The Election is over; Now What?

The elections are over. Many had hoped that with the new president elect, our financial crisis would begin to subside. Much to their dismay, the stock market has tumbled twice since.

I often wonder how much the media has contributed to the current state of economic affairs? What if nobody told us how bad it was; what if we didn't repeatedly hear and read, over and over, the economic bad news, how would we know?

Some people who have endured job lay-offs, foreclosures, etc. would have first hand knowledge obviously. But what about the rest of us? Do we really need to know? Maybe the better questions is do we want to know?

Personally, I don't want to hear about it anymore. Not sticking my head in the sand because I realize the importance of personal finance and money management. Moreover, I understand the importance of a good mental state of mind; the importance of attitude!

With all of the negativity fed to us by the media, we are begin to feel defeated. We are constantly reminded of an economic Armageddon.

I say damned the news! I'm putting my chin up and going forward with the best that I have! The sun has come up today and both of my feet hit the floor, look out world! We all have another opportunity today to take ourselves and our circumstances to the next level!

So, shut off the news and radio and go for it! Keep your chin up and keep doing your best! Make your attitude a good one! Things will get better!

Gas or Milk......

As I was driving along today, I observed these two signs. Both of them were at the same convenience store. Curiously, the next gas station that I came upon, 12 miles away (yes, it's rural here..) the price per gallon for gasoline is $3.88. I didn't check on the milk...

Cast Off!

The cast came off my arm Friday!  Now for the therapy.  I cannot believe how much my arm atrophied in just 6 weeks!

It is painful to try to move my wrist; I wonder how long it will take to get my mobility back?

Over the past few weeks I've used my time to catch up on some Personal Finance Reading.  I plan on writing a post reviewing these books in the coming weeks.

Seems like quite a lot has happened in the PF world since breaking my wrist.  That's good; we'll spend some time catching up!

I start therapy tomorrow.  I hope that it is as quick as I suspect it will be painful.  What's the saying- no pain no gain?

See you soon!

Check your refund status with "Where's my Refund"

This just in from the IRS Newswire, a free IRS e-mail service.

 

Taxpayers Can Check Their Refund Status
with “Where’s My Refund?”

WASHINGTON — Taxpayers who have filed their federal income tax returns and are expecting their refunds can use the Internal Revenue Service’s online tool, “Where’s My Refund?,” to check on the status of their refunds.

“Where’s My Refund?” is fast, easy, safe and convenient.  Nearly 9.7 million taxpayers have checked the status of their 2007 federal income tax refunds online, up about 18 percent over the same time period last year.

To get to personalized refund information, taxpayers should be ready to enter their:

• Social Security Number (or Taxpayer Identification Number),
• Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er)),
• Exact refund amount shown on their tax returns.

Taxpayers can check on the status of their refund seven days after e-filing a return. For a paper return, check four to six weeks after mailing the return. 

“Where’s My Refund?” also includes links to customized information based on a taxpayer’s specific situation. For example if “Where’s My Refund?” shows that the IRS was unable to deliver a refund, a taxpayer can change his or her address online. Taxpayers can avoid undelivered refund checks by having their refunds directly deposited into a personal checking or savings account.

If 28 days have passed after the IRS says it mailed a refund check, “Where’s My Refund?” enables taxpayers to initiate a trace.

New this year Spanish-speaking taxpayers can get information about the status of their federal refunds using Dónde Está mi Reembolso? available by entering the Spanish language area of the web site by clicking the Espanol link on IRS.gov. The refund trace and address change features are only available in English at this time.

Taxpayers without internet access can check the status of their refunds by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.

Where’s My Refund? is also accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.

Some scam artists are sending phony emails, including those relating to “Where’s My Refund?”, to trick individuals into revealing personal financial information that can be used to access their financial accounts.  People who want to access the genuine IRS Web site and the “Where’s My Refund?” feature should go directly to the IRS Web site by typing the address, www.irs.gov, into the address` line of their Internet window.  The only genuine IRS Web site is IRS.gov.

Still nursing a broken wrist...

Typing is hard enough with both hands, it's a lot harder with only one!

This is a guest post from Liza

Debt solution

More and more people who are facing enormous difficulties in paying off their debts are turning to debt solutions. There are almost four types of debt solutions namely repayment arrangements, debt consolidation and debt settlement. Amidst the mentioned debt solutions, debt consolidation and debt settlement the most sought after ones.

At it most basic, debt consolidation is combining all your debts into one single monthly repayment. Thus, at the end of each month instead of paying twenty different bills to different creditors all you have to do is simply make one singular monthly payment. The advantage of one monthly payment is that the risk of missed or late payments is reduced. Usually consolidation of debts is accompanied with lowering of interest rates. The consolidated debts carry much less interest rate, almost at times half, of what you had to pay earlier.

Debt settlement is another option that’s becoming increasingly popular with individuals who have a lot of debt and are considering filing bankruptcy. In a nutshell, debt settlement is an alternative to bankruptcy. You stop paying your bills and instead start accumulating funds to pay your creditors. Once you accrue a lump sum amount of money, start negotiating with your creditors. With the help of debt settlement usually 50% or sometimes even 75% of the original amount is reduced.

You might face troubles in negotiating with creditors and collection agencies. They might create pressure on you to collect more money. If you find that they are in no mood to negotiate then contact a reputed settlement company. The settlement companies have the experience and know very well how to come to an agreement with creditors and collection agencies.

IRS Offers Tips for Tax Filers for ES Payments

Tips for Tax Filers on Economic Stimulus Payments

WASHINGTON — The Internal Revenue Service today urged taxpayers eligible for the economic stimulus payment to file their tax return now in order to get their payment in a timely manner.

This IRS reminder applies to taxpayers yet to file their 2007 income tax returns as well as retirees, disabled veterans, low-wage workers and others who normally are not required to file a return but who must do so this year to receive an economic stimulus payment.

