services
Blue Cross Blue Shield of Kansas
1133 SW Topeka Blvd
Topeka, KS 66629-0001
Phone: (785) 291-7495
Email: Jan.Zillinger@bcbsks.com
TOP 10 SIGNS YOU'RE BROKE
1. American Express calls and says: "Leave home without it!"
2. You're formulating a plan to rob the food bank.
3. You've rolled so many pennies, you've formed a psychic bond with Abe
Lincoln.
4. Long distance companies don't call you to switch.
5. You finally clean your house, just hoping to find change.
6. You think of a lottery ticket as an investment.
7. Your bologna has no first name.
8. You give blood everyday...just for the free orange juice.
9. McDonalds supplies you with all your kitchen condiments.
10. At communion you go back for seconds.
Jan Zillinger
Senior Systems Analyst, Claims
Information Services
Blue Cross Blue Shield of Kansas
1133 SW Topeka Blvd
Topeka, KS 66629-0001
Phone: (785) 291-7495
Email: Jan.Zillinger@bcbsks.com
Saturday, June 11, 2005
Deal of the Day
Wow, what a deal I found! A Richo 35 mm, automatic telescopic lens camera. It came complete with a leather case, all for the mere price of $3.99. I was happy. My similar camera broke two summers ago. I generally do not replace those type items until they break. In other words I do not run out and buy the latest and greatest electronic gadget just because it has been improved. The rule of thumb is that the old gadget must break first, beyond the scope or cost of repair, in order to purchase a new one. When the replacement can be made for $3.99, that is truly a great deal!
I admit it, I do have a digital camera. It was a Christmas gift. Digital is nice, but there are times when you want the trusty 35 mm. The camera digital storage gets full and I forget to transfer the pictures into the computer. Somehow those pictures just never seem to get printed.
You're not going to believe this, but I went back into the same store the very next day to pick up a drafting chair (for less than $20). I often see something that interests me, but delay the purchase. I leave the store and go home to 1) make sure the item is needed and 2) that it will work in my home, before I make the purchase. Thrift store purchases are non-returnable.
While in the store, I saw another camera, this time a Fuji, complete with case and manual. It had just been put on the shelf. It too was fully automatic with an automatic telescopic lens. The cost was a little more due to the brand, a whopping $5.99. My 12 year old son's camera was recntly destroyed. At that price, I could afford to replace his minimal 35mm with a very nice upgrade.
If you are wondering why I frequent this particular store, the answer is location and quality. The store is next to both my bank and the Post Office. It has great donors; it's proceeds go to the Kidney Foundation.
Written by Sandy Davidson, The Debt Coach
I admit it, I do have a digital camera. It was a Christmas gift. Digital is nice, but there are times when you want the trusty 35 mm. The camera digital storage gets full and I forget to transfer the pictures into the computer. Somehow those pictures just never seem to get printed.
You're not going to believe this, but I went back into the same store the very next day to pick up a drafting chair (for less than $20). I often see something that interests me, but delay the purchase. I leave the store and go home to 1) make sure the item is needed and 2) that it will work in my home, before I make the purchase. Thrift store purchases are non-returnable.
While in the store, I saw another camera, this time a Fuji, complete with case and manual. It had just been put on the shelf. It too was fully automatic with an automatic telescopic lens. The cost was a little more due to the brand, a whopping $5.99. My 12 year old son's camera was recntly destroyed. At that price, I could afford to replace his minimal 35mm with a very nice upgrade.
If you are wondering why I frequent this particular store, the answer is location and quality. The store is next to both my bank and the Post Office. It has great donors; it's proceeds go to the Kidney Foundation.
