Mike About Money

The Psychology of Holiday Shopping

2011-12-21T06:35:00.000-08:00

11 Ways to Outsmart the Overspending Impulse

In addition to a festive time spent with family and friends, for most of us the Holidays mean a small fortune spent on gifts and other non-necessities. Leslie Greenman explains why we feel so compelled to shop till we drop during the Holidays-and how not to do it this year.

Were you tempted by the Black Friday and Cyber Monday sales offers? Were some of the sales so good that you veered off your Christmas list a bit, buying items for yourself in addition to a few other holiday extras? Did you internally justify going over budget because, “Heck, it’s Christmas! I deserve to splurge a little!”? Were you careful to keep a “what I don’t know can’t hurt me” mentality about you and your spouse’s financials, staying in the gray to ward off any guilt that might come with overspending?

If you answered yes, yes, yes and (embarrassed blush) yes, Leslie Greenman says your brain has been hijacked by the psychology of overspending. She wants you to curb these out-of-control holiday spending frenzies-but first you must understand WHY you feel the need to splurge in the first place.

“This is a very difficult time of the year to stick to a budget and the reasons why are numerous and complex,” says Greenman, a financial advisor and author of the new book, Dating Our Money: A Women's Guide to Confidence with Money & Men,“One of the biggest reasons is that women tend to be givers and pleasers by nature. We want to buy great gifts for friends and family members. We want to get the best looking decorations for the house.

“We convince ourselves it’s okay to overspend because Christmas only comes once a year!” she adds. “This is our time to forget the budget and do whatever we can to make those around us happy. So in the name of making the holiday the best one ever, we carefully avoid the truth about our financials. After all, if we don’t know for certain that we’re going way over the family budget, then what’s stopping us from spending a little more on the kids’ presents or buying that new dress for the office party?”

Greenman notes that the nature of holiday spending-the fact that we’re buying for others and not ourselves (in theory anyway)-increases our tendency to overspend.

“Many women think the holidays give us a guilt-free pass to shop ’til we drop,” says Greenman. “We justify it by telling ourselves, ‘Well, I have to get gifts for everyone or they’ll be disappointed!’ While it’s nice to give someone something they want, that good feeling will quickly fade when you see how much your holiday spending affected the family’s finances.”

The good news is that with careful planning you can give everyone on your list a special holiday without having to pay for it for months and months to come. Read on for Greenman’s advice on how to better understand the psychology of overspending and what you can do stop it:

Get real about your financials. Before you step out the door to head off to the next great sale, you need to be honest with yourself. Sit down with your spouse and have a heart-to-heart about your financials. Make sure you both understand what the budget will allow for in holiday spending this year.

“Look at how much you can realistically spend,” advises Greenman. “Make sure your holiday spending will in no way negatively affect your bigger plans. Too often, women think of the financial picture like it’s a black hole. Credit cards are a huge cause of this because they allow us to avoid the reality of debt. We can just whip out our credit card without taking an immediate hit in our bank account. But that has to stop. Now is the time to gain a clear understanding of the family financials. When you do so, you’ll be more inclined to control your spending.”

Don’t let the psychology of the sale get the best of you. Shoppers were out in droves this year on Black Friday in part because they were hammered with promotions on sales that that were just too good to resist. When there’s a great sale, two factors are usually used to justify spending, explains Greenman. First off, we fear that if we don’t take advantage of the sale now we might not be able to get that item later. And secondly, most women love to feel like they’ve gotten a great deal when they’re shopping.

“Even if the on-sale item is still too much for your budget, you convince yourself that it’s ok to splurge a little in this case because the deal being offered is so good,” she says. “But let’s be honest. Going over budget is going over budget. It doesn’t matter what purchase is deepening your debt; just that your debt is increasing. So don’t let holiday sales get the best of your budget. If an item is too much for your personal financial situation, don’t buy it.”

Don’t shop for yourself. According to the National Retail Federation’s 2011 Holiday Consumer Intentions and Actions Survey, the average person will spend $130.43 on themselves while holiday shopping. When you’re making it okay for yourself to do a lot of spending, it can be difficult not to stray off your list and buy a couple of things for yourself.

“We have all done it,” says Greenman. “You see something you like and think, Wow, that is so cute. I will buy one for so and so and one for me. Or you want to feel great at the office holiday party and think the best way to feel great is to look great. So you justify splurging on a great dress and new pair of shoes for the party.”

“But before you spend, consider some money-saving alternatives,” she suggests. “You could borrow a dress from someone or add an accessory or a great pair of shoes to a dress you already own. In fact, this is actually a good reason to organize your closet. When you can easily see what you have, you can quickly put together a great holiday outfit without spending a dime. ”

Don’t shop when you’ve got the holiday blues. This time of year can bring a lot of joy, but it can also be overwhelming and stressful. What’s more, the holidays are filled with grief triggers-sights, sounds and smells that bring back memories of days past when life was better and loved ones hadn’t yet passed on. Those holiday blues, whether we understand why we’re feeling them or not, can pose a pocketbook problem: studies have shown that we are willing to spend more when we’re sad.

“Avoid shopping when you’re having a down day,” advises Greenman. “Curl up and watch a holiday movie or go do something fun with your kids instead. Save the shopping for a better mood. ”

Invest in relationships, not in “stuff”. It’s perfectly natural to want to give back to those who give to you. It feels good to watch a friend open the gift you’ve given her or to see your son’s face light up when he sees Santa brought him everything on his list. This satisfies the nurturing instinct in women, in particular. And it also helps us assuage the guilt we often feel for the shortage of time we have to spend with our loved ones. What we need to realize is that what other people really want, kids and adults alike, is our presence (not our presents).

“According to a Consumer Reports poll, holiday shoppers will spend approximately 19 hours shopping and 3 hours standing in check-out lines this holiday season,” says Greenman. “Aren’t there much better ways we could be spending our time? Rather than throw down cash to buy the video games your son wants, spend a day with him doing the things he loves to do. Suggest to your best friend an afternoon together meeting for coffee and going to a movie. Or treat your parents to a home-cooked meal and some Christmas carols performed by their grandkids. You can also take this a step further and make it even more gratifying for everyone involved. Suggest to your loved ones that the time you spend together be used to volunteer for a local charity-a great way to enjoy the true spirit of the season!”

Establish an “Operation Holiday” plan. Once you know what your budget is, start mapping out your shopping plan. Make the gift list and then think about where you’ll need to go to purchase each present. The specificity will override the “vagueness trap” that allows us to fool ourselves about how much we’re really spending.

“The more specific your plan, the easier it will be for you to hold yourself accountable to it,” notes Greenman. “Keep your key goals in mind, both short-term and long-term. For example, are you trying to keep each gift under X amount of dollars? Do you want to be finished by a certain time? Do you still need to have enough money left over in the budget to make your monthly donation to the family summer vacation fund? Don’t sacrifice your long-term financial plans to satisfy short-term holiday spending cravings.”

Don’t put off your shopping until the week before Christmas. It is best to start your holiday shopping as many shopping days before Christmas as you can. Procrastinating will only send you into a state of panic that usually ends in overspending.

“As the holiday gets closer and you realize you haven’t even made a dent in your list, you’ll start to get desperate,” explains Greenman.

“And when you’re desperate, you won’t have as many misgivings about going over budget in order to get your shopping done. You’ll also have less time to finish your shopping so you’ll think you have to get whatever is available. ‘Shop early and save’ should be your new motto. Another positive to getting all your shopping out of the way early is that it gives you more time to kick back and enjoy all of the fun festivities leading up to the holidays.”

Set a holiday shopping curfew. You don’t have to go tearing through stores, pushing innocent shoppers from your path (or spraying them with pepper spray as one much-publicized shopper did on Black Friday), but setting a time limit on your shopping will help you keep your spending impulses in check and stay on budget.

“When you know you only have until 3:00 p.m. to finish your shopping, you won’t linger in the women’s clothing section until you see something you want to buy for yourself,” notes Greenman. “It also keeps you from going to sections of a store that you know don’t contain any items from your list but that are just fun to spend time in. Remember, the less time you spend shopping, the more time you’ll have to spend with friends and family.”

Remember, it’s the thought that counts. You might find the perfect gift for someone but then reject it because you don’t think the price is significant enough to be an adequate gift. That’s because we unconsciously equate love with money. Not only is there absolutely no connection between the two, this self-imposed spending minimum can lead us to bypass meaningful gifts in favor of expensive, less meaningful ones (which the recipient may not even remember by Christmas of next year).