“The quickest way to receive your refund and your economic stimulus payment is to file early, file electronically and use direct deposit,” said IRS Commissioner Doug Shulman.

Starting in May, the IRS will begin sending economic stimulus payments of up to $600 ($1,200 for married couples) to people who earn less than $75,000 ($150,000 for married couples). There is also is an additional payment of $300 for each eligible child younger than 17.

People who have no tax filing requirement may still be eligible to receive a payment of $300 ($600 for married couples) if they have at least $3,000 in qualifying income. Qualifying income includes any combination of earned income, nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement. Individuals in this category may also be eligible for the additional $300 payment for each qualifying child.

The IRS offers these tax tips for taxpayers:

File now: Don’t wait until the 11th hour on April 15 if you want your stimulus payment on time. Your tax return must be processed by April 15 for you to receive your payment according to the payment schedule. Filing a paper return? Write ‘Stimulus Payment’ at the top of your form ONLY if you do not normally file a tax return and are filing just to receive a stimulus payment.

Use Free File: IRS Free File is a public-private partnership with 19 tax software companies that make their tax preparation software and electronic filing available for free to certain taxpayers. Anyone with an adjusted gross income of $54,000 or less, and that’s 97 million taxpayers, is eligible to use Free File, available only through www.irs.gov.

Use IRS e-file: If you don’t qualify for IRS Free File, you should still file your tax return electronically. Taxpayers can use IRS e-file through paid preparers or over-the-counter software. It’s the fastest way to process your tax return, which means it’s the quickest way for you to receive your refund and your economic stimulus payment.

Use direct deposit: It’s the best way to receive your refund and your economic stimulus payment. Even if you owe taxes, complete the blanks for direct deposit and, if you are eligible, the IRS will transmit your stimulus payment electronically. The IRS will begin making stimulus payments into direct deposit accounts on May 2. The agency will mail paper checks starting May 16.

Need more time: If you can’t make the April 15 deadline, remember to file a Form 4868, the automatic extension of time to file. This will give you until October 15 to submit a 2007 tax return.

Avoid Scams: If you receive unsolicited email or telephone calls from anyone purporting to be from the IRS, it’s probably a scam. Don’t click on any links; don’t answer any questions. Forward the emails or report the calls to phishing@irs.gov.
This year, there are millions of people who are not required to file a tax return but who must file a 2007 income tax return to let the IRS know they are eligible for a stimulus payment. Those are people who have no tax liability but who have at least $3,000 in qualifying income.

The $3,000 in qualifying income, for those who have no tax liability, must come from one or a combination of these sources: earned income (wages, tips, salary) nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement. Interest income, capital gains or Supplemental Security Income payments do not qualify as income.

For people in this category, there are a few extra tips:

Super Saturday: Approximately 320 IRS offices will be open Saturday, March 29 from 9 a.m. to 3 p.m. to help prepare returns for people who are filing only so they can receive their stimulus payment. There is a state by state list of sites on IRS.gov.
Use Free File: Several Free File partners are offering tax software programs just for people who are filing solely to receive the economic stimulus payment. There is a special page on IRS.gov: Free File – Economic Stimulus Payment.

Package Form 1040A-3: This also includes tax tips, a sample Form 1040A and a blank Form 1040A that can be completed and mailed to the IRS. Filing a paper return? You must write “Stimulus Payment’ at the top of the Form 1040A.

Need more time: If you can’t make an April 15 deadline, you automatically have until October 15 to file a tax return solely to receive an economic stimulus payment. You do not have to file a form to be granted an extension. However, you must file by October 15 so the IRS can process your return and issue a stimulus payment before the end of the year.

Free help is available for low-income and older Americans. Volunteer tax preparation sites can be found by calling 1-800-906-9887.

Good Afternoon everyone,...

Good Afternoon everyone, I just want to give you an update on the lay and low for the next few anyway. I had the unfortunate experienced on falling on a ladder today and bone in my risk, So, my ability to type is hampered a little bit. And in any event, I'll try to keep place and keep up the voice blogs for the next two days. Thanks , and I talk to you soon. listen

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Decoupled Debit Cards- What?

Decoupled Debit Cards- What?

For a minute, lets imagine a new debit card in your wallet. This new debit card is just like all the others; it looks like a credit card; you swipe it like a credit card. But, different than the others, it's not associated with a specific bank account. Instead, you tell the issuer of the card, say Capital One for example, which checking account you want the money to come from. This new debit card is like a universal debit card that you link to all of your many different checking accounts. So now instead of having a pocket full of debit cards, you have only one.

Okay, let's wake up! Day dream is over! Back to reality.

What if this dream were reality? What if I told you it IS reality?

Capital One bank has quietly been piloting this new debit card for almost a year now.

As reported on PaymentNews;

"Having quietly tested the cards via direct marketing with their own credit card customers earlier in the year, Capital One says it now has its first co-brand debit pilot in market with in-store kiosk, Internet and phone-based enrollment. It says it plans for a second merchant client to launch its pilot this summer and for an affinity client to launch in the third quarter.

With this new debit card, Capital One will offer awards with every purchase! Whether you're using the card to pay for groceries, credit card bills, or to purchase gasoline, you might earn points or other rewards from the issuer. Gwenn Bezard of Aite Groupe says..

"There's a huge difference between the rewards programs of credit cards and debit cards. The actual value received by the customer is 64 cents for every $100 spent with a credit card, while the value received for a debit card program is 10 cents. The actual value that a customer will receive (with the Capital One MasterCard) is expected to be between 40 cents and 60 cents. That's four to five times higher than the typical debit rewards card."

What's in it for Capital One? They earn income know as 'interchange' for each transaction that you complete. Gwen Bezard describes in a report by research firm the Aite Groupe that decoupled debit cars will be a "direct assault against incumbent deposit financial institutions." This means that many banks risk losing HUGE amounts of income to Capital One. If this pans out as Capital One hopes, it will redefine the bankers view of interchange income. Not only would the banks lose the interchange, they'd still have to pay for the processing charges, further damaging their income. Processing includes handling disputes and error resolutions, insufficient fund issues, and ACH transaction fees.

