Category: Money Management

Sorry, your card was declined

Sorry, your card was declined

You never want to hear your waiter say, “Sorry, your card was declined.” For people with bad credit, hard times are inevitable. When they occur, you can dig a deep hole and crawl in, but there are better ways to respond. Here are the most common scenarios involving embarrassing credit and answers most worthy.

1. “I’m sorry sir, but your card was declined.”

When a boy says these terrifying words, you are bound to flush crimson dining companions as speculate on the state of your finances.

Squelch panic, “said John Ulzheimer, president of consumer education. Explain calmly that the tape may have been damaged, and make another card for the purchase. If she was denied because you are maxed out, however, and you have no plastic or other cash, excuse yourself and call the creditor to request an “opt-in for overlimit fees.“” This will allow operations overlimit to fill, “says Ulzheimer. You will be assessed a fee, but your reputation will be saved.

2. “Er, Jane, we need to discuss this issue before you pay.”

It’s awful to be sued for a debt, but it is horrible when your employer receives an order for garnishment of wages, a part of your salary should be given to your creditor.

Do not wait until the sheriff to serve hits the paper, said the trust expert Delores Pressley. Be proactive and request a meeting with your boss, saying: “I am terribly sorry that a personal question has extended to the workplace. I’ll find a solution as quickly as possible. “This straightforward approach may compensate for a negative opinion of your supervisor. Also, you can not be fired for garnishment (unless there was more than one in a period of 12 months), which may inspire some confidence.

3. “Rent to you with your bad credit? Ha!”

Ready to sign a lease? If your credit is terrible, you could be in the same humiliation that Matthew and Fiona Peters, Madison, Wisconsin, experienced. As newlyweds, Peters thought they had found the perfect apartment. Yet in the rental office crowded, the agent announced loudly: “There is no way that we can rent with your credit. It is bad… very bad. “Every parent called and asked for help in vain.” After the second call, we sat there red-faced, wondering what we were supposed to do or say next, “said Matthew Peters.” It was emasculating! ”

Today, Peters offers advice to others in similar situations, “Keep your cool and do not take it personally seen a high level for all residents not only protects the property owner’s investment, but people living there as well.. “Focus on your finer points.” You could say: “My credit is bad, but I’m busy and make it a point to always pay for my first home,” said Peters. You may need to sweeten the deal by offering a co-signer, doubling the deposit or to pay rent in advance.

4. “Great, once we see your credit file, we can complete your job application.”

credit checks pre-employment are the norm today – and you’ll want to hide if yours is full of big balances, late payments and accounts written off.

Sure, you can deny access to your reports, but it could encourage the hiring manager to build your resume. So stand tall and to disclose past problems at the front. Honesty can not increase your chances. And relax on shamefully low credit rating. “The credit bureaus and their professional organization (the consumption data Industry Association) have publicly stated countless times stating that they do not provide credit ratings and audit reports of the working credit” says Ulzheimer.

5. “Darling, I can not wait to start a life with you – buy a house, have children …”

Have terrible credit, but in the beginning of a long term relationship? Assuming it can be scary. Like it or not, you must reveal the horrible truth. Then, commit to open communication and make amends, “said Joe Rubino, author of” Self-esteem book.”

“Contact all debtors, make arrangements to clean the debts, start a savings plan, cut credit cards and take full responsibility for the management of future purchases responsibly.” Strengthen your skills and your faith life partner through financial counseling, therapy or life coaching.

6. “I need to talk with Mary about a bill pending.”

Whether calls or messages collection go to your workplace, roommate or relative, your private situation will become public. First, the end of the phone calls. The Fair Debt Collection Practices Act prohibits collectors third discuss your debt with anyone but you. And while they may contact you at work if you ask them to stop, they should.

Tell them you know the law and that you will file a complaint with the Federal Trade Commission, if they persist. Then, “said Rubino, act with integrity and clean up your mess of money. “This done, he is afraid of anyone except your own. If you feel the need to explain calls to anyone, just say you made financial arrangements to settle debts and the case is supported “.

7. “OK, Phil, go ahead and charge those costs and we will reimburse you.”

A business trip is imminent and you are supposed to book a hotel room, flight or rental car. Uh oh, you have no credit. Do not worry, you’re not the only one not charging fees. About 29 percent of Americans live without credit. Suffice it to say that you only use cash, and ask to be paid with corporate funds or corporate card. Few employers balk at such a reasonable request.