“A gift with a lot of thought behind it or shared meaning for you and the recipient can have far more significance than a more expensive item,” says Greenman. “For example, a special photo of you and a friend in a frame with a special note about how much you enjoyed the time you spent together is a great gift. Or have your kids write down the 10 things they love about their grandparents and include the list in a photo album of the kids. These are all gifts that involve more thought and meaning than just going to the store and buying a gift. And the people receiving them will truly appreciate it.”

Make a list, check it twice, and bring cash! How many times have you walked into a store and immediately found the perfect gift for a friend? Sure, you hadn’t planned on spending that much, but she would love it, so why not? You can just put it on your credit card, right? Wrong, says Greenman. Buying on credit is a trap to be avoided if at all possible-and the best strategy for defeating temptation is to bring a list you don’t veer from and only the cash needed to purchase the items on it.

“If you use your credit card, you’ll probably end up buying those gifts two or three times over in interest payments,” she notes. “Do not stray from your list. If you do stray, the cost of the non-list item needs to be the same as the one you had already budgeted. Bring only cash with you when you’re shopping, or at the very least, use your debit card or write a check.”

Don’t shop with a holiday budget saboteur. If you prefer doing your shopping with someone else in tow, choose someone who won’t encourage you to go off budget. In fact, make sure it is someone who will truly hold you accountable. Many people are easily influenced by the behavior of their friends. When they’re with free spenders, they become free spenders. Likewise, when they’re with more disciplined friends, they’re influenced by this positive peer pressure.

“If I shop with one of my girlfriends, I know it could quite possibly turn into a several hour affair,” notes Greenman. “I also know that some of my girlfriends would rather encourage me to splurge than support me in my efforts to stick to a budget. If you’re going to pair up with someone to do your holiday shopping, make sure it’s someone who’s going to keep you on track. For example, maybe your mom is a stickler when it comes to managing the family budget or maybe using the holiday shopping outing to educate your kids about sticking to a budget will help you hold yourself accountable as well.”

Point, click, and save. The benefits of online shopping are obvious. You don’t have to battle holiday traffic, it is practically hassle-free, it’s easier to compare prices, and best of all, it allows you to resist the temptations that come along with being in a store.

“When you’re in a store it can be really tempting to wander off your plan and start looking at items that aren’t on your list,” says Greenman. “Because you can search for specific items, online shopping helps you to stay on task. It also provides a greater selection of those items so that you can easily compare cost and quality. And usually free shipping is offered around the holidays!”

Don’t be afraid to regift. Regifting has a stigma attached to it. Many people feel it violates gift-giving etiquette. Maybe they think it makes them feel like an unimaginative gift giver or perhaps like a poor person.

But remember, you’re opting out of the herd mentality this year anyway. Take a new look at regifting. When done well it can help you find a home for items that you’re never going to use and make the day of the gift recipient.

“There is nothing wrong with regifting items that you haven’t used and that you know someone on your Christmas list would like,” says Greenman. “Sure, there is a line that has to be drawn. If your grandmother got you a sweater you hate, but she expects you to wear, then that’s probably not an item that you should regift. Suck it up and wear it! But let’s say a former colleague got you a scarf as part of a Secret Santa exchange at work last year. It’s a perfectly nice scarf, but it’s a color that just doesn’t look good on you. That’s a great item to regift. You’ll get it out of your house, and someone else will love having it.”

“Other great options are unused gift cards-as long as they haven’t expired- or clothes or other items either with the tags still on or still in their original box that you never used,” she adds.

“Don’t convince yourself that just because it’s the holidays it’s okay to ignore your budget and overspend,” says Greenman. “If you don’t know the big picture of your current financial status, then make sure you have a very clear understanding of it before you start your holiday shopping. Remember you can give a lot without spending a lot. Stick to your budget and then be generous with your time and spirit. Once the holidays are over, you’ll be happy you didn’t blow your savings, and you and your family and friends will be fulfilled by the time you all spent together.”

This is a great book that we highly recommend to all of our readers and students. You can get a copy at huge savings here.

Are you getting tired of doing without?

2011-10-27T08:02:00.000-07:00

After months, and even years of working to pay down debts and not spending money on much else, a family can start to tire of the discipline required to stay on track month after month with no splurging or spending on "fun" things. Some families get used to the minimalist lifestyle without much effort, while other families constantly struggle under the strain of watching every dollar so carefully.

For many people, it's similar to trying to stay on a diet. Depriving oneself of favorite foods eventually can lead to binging. Eating one, seemingly innocent potato chip, can lead to eating an entire bag. The same thing can happen with spending deprivation. Every marketing channel around us, from TV to the Internet, is screaming

for us to spend money. It's not easy to avoid the temptations for long. Many individuals and families destroy months of successful financial management and debt reduction with a few days or weeks of uncontrolled spending and borrowing on credit.

To avoid the temptation of falling off of the proverbial "debt management wagon," give yourself permission to spend on some enjoyment for you and your family on a planned, regular basis. Maybe once a month or every few months as a reward for your hard work. This spending would be planned and affordable and you would be in control of the expenses, but, let it be something fun. It does not have to be something expensive or big. It can be a simple movie rental or trip to the movie theater. Maybe a nice meal out? A car ride without worrying about the cost of fuel might be all the family needs. Something to help let off some steam and relax a bit while you celebrate your progress.

The effort to reduce the feelings of, "always doing without," is as important as the work you do week after week to balance your family budget to keep up with paying your bills. Plan to spend some time and money to reduce that feeling of doing without and your chances or staying on your debt management plan to completion will be greatly enhanced.

Take Action!

Check your budget, then get the family together to discuss some ways everyone would like to celebrate the great progress you've made so far and make everyone feel that their sacrifices are recognized and much appreciated. Remind everyone that with continued efforts, a debt free future is closer than ever.

Mike

Living a Richer Lifestyle

2011-09-27T06:41:00.000-07:00

Are you headed toward your version of a richer lifestyle?

If you asked people to define their idea of a richer lifestyle, it would be defined in a million different ways by a million different people.

To some people it means having more money with which to buy material things. To others, it means having more things of higher quality or an improved social status. To many, a richer lifestyle simply means more time to spend with family and less time spent working to earn money.

A richer lifestyle may be just a few credit card payments away for you. If you are living under the burden of a huge debt load, you may feel richer once you get the debt paid down to a manageable size. For most, a richer lifestyle would be a life free from the worry and stress of struggling to pay the bills. Others might define a richer

lifestyle as one full of creative or charitable pursuits. And, for some, a richer lifestyle means nothing less than living the life of a multi-millionaire.

In whatever way you envision a richer lifestyle, the key thing to know is that you can have that lifestyle virtually right away. No, you won't be a multimillionaire overnight. But you can greatly improve your enjoyment of life starting today. If anything, our message is take responsibility for improving your financial life. There really is no magic to it. It takes some work. In a lot of cases, it will be hard work because most people have never gone to the trouble of stretching beyond their comfort zone in order to get the things they really want in life.

The world is full of plenty of examples of people who overcame incredible hardship and disadvantage to build wonderful, fulfilling, and, what many would call rich lives. These people did not luck into success. They earned it. They worked for it. Somewhere along the line, they learned the important lesson that setting clear financial goals, taking action, and persevering through the difficult times will get you where you want to go.

We are lucky enough to be living in the greatest country in the world where financial opportunity surrounds us. People come to the United States from everywhere in the world to participate in our system. It is easy for us to take our good fortune for granted and become complacent. There are people around you that would try to convince you that someone owes you a free lunch; perhaps that our government should take care of us. You and I know that this thinking couldn't be further from the truth. However, you may feel victimized by the financial system or your current financial status. It is easy to blame the system for being unfair. You might blame fate or others for your financial problems.

Our current economic environment doesn't make positive thinking any easier: High levels of unemployment, record personal bankruptcies, high consumer debt, corporate scandal on Wall Street, and an uncertain economic outlook for the near future.

No matter how bleak things may seem, there is still opportunity for you to financially do better tomorrow than you are doing today.

Take Action!

Start envisioning your "Richer Lifestyle." Clearly see yourself in the financial situation you have only dreamed about up until now. That vision will be your spark to take the beginning steps needed to get you moving toward making your dreams a reality.

