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You can always see just how much money you have available to you and where it is.

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Quicken Online Now Free

Question: Cindy, can you give me some specific ideas for how to save money on everyday stuff? Thanks. ~ Janice

Answer: Sure, Janice, frugal living does not have to be about a life of deprivation. The frugal life is one of thrifty shopping, careful choices, and a saving mindset. Making just a few adjustments in five areas of your normal life will help you become a frugal person. Readers: if you have ideas, please add them to the comments below.

Groceries are one of the most expensive items on any budget.

• Be sure to take a list with you to the grocery store; this will help to cut back on impulse items. If you are still concerned, then why not take a friend shopping with you. Exchange lists at the store and each of you can gather up the other’s groceries, virtually eliminating all impulses.
• And don’t forget to cut out coupons. It may take some time, but it will add up in the end.

Frugal people still vacation, they just do it wisely.

• You can really stretch the vacation dollars by traveling during the shoulder season or off-season, although it’s a good idea to check to see if local attractions will be open if you want to attend.
• Since much of a vacation budget goes to housing, why not spend your vacation visiting family? There is the joy of bonding with relatives, but you also get to stay for free.
• Being frugal doesn’t mean that you have to stay home all the time. If you do a little looking around, you are sure to find that many of the museums, zoos, botanical gardens and other places offer free or discount days. For those that don’t offer the free days you can check to see if a group discount is available and then call up your other frugal friends for an outing.
• For movie nights, check with the local library to see if they have movies available to check out. There are lots for you to do, and you can do much of it without ever spending a dime.

Clothing is one of those items that civilized society has deemed necessary. The clothing manufacturers, who realize our dilemma, often charge outrageous prices.

• Buying out of season (buying winter clothes in the summer and vice versa) will help to cut this item in your budget.
• Instead of buying new, check out your local thrift store or second-hand store where prices are a fraction of the retail (and sometimes the clothes still have the original tags). Consignment stores in big cities often have lots of great bargains.
• An even better way is to just trade with friends. Hand-me-downs are the frugal person’s best friend.

One item that it is not always wise to buy new is the automobile.

• While there is nothing wrong with having a nice car, if you can’t pay for it with cash then it is probably not worth it. Drive what you have while you save up, and then purchase with cash. Just having the money in hand will give you a lot of negotiating power. Today, many of the used car dealers include some type of warranty with their cars, making the purchase even more secure.

The frugal lifestyle can be more enjoyable than any other. There is money for the things you truly want to do and there is no worry about how the bills will be paid each month. By being a little thrifty here and there, by thinking about your choices before you make them, and by developing a mindset of savings, you can live a fulfilled frugal life.

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5 Areas in Your Life to Live Frugally

Question: Cindy, I have over the past few years been rolling over funds from one 0% credit card to the next. I now have one for $8K expiring in a few months and have not seen any offers come in for low interest rate credit cards. What do you recommend? My credit score is very good, around 750 last time I checked and I am not in a position to pay it off. BTW, you helped me restore my credit score, remember? ~ Lucy

Answer: Hi Lucy, I do remember and 750 is a terrific credit score. Unfortunately, it is going to be tougher and tougher to find those 0% credit cards. You can blame the sub-prime mess for it, too.

In many cases, the banks are going using their credit card division profits to prop up their other operations. That means less good deals for consumers.

Take a look at Card Ratings.com run by my friend Curtis Arnold and get the best card you can find even if it’s not at 0%, although Card Ratings.com is still showing a number of 0% cards out there. Hopefully those good deals will come back especially for those with great credit ratings like you!

Warmly, Cindy

P.S. Curtis has written a new book How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line.

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Are 0% Cards Still Available?

The other day I got a call from “Mastercard and Visa” offering to lower my interest rates. “Yippee,” I thought.

But, I was immediately on guard because I know that Mastercard and Visa are separate companies and I didn’t think they’d be working together. Not that I know this for sure, but that’s what came up for me.

The guy told me that a lot of people are cancelling their credit cards because of high interest rates and the banks would rather lower the interest rates and keep the customers. He asked me if I had any cards with balances over $5000 and interest rates higher than 10%.

I laughed and said, “I don’t know.”

He said, “You don’t know if you have balances over $5,000?”

I said, “I don’t know if I have interest rates over 10%.”

Then I asked him if I would have to give him my credit card numbers.

Click.

I guess not.

Just a reminder to be aware of anyone who calls you looking for personal information. Legitimate companies, banks and the government DO NOT do that! Getting lower interest rates sounds like such a great thing that it’s easy to be taken advantage of.

It is OK to call your creditors and ask for lower rates. If you’re making the call to a verifiable phone number (such as the one on your credit card statement), go ahead and provide the information requested to identify you. They’ll probably ask a number of questions to verify that it really is you who’s calling.

Warmly, Cindy

P.S. Please pass this warning on to your friends and family.