Here's a short video on US Banker, the Lowdown on Decoupled Debit Cards.

Want more info? Read this article at Smartmoney.

Keep your eyes open! If a decoupled Capital One debit card sounds good to you, you'll have to wait until you receive an invitation. Spend a few minutes searching online and you will find their application to enroll, but you need a reference code that per Capital One, you can only receive by invitation.

If you want to call Capital One for more information, their phone number is 1-866-833-9233.

Credit after Bankruptcy

A reader asks...

What happens with my credit cards after filing bankruptcy? Will I still be able to use them? Do I send them back? What if I need a credit card in the future?

A discharge in bankruptcy will wipe away your credit card debt. This means that you will no longer be obligated to repay and the credit card company(ies) are forbiden from ever attempting to collect the debt from you.

Any credit cards that you have now with balances that are discharged in bankruptcy will be closed by the credit card company and you will no longer be able to use them.

However, after the bankruptcy is complete, you may be able to obtain a secured credit card from a bank or credit union. You might may be able to obtain a traditional 'unsecured' credit card, but the limit will be quite low and the interest rate will be very high.

A secured credit card is a 'traditional' credit card with a twist. You deposit money in a financial institution and grant that institution a security interest in your deposit in exchange for the credit card. The financial institution will hold the money that you have on deposit just in case you were to default on the credit card. If you were to default, they would take the money on deposit to payoff the balance on the card and close the account.

For example, you deposit $500 in a savings account at a credit union, the credit union puts a 'freeze' on the $500 and issues you a credit card with a $500 limit.

A secured credit card after bankruptcy is really a good way to go. You get a managable credit line at a reasonable interest rate. This is a good way to rebuild your credit after bankruptcy.

BIG VISA security breach~Hannaford Brothers

Here we go, again! Do you remember the TJ Maxx data security breach? This new compromise isn't yet as big, but could be!

News just started to filter out to financial institutions on Friday that VISA branded cards and their card holders were compromised. Because of the agreements that VISA has with their merchants, not much more was said. They only explained that a merchant discovered a problem.

Now, a few days later, it is official. The breach happened at Hannaford Brothers grocery stores. Thus far, 4.2 million cards have been compromised and 1800 cases of fraud have been reported.

Hannaford reports that no identifying personal information was exposed, only VISA card and PIN numbers.

So, if you used your VISA debit card in a Hannaford grocery store in the Northeast, or a Sweetbay store in Florida, or in an independent grocery store selling Hannaford branded products, you should immediately contact your financial institution.

Yesterday, the VISA networks put out a formal alert to all financial institutions explaining the compromise. This alert directs the financial institutions to block the affected cards and re-issue replacements.

Apparently this breach was discovered on Feb. 27, 2008, and shut down on March 10th. According to reports, the data breach started on Dec 7, 2007.

Your financial institution has received a list of all their customers with accounts that were compromised. If you discover unauthorized transactions on your card, immediately contact your financial institution. Keep records of everything just in case you need to follow up; copies of statements, name of the person that you spoke with and the time of day, dollar amounts, dates, etc.. You have protection under the banking laws just in case you are a victim of fraud.

News from the IRS- Economic Stimulus Payments

Just received this alert from the IRS about the Economic Stimulus Payments-

WASHINGTON — The Internal Revenue Service announced today that it will begin sending more than 130 million economic stimulus payments starting May 2. The initial round of weekly payments will be completed by early July.

The IRS also announced the availability of a new online calculator on IRS.gov to help people determine the amount of their stimulus payments.

Stimulus payments will be made by direct deposit to people who choose to receive their 2007 income tax refunds through direct deposit. All others will receive their economic stimulus payments in the form of a paper check.

“To receive an economic stimulus payment, people just need to file their tax returns as they usually do,” said IRS Acting Commissioner Linda E. Stiff. “The payments will be automatic for the vast majority of taxpayers. Some lower-income workers and recipients of certain Social Security and veterans benefits who don’t normally need to file a tax return will need to do so in order to receive a stimulus payment. IRS.gov has all the information people need to help them obtain a stimulus payment.”

Stimulus payments will be sent out in the order of the last two digits of the Social Security number used on the tax return.

Because the IRS will use the Social Security number to determine when checks are mailed, taxpayers may receive their checks at different times than their neighbors or other family members. On a jointly filed return, the first Social Security number listed will determine the mail-out time.

The IRS expects to make about 34 million payments within the first three weeks after the payment schedule begins May 2. With more than 130 million households expected to receive stimulus payments, more than 25 percent of the payments will be made in the first three weeks.

Taxpayers who choose direct deposit on their federal income tax returns can expect to receive their economic stimulus payments between May 2 and May 16 provided their returns were received and processed by April 15, 2008. For taxpayers who did not choose direct deposit on their tax return but whose returns were processed by April 15, the paper checks will be in the mail starting May 16, with the initial mailings completed by around July 11.

The IRS is also announcing today the availability of an on-line calculator on IRS.gov to help taxpayers determine if they are eligible to receive an economic stimulus payment and if they are, how much they can expect. Anyone who has prepared a 2007 income tax return can use the calculator. It will ask taxpayers a series of questions, so they should have their 2007 tax returns handy. After answering the questions, the calculator will provide the projected dollar value of the payment.

Below are the schedules for economic stimulus payments related to tax returns processed by April 15, 2008.

Stimulus Payment Schedule for Tax Returns
Received and Processed by April 15

Direct Deposit Payments

If the last two digits of your Social Security number are:
Your economic stimulus payment deposit should be sent to your bank account by:

00 – 20
May 2

21 – 75
May 9

76 – 99
May 16

Paper Check

If the last two digits of your Social Security number are:
Your check should be in the mail by:

00 – 09
May 16

10 – 18
May 23

19 – 25
May 30

26 – 38
June 6

39 – 51
June 13

52 – 63
June 20

64 – 75
June 27

76 – 87
July 4

88 – 99
July 11


A small percentage of tax returns will require additional time to process and to compute a stimulus payment amount. For these returns, stimulus payments may not be issued in accordance with the schedule above, even if the tax return was processed by April 15.