Mike

Finding Summer Work

2011-05-22T18:50:00.000-07:00

It's tough enough for adults to find work these days and it is expected that High School and College students will encounter another tough summer of trying to find work. But, here are a few suggestions of businesses where students might not normally think to apply for summer work:

Museums and Other Cultural Institutions
Summer is a busy time for Museums which are always looking for affordable help and don't require much in the way of previous experience. It is also a great way for a young student to enjoy some interesting and educational shows and exhibits for free.

Golf Courses, Tennis and Recreation Centers
Golf courses are plentiful and usually need seasonal workers. Caddying, landscaping and working in the restaurant and pro shop are some jobs available to teens. Other than caddying, no special golf knowledge is needed for most jobs. While there are fewer Tennis and Recreation centers around, they offer a great opportunity for young people to stay active and earn some money.

Non-profit organizations
Although volunteering does not usually pay, it does offer a great way for young people, and adults, to help out in the community and gain experience. Volunteering enables teenagers to develop skills, network, and improve their resumes and college applications. Colleges are putting more weight on volunteer and community service work than ever before when reviewing applications.

Smart Moves when Moving

2011-05-09T19:40:00.000-07:00

Nearly 40 million Americans move each year. If you are planning a move, it makes sense to avoid mistakes that can cost you money and time, and raise the stress level of the entire family.

Overspending and inadequate research are the two most common mistakes when moving to a new home, according to USAA and author Sandee Payne, who as a military spouse, has moved all over the world seven times in the first 10 years of her marriage, at times on her own and with children while her husband was deployed. Payne has learned many important lessons. Here are her seven most common mistakes families make when they move:

Spending beyond your budget.

Be aware of the hidden costs when buying a home. Consider the financial obligations beyond a mortgage that add to the cost of homeownership, including: city taxes, utilities, insurance, and maintenance - not to mention the length of a commute, given the fluctuations in gas prices. And remember updating expenses such as granite counter tops, plantation shutters, or a pool or spa.

Not researching your new community.
Use the Internet to research real estate listings and to learn about your new home, city, local amenities, school ratings, crime rates and children's activities. Talk to parents in the community who can provide firsthand insight on the topics that are most important to you. Make sure to understand your neighborhood by day and by night before moving in.

Lacking a household inventory.
Use photos, video or a notebook to document valuable items. This will help you file a claim if an item is lost or damaged. Store them in a moving file or on a thumb drive.

Not watching how boxes are organized.
One of the most common mistakes when moving to a new home is placing large items, like lawn equipment, next to boxes containing valuables in the moving truck. Keep a watchful eye on those packing for you if using a moving company.

Moving all belongings.
Not everything has to go with you. Pack suitcases and storage bins as if you're going on a short vacation. Include essentials for the first few days in your new home. And take the time to separate items into sections of keep, sell, donate or discard before you pack.

Dismantling your electronic equipment without labeling wires.
Take photos of the connections, and place the wires in a single box. Knowing how to reinstall your kids' computer games can be a lifesaver.

Not keeping important documents with you.
Hang on to important documents so you can easily re-establish your lifestyle. These are needed at every stage of a move, from making travel arrangements, registering children for school and establishing new physicians using your prior medical records.

"Moving your family can be overwhelming, but technology and timely advice can be the ace up your sleeve," said Payne, who learned that it's about finding a place that fits your family's lifestyle with minimal disruption. It's critical to have online tools and resources you trust, placing you in control of your move."

And according to a recent survey by USAA, 34 percent of consumers agree with Payne. They would prefer to search online for a new place to live, compared with 10 percent who would use newspapers or other printed materials.

About USAA

USAA provides insurance, banking, investment and retirement products and services to 8 million members of the U.S. military and their families. Known for its legendary commitment to its members, USAA is consistently recognized for outstanding service, employee well-being and financial strength. USAA membership is open to all who are serving or have honorably served our nation in the U.S. military - and their families. For more information about USAA, or to learn more about membership, visit usaa.com.

www.usaa.com

Enjoy!

2011-02-23T06:59:00.000-08:00

Courtesy of our friends at FreeBirthday.com

Eliminate Fake Work in Your Organization | trainingmag.com

2011-02-16T11:28:00.000-08:00

Fake Work is an insidious problem dwelling in almost every organization—large or small. We define it as work that is not linked directly to the strategies of the organization. Simply, Fake Work is any work that is not aligned with and directly linked to organizational strategy. It’s the wasted effort, wasted energy of hardworking, dedicated people who could have been executing work of value and helping get results that truly matter.

read the entire story:

Eliminate Fake Work in Your Organization | trainingmag.com

Home sales rise in Florida

2011-01-20T12:34:00.000-08:00

ORLANDO, Fla. – Jan. 20, 2011 – Sales of existing homes and condominiums in Florida rose in December, a positive trend also reported at the close of 2010 as statewide sales activity posted gains over the previous year, according to the latest housing data released by Florida Realtors®.

A total of 15,550 existing single-family homes sold statewide in December, up 4 percent from the 14,923 homes sold in December 2009.

In December, 12 of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales and 14 MSAs reported higher existing condos sales.

Looking back on 2010, Florida’s existing home sales rose 5 percent for the year, with a total of 170,848 homes sold compared to 162,873 homes sold in 2009. Statewide existing home sales activity in 2010 also was 37.5 percent higher than 2008 statewide sales, records show.

“It’s encouraging to close out the year for Florida’s housing market with increased sales activity,” said 2011 Florida Realtors President Patricia “Pat” S. Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound. “The homebuyer tax credits helped to fuel home and condo sales during the first half of 2010, while favorable affordability conditions and historically low mortgage rates continued to bring buyers into the market in the waning months of the year.

The latest industry outlook from NAR offers positive predictions for 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” said NAR Chief Economist Lawrence Yun. “All the indicator trends are pointing to a gradual housing recovery.”

New Rules for ATM and Debit Card

2010-12-13T09:20:00.000-08:00

New Rules for ATM and Debit Card Overdrafts New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. Banks, credit unions, and other financial institutions must offer you
the ability to make decisions about overdrafts for transactions made with your debit or ATM cards.

Expect your bank to send you an explanation about how it treats overdrafts; Here are some key things you need to consider when reading the notice:

The basic facts
An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a fee, your bank will cover you when you become overdrawn. This fee can apply each time you overdraw your account. Generally, banks can cover your overdrafts in one of two different ways:

* Standard overdraft practices. Your bank will cover your transaction for a flat fee of about $20-30 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but
only have $100 in your account, your account will be overdrawn by $50 and your bank will charge you a fee. If you then make an ATM withdrawalfor $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, if the fee your bank charges for its standard overdraft practices is $30, you will pay a total of $60 in fees.

* Overdraft protection plans. Your bank may offer a line of credit or a link to your savings account to cover transactions when you overdraw your account. Banks typically charge a fee each time you overdraw your account, but these overdraft protection plans may be less expensive than their standard overdraft practices.

The new rules

* You choose. In the past, some banks automatically enrolled you in their standard overdraft practices for all types of transactions when you opened an account. Under the new rules, your bank must first get
your permission to apply its standard overdraft practices to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).

* Existing accounts. If you did not opt in (agree), as of August 15, 2010, your bank's standard overdraft practices won't apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don't have enough money in your account, but you will not be charged overdraft fees.

* New accounts. If you opened a new account on or after July 1, 2010, your bank cannot charge you overdraft fees for everyday debit card and ATM transactions unless you opt in. If you opened a new account before July 1, 2010, your bank will treat you as an existing account holder: you will receive a notice about your bank's standard overdraft practices and will have to decide if you want them for everyday debit card and ATM transactions.

* Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.

* Checks and automatic bill payments. The new rules do not cover checks
or automatic bill payments that you may have set up for paying bills
such as your mortgage, rent, or utilities. Your bank may still
automatically enroll you in their standard overdraft practices for
these types of transactions. If you do not want your bank's standard
overdraft practices in these instances, talk to your bank; you may or may not have the option to cancel.

Mike

Special Report: How to Make Money in Bad Economy

2010-10-27T05:59:00.000-07:00

Over the past year hundreds of people have asked my opinion about various business opportunities for making money from home so I have been looking closely at what is out there and trying to separate the good from the bad. There is a lot of bad out there but I have uncovered a few gems. One in particular caught my attention because it involves a gentleman I've known of for several years. His name is Bill Bartmann.

On their cover, Inc Magazine called Bill Bartmann "The Billionaire Nobody Knows." What is even less known than Bill himself is his story, which is arguably the most astounding "rags-to-riches" development in U.S. business history.