P.S. Scam artists are also calling about the Economic Stimulus Money from the government.
NO ONE will call from the government about this check!

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Lower your Interest Rates? SCAM WARNING

Question: I am contemplating using a convenience check from my credit card company instead of taking out a personal loan from my credit union. The convenience checks carry a 3.99% interest rate for the life of the loan. However, a personal loan from my credit union would carry a 10.25% interest rate for the life of the loan which can be no longer than 5 years.

I am thinking about borrowing between $10,000 to $15,000. I have about a $400 balance on my credit card and would pay that balance off completely if I used the convenience check and resolve not to use the credit card again until the “convenience check” loan was paid.

I don´t have any debt obligations at the present time and was wondering which route would be the best route to go. Thanks in advance to any advice you could provide. ~ John

Answer: Hi John, excellent question. I can’t tell you exactly to do without knowing more info, but I can ask some questions that might get you thinking more broadly and lead to the answer that is best for your situation.

First, what will you be using the $10,000 - $15,000 for? How do you plan to pay it back?

If you pay it back using the minimum payments (15,000 loan at 4%), it will take you 209 months to be rid of your debt. In that time, you will pay $2,275.87 in interest. (play with it yourself at BankRate.com). This is a minimum payment of 2.5% of the balance or $375 per month.

If you take 5 years to pay it off (like the personal loan from the credit union) (found at BankRate.com), it will cost you $276.18 every month.

Interesting with the 2nd calculator: if you pay $375 per month, you’ll pay it off in 43 months.

Another thing to check is the fine print. Can they raise your rates if you are late on any other bill? This is a new “twist” many credit card issuers are adding (see previous article on Universal Default).

Just be sure what you are able to afford in terms of payback and the use of the money. Set aside reserves for the life’s usual “emergencies” like home/auto repair, medical expenses, job layoff or reduction, etc. Please don’t use the money to create additional lifestyle expenses like purchasing a boat or airplane or fancy car. These “toys” are far more expensive to keep up than the initial payment!

Hope this helps. Let me know if you need more info.

Warmly, Cindy Morus

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Credit Card Convenience Checks

Does Divorce Threaten Your Financial Future?

Come learn the 5 most important things you need to know BEFORE you sign on the dotted line.

Don’t let a lack of financial expertise stand in the way of negotiating a fair divorce settlement.

Q&A time included.

Class will be held on teleconference line to preserve your privacy (long distance charges apply).

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Don’t Divorce Your Money teleclass

January 7, 2009
3:00 - 4:00 Pacific/6:00-7:00 Eastern
Cost $29 Early Bird Registration by January 2
$39 after January 2

Class will be held on teleconference line to preserve your privacy (long distance charges apply)

Did you know that if you can pay all your bills on time, all you really have to do is change the way you pay your debts - using the money you already make!

Learn how to outsmart the credit card companies, get off the credit card debt roller coaster and create a new way of thinking and behaving about money that will change your life forever.

Step-by-Step Debt Elimination Plan available from instructor.

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Pay Debt Quickly

Question: My fiancee has a lot of debt. I’ve already helped her get out of some of it, but I’m not sure if this is a good situation to be married to. What should I do? ~ Sheldon

Answer: Hi Sheldon, you’re right to be concerned! I’m sure many of our readers can give you some good advice. (Readers can comment below).

My advice is for you to be very concerned. I have lots of divorcing couples in my office who say “I paid off his/her debt before we got married.”

Here are some questions for you to think about:

• How did she get the debt?
• What has she done to get out of it?
• What is she doing now to get debt free?
• Has she changed her money behaviors?

If she’s continuing the patterns that got her in to debt and looking for outside help (you), it’s a situation that will probably not get any better and you might find yourself in my office looking for divorce financial help.

Please encourage your fiancee to straighten things out before you commit to the marriage and if she’s unwilling, “RUN“. We all know the statistics on what money problems do to a marriage. Set yourselves up for success, not failure.

I’d be happy to work with you, too. As a Certified Divorce Financial Analyst, I much prefer to help couples before they end up in divorce.

Warmly, Cindy Morus

P.S. A good book to read is David Bach’s Smart Couples Finish Rich.

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Fiancee has Lots of Debt

It’s “Ask a Stupid Question” Day!

Today’s your day to ask me any money question you’ve ever wanted to know, no matter how stupid or silly it might seem.

I’ll answer as many of them as I can get to today.

So, click http://www.mendyourmoney.com/contact.htm and ask away.

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“Ask a Stupid Question” Day

I’m sure you’ve seen and heard headlines just like this.

So, exactly what is a Recession?

A Recession means that a country’s GNP (Gross National Product) drops at least 2 quarters in a row - 6 months of shrinking. Unfortunately, we only know that we are in a recession after the 2 quarters are over and all the data has been gathered and reported in the media.