Is it easy to deal with these credit problems mortifying gracefully? Of course not. But keep in mind that even a show of assurance from the air – and feel – better than avoidance.

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Four ways to save $100 every month

Four ways to save $100 every month

Two frugal experts reveal how to shave 15 percent off your monthly utility bills.

Imagine spending just $20 a year — or less — for yearly telephone service. Or, perhaps you’d be interested in shaving 15 percent off your monthly utility bills. Two frugal experts say you can do it.

Everyone looks for simple ways to save, especially in today’s tumultuous economy. Bankrate asked two frugal bloggers to share their thoughts on some nearly effortless ways to hang on to your hard-earned green.

If you take their advice to heart, you’ll likely save at least $100 a month around the house.

Rethink Your Phone Service

Fed up with expensive telephone bills? Jonni McCoy, author of the Miserly Moms website, recommends switching to an alternative phone service like magicJack or Skype.

Such services allow you to make local and long-distance calls for a fraction of the price of traditional phone service. For instance, magicJack customers can get phone service for as little as $19.95 a year, while Skype calls are free to other Skype users.

“These are good alternatives to (traditional) phone service, and they include long distance, so no extra card is needed,” McCoy says.

Customers nervous about dropping their traditional phone carrier have other options for saving money.

For example, consider canceling long-distance service from your phone carrier and using calling cards instead, says Susan Palmquist, creator of money blog The Budget Smart Girl’s Guide to the Universe.

Need a second phone line? In this case, a service like magicJack works well, because it’s “much cheaper than adding a second line to your existing phone account,” Palmquist says.

When it comes to your monthly cell phone bill, save money by cutting down on your minutes and switching to a more basic plan. Palmquist recommends switching to a pay-as-you-go cell phone.

Cut Down on Electricity

Each month, utility bills silently drain a little more cash from your wallet, preventing you from building a sizable emergency fund or retirement nest egg.

There are several ways to trim these bills. Three quick and painless ways to save include: switching to compact fluorescent light bulbs (which are more energy-efficient than standard light bulbs) lowering the temperature on your hot water heater (130 degrees Fahrenheit is enough to kill germs) and drying your clothing on a clothesline or rack whenever possible.

McCoy and Palmquist also recommend signing up for any incentive or rebate programs offered by the local utility company.

With these programs, you typically agree to allow the power company to briefly shut off certain appliances when energy demand is particularly high. In return, you get a credit on your monthly bill.

For example, customers who participate in Florida Power & Light’s On Call Savings Program allow FPL to install a small device on their water heater and air conditioner compressor. This allows the utility company to periodically borrow electricity for 15 minutes or so.

Palmquist — who lives in Minneapolis and gets her power from Xcel Energy — does this and gets a 15 percent discount on her bills.

Conserve Water

Are you drowning in monthly water bills? Palmquist and McCoy recommend money-saving options such as washing all clothing in cold water.

“I use cold water to wash clothes, and recently read that using the delicate cycle also saves water, too,” Palmquist says.

In some cases, saving cash actually goes hand in hand with superior performance, Palmquist says.

“We installed a low-flow shower head in the main bathroom and find it not only saves water, but the flow is better than the old one,” she says.

Of course, another “no-brainer” way to save is simply to use appliances less frequently. Wait until you have a full load before running the washing machine, dryer or dishwasher.

Don’t overlook water-saving tips for outside the home. Palmquist plans to invest in a rain barrel for outside watering next year. Meanwhile, McCoy recommends making changes to landscaping “so there is less lawn to water.”

Bundle or Drop Cable and Internet

McCoy suggests saving money by bundling cable and Internet services. Palmquist agrees, and recently switched to an “economy package” for her TV service.

However, Palmquist says it’s important to look before you leap into bundling.

“Sometimes it’s more expensive and they can lock you into a two-year contract, so check out everything first,” she says.

If you’re really gung-ho about saving, simply drop cable altogether. Perhaps you can watch your favorite TV shows for free on an Internet site.

Or, maybe it’s time to simply give up those expensive TV habits and think about the priorities that really matter to you.

“My main advice is to think about wants and needs,” Palmquist says. “Many of us think something’s a necessity when really it’s just a want.”