Bill Bartmann went from...

- Homeless (lived under a bridge viaduct)
- Gang member
- High-school dropout
- Alcoholic
- Paralyzed (and told he'd never walk again)
- Completely bankrupt with cars repossessed

...to become the 25th wealthiest American, with a net worth at the time that exceeded the likes of Donald Trump, Rupert Murdoch and Ross Perot.

Ironically, Bill made his first fortune during a recession. (His business method only works in a BAD ECONOMY, and today we have, what most economists agree, are the worst economic conditions since the Great Depression.)

Now he's at it again. You should check this out...

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BANKRUPTCY-TO-BILLIONAIRE: HOW TO MAKE MONEY
IN A BAD ECONOMY
by Bill Bartmann
www.BillsOffer.com/Report/A18206
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DOWNLOAD SPECIAL REPORT FREE here

This report will inspire you ... and show you a way to make money during this down economy that you likely have never even thought of before.

In a world of hype and over embellishment...Bill Bartmann is the REAL DEAL. If he can become financially independent, you can too. Take yourself to the next level...

Get your copy of his powerful free report now.
I am reading his book right now and look forward to hearing from you about what you think of his business plan. In an economy like this, creating a small business may be the only chance most have to regain their previous lifestyle.

Enjoy!
Mike

Officials in 50 states launch foreclosure probe

2010-10-13T10:06:00.000-07:00

State officials are finally investigating what is looking more and more like a major fraud and cover up. Either bank employees were completely ignorant of State and Federal laws governing the mortgage and foreclosure process or they were complicit with their employers in knowingly approving foreclosure paperwork that was not properly verified and accurate. One mortgage company lawyer has already admitted to signing thousands of documents without reading anything.

This is a major story and one that we will follow closely. For the past two years a handful of lawyers across the country have been working on behalf of people facing foreclosure and using the "show me the note," defense in making the case that foreclosing entities did not have the right to do so based on not having original and accurate paperwork.

Last Friday the largest bank, Bank of America, ceased all foreclosure sales until it sorted out its situation in regard to having proper paperwork and procedures in place.

I t appears that the processing of foreclosures was so fast, furious and lucrative that banks did not want to spend time to actually verify that what they were doing was, in fact, proper. According to today's Associated Press report:

many of those documents appear to have been signed without a notary public witnessing that signature -- a violation of most state laws

In the end, will anyone get their home back? I doubt it. What about the investors who have scooped up these homes in foreclosure sales? Will they have to give them back? I doubt it. I have a strong feeling some lawyers will be getting very big settlements in class action suits against the big lenders...I think some big banks will be paying some big fines to the government...I see some very lucky homeowners who can't afford their mortgages getting to stay in their homes because of this mess....but I don't see any former homeowners, who were foreclosed improperly, getting their homes back.

What do you see???

Mike

Understand how your credit score is determined

2010-09-16T07:38:00.000-07:00

Your credit score is usually based on the answers to these questions:

Do you pay your bills on time? The answer to this question is very important. If you have paid bills late, have had an account referred to a collection agency, or have ever declared bankruptcy, this history will show up in your credit report.

What is your outstanding debt? Many scoring models compare the amount of debt you have and your credit limits. If the amount you owe is close to your credit limit, it is likely to have a negative effect on your score.
How long is your credit history? A short credit history may have a negative effect on your score, but a short history can be offset by other factors, such as timely payments and low balances.
Have you applied for new credit recently? If you have applied for too many new accounts recently, that may negatively affect your score. However, if you request a copy of your own credit report, or if creditors are monitoring your account or looking at credit reports to make prescreened credit offers, these inquiries about your credit history are not counted as applications for credit.
How many and what types of credit accounts do you have? Many credit-scoring models consider the number and type of credit accounts you have. A mix of installment loans and credit cards may improve your score. However, too many finance company accounts or credit cards might hurt your score.

Have you changed your Spending Habits?

2010-08-25T11:06:00.000-07:00

A recent study of current consumer spending habits found 33% of consumers plan to maintain reduced spending habits, while 43% are undecided.

Based on the results of the study, it's clear many consumers are either sticking with their "new normal" or are still forming their new spending habits and don't plan to fully return to their old spending habits.

The study of over 1500 US consumers by market research firms Chadwick Martin Bailey and iModerate Research Technologies found that although 24% of consumers only made minor cutbacks to their spending during this economic downturn, another 33% who reduced their spending plan to continue with their new slimmed down budgets even during an economic comeback. The largest group is the 43% of consumers who have reduced their spending and have not yet decided if or to what extent they will go back to their old spending habits.

The study identified four distinct spending categories:

1) Investments in My Quality of Life (vacations, home improvement, dining out and home furnishings) There is no easy substitute for these items. Some tend to be more of an experience vs. a possession therefore they are less likely to be cut back, and more poised for a rebound as people feel their financial situation improve.

2) Things I Don't Think About
These include activities for children and subscription services such as cable TV/Internet and magazines. People are less likely to cut back on things that they need to "opt out" of, as opposed to purchase decisions they need to make every time they buy. They are also less likely to cut back on experiences (especially for/with their family) than things.

3) Things that Entertain Me:
This category includes spending on video games, books and electronics. In the end, people still have time to fill. In many cases they are looking for more efficient ways to fill it: best balance of utility (i.e. fun) and price.

4) Guilty Pleasures
This category includes spending on items such as jewelry, designer clothes and shoes. Items seen as "frivolous" purchases, particularly those where consumers can't rationalize a tangible value, face the most difficult road to rebound. This trend was consistent across income levels: even more wealthy people need better reasons to buy. However the aspiring affluent are particularly vulnerable, people with expensive tastes, but with incomes that aren't large enough to be recession-proof.

The "Things I Don't Think About" category, which includes items like cable TV and subscription services saw the least reduction in spending mainly because they were expenses consumers had already "opted into" and were thought of as part of the core budget, therefore they were less likely to take action to "opt out." The hardest hit category of Guilty Pleasures seems like it will be the slowest to rebound. It is clear that consumers are re-thinking purchases that are seen as frivolous. These purchases which are hard to rationalize will continue to have a difficult time rebounding.

Consumers Have New Perspective On What They Need
Many consumers reported changes in shopping behaviors and being content with their new spending habits. While many say they will not return to their "spend at will" habits, many look forward to some financial breathing room to "splurge" every once in a while.

Here are some consumer comments from the study:

"I used to buy whatever clothes and shoes I wanted. Now I only buy when I need something, like clothes for summer and trying to use as much as I can from previous years"

"I'm mostly cutting back on the more frivolous purchases and saving money for the important things. I'm just content with making smarter choices when it comes to things I want versus things I need."

"When the economy picks up and I am making the money I was before, then I will be able to go out to dinner and get clothing and electronics."

What would you say your current spending philosophy is?

Sources of the survey:

Chadwick Martin Bailey is a custom market research and consulting firm who works with many of the most successful companies and best known brands in the world to help them acquire, maintain, and grow their customer base. www.cmbinfo.com

iModerate Research Technologies listens, connects and digs deeper with consumers online to provide the research story organizations need to win in the marketplace. www.imoderate.com

Ask the DebtBuster

2010-08-24T10:17:00.000-07:00

Q: Mike, I attended your seminar twice at Workforce One and really enjoyed it. I heard on the radio that there was a new legislation for credit cards that was just released - if your interest rate on a card is high and high due to a reason, you can request to lower it down.They also said if you are late on a payment and your minimum payment is $20, your late fee will be no more than $20.

How true is all this? I have never been late in my life. My credit cards used to be at a low of 7.99% or 9.99% fixed but they went up about 1 or 2 years ago after that last credit card act where the credit card companies could raise your APR% and make it variable instead of fixed. Can I call my Credit Card company to get a lower interest rate?

A: Yes, the last phase of the CARD Act went into effect on August 22. It restricts how much credit card issuers can charge in penalty fees to no more than the amount of the violation. For example, if a consumer is late paying a $10 minimum payment, the late fee cannot be more than $10. The CARD Act rules include what is called a “Safe Harbor” cap on fees of $25 for the first violation and a $35 fee if another violation of the same type occurs in the next six billing cycles. So if you are late with a $150 minimum payment, you won’t see a late fee of $150.