Regardless of whether the US economy is in a Recession, your family may be in one. Has your income stayed the same or even shrunk over the last year or two? And we know energy, food, housing and taxes are all increasing. This combination could mean that your family is in a Recession.

Recessions are as important to an economy as the boom times just like a controlled burn improves the health of a forest. During recessions, weaker companies are weeded out and companies who make it through are stronger for the next boom time.

Furthermore, even if the economy is booming, you can be going through a personal recession due to job or lifestyle changes such as a new career, starting a new business, leaving the workforce to take care of a family member or a medical condition.

What should you do?

On the Home Front

1.      Reduce or eliminate the non-essentials. Act as if you are on a desert island. What would you really need to be there? Be brutal and leave no spending unexamined. Newspapers, groceries, telecommunication services, personal grooming, transportation - can any be postponed or eliminated?

You can start by reducing expenditures rather than completely eliminating them. For example, when I looked at my newspaper cost a couple of years ago, I decided it just wasn’t worth it but I so enjoy the Sunday paper that I kept it. Now, I’ve canceled it altogether and when I have the urge for the Sunday edition, I walk to the grocery store and pick one up.

Keep a Needs/Wishes list (you can download one here) so your subconscious mind isn’t constantly reminding you. When you do have extra money, go for the needs and save up for the wants. This is a good habit to get kids to develop, too, and the Needs/Wishes list is a good one for them, too.

Note: you’ll want to involve your family or you’ll feel like the Enforcer if you make all the decisions. And, when offered the opportunity, kids can be very creative. Try to make it a game rather than making the kids feel like they’re in the poor house.

2.      Review all insurance policies. Get appropriate insurance for the best prices. Life insurance, for example, has come down in price over the last few years so you may be able to get equal or more coverage for lower cost. Increase your deductibles if you are able to pay more out of pocket. Make sure your insurance shows that you have alarms, air bags, or a home security system.

3.      Request rate reductions from on your credit cards. Yes, some credit card companies are lowering rates but they often don’t do it unless you ask. If you hear “No”, ask for a supervisor or ask when they would be able to do it for you. You can call in again later if you don’t get the answer you are looking for.

4.      Refinance your car. Believe it or not, this is possible. One of my clients purchased a new Prius last year and the original interest rate was a whopping 12.45%. As soon as she started coaching with me, I suggested she refinance it and she was able to get it down to 8.45%. Just last week, she refinanced it to 6.45%!

At Work

1. Protect your current job. Find out if there’s any additional training you can participate in. Let your boss know you are ready and willing to take on new responsibilities. Look for opportunities to reduce expenses, improve customer service and offer more value to your employer. Take outside courses, read books or learn more online - keep yourself up-to-date on happenings in your field. Try copying articles to your boss that would be interesting or helpful and make a comment or two about how it relates to you.

Attend and participate in at least one professional organization. Offer to be the greeter so you can chat with everyone that attends. See how you can offer value to other members.

2. Think of yourself as a contractor. Gone are the days of life long employment. Your employer will keep you around as long as they get more out of you than you cost them. You should be thinking the same way; if you’re growing in your profession and earning a salary appropriate to your skills and talents, then stay with your current employer. But always be on the lookout for better opportunities. Your loyalty is to you and your family rather than your employer. Always keep your resume fresh and your ears to the ground at work. Read your company’s annual report (and others in your field) and set up a Google alert so you can be informed and watching for current news about your employer.

3. Change your income tax withholding. Did you get a refund this year? If so, you can increase your monthly take-home pay by reducing the amount taken out for taxes. The average family gets about $2000 back and that’s $166 per month (just for federal). Of course, you have to remember that you won’t get a refund next year. You should target paying exactly what you owe. Check out the IRS withholding calculator for an estimate http://www.irs.gov/individuals/page/0,,id=14806,00.html. You can change your withholding any time you want. Note: if you are working several jobs, add all the income together and do the calculation.

4. Check your benefits. Make sure you are taking advantage of all that your employer has to offer - health care and health care savings accounts , retirement contributions (you and your employer), education assistance for you, scholarships for your kids, child care accounts, etc. If you have a health care savings account, review what is a covered expense and make sure you don’t lose anything you’ve contributed

5. Continue funding your retirement. This should be one of the last things to go because retirement is inevitable and the longer you have your money in a retirement account, the more it grows. $10,000 in a retirement account for 10 years at 7% will be approximately $20,000 but for 20 years, it will be about $40,000 and 30 years will be $80,000 — and it will be even more if you continue to contribute. If you must stop your contributions, restart as quickly as possible.

When all else fails…

1. Contact your car loan holder or mortgagor and ask for an extension. If they say “yes”, they’ll extend your loan by a month and will probably ask you to cover the interest for the month. This will increase your total costs but it’s better than having your home foreclosed or your car repossessed.