All or part of an economic stimulus payment may be applied to back taxes or certain other debts of the taxpayer, such as delinquent child support and student loans. In such cases, the IRS will send a letter to the taxpayer explaining the offset.

To accommodate people whose tax returns are processed after April 15, the IRS will continue sending weekly payments. People who file tax returns after April 15 and receive a refund can expect to receive their economic stimulus payments in about two weeks after receiving their tax refunds, but not before the date they would have received their payment if the return had been processed by April 15. To ensure taxpayers receive their stimulus payment this year, they must file a tax return by Oct. 15.

Two bureaus of the Treasury Department are involved in making the payments. The IRS will calculate the amount of each economic stimulus payment based on the tax year 2007 income tax returns it receives. The IRS will then forward the information to the Financial Management Service (FMS), which is the bureau of the Treasury Department that makes federal payments such as Social Security benefits, federal income tax refunds and, now, economic stimulus payments.

The IRS reminds taxpayers that they can get their stimulus payments faster by using direct deposit when they file their tax return.

In addition, the IRS urges taxpayers to file electronically. For people who normally don’t need to file a tax return, the IRS and Free File Alliance have a special program set up to allow for free electronic filing.

Resolution Update

Seeing that we're almost through the first 90 days of the year (76 and counting..), I thought I'd look to see how I'm progressing towards my new years resolutions. The original post is in quotes...

* Drop Sixteen Pounds by April 1- just before hunting season '07, I weighed in at 166#. This morning I'm 180#. I have this really cool Navy Seals exercise and diet plan that worked very well for me a few years ago. I'll begin that plan again to help reach this goal.

With two weeks to go, I've made progress, but I'm not nearly as close to my target. Right now I'm at 174#. At this rate, it will be the end of April before I'm down to where I'd like to be. Good news is that I'm going in the right direction!

* Payoff the MBNA Visa Card- I have a few more months at the intro rate of 1.49%, then it will adjust to prime +. The balance is right around $7k (I intentionally charged some big ticket expenses and purchases instead of taking the money out of a high yielding money market account, of which I will do when the rate on the credit card adjusts.)

I was able to meet this goal, although I didn't exactly pay it off. In reality, I paid off about $4500 of the amount owed and refinanced the balance into long term debt. The good news here is that we are down to a car loan, our mortgage, our HELOC, and a small personal loan. Other than our monthly living expenses, this is all of our debt. Progress!

* Sell the boat- not the little fishing boat, but the run about. On top of being expensive to insure and maintain, the price of gasoline is becoming quite prohibitive. The only problem with selling it now is I'll be taking a bath in losses because I'll need to price it low enough to attract a buyer. The boat, although in extremely good condition, is 20 years old this year. This 23' Regal Valenti runs like a top, powered by a 7.4 liter Mercruiser. I've owned it now for 4 years and loved almost every minute with it! In case you or somebody you know wants to buy it, I'll email you pictures! It has a brand new 2006 Venture Trailer that can go with it, if the price is right!

This is one thing that I really do not want to do, but understand that I really should. It's not yet the right time of year to put a boat up for sale (we still have a foot or two of snow on the ground..). I think that my bath might be worse now than what I originally thought. I'm not in a position where I NEED to sell the boat, its just that if I don't use it more than a few times a year, is it really worth keeping?

* Read a book a week- right now I'm finishing up Rudy Giuliani's biography (not that I'm a fan or anything, just reading the book). Next in line will be Tim Ferriss's 4 Hour Work Week or Lee Iaccoca's latest.

I finished reading Giuliani's biography. I'm glad that's over. I also finished Tim Ferriss's 4 Hour Work Week. This has to have been one of the most eye opening books that I have ever read. Highly recommended! I probably would have read a couple of more books by now, but I've been so engrossed reading, and re-reading this book, I haven't wanted to use the time that I've found for anything else, yet!

* Work 4 hours per week!

It was relatively easy to shave off a few hours a week by employing some of the methods discussed in the 4 Hour Work Week. Progress!

* Stay within the budget!

Anyone who has ever tried to stay within a budget will tell you that one of the hardest parts of establishing a budget is keeping track of everything that you spend. Simplifying our spending was and is the hardest part. However, the fewer the daily expenses, the less there is to keep track of. More progress!

* Continue to grow my business- will be adding a few new services to include tax prep and plastic card POS processing.

Thus far, I've progressed to the point of having the plastic card POS processing service available, but haven't yet pursued it. It's on the back burner right now. I need to work on the game plan.

* Visit Graceland

Our plans for this goal have changed a tad. Instead of going to Tennessee, we're going to DC. We'll be visiting all of the attractions.. We'll be there for about a 3 days, so we should have enough time. From there, we're going to visit Hershey, PA, going to Hershey Park. No telling how long they'll be open now that they're moving operations to Mexico....

Kids and Cash

One of the best and nicest things that we as parents can do for our children is to teach them about money. I don't mean things like balancing a checkbook. I'm talking about fiscal responsibility.

Things like how to earn. How to save. How to buy. How to give. How to invest.

A while back, I wrote in this post about a story that suggested kids today expect that they'll be big wage earners, earning over six figures. I hope its true! But, without knowing how to handle their finances, they'll end up living paycheck to paycheck, no matter what their level of income.

Here are a couple of real quick ideas posted at Free Money Finance on starting the teaching the process with your kids.

Related posts on Money and Credit
Teaching a son about borrowing
Financial Illiterates

Tapped into the Emergency Fund

At around midnight Sunday, the lights went out. I was worried that if the power was out for too long, the pipes might begin freezing. But, it wasn't terribly cold outside and I knew that it would probably be okay at least until it was light out.