Also, a consumer who exceeds their credit limit by $5 cannot be charged an over-the-limit fee of more than $5. The CARD Act requires consumers give their permission to their creditors to allow them to borrow over their account limit. My advice is NOT to give this permission.

Phase 3 rules also requires the Credit Card issuers to review all accounts every 6 months to see if the consumer meets requirements for a possible reduction in their interest rate, so you may automatically see your rates decline if your credit score goes up, but this is not guaranteed. Neither is the amount of any reduction that might be given.

The CARD Act also allows the issuers to raise a consumer’s interest rate if a payment is 60 days or more late. If that happens but the consumer gets caught up and makes on-time payments for 6 months, the issuer then must reduce the interest rate back to where it was before the late payments happened. This is new and very helpful for consumers who go through a tough patch financially but then get back on their feet.

If you’ve made at on-time payments for at least 12 consecutive months be proactive and ask your Credit Card issuer for a lower interest rate. Understand that the banks are being very stingy these days about lowering credit card interest rates, even for people with good credit, because the CARD Act has reduced or eliminated many of the profit sources for the banks such as raising interest rates at any time for any reason, double cycle billing, and limiting fees as discussed above. It still comes down to your credit score, overall available balances, how much debt you are revolving each month, your history with that particular creditor, as well as the types of Credit Card programs your issuer offers. Sometimes you have to open an account with another provider in order to get a lower rate based on your good credit.

Be sure to check your credit for free at www.annualcreditreport.com and purchase your Equifax FICO credit score while you are at it so you have an idea of where you stand before you contact your Creditors. A credit score above 750 should give you leverage to negotiate better interest rates.

Good luck and please keep me posted.

Mike “The DebtBuster” Schiano
Listen to Mike About Money each weekday at 4pm eastern

Money Talk Network grows over 500%

2010-07-28T19:28:00.000-07:00

The growth at Money Talk Network has been incredible. Both daily visitors and featured experts have gone up exponentially. We are featuring more of today's top personal finance experts than ever with more being added every day. If you need personal finance advice, get the information you need when you want it.

Mike

Citi Credit Card Numbers indexed and shown by Google

2010-04-28T11:26:00.000-07:00

In yet another episode of inferior security by a company that is aggregating consumer information, new social networking site Blippy apparently failed to protect users’ credit card numbers. As reported on several web sites, "Blippy allows users to see what friends are buying and comment on their purchases. Apparently, it also let Google index the purchase information, including credit card numbers."

Blippy's co-founder has responded to the issue on the company blog. They are understandably downplaying the problem.

Alert!! If you are a Blippy user—especially if you have a Citibank card—keep an eye on your account and look for unfamiliar charges. Contact Citi and tell them your account may have been compromised on Blippy and ask for a new card and account number as a proactive measure.

Always on the lookout for you!

Mike about Money

Happy National Financial Literacy Month!

2010-04-06T12:50:00.000-07:00

National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits.

In 2000, The Jumpstart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month and in 2003 the United States Congress showed its support. Senate Resolution 48 and House Resolution 127 asked President George W. Bush to declare April as Financial Literacy for Youth Month. April was named National Financial Literacy Month by the passing of Senate Resolution 316 with unanimous consent, championed by Daniel Akaka D-HI.

Student Loans getting SAFR?

2010-03-30T13:28:00.000-07:00

The new Health Care bill contained overlooked legislation that will affect the finances of millions of American parents and College students.

As I just discussed at length on Jesse Menendez' show on Chicago Public Radio's 89.5 FM, (hear the podcast of the interview at Vocalo.org, The Student Aid and Fiscal Responsibility Act was signed into law March 21 and cuts out Private Lenders from originating federal student loans as of July 1, 2010. Private lenders still get to service loans made by the government, so, while private lenders lose money originating loans, they'll surely make up losses on back end service revenue.

All new federal student loans will be originated through the Department of Education's Direct Loan program instead of through the federally-guaranteed student loan program. The government will no longer subsidize and insure new private loans, a change expected to save taxpayers $61 billion over ten years according to the Congressional Budget Office. At the same time the federal deficit will be reduced by at least $10 billion.

The new law does not transfer existing private loans to the government but does lower the cap on monthly loan payments from 15% of current discretionary income to 10% of discretionary income in 2014. However, the loan payoff time will be shortened from 25 years to 20 years. But, if borrowers make payments on time for 20 years, any balance will be forgiven.

The SAFR Act will save the Pell Grant Program, which 8 million low income college students currently rely on for aid. The Pell Program was scheduled to be out of money this year but the new law will free up $36 billion to flow into Pell. Eligible students will see the maximum Pell Grant award rise from $5350 to just under $6000 in 2017. Without the change, next year's max Pell Grant award was expected to drop to $2150.

Students will still apply for federal loans through the financial aid office at their school.

Other highlights of the law include:

$750 million to increase funding for the College Access Challenge Grant program and other innovative programs that focus on increasing financial literacy and help retain and graduate students.
$2.55 billion goes to Historically Black Colleges and Universities and Minority-serving institutions
$2 billion for a competitive grant program for community colleges to develop and improve educational or career training programs.

The bottom line for low income parents and their college students needing financial assistance to attend school, it should now be easier to apply for, receive and pay back student loans. It is important to remember that supplementing federal loans with grants in aid and scholarships is very important.

I'll keep you posted.
Mike About Money

Debit Card Fraud on the Rise

2010-03-30T07:32:00.000-07:00

In my "Give Yourself Credit" workshops, we talk about Identity theft being the fastest growing crime in America. We also discuss the dangers of using Debit Cards for transactions and the difference in fraud protection afforded users of credit cards vs. debt and ATM card users.

And no, the debit cards that have a Visa or Mastercard logo don't receive extra fraud protection like credit cards. This is a common misconception, in fact, people I coach often refer to them as credit cards but the money for purchases comes directly out of you checking account on these cards.

Investopedia offered this tip to detect debit card fraud today

The easiest way to spot problems early is to sign up for online banking, if you haven't already. Check your balance and recent transactions daily. The sooner you detect fraud, the easier it will be to limit its impact on your finances and your life. If you see unfamiliar transactions, call the bank right away. If you're the forgetful type, start hanging on to the receipts from your debit card transactions so you can compare these against your online transactions.

read the entire article

The DebtBuster tip: Use Debit Cards sparingly if at all and stick with the relative safety of credit cards if you wish to have the convenience of using plastic. Just pay the credit card bill in full to avoid paying high interest rates.

Stay safe out there.

Mike About Money

16% Likely To Miss A Credit Card Payment In Next Six Months

2010-03-25T12:41:00.001-07:00

16% Likely To Miss A Credit Card Payment In Next Six Months

Posted using ShareThis

A reprieve for Doctors and Seniors!

2010-03-12T09:22:00.000-08:00

The U.S. Senate voted March 10 to delay the 21 percent Medicare physician payment cut, postponing it until Oct. 1. The delay follows a March 2 U.S. Senate vote to postpone the reduction until April 1.

On March 1, all physicians accepting Medicare faced a 21 percent rate reduction and seniors faced a loss of doctors who accepted Medicare, longer lines at those who did take the insurance payments, and a complete loss of confidence in Congress.

You didn't really think the Senate would pass this measure during an election year did you? Medicare is a federally funded health insurance program for people age 65 and older. Guess who comes out in droves to vote? People 65 and older. To even bring this up is virtual political suicide next in line only to messing with Social Security.

My guess is that the date will be changed again to sometime in 2011, well past the 2010 fall elections but before the 2012 presidential elections.

Advice to seniors needing medical care. Schedule those appointments right away. Get expensive procedures scheduled in advance of October 1, just in case the improbable happens and the cut date remains October 1.

In the meantime, keep those cards, letters, emails and phone calls going to your elected officials in Congress and ask local politicians where they stand on the issue as well.

Mike About Money

Spring into Spring with a fresh start on managing your money!

2010-03-09T13:57:00.001-08:00

It is finally starting to warm up where I live! Ok, I live in Florida, so I can't really complain, but, we did have snow this year. My friend Kurt in Colorado is laughing at me but...it was cold to us.

As it does warm up across the nation, this is a great time of year to create a new beginning when it comes to family finances.

Tough times with money are like a long, cold winter; dreary and difficult to deal with day after day, month after month. There often seems no end in sight, which can be depressing. But, just as with the weather, a new season starts eventually.

As the cold weather turns to warm, let’s use this as our cue to warm up to our personal financial management and begin to oversee our money the way we’ve always dreamed of doing; with confidence and in control at all times.