2. Get counseling. Talk to Consumer Credit Counselors or a Mortgage Counselor. Watch out for scams in this area. Above all, don’t ignore your creditors - you’ve promised to pay and they expect you to do so. But they’re used to dealing with people who are struggling and most have programs that can help you out of a temporary jam.

3. Consider borrowing from your 401k. You will have to pay it back over 5 years so if you’re already having trouble making your payments, this one isn’t for you. For example, if you borrow $50,000 at 4% interest, your payments will be over $900 per month after taxes so subtract $900 from your current take home pay. Can you afford that? Plus, if you are laid off or leave your job, the entire amount will be due or it will be taxable (see below).

Don’t you dare…

Raid your retirement accounts. The government heavily discourages you from doing this by tacking on any withdrawals to your income (you pay taxes on the amount and it could push you into a higher tax bracket) plus a 10% penalty. One of my clients took $40,000 out of their 401k last year and it pushed them into the 35% bracket. So out of the $40,000, they paid the IRS $14,000 in additional income tax plus $4,000 in penalties and that was before Oregon got them (another 9% or $3,600). In the end, they netted $18,400! And since they didn’t have enough taxes withheld from it, they’re in “hock” to both the IRS and Oregon.

One final note…

Have you ever noticed that the more you focus on the negative things around you, the worse things seem to be?

The good news is that you can ‘choose’ to do just the opposite! If you focus on all the wonderful things in your life, guess what you get more of? Exactly! Wonderful things.

So while you’re out there breathing anyway, see how many things you can find in your life today that are wonderful and focus on them. Think of family, friends, home, a job, your health and more! (This is another great thing to teach your kids).

By the way, ‘choice’ is one of the biggest principles we teach in all of our programs. financial freedom, after all, is your choice.

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Recession Actions

2. Buy a home and pay off the mortgage before you retire. The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. They also have an asset that can be borrowed on in emergencies or converted into cash through sale of the home.

3. Participate in a work-related retirement program. Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100% on their investment.

4. Outside of work, save monthly through an automatic transfer from checking to savings. These savings will provide funds for emergencies, home purchase, school tuition, or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Savings Bond, or stock mutual fund. What you don’t see, you will probably not miss.

5. Calculate your risk and return. If you earn 4% interest, your money will double in less than 15 years; at 7% it will double in about 10 years and at 10% it will double in 7%. Use Asset Allocation to reduce your overall risk.

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5 Easy Ways to Save and Build Wealth

How about you? The long drive to California and my parent’s party gave me a chance to reflect on what my parents taught me about money and finance…

Mom and Dad were Depression babies who grew up in blue collar families. My Dad (#2 of 6 kids) was the first one to go to college and he did it all on his own for 2 years, then they got married and both worked to support themselves.

We always lived in nice, suburban houses (there were 3 kids) but none was ever the nicest one on the block; we rode in Ford station wagons (I always wanted the one with the wooden sides and the seats in the trunk, though), and went camping or visited family for vacation. One year they took us to Florida because my Dad’s company had an apartment they let us use and when I was in high school, we flew to Florida for spring break.

We even had a 2-way “party” line until I was in Middle School and we were never allowed to talk for more than 30 minutes! We got our first color TV when I was 12 and never had more than one.

My Mom and I sewed all my clothes (and I had something new for every date I went on!) They didn’t buy me a car or pay my insurance. I didn’t have any student loans because they covered college for me along with my high school savings. We didn’t talk about money much but one of my favorite memories is sitting with my Dad at the breakfast table reading him the stock market pages.

I remember being about 15 and adding up all the bank accounts we had - it was $20,000. Wow, I thought that was a lot of money. When I told my Dad, he made a face and a disgusted sound. I asked him “Why?” and he said, “That’s not a lot to show for 20 years of work!”

My Dad moved us around every 2-3 years (Cincinnati, Detroit, Cleveland, Dayton, Cleveland, New Jersey, California) and every move meant a new company. This was before “vesting” so he didn’t have any retirement or pension plan until he was 40-45. They did do well with homes they purchased in California and New Jersey after 1975 and they maxed out IRAs and 401-(k)s when they became available. I’m sure this is why I focus on retirement with everyone I work with.

Now, they live in a luxury retirement development where they have time and resources to travel and party (non-stop) with their friends.

So what’s the lesson here?

They focused on the basics with their kids, didn’t create debt and saved as much as they could. They got a late start on retirement but didn’t let that stop them from taking advantage of every retirement account they were eligible for. Now, they can live forever (and I hope they do) and still not run out of money.

What did your parents teach you about money? You can post your comments below!

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What I learned about Money from Mom and Dad

Are you losing your home because you can’t afford to pay your energy bills and your mortgage? If you aren’t facing foreclosure can you afford temperature settings that keep you feeling comfortable inside your home?

During the recent U.S. housing boom, builders completed homes quickly. Interest rates were low and investors eager to cash in on high returns on investments. Unless you were knowledgeable about energy-efficient home features and made sure they were included during construction, chances are your new home wastes a lot of energy. It’s also likely you don’t feel comfortable in your home due to uneven room temperatures, drafts, cold floors, etc.