Written by Sandy Davidson, The Debt Coach
Saturday, June 04, 2005
Jewels in the Rough
I bought 35 great books for less than the price of one! I never expected to find those jewels in a Habitat for Humanity Home Store. You just never know what can be found in a thrift or resale store. As an avid bargain shopper a good thrift store draws me like a magnet. If you are one of those people who turn up your nose to thrift store shopping, take heed. The books I purchased were all relative to my business. Had I purchased them new from the bookstore, they would have cost me a few hundred dollars. I bought them all for less than $11. The price listed on the back of just one of those books was $16.95. Knowledge is power and gaining power at this price is truly a great bargain!
All thrift and resale stores are not alike. Some are better than others; some are more organized and cleaner than others. A sure sign that you have found a good one is that it is a busy place and the good items go very quickly. Of the five close to me, I only frequent two. I have found some really great things in those two; not worn out, old, cruddy, used up things; but almost new things with designer labels, and sometimes still sporting original price tags. My thrift store jewels include designer clothes, high end bedding, light fixtures, household items, music CD's and great books. All were purchased at a fraction of what they would have cost in a regular store. It's great to get compliments on a skirt you bought for $2.99.
Let's face it folks, we all buy clothes we do not wear, things we end up not using or using very little, and we change sizes. We do not want to throw out the stuff we paid good money for, so we look for a good place to donate it. One thing to remember when shopping: a bargain is not a bargain at any price unless it is something you truly need and will use. Know what you like; know your style; know what you need and will use.
If a good thrift or resale store does not exist in your area, consider the business opportunity. In one area where I lived, a group of women got together and put on a time limited sale. They received items for consignment under specific criteria, temporarily rented an unused retail space, and hosted the sale to make extra money. The venture was so successful that they continue to host the time limited sale twice yearly, in the Spring and Fall. They are now in their 8th year.
One man's trash is another man's treasure. I pulled brand new, still in the package, never opened, never used patio blinds out of my neighbor's trash can. I waited until she was not looking of course. They are perfect for my back porch. And the 10 gallon fish tank I picked up a few years ago has hosted many a found creature for my two boys.
Don't be shy, take the plunge!
Sandy Davidson, The Debt Coach
All thrift and resale stores are not alike. Some are better than others; some are more organized and cleaner than others. A sure sign that you have found a good one is that it is a busy place and the good items go very quickly. Of the five close to me, I only frequent two. I have found some really great things in those two; not worn out, old, cruddy, used up things; but almost new things with designer labels, and sometimes still sporting original price tags. My thrift store jewels include designer clothes, high end bedding, light fixtures, household items, music CD's and great books. All were purchased at a fraction of what they would have cost in a regular store. It's great to get compliments on a skirt you bought for $2.99.
Let's face it folks, we all buy clothes we do not wear, things we end up not using or using very little, and we change sizes. We do not want to throw out the stuff we paid good money for, so we look for a good place to donate it. One thing to remember when shopping: a bargain is not a bargain at any price unless it is something you truly need and will use. Know what you like; know your style; know what you need and will use.
If a good thrift or resale store does not exist in your area, consider the business opportunity. In one area where I lived, a group of women got together and put on a time limited sale. They received items for consignment under specific criteria, temporarily rented an unused retail space, and hosted the sale to make extra money. The venture was so successful that they continue to host the time limited sale twice yearly, in the Spring and Fall. They are now in their 8th year.
One man's trash is another man's treasure. I pulled brand new, still in the package, never opened, never used patio blinds out of my neighbor's trash can. I waited until she was not looking of course. They are perfect for my back porch. And the 10 gallon fish tank I picked up a few years ago has hosted many a found creature for my two boys.
Don't be shy, take the plunge!
Sandy Davidson, The Debt Coach
Thursday, May 19, 2005
Tending the Pond
As I was tending my garden pond this morning, which I dearly love, it occurred to me that there were many similarities between tending the garden pond and tending finances. The other night I went out back and noticed frogs frolicking in the pond. It started out that there were two, then there were four. They swam and played and had quite a good time. Today I noticed a prolifera of tadpoles in the pond. So the big frogs had gotten together and made many little tadpoles. The tadpoles, if left to grow, will develop into more big frogs who will make more tadpoles. Investments are much the same way. A few well placed investments will grow to produce interest (tadpoles) which if properly nourished and left to grow will themselves become large frogs producing more tadpoles(compound interest). Before you know it you will have a whole pond full of frogs, as much as you want (wealth).