This is also a good time of year to begin summer planning if you’ve not done so already. Before long, the kids will be out of school and many will be traveling on vacation. Don’t let those expenses sneak up on you this year. Dust off the Spending Plan and start to consider the next three to six months income and expenses and update the plan accordingly for optimum success.

Getting ahead of anticipated expenses, just like fertilizing a garden, will reap the strongest crop with the fewest weeds.

Stay out of the financial weeds with Mike About Money!

Listen daily at MoneyTalkNetwork.com.

Mike

Mike and Mark back together again

2010-03-05T07:20:00.000-08:00

I am thrilled to be back "on the air" with radio legend Mark Larsen on his new daily PodCast, "Mark in the Morning."

Mark and I have been talking money and the economy on the radio every week for the past 6 years. Listen for the Money Segment every Friday morning and start making smarter financial decisions. We will be linking to Mark's show from Money Talk Network as well.

Mike Schiano
The Debtbuster

Mike Schiano picked as a Top Talk Radio Personality for 5th Straight Year

2010-02-26T09:33:00.000-08:00

Orlando, FL – Talkers Magazine, the Talk Radio Industry’s leading publication, has selected Mike Schiano to its prestigious “TOP 250″ list of the most important Talk Radio Personalities in America for the 5th year in a row.

“I’m excited to be selected, once again, to be part of such a talented group of broadcasters who do such entertaining and important work every day. I want to thank Michael Harrison, the founder and publisher of Talkers for his support over the years. Being selected this year is really special,” said Schiano.

Mike has made the “Talkers 250″ list since 2006 and is celebrating his 28th year as a professional broadcaster and personality.

During the last 6 years he was a regular on The Morning Magazine show on Tampa’s 820 WWBA, he’s hosted several nationally syndicated programs, and, as a personal finance expert, is a popular guest on radio and TV shows across the country. His program, “the Money Minute with Mike” was sndicated on over 400 radio stations and was nominated for a George Foster Peabody Award twice. He is one of the pioneers of Internet Radio and launched the MoneyTalkNetwork.com last year.

No Sand in Haiti!

2010-02-17T07:52:00.000-08:00

According to the Associated Press, Haiti's government is banning the use of quarry sand from structural construction in an attempt to improve building safety.

Poor construction is blamed for the collapse of many buildings in the Jan. 12 earthquake that killed more than 200,000 people. read the full story

I suggest you visit www.constructionjobsinhaiti.com if you are in the construction industry to learn more about the new Job opportunities in Haiti. According to Haiti's Prime Minister, it will take three years just to remove the rubble! Then another 10 years to rebuild. Other experts have estimated the construction project may continue for 20 years or more. Meanwhile, construction jobs in the US dropped by 75,000 in January.

Mike

Deceptive and Unfair Practices... Aren't we ALL victims?

2010-02-16T13:26:00.000-08:00

2700 people in Florida will be getting a check in the mail for $6000! These "Foreclosure Relief Payments" are the result of a lawsuit filed by the State of Florida on behalf of "distressed homeowners," to help them save their homes from foreclosure.

"The settlement was based on a July 2008 lawsuit filed against Countrywide, one of the nation’s largest mortgage companies, for what the government said were deceptive and unfair trading practices. According to the lawsuit, Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading." read the entire story

That's great for those 2700 people, but I can't help but think that all of us have been victims of deceptive and unfair practices of some financial services company or companies over the years haven't we? According to President Obama, the new Credit Card Accountability, Responsibility and Disclosure Act, "marks a turning point for American consumers ending the days of unfair rate hikes and hidden fees."

And, by the way, which homeowners in Florida, or in any state, are not "distressed" these days. I'm no lawyer, but couldn't we make a logical argument that Countrywide's practices led to, or, at least, greatly contributed to, the home value meltdown that all of us homeowners are suffering through?

Wow, to think, all I needed was a Mortgage from Countrywide to eventually cash in and get a $6000 distress bonus. Makes me wish I didn't throw away all of that junk mail from Countrywide trying to get me to refinance with them a few years ago.

Mike

Have you visited FreeBirthday.com lately?

It's Your Birthday...Everything should be FREE!

Lowe’s Expands Year-Round Discount for Military

2010-02-11T06:42:00.000-08:00

Lowe’s Expands Support of the Military with Year-Round Discount

10 Percent Discount for Active, Reserve, Retired and Disabled Military Personnel and Immediate Family Members

MOORESVILLE, N.C.--(BUSINESS WIRE)--Lowe’s Companies, Inc. announced today it will expand its support of the military by offering an all day, every day 10 percent discount to all military personnel who are active, reserve, retired or disabled veterans and their family members, with a valid, government-issued military ID card.

“Lowe’s was founded on the heels of World War II by veterans Jim Lowe and Carl Buchan and has always been a supporter of the military”

All other military veterans will receive the discount on the Memorial Day, Fourth of July and Veterans Day weekends.

“Lowe’s was founded on the heels of World War II by veterans Jim Lowe and Carl Buchan and has always been a supporter of the military,” said Larry D. Stone, Lowe’s president and chief operating officer. “The year-round discount program is one way we are reaffirming our commitment to the thousands of men and women who are serving throughout the world, as well as their family members at home.”

The discount is available on in-stock and Special Order purchases up to $5,000. Excluded from the discount are sales via Lowes.com, previous sales, and purchases of services or gift cards.

While Lowe’s has had a military discount program in the past during select times of year, the new policy will allow those who are serving to benefit from the discount whenever they need it the most.

A Champion and a Dad

2010-02-08T11:01:00.000-08:00

This shot from the AP will go down as one of the great sports pictures of all times. Any father who has played sports and envisions greatness for his children will appreciate this picture! And to think, my beloved Miami Dolphins could have had Drew Brees and blew it. Then again, they had Dan Marino for 17 years and couldn't win a Super Bowl so I guess it all worked out in the end. Especially for Drew Brees and his family and the New Orleans Saints.

Let the good times roll New Orleans!!

Mike About Money Minute

2010-02-04T08:47:00.000-08:00

Today's MikeAboutMoney Minute
Avoiding ID Theft brought to you by the Money Talk Network

The Cost of a Kiss

2010-02-01T08:25:00.000-08:00

According to the National Retail Federation, couples will spend less this year on Valentines Day gifts.

According to its recent survey, Couples will spend an average of $63.34 on gifts for their significant other or spouse. The average person will spend $103.00 on traditional Valentine’s Day gift purchases this year, similar to last year’s $102.50.

But the spending won't stop there. Look at all of the other people who are on the gift list this year, and every year. The average person will spend $5.37 on friends, $4.29 on classmates and teachers, and $2.84 on co-workers. Do you really buy your coworkers Valentines gifts??

The average person also says they'll spend $3.27 on family pets, up from $2.17 last year. Spending on family members will remain the same $20.94.

This example illustrates the importance of creating a very detailed Spending Plan (Budget). Even someone who spends a great deal of time on their finances probably left Rover's Valentines Day gift out of the February Spending Plan. The more detail you provide in your monthly budget, the better you will be able to manage your finances.

Happy Valentines Day!
Mike

Avoid Fees and Build Wealth!

2009-12-29T11:29:00.000-08:00

One key to building long-term wealth is to avoid paying fees as much as possible. Fees can be found everywhere these days from extra bag check fees at the airport to extra fees on a variety of everyday transactions. Fees are extra money that you could be using to invest or pay down debt, but, instead, are paying to a merchant or lender.

An industry chock full of penalty fees which eat up a lot of your future wealth is the Financial Services industry. Credit Card issuers and Banks lead the way in charging fees of their customers. These fees are often issued as penalty payments as a result of a mistake that you make such as missing a payment deadline or going over your credit limit. Proper management and planning of your various financial accounts can help you avoid paying a majority of fees which will lead to more money in your bank account where it belongs.

In light of the recent losses banks are suffering as a result of the economy's meltdown, financial institutions are adding fees and penalizing account holders like never before in order to prop up their profits. It has been reported that the fees associated with bank checking accounts have risen to an all time high this year. According to a prominent economic research firm, the financial services industry will earn $38.5 billion this year on overdraft and non-sufficient fund fees.

You should be on the lookout for fees of any kind as you manage your finances and run your life! Far too many people adopt a “victim's mentality," thinking there is nothing they can do to avoid fees. In fact, the more alert you are to the many potential fees that surround you especially penalty fees allocated for making financial mistakes, the more likely you will be to avoid making those mistakes.