There was a time when home air conditioning was a luxury. Now it seems more like a necessity. Average temperatures in North America have risen over the last 20 years, remaining high for longer periods and forcing people to turn on air conditioners powered by electricity to survive excessive exposure to heat.

Rate caps that once held down electricity costs are ending countrywide. Maryland residents recently experienced the shock of a 70% electric rate increase. Pennsylvania residents will receive the first of several rate increases starting in 2008.

The mortgage industry facing huge losses from foreclosures is working with homeowners to reduce monthly mortgage costs. A reduction in mortgage costs may help, but this is only a temporary solution. Moving to another home, unless it is energy efficient will not solve the problem.

The best solution is to implement energy saving features in your home as quickly as possible. This will not only be good for you financially, it will also be good for the planet.

Siti Crook, 2007

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Foreclosures Caused by Rising Energy Costs

October 7, 2008 from 6:30 - 8:30
Hood River Middle School Room 119
Limit 12     Cost: $29

Contact Community Education at 541-386-2055 for registration

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Discover Your Money Habitudes

Money Wi$e Women Conference

Saturday, November 1, 2008
9:00 -  5:30, lunch included

Portland Community College, Rock Creek Campus

• Being Wealthy isn’t about Money at all
• Why Handling Pennies is so Important
• Keeping the Money Demons out of Marriage
• Proactive vs. Prescriptive Spending
• Why Time and Knowledge are your Best Friends

Cindy will cover all these topics and more in her 1 hour workshop! Bring your questions.

Money Wise Women Educational Services educates and empowers women of all ages, ethnicities and economic backgrounds on financial literacy. The registration fee includes all conference sessions, materials, and lunch. Every participant receives a copy of the book The Money Therapist: A Woman’s Guide to Creating a Healthy Financial Life and Track Your Spending Checkbook.

Money Wi$e Women Conference Registration
Early Registration: $39.00 (if registered by October 24, 2008)
Bring a Friend Special: Register yourself & a friend for $68.00. ($34.00 each — $5.00 off)
Registration after October 24, 2008: $49.00

Download the flyer!

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Sometimes the desire to buy the amazing things you see in the home improvement stores can be almost overwhelming. There isn’t too much that you can do about that except to move on as quickly as possible on to the next item on your list.

That said, decorating on a budget can be quite fun if you can manage to loosen up a bit and not drool all over the expensive items. There are many inexpensive items you can buy that will look like their expensive cousins if they’re displayed properly. And that’s really the challenge of decorating on a budge, the ability to take an inexpensive item and be able to disguise its true worth and make it look like a hundred bucks instead.

Then you also have the challenge of actually staying within your budget. For me now, that’s more of a challenge than anything else as I regularly tend to go overboard. Unfortunately if you’re decorating on a budget then the very last that you want to do is to go overboard.

If you do spend more than is feasible on one particular piece then you can be sure that everything else on your list is going to get thrown off and no matter how hard you try it will be difficult to get everything back on track.

The only way that you could even justify going way over budget for one piece of furnishing is if the quality is exceptional and you’re thinking of making it the key piece of the room. If that’s the case then you can always get away with something as your other pieces will necessarily be less expensive. In this case what you need to do is to highlight this expensive piece and use the other pieces to enhance it.

Decorating on a budget need not mean that you have to cut down on quality to get everything that you want. As you are decorating on a budget it can also be fun, and creatively undertaken, it can also be done with flair.

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Decorating On A Budget

Cash back on gasoline purchases is more important now than ever. Gas prices have skyrocketed over the past few years and we could use a discount wherever we can. With 2% cash back on a credit card, if you use your credit card when buying gas, you get an instant 2% discount.

In addition to these benefits, the Capital One No Hassle Card also offers no annual fee and a 25 day grace periods. As long as you pay off the balance on your card every month, you won’t have to pay anything in interest or fees. This means that all the cash back is yours.

If you have looked into any other cards, you may have noticed that some offer a higher cash back rate between 3 and 6%. So then why should you use the Capital One No Hassle Card with only 2% cash back? The best benefit of the No Hassle Card is that there are no limits to rewards.

This means that no matter how much you spend, you get 2% cash back on gas and 1% cash back on everyday purchases no matter what. With other cards you may only be able to get at most $15 per month. That means if you spent enough money to get $30 cash back, you will only get $15. If you spend enough money to get $30 cash back with the No Hassle Card, you will get the whole $30 back.

This no hassle, no limit feature is perfect for those who spend a lot of money on gas and other purchases. For example, let’s say you and your spouse both have a 1 hour commute 5 days a week and 2 kids that drive as well. If you have to fill up the tanks of 4 cars for a total of 6 times costing about $50 each, you’d be spending $300 a week getting $6 a week back and $24 a month. If you got 3% cash back limited to $15, it wouldn’t matter that 3% of $1200 a month is $36 because you would still only get $15 back.