Before I started my pond, I educated myself as to how to set it up, and how to care for it. I made sure I had all the proper supplies required. Take a little time to learn about the investment you want to make. Any broker worth their salt will take time to explain it to you and teach you what you need to know to monitor your investment. If yours won't, then find one that will. When I consulted a pond expert, I found one that had established and managed a pond of their own. You better believe that my investment advisor has solid investments for himself, and his own retirement plan that works. I want an advisor who walks the walk, not just talks the talk.
So what needs to happen to produce tadpoles? First, you need an inviting pond in which the frogs can frolic. To me that would be a solid mutual fund, for you it may be some other type of investment that generates compound interest. Then, you need someone to manage the pond, clean the filter, make sure the water does not become toxic, etc. That would be the investment broker, or account manager. I chose a seasoned investment broker that I liked and who convinced me he knew what he was doing.
Know when your pond needs tending. What would happen if you started a garden pond, then ignored it for the rest of the summer? You would get rancid water and leaches, that's what. Watch your pond, open those notices that come in the mail from the investment account and read them. Know what is happening with your account. Clean out the junk. Consult the manager if you feel something is not quite right or not producing the results you expected. I call my manager at least quarterly. Take it upon yourself to make sure your pond is conducive to tadpole growth and development.
Let the tadpoles grow into frogs. Reinvest dividends; do not take money out of your investment account unless it is an absolute emergency and you have no other option. If you take the tadpoles out of the water they cannot grow into big frogs and will not produce more little tadpoles. So if you do take money out, make sure you are putting it into something else that can grow tadpoles. You can move the pond, even change ponds, but a dry pond will produce nothing but dust.
One other thing, if you are putting your tadpoles into the creditor's pond, then they become tadpole producing frogs for them, not you. They like it when they get your tadpoles. They work hard at it.
So how are your tadpoles growing?
Sandy Davidson, The Debt Coach
Before I started my pond, I educated myself as to how to set it up, and how to care for it. I made sure I had all the proper supplies required. Take a little time to learn about the investment you want to make. Any broker worth their salt will take time to explain it to you and teach you what you need to know to monitor your investment. If yours won't, then find one that will. When I consulted a pond expert, I found one that had established and managed a pond of their own. You better believe that my investment advisor has solid investments for himself, and his own retirement plan that works. I want an advisor who walks the walk, not just talks the talk.
So what needs to happen to produce tadpoles? First, you need an inviting pond in which the frogs can frolic. To me that would be a solid mutual fund, for you it may be some other type of investment that generates compound interest. Then, you need someone to manage the pond, clean the filter, make sure the water does not become toxic, etc. That would be the investment broker, or account manager. I chose a seasoned investment broker that I liked and who convinced me he knew what he was doing.
Know when your pond needs tending. What would happen if you started a garden pond, then ignored it for the rest of the summer? You would get rancid water and leaches, that's what. Watch your pond, open those notices that come in the mail from the investment account and read them. Know what is happening with your account. Clean out the junk. Consult the manager if you feel something is not quite right or not producing the results you expected. I call my manager at least quarterly. Take it upon yourself to make sure your pond is conducive to tadpole growth and development.
Let the tadpoles grow into frogs. Reinvest dividends; do not take money out of your investment account unless it is an absolute emergency and you have no other option. If you take the tadpoles out of the water they cannot grow into big frogs and will not produce more little tadpoles. So if you do take money out, make sure you are putting it into something else that can grow tadpoles. You can move the pond, even change ponds, but a dry pond will produce nothing but dust.
One other thing, if you are putting your tadpoles into the creditor's pond, then they become tadpole producing frogs for them, not you. They like it when they get your tadpoles. They work hard at it.