When the sun came up, we still didn't have any power. So, I went to the basement to get out the emergency generator. Getting it out from the basement wasn't an easy chore. Ice had built up in front of the basement door. I had to chop through that before I could get the door opened.

Finally, I got the generator outside and went to start it up. Wouldn't you know, after my third or so pull on the cord it snaps! Now what!

I go inside to call the power company to find out just how long they anticipate the power being out. After holding for 15 minutes or so, I'm told it could be until TUESDAY!

Now, the power had been out for nearly eight hours at this point. I couldn't fix the generator, or otherwise get it to start, so I called Lowes to see if they had any generators.

Chuck told me that they were going fast, that he had a few left. I took out my emergency credit card and purchased it over the phone.

This generator set me back about $750.00.

I really didn't want to spend this money, but I didn't feel I had much of a choice. As far as I knew, the power may have been out for another couple of days, and if my pipes were to freeze, it would have cost me as much, if not more, to repair the damage. Not to mention that I wouldn't have any heat or water if the pipes were to freeze.

Anyway, the new generator has an electric starter, so I won't have to worry about breaking the cord next time. I'll get the old generator fixed and keep it as another stand by, or maybe I'll sell it to get some of the money back.

The power came back on at 4:00 pm. The new generator ran for just over 5 hours...

Reviewed- Kiplingers new Car Buyers Guide

Kiplinger just announced its new Car Buyers Guide, so I thought I'd spend a few minutes checking out the site. Here is what I found-

User Friendliness-

On a scale of 1-10, 10 being the most user friendly, I'd rate this site a 10. I was able to quickly and easly find out MPG and invoice information on each vehicle that I researched. Very easy to navigate.

Usefulness of Information-

Excellent information is provided on each model that was researched. From saftey equipment and ratings, to base invoice price, tons of easily accessable information!

Site Design-

Although it is a little busy, it is nicely laid out and easy to navigate. It didn't take me long to adjust to all of the infomation and to find what I was looking for.

Content-

Tons of information for the car shopper. From new car invoice pricing to used car information, this site appears to have it all! I especially liked the ability to 'spec out' the car of my choice so that I could (1) see how much money it would be, and (2) see what options were available.

Summary-
Great content, lots of information for the car shopper. If you're looking for information to arm yourself with before shopping, I'd highly recommend visiting the Kiplinger Car Buyers Guide

Click Here for the Press Release

This Remedy is as bad as the problem!

This remedy is about as bad as the problem!
Bernancke suggests banks write off loan principal to save foreclosure

During a speech yesterday at the annual convention of Independent Community Bankers in Orlando, Florida, Chm. Bernancke gave a speech about 'Reducing Preventable Mortgage Foreclosures'. He mentioned that over the past year and a half, delinquency rates on riskier mortgage loans have steadily climbed.

"... weak underwriting might not have produced widespread payment problems had house prices continued to rise at the rapid pace seen earlier in the decade. Rising prices provided leveraged borrowers with significant increases in home equity and, consequently, with greater financial flexibility. Instead, as you know, house prices are now falling in many parts of the country. The resulting decline in equity reduces both the ability and the financial incentive of stressed borrowers to remain in their homes. Indeed, historically, borrowers with little or no equity have been substantially more likely than others to fall behind in their payments. The large number of outstanding mortgages with negative amortization features may exacerbate this problem."

The banker\lenders job is to measure risk, mitigate risk, and recirculate the money. One factor used to mitigate risk is limiting loan to value (LTV). In a real estate market that for years did nothing but climb and climb, it may have become easy for the banker\lender to exercise more flexibility when it came to LTV, assuming that the housing market would not crash.

One of the work out strategies that the Chairman discussed was refinancing the delinquent mortgage. He recognized that in many cases this is not possible. Two major challenges to refinancing are (1) tightening credit standards, and, (2) LTV Limitations.

"In cases where refinancing is not possible, the next-best solution may often be some type of loss-mitigation arrangement between the lender and the distressed borrower. Indeed, the Federal Reserve and other regulators have issued guidance urging lenders and servicers to pursue such arrangements as an alternative to foreclosure when feasible and prudent. For the lender or servicer, working out a loan makes economic sense if the net present value (NPV) of the payments under a loss-mitigation strategy exceeds the NPV of payments that would be received in foreclosure. Loss mitigation is made more attractive by the fact that foreclosure costs are often substantial. Historically, the foreclosure process has usually taken from a few months up to a year and a half, depending on state law and whether the borrower files for bankruptcy. The losses to the lender include the missed mortgage payments during that period, taxes, legal and administrative fees, real estate owned (REO) sales commissions, and maintenance expenses. Additional losses arise from the reduction in value associated with repossessed properties, particularly if they are unoccupied for some period."

Mr. Bernancke further discussed the Hope Now project, where lenders have modified loan terms and reduced interest rates to make payments more affordable. But, he explained, this isn't really happening.

What he suggested as a remedy would further poison our economic recovery. Yes, it would stave off foreclosure, but how will it motivate those who aren't willing to or otherwise cannot make the payments, whether out of poor financial skills or lack of income? Moreover,it would wreak further havoc on Wall Street.

In order to cut losses, Chm. Bernancke suggests that banks write off the amount of the loan that is 'unsecured'; the balance of the loan that exceeds the property value.

If banks were to subscribe to this kind of thinking, how would investors react? How many more billions of dollars in losses would this amount to? How would this pan out?

First, housing values would further deteriorate, credit would become even harder to come by. Credit standards would be even more stringent, and interest rates and fees would skyrocket in an effort to immediately recover these losses.

I understand the 'why' behind Chm. Bernanckes suggestion, but I'm not clear on how it could possibly make a bad situation any better. I see it as another blow to our economy should it ever happen.

Read the transcript of the entire speech here

Should you take your $$$ and run?