If you want to save money on gas, this might be the way to go. The cash back could be a big help in a time of high gas prices. If you can save money, take advantage of it!

As always, use your credit cards wisely and responsibly. And remember, if you’re carrying a balance on the card, there’s no grace period.

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Is the Capital One No Hassle card for you?

Why Does It Matter?

Most of you know that a low credit score will hurt you on mortgage, car and credit card interest rates. But did you know that a low credit score can hurt you in other areas, too? Such as…

• Car and Home Insurance
• Getting a Job or a Promotion
• Utility Deposits
• Cell Phones
• Some Medical Procedures
• School Loans
• Your Marriage

6 Ways To Improve Your Credit Score:

1. Make Sure Its Right

Mistakes in your credit report will ruin your score. So, get copies of your Credit Report through Annual Credit Report.com (not free credit report.com) or by calling 877-322-8228 (it’s OK to give your Social Security Number because you called them).

For those of you who keep up with your Credit Report, Annual Credit Report.com is just fine. If not, I recommend myFico because it’s easier to read and you’ll be able to see all the info at once. It’s also the most like the one that will be sent to your creditors. Annual Credit Report.com gives you one report for each (lots and lots of pages.

You can dispute any errors by writing a letter to the credit reporting agency (you’ll have to do it for all three if the error is on all your reports). Tell them what’s not correct and send copies of any documentation you may have. Request that it be removed or corrected. Go to the post office and send it “return receipt requested” so someone has to sign for it. Keep copies of everything.

Next, let the creditor know that what’s incorrect because if they keep reporting the error, it won’t be removed from your credit report.

2. Know the Truth

Before you can improve your score, you have to know what it is!

You can get copies of your credit report at Annual Credit Report.com for free but you’ll have to pay for the credit scores.

I recommend getting your FICO score straight from the source…

If you get your score regularly and just want to make sure nothing creeps in, you can use two new free credit score website: Quizzle and Credit Karma. I tried both and was impressed with them.

3. Pay Your Bills (on time)

The best “secret” for having and keeping a great credit score is to pay your bills on time. And watch out because the credit card companies are getting sneaky - if your bill arrives after the specified due time (not just the date), it will be late, you will pay a late charge and it will affect your credit score. Mail it in plenty of time or pay online at the creditors’ website (check the fine print first). You might also want to set up automatic payments for at least the minimum payment so you’ll always pay on time even if you are out of town. You can always pay more separately.

Paying any bills late may affect all your other bills. This includes unpaid parking or speeding tickets, library fines, medical and utility bills. These creditors are reporting late and non-payments to the credit reporting agencies, too. I received a bill the other day from my daughter’s college town for a parking ticket shed thrown away; I made her pay it immediately before it hurt my credit score.

By the way, if you are on on-time payer and are late, call the creditor and ask them to reverse the late charge and not report it. Most will but you have to catch it promptly.

4. Don’t close old credit cards.

After you’ve paid it off, put the card in a safe place and keep the account open. The length of your history is an important part of the calculation. Another reason to keep it open is that your “utilization ratio” is another big part of the calculation. This means how much of your credit limits you’ve used up. The ideal is in the 30% range.

Weird, I know. Why would they give you a high credit limit and then not want you to use it? Statistics show that people who are bumping up against their credit lines have a higher chance of defaulting.

5. Don’t Go Crazy

Be cautious about applying for lots of credit in a short time frame. Lenders call this “excessive credit seeking” and it makes them think you’re desperate.

If you’re applying for home or auto loans, you have a 30 day window where multiple applications will only be counted once. You’ll want to shop around before actually applying.

6. Don’t Delay

Unfortunately, these steps will not fix your credit score overnight. It can take 3-9 months before you see improvements. However, I can pretty well guarantee you won’t see improvements if you do nothing.

The good news is that even if your score is really down in the dumps, you can improve it and the last 2 years count the most.

What Next?

I know that all of this can be overwhelming from ordering it to reviewing it to making the corrections. If you need help with your credit report, call me. I’m a Certified Credit Report Reviewer and I’ve reviewed hundreds of credit reports.

You’ll order your credit report and send it to me by mail or email. I’ll look it over and well have a 30 minute review to tell you exactly what you have to do. And… If you don’t want to write the letters, I’ll do that, too and send them to you by email so you can put in your private information, sign them and send them out. What could be easier?

You can call me directly at 541-387-2995 to find out more.

Warmly,

Cindy

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“Why Your Credit Score Really Matters - In Ways You Might Not Know - And 6 Ways To Improve It”

Yes, you can be covered for more than $100,000 based on how the account is titled. For example, you can have account(s) for 1$00,000, your spouse can have account(s) for $100,000  and you can have joint accounts for $200,000. Note: Joint Trust accounts are not included in this ownership. For more information, see the FDIC publication, “Insuring Your Deposits.”