So how are your tadpoles growing?
Sandy Davidson, The Debt Coach
Sunday, May 15, 2005
The Easy Slide
I have a challenge for those of you who feel operating on cash is a thing of the past. I went to Walmart the other day to have a quick picture taken and stored in digital format. I called ahead and was told I could come in anytime except they closed for lunch from 2 and 3.
I got ready and arrived at 1:40 only to find the photographer had closed early for lunch. I decided to buy lunch in the deli and eat it in the onsite McDonald's. I purchased a work related magazine to help pass the time in a productive manner. I forgot my glasses so I had to go to the accessories section to "borrow" some glasses. While there I noticed a pin that would look great on my jacket. The price tag for lunch including the magazine and pin came to right under $10.
I arrived at the photo studio to be the first after lunch customer. The phone quoted price of the disk was $14.95. On site I am told in order to purchase the disk, I must also purchase their special package; the total cost would be $28.95. Well I was dressed, ready, and there, so I agreed to the "new" terms.
Picture over, disk in hand, I remembered I needed cat liter. As I was walking through the store I decided to browse in other departments. I remembered I needed to refurbish my supply of foundation garments, and a couple of new summer shirts to start of the season would be nice. The price tag at the register was right at $128.00.
As I was sliding my debit card to seal the purchase, I wondered if I would have spent the same amount if I was paying cash. A planned $14.95 purchase ended up costing me $166.95. Nothing I purchased was pricey. The only planned expenditure was the pictures on disk.
I went to the local community theater that evening to enjoy a play. While waiting for my escort, I sat on a bench next to another friendly lady waiting for her escort. Our conversation turned to the easy slide, the fact that it is way too easy to slide that debit card into the machine without thinking about what you are spending. We both agreed that we would spend less money if we paid in cash. It is so much harder to take all those bills out of your wallet and hand them over to someone else. You hardly even think about it when you do the easy slide.
If you are one of those who feel operating on cash is passe', try this. For one month pay cash for all your purchases. That's right, carry cash and only pay cash for everything you buy. No credit or debit cards allowed. Keep the receipts and track your spending. At the end of the month analyze your spending and compare it to previous months to see if you spent less. I am betting you will.
Just think what you can do with that saved money. Put it toward your rapid debt elimination plan, plop it into your investment account for a more secure future, or decide to splurge on something you really want or need. I think I'm going to give up the easy slide and revert to cash only spending. How about you?
The most convenient way is often not the best way!
From Sandy Davidson, The Debt Coach.
I got ready and arrived at 1:40 only to find the photographer had closed early for lunch. I decided to buy lunch in the deli and eat it in the onsite McDonald's. I purchased a work related magazine to help pass the time in a productive manner. I forgot my glasses so I had to go to the accessories section to "borrow" some glasses. While there I noticed a pin that would look great on my jacket. The price tag for lunch including the magazine and pin came to right under $10.
I arrived at the photo studio to be the first after lunch customer. The phone quoted price of the disk was $14.95. On site I am told in order to purchase the disk, I must also purchase their special package; the total cost would be $28.95. Well I was dressed, ready, and there, so I agreed to the "new" terms.
Picture over, disk in hand, I remembered I needed cat liter. As I was walking through the store I decided to browse in other departments. I remembered I needed to refurbish my supply of foundation garments, and a couple of new summer shirts to start of the season would be nice. The price tag at the register was right at $128.00.
As I was sliding my debit card to seal the purchase, I wondered if I would have spent the same amount if I was paying cash. A planned $14.95 purchase ended up costing me $166.95. Nothing I purchased was pricey. The only planned expenditure was the pictures on disk.
I went to the local community theater that evening to enjoy a play. While waiting for my escort, I sat on a bench next to another friendly lady waiting for her escort. Our conversation turned to the easy slide, the fact that it is way too easy to slide that debit card into the machine without thinking about what you are spending. We both agreed that we would spend less money if we paid in cash. It is so much harder to take all those bills out of your wallet and hand them over to someone else. You hardly even think about it when you do the easy slide.