During recent testimony, Chairman Bernanke predicted that there could be a rise in the failure rate of small banks. This comes because many of these small banks may have invested in areas where prices have fallen dramatically and are suffering losses associated with the subprime mortgage fiasco. What happens to the money that you have on deposit in these banks if they go belly up?

Federal Deposit Insurance Corporation

The FDIC protects your deposits up to certain limits should the bank fail. So, you don't need to rush out and withdraw you money from these small banks. However, you need to make sure that your deposit accounts are appropriately structured and that the bank IS in fact insured.

Not all banks are insured by the FDIC
Look for this logo to be sure that your bank is insured:

Click here to find out if your bank is insured by the FDIC

Types of deposits that are insured by the FDIC are; checking accounts, savings accounts, trusts, CD's, and, IRA's. Note that the maximum insured balance per account is $100,000 (Federal Law provides up to $250,000 coverage for certain IRA's). So, if you have a savings account with $137,000, only $100,000 of it is insured, the remaining balance is at risk.

How do you protect the entire amount? This from the FDIC Publication Your Insured Deposits "Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured."

There are eight ownership categories recognized by the FDIC which have certain requirements that will allow you to insure more than $100,000. Click on each for more information.

* Single Accounts
* Certain Retirement Accounts
* Joint Accounts
* Revocable Trust Accounts
* Irrevocable Trust Accounts
* Employee Benefit Plan Accounts
* Corporation/Partnership/Unincorporated Association Accounts
* Government Accounts

Don't make a bad debt collector out of a good one!

Just like good customer service and poor customer service, you have good and bad debt collectors. The good ones will work with you in order to get the debt paid. The bad ones on the other hand, they'll become abusive and break the law in order to get paid.

Speaking as an experienced debt collector (a good one!), nobody likes to be tricked or lied to, especially someone who is looking for ways to help you through a hard time. If you say that you're going to do something, then do it. Or, if something happens that makes it so you can't do what you say you're going to, then let the debt collector know.

"Most people are not aware of their rights.
And unfortunately debt collectors take advantage of that fact,"

Don't tell a lie just to get the debt collector off the phone. The debt isn't going to go away and neither is the debt collector. It is time to come to terms with the debt, own up to it, and deal with it.

What if you're one of the unfortunate ones that get a bad debt collector who is nasty, abusive, and, doesn't care about the Fair Debt Collection Practices Act? First, know your rights! You need to know what the debt collector can and cannot say and do. Knowing your rights is your primary defense against unfair debt collection practices.

This article called "Rogue Debt Collectors--How to Fight Them" by Jen Haley, explains some of your rights and shares some ideas on ways of dealing with the rogue debt collector.

Own a cat? You can relate!

Couldn't help but put this up here...

If you've ever owned a cat...
Uploaded by a62vw

Don't take anything for Granite

I listen to Morning Edition on NPR during my commute to work. This morning, they aired an interview that they had with a granite company owner in Barre, Vermont.

Barre toutes itself as the Granite Capital of the World. Have you ever been there? It is a very Italian community with many very skilled atisians. The Hope Cemetary, as are many of the other cemetarys in central Vermont, is a showplace of the scupltures that these talented folks create.

The interview wasn't about how gifted these people are. Instead, it is about how much of the talent and granite is now imported from China. The granite company owner said that what would cost her over $2000 to create is available, delivered from China, for LESS THAN HALF of what it costs her!

What will this do to the granite industry in the US? What about the scupltors who live here? What does this have to say about us, the consumers?

It made me think about how we in this country have raised the bar of living so high that we have driven ourselves right out of the market place; we are too high priced! The people in China are happy just to have a pot to, well, cook in! We on the other hand, not only need more, but WANT more!

Seperating our needs from our wants must become a priority. Lowering our standards might help to drive down our costs, and eventually turn things around for us.

Could this be what happens when a people become materialistic?

What are you thoughts? How do you feel about our standard of living? Do you feel that by having such high standards that we have ruined it for ourselves? Do you think that we have too many luxuries that have turned us into spoiled children?

Here is a link to the NPR podcast "U.S. Increaasingly Turning Overseas for Granite"

How to stop charging stuff on credit cards

Stop charging stuff on credit cards

This might seem like a no brainer to some, but to others it is real issue. People trying to get themselves out of debt can have a hard time doing so if they continue to use credit cards instead of cash. When you're in the debt hole, a credit card isn't a ladder to help you get out. It's like a shovel that digs your hole only deeper. The enticements to use the credit cards, like low introductory interest rates, rebates, and, travel points, don't help at all. If you're in the debt hole, you need to ignore these incentives and take steps to make steps to climb out of the hole!

If you use credit cards out of necessity, you need to take a hard look at what you are purchasing with the credit cards. The suggestions that follow should help.

Identifying the Stuff

The first step to take is find out what 'stuff' you are charging. Get your last few months of credit card statements, a pad of paper, a pen, and take a look at what you purchased with the credit cards. Make three columns on a piece of paper. Title them as follows; Bills and Utilities Stuff, Store and Online Purchases Stuff, and, Other Stuff. You can take it a step further and add columns to track the amount of the charge for the stuff, but keeping this simple is more important than detail right now.

Next, take another hard look at the things that you charged. Put an 'X' next to each item that you know that you could have lived without, a 'feel good' charge. Circle those items that are necessities in your life. Place a check next to anything that wasn't a necessity, but something that you like anyway and aren't really willing to do without. If there is anything left that doesn't have an 'X' or a check mark or is circled, draw thin line through it. These are things that you don't need and can live without. Take an honest look at why you decided to trade your money for this 'stuff' and keep reading...

Click here for an example of what your paper might look like -

Click here for a spreadsheet

Breaking the Cycle (BTC)- Start paying cash

Let's look at ways to make purchases in the future without using the credit card. Each charge that you made was a payable to someone, that instead of giving them cash or writing them a check, you opted to use a credit card. From a convenience and speed perspective, nothing is better than swiping the plastic to take care of the bill, but at the same time it conveniently and speedily puts you in debt! It is too easy for most people to make charges to their credit card and lose track of how much they've spent until they get their credit card statements in the mail.