Some fees are easy to find while locating other, hidden fees will require digging through your account agreements, statements, and other literature from your lenders. Often, the best way to learn about all of the fees associated with any account is to review the fine print on the back of your monthly statements. It is tough reading, but well worth the effort. Calling the creditor with specific questions about things you don't understand in your agreement, especially about how and when penalty fees will be inflicted upon you, is a good idea.

The easiest place to start is with your bank accounts. Checking Account fees can include the following fees:

Bounced Check Fees
Pay for writing a check for an amount that is higher than the available balance in the account.

Overdraft Fees
It is reported that 75% of banks automatically enroll checking accounts into Overdraft Protection Programs, often at an annual or monthly fee. You may be paying fees for a service you never wanted to sign up for in the first place, and have never used. You’ll pay a fee if the Overdraft protection service is initiated to assist you. This fee will be in addition to the Bounced Check Fee you will also incur.

ATM Surcharges
These are easily avoided if you know your banks policies regarding which ATMs you can use without incurring a fee and planning to only use fee-free ATMs in your bank's network.
Miscellaneous Monthly Service Fees
These fees can be charged for a variety of issues including account inactivity, keeping an insufficient minimum balance in the account, simply having the account open, and requesting copies of checks or other account information.
Credit Card account holders may be paying fees that include the following fees:

Inactivity Fees
Avoid inactivity fees by using your Credit Card at least once each year for a small purchase like a tank of gasoline or a meal.

Reinstatement fees for Membership Rewards Programs
If you are ever late or miss a payment, some creditors have instituted a new tactic to charge fees. They freeze your access to the Membership Program points you have built up to that point and charge you a fee to regain access to participating in the program and using your points. The average fee to reinstate access is now $29.

Annual Fees
Ask for a waiver of your annual fees permanently. If the creditor won't remove the annual fee forever, ask for a waiver for this year and then ask again each year.

Over the Limit Fees
Knowing the limits on credit cards and staying well below them is the way to avoid this unnecessary fee. New Federal laws going into effect in February will require Credit Card companies to get your approval before allowing a charge to take your account over its limit then charging you the fee. You obviously should never give this approval.

Late Payment Fees
Today’s technology gives us the ability to schedule automatic payments to be made each month directly from our checking and savings accounts, so late payments can be easily avoided. If you continue to mail payments, be sure the check is in the mail at least 10 days before the due date.

Imagine the extra cash flow you could put to work and enjoy if you could avoid any and all extra fees all of the time! Here is a fact; Wealthy people and those who avoid financial trouble avoid fees! And they avoid them all of the time...year after year. The money that does not get paid out in the form of fees stays in the accounts of smart consumers to grow over time. After many years of avoiding fees the savings really add up.

Be sure to make one of your financial objectives in the New Year to avoid paying as many extra fees as possible. Start by finding as many of the potential fees in your accounts as you can and endeavor to understand the rules on how to avoid paying them either by changing services or avoiding mistakes that lead to those fees being charged. By the way, don't forget other accounts that might be charging you fees such as brokerage accounts, utility bills, memberships, and other services financial and otherwise.

The Federal Reserve and Congress are both taking action to reign in many of the punitive fees which the financial industry has introduced. In the meantime, it is up to you to protect your family's financial future by becoming more informed and avoiding fees whenever you can.

A Money Saving TIP
“Many banks offer free or lower cost checking through direct deposit or if you agree to only use the ATM.”

Mike Schiano, "The DebtBuster," is the author of Spend Your Way to Wealth, is a frequent Radio and TV guest, and currently serves as Director of Education for Consumer Advocates Credit Counselors, Inc. in Boca Raton, FL. Send Mike your personal finance questions: mike@askthedebtbuster.com or visit www.askthedebtbuster.com.

2% Mortgages...Where do I sign up??

2009-12-17T06:08:00.000-08:00

Here's one for all of you who have fought, scraped and sacrificed to pay your bills on time, all the time every month as we've struggled through this "great recession" dealing with stagnant wages, fear of job loss, increasing oil and gasoline prices, no return on savings, loss of business, and a volatile stock market; some people are getting 2% mortgage rates.

"Californians Steve and Elena Servi received a 2% fixed-rate loan from Wells Fargo that replaced the 6.75% adjustable rate mortgage on their Rowland Heights house."read the entire story at CNNMoney

According to the article, the "Neighborhood Assistance Corporation of America(NACA) has agreements with all the top lenders to reduce interest rates to as low as 2% if that's what it takes to make loans affordable."

Granted, the banks are modifying only to try to fight off bigger losses that the foreclosure process brings. And, the percentage of people who are getting loan modifications is very low, and, they are people who have defaulted and face foreclosure.

But, I can't help thinking about us people who pay our bills. Those of us who used up savings during unemployment to keep our payments current. Besides jacking up our Credit Card interest rates to make up for shortfalls from those defaulting on credit card and mortgage loan payments, what do we get out of the deal? We are the one's doing things right. We are the one's doing what our parent(s) taught us to do. Work hard and find ways to pay your bills and meet your responsibilities. We didn't over borrow and pay too much for our homes. We didn't agree to outrageous adjustable rate mortgages. We didn't speculate with our family's future. We just went to work, paid our bills and did what we thought we were supposed to do. Yet, in the end, we don't get an interest rate break, we don't get principle reductions; We get to pay our bills and continue to struggle and fight and sacrifice to pay our bills again next month while others are dancing to the bank to pay their 2% mortgage loan.

At last check, 50% of those who get a mortgage modification default again. So, who really is a better bet and more deserving of a reduction in mortgage interest? Those in default or those who pay their bills? Wouldn't you invest more, either in real estate or equities, if YOU could get a 2% mortgage loan?? Wouldn't you spend some of that extra cash flow at the mall? You bet. If the government wants to stimulate the economy, let's see some relief for people who have jobs and would put cash flow to work in the economy!!

What do you think?

Mike

Make Your New Year FIANCIAL Resolutions Today!

2009-12-10T13:07:00.000-08:00

Most people wait for New Year’s Eve or New Year’s Day to make their New Year resolutions after they’ve spent the last part of the year “living it up.” Most vow to atone for their bad habits like over spending or over eating starting in January. While getting started in changing bad habits anytime is a good time, wouldn’t make even more sense to get started now? Why wait?

Though, you have already vowed to make positive changes when you decided to enroll in the Debt Management Program, the start of a New Year brings with it lots of possibilities for improvement over the last year. You have a full year ahead of you to implement good financial habits at the same time you are paying down debt. December is the perfect time to take some time and plan the next year. If you are lucky, you will have some time off from work and can spend some quiet time assessing the past year and contemplating goals for the next year. Even if you don’t have time off of work, make it a point to schedule a few hours for planning your finances.

span>What should you be working on? Your key focus should be on how you plan to allocate your family’s income in the coming year on a month by month basis. Do you have any big expenses coming up in the New Year that will be unavoidable? How about all of the small expenses that most families don’t plan for in advance such as Birthday presents, gasoline, and sneakers for kids?

Key Items to work on for the New Year include:

Creating a Spending Plan

Working out a Savings Plan

Planning for Major expenses

Reviewing your investments

Reviewing your Life, Health, Auto and Homeowners insurance policies and rebid them for lower premiums.

Reviewing Credit Reports and Scores

This is a perfect time of year to review your Credit Reports and Credit scores. Visit http://www.annualcreditreport.com/, for free copies of your credit reports. If you’ve retrieved your free credit reports in the past twelve months, visit the individual credit bureaus online to order a copy of your report for around ten dollars each.

Plan to Make it a Happy New Year!

Mike

10 Ways to avoid Holiday Over-Spending!

2009-11-10T09:46:00.000-08:00

This year, with the economy still on tender footing and sixteen million Americans out of work, and tens of thousands more people considered under-employed, we are facing one of the most challenging holiday seasons in history.

According to leading psychological studies, lack of money is the top cause of family tensions, holiday blues and depression. We also feel tension from the pressure of gift-giving, the perceived or real shortage of time to get things done, and, of course, the stress of dealing with growing credit card debt. While credit card debt has been declining during this year, we anticipate an uptick in credit card usage, especially among people who don't have adequate cash flow from employment but who feel they must buy gifts and celebrate the holidays whether they can afford it or not.

Here are some smart techniques that I recently included in the CACC Money Wise Newsletter that can help you avoid overspending in the next couple of months.