If you are one of those who feel operating on cash is passe', try this. For one month pay cash for all your purchases. That's right, carry cash and only pay cash for everything you buy. No credit or debit cards allowed. Keep the receipts and track your spending. At the end of the month analyze your spending and compare it to previous months to see if you spent less. I am betting you will.
Just think what you can do with that saved money. Put it toward your rapid debt elimination plan, plop it into your investment account for a more secure future, or decide to splurge on something you really want or need. I think I'm going to give up the easy slide and revert to cash only spending. How about you?
The most convenient way is often not the best way!
From Sandy Davidson, The Debt Coach.
Thursday, May 12, 2005
Old School Finances
In the days of graduate school my approach to finances was a simple one. Graduate school for me was funded by stipend and finances were most definitely limited. Managing them to ensure the funds lasted through the month was essential. I used the envelope method. I simply had three envelopes in my bedside table. One was for the bills: electric, water, rent, and phone. Another was for gas, groceries, toiletries, and health needs. The last envelope held what was left over and was my available cash for everything else like entertainment, clothing, car repairs, and emergencies. The system worked great. I always was able to pay my bills and had food and gas throughout the month.
I think today many of us should adopt a modified version of the envelope method. We should all plan our spending at the beginning of the month rather than letting our spending plan us. The technologically savvy can set up computerized financial files with the allowed amounts listed and spending tracked categorically.
Somehow, I still like the envelope method best. It seems easier. When the envelope is empty, there is no more spending in that category. For us visual folks, a quick peak tells how much is left. I would however add a new envelope, and it would be labeled "Monthly Investment". We should all be putting a little aside each month for our future financial health.
It is always best to make compound interest work for you rather than them! Think twice before buying on credit. Ask yourself, "Is this a want or a need?' Then ask, "Can it wait until I can pay cash?" Then finally, know what it is going to cost you in the long run and be sure it is worth it.
Written by Sandy Davidson, LISW-CP, CFIC, The Debt Coach, Real Solutions for America's Debt Habit
I think today many of us should adopt a modified version of the envelope method. We should all plan our spending at the beginning of the month rather than letting our spending plan us. The technologically savvy can set up computerized financial files with the allowed amounts listed and spending tracked categorically.
Somehow, I still like the envelope method best. It seems easier. When the envelope is empty, there is no more spending in that category. For us visual folks, a quick peak tells how much is left. I would however add a new envelope, and it would be labeled "Monthly Investment". We should all be putting a little aside each month for our future financial health.
It is always best to make compound interest work for you rather than them! Think twice before buying on credit. Ask yourself, "Is this a want or a need?' Then ask, "Can it wait until I can pay cash?" Then finally, know what it is going to cost you in the long run and be sure it is worth it.
Written by Sandy Davidson, LISW-CP, CFIC, The Debt Coach, Real Solutions for America's Debt Habit
Wednesday, May 11, 2005
The Debting of America
America is being courted and seduced into debt. Using credit is presented as a good thing, sometimes even like a special priviledge. Recently I began keeping in a stack all the enticements to use credit that I received in the mail. Before six months had passed, the stack had grown to be a foot high. I was amazed at how quickly it grew. They are trying hard to seduce you and me into debt.
Make sure you do not miss the real message here. Compound interest is big business. They, the banks, mortgage companies, credit card companies, and the department stores, all are trying very hard to entice us into using credit and going into debt. Direct mail is expensive. Can you imagine the amount of money that is spent to send you and everyone else those credit card invitations? Just how do you think they are paying for it? If you succumb, you are paying for it out of your hard earned income.
Just think what could happen if you kept that money for yourself and used it to compile compound interest belonging to you. Visit a wealth calculator if you are curious.