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10 smart ideas for reducing credit card debt

10 smart ideas for reducing credit card debt

A $10 purchase can help you save more than $40 a month — and get you started on paring down what you owe.

If you find yourself falling deeper into credit card trouble, it’s time to take a hard look at what’s coming in, what’s going out and see where you can free up some cash quickly to start hacking away at your debt.

Some trims may seem small, but if you package several of them together, you can soon get started on a respectable payment plan. Here are some ideas for places to turn first.

1. Cell Phones

“For $9.88, you can buy a TracFone (prepaid cell phone) with pretty decent coverage and pay by the minute,” says Mike Sullivan, director of education at Take Charge America in Phoenix. “And if you’re careful, you can end up saving $40 to $50 a month off a typical $80 cell phone bill.” He also recommends canceling your land line unless you have medical issues that may require emergency calls.

2. Cable / Satellite

Most people can save money just by getting rid of the extra pay packages they have — such as premium movie channels and extra services. “If you’re really in trouble, cancel the whole package,” Sullivan says. Check out the library for free movies, DVDs and CDs to bridge the entertainment gap.

3. Homeowners Insurance and Car Insurance

By increasing the deductible of your policy from $500 to $1,000, you can see big decreases on your premium, says Michael Barry, vice president of media relations for Insurance Information Institute in New York. “People pay about $880 a year, so if I can knock $88 off, it’s a start.” Regarding auto insurance, take a look at your collision insurance if you have an older car. If you have even a fender-bender, sometimes the cost to repair the car would be more than it’s worth, so perhaps you could cancel the collision insurance altogether.

First, look up the value of the car at Kelley Blue Book, Edmunds.com or the National Automobile Dealers Association, then check the collision line on your auto insurance bill and see what it’s worth to you to keep that insurance. Also, if you don’t drive that car much, look for a discount. “If you drive from 7,000 to 7,500 miles a year, you can often qualify for low-mileage discounts,” Barry says.
4. Transportation

Americans are increasingly finding alternatives here. In fact, consumers spent 11 percent less last year in this category, according to the Bureau of Labor Statistics’ 2009 Consumer Expenditures Survey released in October. If you have more than one car, this may be the time to look at downsizing to just one car and getting around with better planning, carpooling, bike riding, public transportation or car sharing. Car-sharing companies such as Zipcar operate in a growing number of cities and on many university campuses. You can rent a car by the hour when you have to have one without the expense of insuring and maintaining your own car.

5. Utilities

“People often overlook programmable thermostats,” says Edward Tonini, director of education of Alliance Credit Counseling in Charlotte, N.C. “You can spend $20 to get a programmable thermostat and if you set it right, it can save you $100 over the course of a year easily.”

6. Food

Households spent an average of just more than $300 a month on food eaten at home and about $215 per month on food outside the home in 2009, the BLS survey reported. “Maybe eating out isn’t necessary for you,” Tonini says. “Packing lunches and eating at home will lower your discretionary spending.”

7. Gym Membership

Are you really using it multiple times a week? Divide your monthly dues by the number of times you go in a month and get a realistic picture of what you’re spending on a one-hour workout. Park districts or community centers often have low-cost or free programs. Also check into exercise videos or a piece of home exercise equipment that you would use regularly. If you decide to keep the membership, check to see whether the facility offers discounts for coming at off-peak times.

8. Movies

A family of four can quickly rack up nearly $100 on one movie with popcorn, drinks and maybe even parking fees. “Instead of going to the movies, have a game night at home. It sounds kind of corny, but it will be more meaningful than sitting in the dark when you can’t talk to each other,” says Dave Gilbreath, a regional director with Apprisen Financial Advocates in Yakima, Wash.

9. Tax Relief

Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawaii in Honolulu, says, “Many of the families we work with are struggling with credit card debt because of loss of income. One of the first things to do is re-evaluate your tax withholding on your paycheck (if your spouse or partner has lost a job). If you don’t make the change, you end up with a whopping refund. You don’t need the money a year from now, you need it now.” If you’re overpaying taxes, you’re also giving the government a free loan and are likely putting off paying for your own bills, which can lead to fees and penalties, she says.

10. Health Insurance for Dependents

“If you’re struggling with loss of income, you may no longer be able to afford $600 being deducted from a paycheck to cover your dependents,” Burkholder says. She suggests checking to see whether you now qualify for a state or federal coverage plan for dependents, such as the Children’s Health Insurance Plan, or coverage by health care providers that may offer reduced prices for basic health care for children.