You can also confirm that your accounts are covered by the FDIC at EDIE - Electronic Deposit Insurance Estimator. It will allow you to calculate the insurance coverage of your accounts at each FDIC-insured institution.

Someone else wrote in to ask why anyone would have that much cash in a bank anyway? That’s a good question and I’ll address that in a future article.

Warmly,

Cindy

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Update: Take Your Money And Run?

I received that very question from some clients this morning. David and Rhonda had heard that one of our local banks was in trouble and wanted to get my opinion on getting their money out. I hope my response caught them before they made the mad dash to the teller window.

Here’s what I told them:

“I doubt there’s a big rush to pull money from XYZ Bank.”

Remember, your money isn’t really “in” the bank. They’ve lent it out to others and they are required to have amount of deposits on hand to cover normal business. However, if everyone takes their money out at once it’s a “run on the bank” and will certainly cause the bank to go under (a la The Depression). Remember what happened in “It’s A Wonderful Life“?”

According to CNN, the FDIC had to close IndyMac because customers made a run for their money withdrawing more than $1.3 BILLION. Ouch!

“This institution failed today due to a liquidity crisis,” OTS (Office of Thrift Supervision) Director John Reich said.

What Should You Do To Protect Your Money?

• Make sure you don’t have more than $100,000 in any one bank
• Sit tight and don’t increase the chances your bank will fail by withdrawing your money. That’s why there’s an FDIC (Credit unions have the NCUA so they’ll be OK, too).

The last thing the government wants to see is banks failing and there are programs in place to make sure you don’t lose your money (up to $100,000 per person - not per account). It just increases all our costs when you take yours out.

There’s lots to worry about in the economy right now but so far, this isn’t one of them. You can be sure that if I’m concerned, I’ll be letting you know.

Warmly,

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Take Your Money And Run?

Question:I don’t know how to pay off my debt. My debts are more than the money I earn each month. What can I do? ~ Naomi

Answer: Hi Naomi, that’s a tough spot to be in. I’m not quite sure from your question if your total debts are higher than your monthly income or if the payments are higher than your income. I’m going to address that your debts are higher than your income but you’re still able to make the payments.

It sounds like this is really worrying you — maybe that you won’t be able to make the payments soon. So, now is a good time to be asking this question.

Since you can make the payments, every month, you’re actually in a good position to be able to eliminate the debt over the next couple of years (perhaps sooner). Here’s what to do…

1. From Minimum Payments to Fixed Payments. Convert all your current minimum payments to fixed payments. That means that if you are paying $55.55 this month, you’ll pay that every single month until the debt is paid off — no matter what the minimum payment is on your bill.
2. Stop Using Your Credit Cards. There’s  no grace period on cards that have a balance so you start paying interest on new charges immediately.
3. Get Clear on Your Debt. List every one of your debts on a piece of paper (you can get my form here) so you know exactly what you’re dealing with. Sometimes it’s worse than you thought and sometimes not so bad but you won’t be able to really know until you see it all in black and white.

If you’d like to instantly create a Debt Payoff Plan and see exactly the date you’ll be out of debt, try our PDQ Pay Debt Quickly system (with a 30 day no-questions asked guarantee). It’s great to have a plan that you can follow every month.

Naomi, please let me know if you have any other questions.

Warmly,

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Debt Payments Higher Than Income

Amanda recently came to see me because she was at her wit’s end. Amanda has a stressful job as a Chiropractor and she often goes shopping after work. She says, “I just need to relax before I go home to Steve and the kids”. She has a closetful of clothes many she’s never worn - and some still have the tags on.

6 months ago, Amanda tried to hide her purchases from Steve but he found out when he opened the bills and yelled at her. Recently she opened up a new credit card in her own name and used her office address so Steve wouldn’t find out. She’s scared that he’ll leave her if he ever finds out.

At the end of our last phone appointment, Amanda said, “I’m so glad I found you, Cindy. It’s such a relief to be able to tell somebody everything and not have you get mad at me or tell me I’m a bad person.”

Most of us know in our heads that this is a dangerous road but we all have a vice or two. If you’re faced with this dilemma here are a few things you can do:

• Shop with a friend or family member who will hold you accountable (and who won’t join you in making purchases you both know you shouldn’t)
• Use a list and promise yourself not to deviate from it
• Use your debit card (did you know that if you are carrying a balance on your credit card, there is not grace period - interest starts adding on immediately)
• Create a “cooling off” period by putting items on hold and coming back in 24 or 48 hours
• Ask yourself “Do I need this or do I want it?” (Download my free “Needs and Wishes” Worksheet)
• Develop a list of fun things to do and choose one when you feel like shopping
• Know that it’s OK to have the urge to shop and not respond
• Find another way to get your “fix” (thrift stores and garage sales can be just as addictive)
• Stay out of the stores and off the internet if that’s your shopping vice

What’s your vice? What are your alternatives? How will you keep from feeling deprived with your new choices?