They entice you into using credit with 10% off today's purchase if you apply for our credit card, easy pay, and low or no interest for 6 months. What they do not tell you is that if you are late on a payment they will jack your interest up as high as 24%. And they will tack on healthy late fees. If you are late on other payments to other people, they can, and most likely will, increase your interest percentage. Soon, you have lost more than any benefit you may have derived from the original offer.
If you are very anal about paying your bills on time and are never, ever late with a payment, maybe, just maybe, you can escape the trap. However, you will still pay interest on that purchase for longer than you think if you make minimum monthly payments until the debt is paid off. Many people actually never pay off the debt because they add more credit purchases to the account. They took the bait and are now hooked.
I do not recommend the use of credit cards. If you must use one, only use it if you intend to pay off the balance in full when the bill comes and before the due date. They are giving you less time now between when you receive the bill and when the payment is due. Plan ahead to pay the account so you will have the money available. Carefully read your statement and notice due dates. Gone are the times of the due date being the same day each month. They also have a cut off point on the due date. If your payment is processed one minute past that cut off time, you will be charged a late fee.
My favorite credit card alternative is a VISA check card linked to my primary checking account. It acts like a credit card, but I am spending my money. I could elect to charge myself interest. Then I would be funding and benefiting from my own credit card. I do notice that it is easy to swipe that card. It is a little harder to let go of the actual cash I rarely have in my purse. Cash is king folks, and the very best option is to make purchases with cash. This reminds me of another story for another day.
The bottom line, if you have to use credit to buy it, you cannot afford it and should not buy it. Wait until you have saved up enough money to pay for it. Look for more to come about how to handle those emergencies that are sure to present themselves.
Just say no to debt.
Written by Sandy M. Davidson, The Debt Coach, helping you be debt free.
Make sure you do not miss the real message here. Compound interest is big business. They, the banks, mortgage companies, credit card companies, and the department stores, all are trying very hard to entice us into using credit and going into debt. Direct mail is expensive. Can you imagine the amount of money that is spent to send you and everyone else those credit card invitations? Just how do you think they are paying for it? If you succumb, you are paying for it out of your hard earned income.
Just think what could happen if you kept that money for yourself and used it to compile compound interest belonging to you. Visit a wealth calculator if you are curious.
They entice you into using credit with 10% off today's purchase if you apply for our credit card, easy pay, and low or no interest for 6 months. What they do not tell you is that if you are late on a payment they will jack your interest up as high as 24%. And they will tack on healthy late fees. If you are late on other payments to other people, they can, and most likely will, increase your interest percentage. Soon, you have lost more than any benefit you may have derived from the original offer.
If you are very anal about paying your bills on time and are never, ever late with a payment, maybe, just maybe, you can escape the trap. However, you will still pay interest on that purchase for longer than you think if you make minimum monthly payments until the debt is paid off. Many people actually never pay off the debt because they add more credit purchases to the account. They took the bait and are now hooked.
I do not recommend the use of credit cards. If you must use one, only use it if you intend to pay off the balance in full when the bill comes and before the due date. They are giving you less time now between when you receive the bill and when the payment is due. Plan ahead to pay the account so you will have the money available. Carefully read your statement and notice due dates. Gone are the times of the due date being the same day each month. They also have a cut off point on the due date. If your payment is processed one minute past that cut off time, you will be charged a late fee.
My favorite credit card alternative is a VISA check card linked to my primary checking account. It acts like a credit card, but I am spending my money. I could elect to charge myself interest. Then I would be funding and benefiting from my own credit card. I do notice that it is easy to swipe that card. It is a little harder to let go of the actual cash I rarely have in my purse. Cash is king folks, and the very best option is to make purchases with cash. This reminds me of another story for another day.
The bottom line, if you have to use credit to buy it, you cannot afford it and should not buy it. Wait until you have saved up enough money to pay for it. Look for more to come about how to handle those emergencies that are sure to present themselves.
Just say no to debt.
Written by Sandy M. Davidson, The Debt Coach, helping you be debt free.
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