Deciding what to cut first will be different for every consumer, but whatever the choice, it should be sustainable, rather than a one-time quick fix, Tonini says. Sometimes it’s cutting out the daily $4 coffee, but “they need to figure out what their ‘latte factor’ is.”

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15-minute fixes to raise a credit score

15-minute fixes to raise a credit score

Setting up automatic bill payments can boost your number by as much as 50 points.

Improving your credit score can feel like a gargantuan task. But by spending just 15 minutes, you can give your credit score anywhere from a small bump to a major boost. Here are some tips from credit experts on quick — and sometimes easy — ways to raise your score.

1. Set up automatic bill payment or alerts.

“The one thing you need to do is pay bills on time — that has the biggest impact on your score,” says Carrie Coghill, director of consumer education for FreeScore.com. One way to do that is to set up automatic bill payment through your bank or credit union, at least for the typical minimum amounts of your bills, says Lita Epstein, author of “The Complete Idiot’s Guide to Improving Your Credit Score.” Or, if you’re not comfortable with automatic bill payment, Coghill recommends setting up regular email or text message alerts to remind you of bill due dates. On-time payments over a period of about six months can increase your score by as much as 50 points, says Epstein. “It shows you are getting responsible about your bills.”

2. Pay down revolving debt.

If your credit card debt is more than 35 percent of your credit limit, it’s probably dragging your score down, but paying balances down can provide a quick boost. Experts recommend setting up regular automatic payments to make a dent in your debt or making one big extra payment if you can sell something on Craigslist or eBay or if you get a windfall. “People sometimes get a sizeable tax refund. I recommend using that to pay off debt,” says Doug Borkowski, director of the nonprofit Iowa State University Financial Counseling Clinic. A good rule to follow is this: For every $1,000 of available credit, try to use less than $350, says Clifton O’Neal, a spokesman for TransUnion. “Say you have three cards, each with a $1,000 limit,” O’Neal says. “One has a $500 balance, one has a $350 balance and one has a $250 balance. Pay on all of them, but pay more on the first one to bring it down under 35 percent.”

3. Pay your credit card bill early.

If you use your card for everything from groceries to utilities to a pack of gum to get rewards — but pay in full each month — pay early. Because if you charge, say, $2,000 each month, but pay your bill after you get your statement, it looks as though you’re carrying a large balance when you’re not, Epstein says. “Check when the statement closing date is,” Epstein says. “Making the payment before the statement closing date — just five or six days early — can make a big difference over time. It will be reported to the credit bureaus as a $0 balance and will look like you’re holding less credit.”

4. Ask your credit card company to raise your limit.

If you carry a credit card balance but have been making payments on time and make enough money to support a higher credit limit, a quick phone call to your credit card company could raise your score. A higher credit limit will lower your credit utilization ratio (the amount of available credit you’re using), experts say. However, experts also say it’s important to be honest about whether that step would tempt you to rack up more debt. “It’s about knowing yourself, asking, ‘Am I going to be responsible using that credit card?'” Borkowski says. “Because what if your limit is $4,000 and it gets raised to $8,000 and all you end up with is more credit card debt? But, for those who can handle it, yes, call and try to get your limit raised so you’re at a one-third or less [credit utilization ratio].”

5. Go online to dispute an item on your credit report.

Some experts advise consumers to dispute a possible credit report error by registered mail, and to include evidence. But, let’s face it, many never get around to making copies, hunting down a stamp and heading to the post office. All three major credit bureaus offer the option of filing a dispute online — and it can be faster and easier, experts say. “The first thing to do is pull a copy of your credit report from all three bureaus. You can do it free once a year at AnnualCreditReport.com,” says O’Neal. “Look at each one and see if there’s anything you don’t recognize. If you have any questions about information on your reports, you can file a dispute online. You can track it online, too, so it’s a lot quicker.”

6. Just say no to too many inquiries.

When you’re buying those cool new sunglasses and the cashier asks if you’d like to get a 10 percent discount by signing up for a store credit card, just say no. “Whenever you take new credit, you get a ding on your credit score, so don’t apply for new credit cards all the time,” Epstein says. In fact, she recommends applying for new credit, at most, twice a year.