If you’d like to talk about your shopping worries (or anything else), check the Event Calendar for my next open office hours.

Warmly,

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Shopping Too Much?

Too often, irregular occurring expenses get left out of our financial equation. Our income stretches to cover the regular monthly expenses and the remainder trickles away toward little things like the morning espresso or lunches out or a dozen other daily splurges. We choose not to think about the brakes that are getting spongy or the plumbing that’s beginning to make strange noises. And we end up riding a financial roller coaster, never knowing when the next crisis will throw us for a loop.

Planning and saving for those events can help prevent an ordinary life from turning into a crisis and can also cut down dependence on credit cards. Not having savings is a major reason people get into debt — event when they don’t have problems controlling their spending.

An Anti-Emergency Fund^TM is the way to anticipate and save for those irregular events that are anything but unexpected. The Anti-Emergency Fund^TM is the foundation of a three-part savings plan.

With a little advanced planning, a broken water heater, a high winter heating bill or the family vacation don’t have to result in financial emergencies. An Anti- Emergency account helps in saving for those variable expenses, both expected and unexpected, that inevitably occur.

Some people call this their “emergency fund,” but it’s really a savings fund that helps you prevent financial disasters. No, you can’t predict when your car is going to break down, but you can predict that it will occasionally need maintenance and repairs and set aside a little money in advance for those events.

Here are some steps to help you get started on your Anti-Emergency Fund^TM:

Identify your irregular expenses.
Take an inventory of those variable expenses that occur throughout the year. Looking back at checking account registers and credit card statements can help you do this. Some examples of these include property taxes, insurance premiums, vacations, car tune-ups, holidays and birthdays. List as many of your non-monthly expenses as you can remember.

Write the anticipated amounts on the calendar.
In many cases, you will know when the expenses are due to occur. In others, you won’t. But you know that sooner or later a car will have problems or an appliance will break down. Try to anticipate these expenses and list them somewhat earlier than you actually expect them to come up. Be sure to update your calendar as you discover more expenses.

Include money in your monthly spending plan for non-monthly expenses.
If your car insurance, for example, is due in May, set aside a small portion each month starting in February. That way, when May rolls around you can transfer the expense to your spending plan and have money available to pay it. Setting aside even a few dollars each month for foreseeable expenses can make it easier to manage your money throughout the year.

You may think you don’t have any “extra” money during the month to set aside, but repairing your car or paying your insurance are not optional expenses. By setting aside small amounts ahead of time, you’re avoiding larger money woes ahead. So you may need to find ways to reduce your regular monthly spending. By tracking your expenses, you may discover areas where you can trim your monthly spending with only small sacrifices. Costs of twice-weekly trips to the drive through or a professional manicure can add up quickly over a month. The important thing is to start today. It may be discouraging at first if you find that you don’t have enough money to fully fund your Anti- Emergency Fund^TM, but you’ll begin to succeed the minute you start the process. Small amounts of savings add up quickly and start compounding immediately!

One of the mistakes people make when trying to get their finances under control is not having a savings account. They may reason that it’s better to put money toward reducing credit card debt at 18 percent interest than to toss it into a low-interest regular savings account. The problem is that if you don’t have money set aside for those unavoidable bills, you inevitably end up adding to your credit card balance to cover the difference.

Stabilizing your debt means agreeing not to incur new charges and to begin paying down what you owe. A savings account is a key element in making that happen — and in improving your financial freedom!

I recommend INGDirect for savings because they’re the best bank I’ve ever found!

Warmly,

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Create your own Anti-Emergency Fund

Suze Orman is making her online Will and Trust Kit available to all at no charge. I don’t know how long it will last! Here’s how to get it:

• Go to SuzeOrman.com.
• Click on Will & Trust Kit link on upper left menu.
• Click the orange Gift Code button.
• Type “people first“.

You can create a will, a revocable trust, Financial Power of Attorney, and an Advanced Directive / Durable Power of Attorney for Healthcare. No more excuse and it’s f-r-e-e!

This is a pretty basic package so if you have a large estate or other issues, you’ll want to consult an estate attorney. You can still go ahead and do the Healthcare Power of Attorney, though and save your family the heartache of having to make end-of-life decisons for you.

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Free Will & Trust Kit From Suze Orman (online version)

This is a busy week for me. I have several new clients who are struggling with retirement issues so I’m working on a special report that I’ll share with you when it’s completed. And it’s Newsletter week, too, so keep your eyes open for that.

In the meantime, if you have any Retirement questions, worries, success, mistakes, tips, traps, etc. that you’d like to see in the special report, I’d love to hear them. You can send them to me here. Would you also include your gender, age and income? Of course, everything will be confidential.

Hope it’s sunny where you are!

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Working on Special Report