BTC Strategies for necessary stuff- The Circles

1. Set up an online checking and savings account, like at ING DIRECT, where you can get free on-line bill pay, a debit card, and, electronic checking. Instead of having your monthly cable or satellite services charged to a credit card, pay them electronically with free on-line bill pay. You can schedule regular payments to come out of the account so that you don't really even have to think about it. If the payments are variable, then go to the utilities web site, and change the credit card billing information to the debit card that will come with your new online checking and savings account.
2. Other necessary purchases like food, clothes, and gasoline should no longer be charged to your credit cards. Instead, plan for these purchases in your budget and begin using cash or your debit card. If you have a traditional bank (bricks and mortar, local branch) where you have a checking account, write checks instead of using the debit card. This helps to break the habit of using plastic. Have a personal goal of eliminating plastic from your life. Its good for your finances, and good for our environment!
3. Carry cash instead of credit cards. Use cash for the small minor and daily necessary purchases.

BTC Strategies for stuff you're not willing to do without- The Checks

1. Eating out is something that many of us enjoy and might not be willing to do without. But, do we need to charge these dining expenses to a credit card? Remember, these are items that are more discretionary than the necessities and are things that are more lifestyle, quality of life type things. Don't let that which brings quality to your life contribute to your debt hole! Bring plenty of cash to pay for your dining entertainment. If you don't have the cash, then reconsider whether or not you can afford this lifestyle (right now anyway, after you get out of debt, you'll surely be able to better afford it!).
2. As already mentioned, these are truly quality of life and lifestyle things which need to be considered in a budget. If you are regularly charging these 'Checks' to your credit card, ask yourself if you could continue enjoying them if you had to pay cash each time. Could you even do it on cash? If not, then this is a HUGE wake up call that you're living beyond your means. This is probably one of the big reasons why you're in a debt hole with nothing to help you but a maxed out credit card and some airline miles!

BTC Strategies for the 'Feel Good' stuff

1. Sometimes people shop and buy stuff just because it makes them feel better. For many this is an addiction for which professional intervention should be sought. For others, it is a matter of prioritizing what they want to use their money for, and how they're going to pay for it. When going to the mall out of boredom, bring some cash, leave the credit cards at home. This limits what you can buy on impulse and won't dig your debt hole any deeper.
2. Put a freeze on your credit card. This doesn't mean you call the credit card company, no it's much easier than that. Here is what you do. (1) Get an empty coffee jar, or some other plastic container. (2) Fill it 3/4 full with water. You can ad some food coloring if you'd like, it makes for a nice effect! (3) Carefully place all of your credit cards in the water. You must be very careful so as to not splash yourself and get everything around you all wet! (4) Place the container with the credit cards in it into your freezer and let chill for 24-48 hours. Now, when you're getting ready to go to the mall and get some feel good stuff, you'll have plenty of time to think about what you're doing with your money while you wait for your credit card to thaw out...

Now, some will tell you to keep one of the credit cards out for emergencies. I've thought about this long and hard. Don't do it- freeze them all! If you are in a debt hole, no matter what, you don't need more debt. There isn't anything so important that you need to spend money on right NOW!

BTC Strategies for all the Other Stuff

1. Plan your purchases. This other stuff is stuff that you've determined that you didn't even need! You just bought it! Now, if it still has tags on it or if its still in its package, maybe you can return it or sell it on ebay.
2. Get on a budget to help plan where you're spending your money. Don't lose site of the fact that just because your not forking over cash or righting a check that you're not going to pay for this. Borrowing and spending is a plan for disaster. You want out of the debt hole don't you? Cut out this other stuff then!

In summary, the goal is to avoid using the credit card to finance your purchases. Although credit cards are convenient and efficient, if you're using them instead of cash, then you're in danger of digging a hole that will be very hard to get out of. There used to be a saying that if you don't have the cash in your wallet, then you can't afford it. In today's world, if you don't have the cash in the bank or the cash flow to afford this stuff that you are charging on your credit card, then you can't afford it. Credit cards are the number one reason people have driven themselves into bankruptcy and other financial ruins. Be wary of credit cards, use cash and checks instead.

Related Posts
Transfer fees and minimum payments
Compulsive Spending Disorder
Bankruptcy on the rise

Need a Smoke?

Fortunately, I was able to break the smoking addiction years ago. You know what they say about reformed smokers, they're the worst kind! One of the things that helped me to stop smoking (notice I wrote stop, not quit? I take great pride in having not ever quit anything, but I have stopped doing some things.. there's a difference!) was the toll it was taking on my wallet, not to mention my health!

A pack 'o' butts cost somewhere in the neighborhood of $5.00. If someone were to go through a pack a day, they're missing out on some serious cash. To say that smoking is expensive is an understatement. Talk about money going up in smoke!

A person smoking a pack of cigarettes a day spends about $1,825 a year. If this person became a non-smoker, and made regular monthly contributions to a savings account earning a measly 4%, they would at the end of...

10 years they would have $22,900
15 years they would have $38,271
20 years they would have $57,040

That's at 4%! What if you could earn 8%?

10 years.... $28,546
15 years.... $53,993
20 years.... $91,907

What if instead of saving this money, it was used it snowball debt? First, the reformed smoker could rapidly reduce and retire their debt, then they'd be able to save like a miser! Not to mention, they'd would be a lot healthier too!

There’s a hole in the bucket - Blunt Money

You're going to the well with you water bucket. It's a pretty good walk from where you started to get to the well. You fill your bucket with water and trek on back to where you began. Now, your bucket is empty. All that work for what? Nothing? An empty bucket? Is that what you wanted?

How did the bucket get empty? Was it because you weren't watching it? Was the water spilling over the sides as you went along?