7. Get a late payment removed from your credit report.

In the “it-can’t-hurt-to-ask” category, it sometimes pays to call a creditor and ask to have a late payment removed from your credit report. “I always say, ‘just ask,'” says Borkowski, who recommends asking for the hardship department whenever you call a credit card company to make such a request. “A lot of times, general customer service might say they can’t help you, but the hardship department — or its equivalent — might,” Borkowski says. “They make a lot of money from the person who misses a payment every now and then but carries a big balance. They like to keep those customers.”

It is often repeated that, when it comes to credit scores, there are no quick fixes. However, if you follow these tips, you could see a big improvement in your credit score — with just a small investment of time.

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5 common credit card habits that cost you

5 common credit card habits that cost you

Most of us are guilty of some bad habits in our lives. There are too eat the fun stuff, and not exercising enough to burn, and tomorrow, salary expenses today. Of course, able to obtain and maintain a budget can be difficult to follow patterns, but avoiding these five common bad habits can add a bit of easy money to your bottom line.

1. By paying only the minimum balance. Paying just the minimum balance on your credit card each month to keep your creditors happy, but not to help you pay the interest costs more.

Corporate credit card to highlight the love Minimum Payment Due on your monthly bill – a trick they use to stretch your payments for years, costing you hundreds, even thousands of dollars in interest . For example, a $ 5,000 balance with a minimum monthly payment of 4 percent and an APR of 18 percent will take you a little over 11 years to repay, costs about $ 2,875 in total interest paid.

Do not believe? Discover what the credit card calculator to a good start today and see the real cost of paying only the minimum. The results are shocking, and you can rethink your habits minimum payment because it can cost you thousands.

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Debunking the myth of ‘good debt’

Debunking the myth of 'good debt'

Don’t prolong your state of debt by thinking some liabilities are smart to hold.

Think your low-interest mortgage is good debt? Think again. There is some comfort in believing that being in the position of owing money to someone or some company can in some circumstances be “good.” Suze Orman, arguably the world’s most popular personal finance author and guru, explains the supposed difference between “good debt” and “bad debt.” Mortgages and student loans are examples of good debt, while car loans and credit cards are bad. Some debt, like high-interest loans and credit card debt, are certainly worse than others, but rationalizing owing money to others by calling it “good” is a stretch.

When the public is willing to consider any particular type of debt good, the lending industry is the only winner in the long run. For the benefit of our own personal finances, we’ll prosper more by considering all debt bad and striving to eliminate that debt even if we feel it is good.

Don’t fall into the trap of prolonging your state of debt while holding the idea that these forms of owing money are somehow good. Here’s why “good debt” isn’t all that great.

1. Mortgages. A mortgage on a house is a classic example of a type of debt personal finance experts and real estate agents want the world to be at peace with. There is something to be said for mortgages: the reality is that only a small percentage of Americans would be able to afford to purchase a house without access to a loan. The lending industry and the government have historically made it as easy as possible to own a home. We’re not escaping home ownership debt any time soon.

The deeper reality is that the value of real estate increases at or a little higher than the rate of inflation over the long term, but is much more unpredictable over the short term — the length of home ownership most people experience. Some consider mortgages to be good debt because it allows a home owner to be highly leveraged, in a good position for appreciation, but it is risky.

In addition, the tax advantages to paying mortgage interest are frequently overstated. While most taxpayers see an increased refund thanks to the mortgage interest deduction, the benefit can’t compete with not paying interest at all. We’re stuck with mortgages for now, but there’s no solid reason for keeping them around longer than necessary, as one might do with anything called “good.”

2. Student loans. Student loans are an investment in the future; a bachelor’s degree in hand will significantly increase a person’s lifetime income compared with just a high school diploma. Again, the lending industry encourages taking on unnecessary debt, and colleges and universities are complicit.

It is unnecessary to borrow money to finance a college education. In his forthcoming book, Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents, author Zac Bissonnette explains how student loans can be more devastating to an individual’s financial condition than a mortgage. Did you know that bankruptcy can eliminate your credit card debt and your mortgage but your student loan will not be forgiven? Even the government will garnish your social security wages if you default on your student loans.

Bissonnette also shows how there is no good reason to borrow money for an expensive private college or Ivy League university when the quality of education you can receive and your earning potential is matched or bested by an inexpensive, local state college. Reconsider the assumption that you pay a higher price for quality.

3. Start-up costs. Whether starting a business requiring an up-front purchase of inventory or have just graduated college and need to buy appropriate attire for a career, some personal finance experts advise the cash-strapped newbie to anticipate tomorrow’s income and pay for your expenses with a credit card or take out a loan today. This, like borrowing money to invest in something without a guaranteed return, is risky.

While it is often true that success requires taking some risks, consider your options for dealing with the worst-case scenario. Unemployment is still at a high level, and many of last year’s graduates are still out of work with credit card balances increasing. Most new businesses fail.

Even borrowing money to finance assets expected to appreciate like a house, a person’s income potential through education, and a career or business carries risks and in some cases can be fully avoided with smart preparation. You may hear some personal finance experts call these types of debt “good,” but they are far from beneficial. At best, they are like other debt but might help improve your financial condition or quality of life at some point. At worst, however, even this debt can devastate your future if not watched, cared for, and eliminated.

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Spending cuts you might not even notice

Spending cuts you might not even notice

These tricks could raise your income or reduce expenses without affecting your quality of life.

It’s painfully clear Americans are still hurting financially. Jobless claims are far too high if we’re actually in any kind of meaningful recovery. Penalty withdrawals from 401(k) plans have been increasing, not shrinking. Mortgage rates are hitting 40-year lows with regularity and we still can’t find a pulse in the housing industry.

If there was a magic wand that would sharply raise incomes or reduce expenses, we’d be out there waving like mad. But that doesn’t mean there aren’t ways to cut and stretch. If you can afford it, give yourself some transition time to get used to spending cuts. Some will come at too steep a price in terms of your quality of life. But others may be painless, and you’ll never look back.

1. Know where your money goes.

This is Number One Obvious Idea that many people don’t follow. How can you possibly know how to save money if you don’t know what you spend it on? There are a growing number of online budgeting sites to help you. Use one, or do this yourself. Whatever you’ve been spending each month, try cutting it by 5 percent. Then cut it by another 5 percent the following month. Keep it up if you can, and put the savings in the bank or pay down debts.

2. Make a grocery list and don’t stray.

Once you’ve tracked household spending, you will see how much you spend at the supermarket. What’s less clear is that you also probably spend a lot of money on stuff you don’t need. In our house, we began downsizing our grocery spending by seeing what we were throwing out and the items that had freezer burn and should have been tossed. This helped sensitize us to unnecessary purchases. (My mom passed away nearly 30 years ago and I can still remember her hollering at me about wasting food.) We also save money by making fewer runs to the store. Our greatest savings come when we make a weekly meal plan, create a shopping list for that plan, and then buy nothing but what’s on that list.

3. Mothball a car.

If your household has two cars, try leaving one in the garage for a month. See how it affects your life. With a modest amount of planning, a lot of households might be able to make do with a single car. Once you’ve determined that you can do likewise, sell the second car, bank the money, and also begin enjoying lower bills for auto insurance, gasoline, and maintenance.

4. Try free phone service.

I’ve bought and used the MagicJack service, which is the most popular of its type. You order a small device — perhaps an inch and a half by three inches and about an inch thick — and it connects to your home computer. The software that launches when you connect the device provides easy-to-follow instructions. MagicJack also links from the computer to your existing phone set. So, you are making your phone calls over the Internet but using a regular telephone to do so.

I’ve found the audio quality higher than with products that require separate headphones and microphones. And picking up the phone is such a long-ingrained habit that there didn’t seem to be much to learn. You do need to get a new local phone number, which Magic Jack will provide at no extra charge. After the initial fee, there is no charge for domestic phone calls. This switch can easily save you hundreds of dollars a year. Think about keeping your existing phone line for a transition period in case MagicJack or a similar device doesn’t meet your needs. If you like the MagicJack and also have a cell phone, if could make sense to cancel your home land line and switch your home phone number to your cell. You’d lose your existing cell number but you’d at least be able to keep your old home number.

5. Trim television services.

Hey, I love my cable, and millions others love their satellite dishes. But if the times demanded, I would wave goodbye to a bundle of monthly cable charges. I’d also be in mourning during football season but I’d survive. I would install a digital antenna. And I’d begin making much heavier use of free online video sites that the networks and other providers offer.