Is there a hole in the bucket? Is the water somehow leaking out from a hole that you're not aware of? Or, is there a hole that you do know about, but you're just trying to get the bucket home before it's empty?

Alright, what does this tale of the empty bucket have to do with personal finance?

What if the bucket was your wallet or bank account. What if the water was your paycheck. What if the trek from the well to where you started was the time between paychecks?

How would you fix your bucket? Some people try to patch the hole with a short term loan. In some cases, these short term loans can be a life saver, as described in this post called Removing the Burden of Debt. But, other times, borrowing to replace the money that you lost because you were careless with your bucket, or to patch a whole is a very bad idea.

Be sure to read this post at Blunt Money There’s a hole in the bucket where there is more discussion about borrowing when you have a bucket problem!

141st Carnival of Personal Finance

The 141st Carnival of Personal Finance is hosted by the Broke Grad Student. There were many, many, excellent posts! Here are few of my favorites.

• Five advantages and disadvantages to online banking by Money Mythos- just what it says!
• Reduce and eliminate ATM Fees at Green Panda Treehouse. According to GPT, over $4.5 billion in ATM fees went from our pockets to the bank. I'm all for keeping this cha-ching!
• Top 10 Tips for Getting Your First Mortgage over at the Finance Blog. Some good advise. I agree that there isn't any harm in waiting. Time is usually on your side.
• The importance of renters insurance, and why you need it at the Moneycrashers. Extremely valuable! Unless you have nothing of value that could be stolen or burned in a fire, then you need it!
• Tips for entering sweepstakes and getting free stuff offered by the Baglady. You can't win if you don't play!
• How to put together a budget with irregular income. Another post at the Moneycrashers!
• Budgeting- An easier, smarter way by Prime time money. I like the idea, focus on what you need to change, not what is working the way you planned.
• The Credit Report Jingle and Car buying Reality by Monroe on a budget. When did lenders stop worrying about whether or not you can afford the proposed loan payment?

Thanks goes out to the Broke Grad Student for hosting this weeks carnival, and thank you for including my post about correcting errors on your credit report !

Looking for some free financial calculators?

I found a post over at the The Digerati Life this morning. You might be interested in some of the calculators mentioned there. I'll bet the Life Expectancy calculator is getting a lot of use!

Have a great weekend!

Here's the link to The Digerati Life and the Free Calculators!

How to correct an error on your credit report- Free e-book

As mentioned in yesterdays post, sometimes there are errors on your credit report. How do you correct them and have them removed?

One way would be to work with a credit repair company. However, you can save money by doing it yourself.

Step One
You'll need to have a copy of your credit report (Click here to learn how to get a free credit report). With this, you'll be able to reference the exact information and how it is being reported should you need to provide it for documentation. Get any other proof of the error that you have (paid receipts, etc.) and make copies of them. DO NOT SEND ORIGINALS because if they become lost....

Step Two
You need to tell the consumer reporting agency (CRA), in writing, what you believe the error is and how it should be corrected. Your letter needs to include your complete name and address and clearly identify the items on your credit record that you are disputing. You need to state the reasons why you believe the information is incorrect and ask that the information be removed from your credit file. Mail COPIES (no originals) of any documentation that you might have. If you are mailing a copy of your credit file, mail only the page that has the trade-line that you're disputing, and highlight or circle the item that you're disputing. Here is a sample dispute letter from the FTC that you can use:

Date
Your Name
Your Address, City, State, Zip Code
Complaint Department

Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing.)

Step Three
Make copies of the letter and all of the documents that you're including. Mail the letter Certified and request a Return Receipt to the CRA. This will give you formal record of both mailing the letter and the CRA's receipt of the letter. Once the CRA has the letter, by law they must act on it unless they feel that it is lacking basis or otherwise does not have merit, completing an investigation usually withing 30 days.

Here is the address and contact information for the credit bureaus:

Equifax
P.O. Box 740256
Atlanta, GA 30374
(800)-685-1111
Web site: www.equifax.com

Experian
PO Box 2002
Allen, TX 75013
(888) 397-3742
Web site: www.experian.com

TransUnion LLC
P.O. Box 2000
Chester, PA 19022
(800) 888-4213
Web site: www.transunion.com

Mail copies of the information that you sent to the CRA to the creditor or other information provider that you dispute the item. Read this post for more information about disputing a billing error.

The CRA will contact the organization that provided the information that you are disputing, forwarding any relevant documents that you might have provided. If the information provider determines that there is an error, they must notify all three of the repositories (Equifax, Trans Union, Experian) of the error and have it corrected. They must report their actions back to the CRA who in turn will notify you in writing of the outcome. You will be provided another free copy of your credit report if any changes are made to it as a result of the investigation.

Step Four
Ask the CRA to send notices of the corrected information to anyone who has received a copy of your credit report in the last six months, just to set things straight with those that might have made a decision about you based upon the incorrect information contained in your credit report. For example, the loan that you received might be priced higher because of the error (read here for more information about how errors can effect your credit score). If the correction has a material effect on your credit score, then you should ask the creditor to reconsider your situation.

Step Five
If the investigation does not result in the item being removed or corrected, then you can ask that a statement about the account be included on your credit file and on future reports. This gives you an opportunity to have your statement appear on the credit report along with the trade-line information that you are disagreeing with.

If the information provider fails to respond to your dispute letter, the CRA will remove the information from your file. This may mean that if you bombard the CRA and information provide with dispute letters, the information provider may give up and not respond or change the information just to make you go away.

Otherwise, if the information is correct, and the information provider is unwilling to change it, the only other way for it to be removed is through the passing of time. Most negative information will be reported for 7 years, bankruptcy information is reported for 10 years. Other information like judgments can be reported for 7 years or until the statute of limitations runs out.

Get this free eBook from the FTC on Building A Better Credit Report

Related Posts
Disputing Credit Card Charges
Get Acquainted With Your Credit Score


You can read this and many other informative personal financial posts at the Broke Grad Student who is hosting the 141st Carnival of Personal Finance!