6. Recheck insurance rates.

A year ago, I went out shopping to explore replacing all my insurance coverages. I wound up saving a bundle. When you’ve had your auto, home, life, and other insurance policies in place for several years, it’s easy to forget what I call “creepage” — those annual bump-ups in premiums. They really add up after a while. And while constantly rising health insurance rates may make it seem like premiums can only move in an upward direction, that’s not true. When you do shop around, you also may discover that your coverage needs have changed. If your cars are the same ones you had five years ago, for example, you probably don’t need as much collision insurance as you once did.

7. Forget about green; go brown!

The summer has been brutal where I live. But with dollars at stake, I am becoming very environmentally responsible. So what if even the goats pass by my yard?

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Five tips to setting effective financial goals for 2016

Five tips to setting effective financial goals for 2016

As the new year approaches, many will be analyzing the last year by assessing their lifestyles and committing to the standard personal resolutions: lose weight, exercise more, sleep more, reduce screen time, etc.

What many may leave off their list is something that may also have a major impact on their lives — a solid financial goal. Now is the perfect time to reflect on past spending and saving habits and to set realistic, effective money goals for the coming year. Here are a few tips to help you create successful personal finance goals for 2016.

1) Review 2015 spending habits

An effective method for setting your 2016 goals is to reflect on ​what you spent your money on this year. Derek Coburn, a partner at Washington Financial Group, recommends taking a look at your 2015 credit card and bank statements and identifying the three purchases that you feel best about and the three purchases that you regret most. According to Coburn, this exercise helps people make better decisions on future purchases and set more realistic financial goals. Coburn adds: “In hindsight, hardly anyone ever feels good about the money they spent on material goods and physical things. They almost always feel good about the experiences they purchased.”

2) Create a 2016 personal budget

Once you have reviewed your 2015 spending habits, creating your budget for next year will be easier. According to financial adviser Tahir Johnson, “Many people avoid creating a budget because they think its only purpose is to limit spending, but that is not the case. By keeping tabs on your income and expenses (both essential and discretionary), you not only gain a better understanding of where your money is going but it also helps you to formulate a plan on how you can save and invest in the future.”

3) Stay organized

One of the most effective ways to maintain your personal finance goals is to stay on top of your expenses, spending and taxes throughout the year. Organize your expenses by using apps such as Mint ​and Level Money or more traditional tools such as Excel or a spending notebook to create budgets, manage money and pay bills all in one place. For any income you plan to earn next year from a side job, such as freelance consulting, driving an Uber or hosting on Airbnb, set aside a portion to meet your income tax obligations. Apps such as Hurdlr automatically manage this for you and help minimize these monetary commitments.

4) Create a vision

Developing an annual budget and tracking monthly expenses is only half of your financial equation. You also want to look at the larger picture and create financial goals that are in line with your long-term vision. Creating a financial vision board is an easy, effective method to lay out your short-term priorities and uncover your larger financial goals.

All you need is a poster board, scissors, magazines and glue. You could cut out phrases and pictures that represent your short- and long-term financial goals (i.e. pictures of a new house or your dream vacation destination, phrases such as “no debt,” specific numbers that you are trying to reach) and paste these images onto your poster board. After you have created your vision board, you may need to alter your budget to save toward your long-term vision, or you may find the extra motivation to stick to your budget in order to achieve that long-term financial dream.

5) Set specific milestones

Many of us will make lofty goals for the new year, but few of us will actually stick to them as the year progresses. It is not enough to create a budget or a financial vision — you have to follow it through! Set goals for specific milestones throughout the year so that you have a way to measure how you are progressing against your plan.

For example, if your goal is to build up an emergency fund, decide how much money you want to have saved by three, six and nine months. Then check in at each of these points in time to confirm that you have hit your target savings and adjust accordingly to reach your ultimate goal. Use the above tips to set your financial goals, write these goals down, and refer to these goals and your vision board often throughout the year.

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How to break your worst money habits

How to break your worst money habits

Using some simple rules and tools can help you save plenty over the long haul.

Break bad habits: The science of habit change

Does it really take just 21 days to change a habit? Experts say it’s not that simple. “Breaking bad habits successfully depends on your readiness to act,” says Heidi Beckman, clinical health psychologist at the University of Wisconsin Hospital and Clinics and speaker on financial behavior change.

John Ulzheimer, president of consumer education at SmartCredit.com, agrees. “If it was easy, we’d all have big savings accounts, and none of us would have credit card debt,” he says.

Beckman says habits change more quickly when you’re in the action stage versus the ambivalence or preparation stages that come before. To catapult yourself into action, she recommends using this three-step approach daily.

1. Create a positive picture in your mind of the result you want, and act as if the bad habit is gone. Use a negative picture of the current stressful result of the bad habit to push yourself further toward action.

2. Identify and focus on your positive financial habits, as proof you can do things the right way.

3. Create simple rules to fall back on when tempted, such as: “Don’t browse shopping websites until all my bills are paid this month.”

Break bad habits: Resist impulse buying

“We’re wired for instant gratification,” says Ulzheimer. “But if you can’t afford to pay cash and whip out a credit card without thinking, then you’re on a downward spiral into debt and money mismanagement.”

Using credit cards to spend more than the cash you have while making only the minimum payments on the cards can build up their balances faster than you can pay them, he says. And if you pay late, penalty fees just add to the total. “You forgo the many benefits of the proper use of plastic, such as for reimbursable business traveling, establishing a good debt utilization percentage on your credit report… and for earning easy cash-back rewards,” says Ulzheimer.

Practice telling yourself “no” when tempted to spend, and try these tactics.

• Distract yourself by making a phone call or unwrapping a stick of gum until the “buy” urge passes.

• Make a rule to only charge for reimbursable business expenses or rewards and only when you have the cash to pay for it during the grace period before the date interest is charged. Double-check dates.

• If you must take drastic measures to curb spending, have your credit card company lower your limit and opt out of over-limit and overdraft spending so your card gets declined.

Break bad habits: Automate finances

Counting on willpower alone is not enough. “When you rely on willpower to meet your expenses, important financial obligations such as timely payments and depositing to an emergency cash or retirement fund are left up to your personal choice and can easily be mismanaged,” says David Bach, author of “The Automatic Millionaire.”

Ulzheimer warns that some use the excuse of not being organized or not having enough money, but paying late just means you pay more because many companies tack on a late fee (typically $39) and many also charge you interest on the unpaid balance as well.

Says Bach: “Make your important payments automatic so bills get paid on time, and important savings deposits that protect you and your family don’t get missed.”

Make payments automatic to avoid late fees.

• Set up shadow payment dates by subtracting seven days from the real due date.

• Make payments automatic using your bank’s or the payee’s online bill pay.

Break bad habits: Pay more than the minimum

Paying just the minimum is a good way to stretch out your debts for as long as you can. “When you only pay the minimum amount due on a credit card, you’re effectively rolling over approximately 97 percent of the balance and adding the interest applied,” says Ulzheimer. This is very profitable for mortgage companies and card issuers, but not you. “The only way to reduce your balance quickly is to pay more than the minimum, avoid fees and stop adding to balances,” advises Ulzheimer.

Pay more than the minimum with every payment.

• Set up automatic timely payments of a higher amount than the minimum.

• For fastest results, create a “debt snowball,” in which you pay as much as you can toward the lowest-balance card until it is paid off. Then you apply that same payment amount plus the new payment amount to the card with the next-smallest balance.
• Consider taking advantage of the automatic biweekly mortgage payment plan your lender may offer. For the one-time fee, the quicker pay-down is worth many thousands of dollars over the life of the loan.

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Riskiest places to use your debit card

Riskiest places to use your debit card

Gas station payment terminals have many characteristics fraudsters love.

Would you give a thief direct access to your checking account? No? Unfortunately, you may be doing just that by regularly using your debit card. Debit cards may look identical to credit cards, but there’s one key difference. With credit cards, users who spot fraudulent charges on their bill can simply decline the charges and not pay the bill. On the other hand, debit cards draw money directly from your checking account, rather than from an intermediary such as a credit card company.

Because of that, even clear-cut cases of fraud where victims are protected from liability by consumer protection laws can cause significant hardship, says Frank Abagnale, a secure-document consultant in Washington, D.C.

He cites the example of the The TJX Companies Inc.’s T.J. Maxx data breach that exposed the payment information of thousands of customers in 2007. The incident resulted in $150 million in fraud losses, and much of it was pulled directly from customers’ bank accounts. While credit card users got their accounts straightened out and new cards in the mail within a few days, the case created major problems for debit card holders who waited an average of two to three months to get reimbursed, Abagnale says.

While debit card fraud is always a possibility, being careful where you use it can help keep your checking account balance out of the hands of criminals.

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