Decide how much money you can afford to spend (if any), and make it part of your November, December, and January spending plan (budget). Yes, January should be included if you are planning to shop at any Post-holiday events. This is the point where you should seriously consider if you can afford to buy gifts this year. Many people feel an obligation to spend money during the holidays but it simply may be something you cannot and should not do based on your financial circumstances. If you find that you don't have the ability to spend money, we have some alternative suggestions coming up.
Pay cash, and avoid using your credit cards.
Make a plan to buy only one present per person. Focus on quality over quantity, even with children. That has actually gotten easier to do each year as electronic toys, games, and computers have become more popular with kids. You can justify fewer gifts because each gift, like a computer, can deliver so much more nowadays.
Make a shorter list! First of all, make sure you are using a list. Then consider if you are buying on auto-pilot without giving much thought to who is on the list or how much you are spending. When was the last time you reviewed that gift list? There is nothing wrong with paring down your list especially in tougher financial years. If you must keep the list in tact, think of cutting the budgeted amount per person. Yes, you should budget a specific amount to spend for each person on your list!
Watch for before-holiday sales. It seems the pre-holiday sales start earlier each year and this year is no exception as retail stores are hurting for sales. Many people think waiting to the very last minute will garner the best savings but that is not always the best strategy. Often, to get sales moving, retailers will start the season with a round of big discounts. Also, waiting to the last minute often leads to increased stress and impulse buying which can lead to over spending.
Make presents. Can you bake or do crafts? Can you write well or take great photographs? Are you musically talented? With today's computer technology, anyone can record music and create CD's. How special would it be if someone wrote and recorded a song just for you? Give needlework, ceramics, framed photographs or other handmade items.
Donate your time as a present. Again, your talents and time are valuable and they might make a better gift than a store bought sweater. Do new parents need a night off from a new baby? Does an elderly relative or friend need rides to the doctor or help cleaning their house? Can you change oil or do other car maintenance? How about giving golf, swimming, or music lessons as a present?
Watch postage costs. Prices have gone up since last year. Be sure to mail early to avoid priority postage rates and choose lighter gifts such as gift cards to save money.
Make homemade cards either by hand or with the computer. Also, avoid expensive fancy wrapping paper. Use bulk postal wrap from the office supply or art supply store. It can be much cheaper and you and the kids can decorate it yourself. As a bonus, it is more environmentally friendly.
Don't forget to cash in bonus points you accumulated by using credit cards. Many programs offer gift cards at major retailers. Just keep a keen eye out for redemption fees of any kind!Carefully plan and shop at post-holiday sales and be sure the prices you are paying are truly discounts.

Finally, avoid using lower prices at post holiday sales as an excuse to over-shop. Many people buy first and think of something to do with the item later. If you don't have a need right now either personally or as a gift, avoid making the purchase. By the way, it is OK to stock up on cards and wrapping paper for next year if you are getting 60%-80% discounts and can afford the purchase.

Happy Holidays...

Mike

Mike Speaking in Hollywood!

2009-11-05T06:54:00.000-08:00

The DebtBuster will be presenting his "Give Yourself Credit" workshop in Hollywood, Florida tomorrow for WorkForce One's PPN Forum.

The average American consumer's credit situation is in rough shape and getting worse. Credit Card interest rates and fees are going up, late payments are on the rise across the board, and late mortgage and rent payments also continue to hurt credit scores. If you happen to be looking for a job, your credit report will likely be a factor in the hiring decision as more and more employers are using credit checks as part of the hiring decision matrix.

Give Yourself Credit covers the key areas of understanding and improving your credit report and scores!
-Why is Credit so Important?
-Standard Credit Reports
-Other Credit Reports
-Credit and Employment
-Improving Your Credit
-Managing Your Credit

-Your Credit Score
-Other Credit Scores
- Improving Your Credit Score

I'm thrilled to be presenting again at WorkForce One and 'll be providing helpful resources and assistance to everyone who attends.

I will also have some updates on the new Credit CARD Act which has led to increases in Credit Card interest rates and Fees over the past 6 months.

By the way, I am available to speak to your employees, members, or clients, contact me today to book a workshop for your group!

Mike

mike@mikeaboutmoney.com

Chase Customers Getting Slammed...Again!

2009-08-18T06:31:00.000-07:00

Just when you thought you had donated enough of your hard earned money to bail out the big banks, here is your chance to increase your donations on a monthly basis.

For the second time this year chase has changed how it calculates the minimum payment due for certain customers, increasing the rate from 2% of the outstanding balance to 5%. That means if you’re carrying a $5,000 balance the required minimum payment will rise from $100 to $250 a month! It's quite a jump, even for a two income family.

While this change certainly will force consumers to pay down debt and save on interest costs, can retailers expect to see the return of consumers any time soon under these conditions? Consumers spending money is a must in order to sustain our economic recovery. How can that happen if consumers face higher costs of borrowing? What about the unemployed Chase customers who were struggling to pay minimums already? If government wants to stimulate spending, how about a "Cash for Credit Cards" program?

Stay in Touch.

Mike

http://www.moneytalknetwork.com/

Have a financial questions. Email Mike@askthedebtbuster.com

Let the Credit Card Lawsuits Begin!

2009-08-13T15:47:00.000-07:00

Unhappy customers can now file lawsuits against Bank of America when they believe they have been treated unfairly or illegally.Wow, they'd better get ready for a landslide of lawsuits. Could this be the result of pressure from the Federal Government after taking so much TARP money?

Bank of America (BAC) is the first major U.S. bank to say it is curtailing use of arbitration.

Read the entire story

While this is a very positive change for all consumers, only very wealthy individuals would have any chance against the powerful banking giants in court. However, this may open the door to Class Action suits. I'm sure attorneys across the land are readying cases. Anything that can curtail continuing consumer abuse by credit issuers is a good thing. We appreciate them lending us money when we need it and don't begrudge them making a fair profit. We just want a fair playing field when it comes to interest rates and fees.

Do you think this will bring about any change in policy at Bank of America in regard to how it treats its customers?

Mike

Health Care Debate - Whose the real Bad Guys?

2009-08-11T09:42:00.000-07:00

As I hosted the morning show this week on 540 WFLA, listeners wanted to talk about the Health Care Bill, more accurately, their concern with having the Federal government shove a one payor system down the throats of Americans against our will. While that is not the case, the perception is such and the fight goes on. My point is this. While it is easy to demonize the Federal Government, let's keep our eye on the ball. Who is really running the health care system and managing this new system debate? Read a bit from this well researched article in the most recent edition of BusinessWeek by writers Chad Tuhune and Stephen Epstein and it will tell you all you need to know.

As the health reform fight shifts this month from a vacationing Washington to congressional districts and local airwaves around the country, much more of the battle than most people realize is already over. The likely victors are insurance giants such as UnitedHealth Group (UNH), Aetna (AET), and WellPoint (WLP). The carriers have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable. Read the entire story

The Health Insurance companies are orchestrating this debate and the eventual legislation to their benefit. Congress is relying on the Insurance companies for information, statistics, and direction in forming opinion and legislation. We are witnessing a classic "deflection move" where President Obama and the Federal Government have been painted as the convenient enemy and the Insurance companies painted as the white knights.

For those of you worried about a Federal Health Plan, rest assured, when the dust settles, your Insurance Company will be there, bigger and stronger than ever, to provide the same service you've always received from them.

Government bailOut-Rage

2009-07-30T19:06:00.000-07:00

New York's Attorney General, Andrew Cuomo's investigation has spotlighted the fact that bailed out banks have given out more than $30 Billion in bonuses in 2008.

Citigroup, which is now one-third owned by the U.S Taxpayers, as a result of the bailout, gave 738 of its employees bonuses of at least $1 million, even after it lost $18.7 billion during the year, Cuomo's office said.

According to Bob Rinear, editor of InvestYourself Newsletter, about 5000 bankers and traders were paid $1 million or more in bonuses last year even as profits at the largest banks shrunk.

So where did all that money come from? From you, the U. S. Taxpayer! Tens of billions of dollars of taxpayer money, according to Cuomo's report, were paid to millionaire bankers to make them even richer!

But wait, there's more: Bank of America Corp., which also received $45 billion in TARP money, paid $3.3 billion in bonuses, with 172 employees receiving at least $1 million. Merrill Lynch, which Bank of America acquired during the credit crisis, paid out $3.6 billion.

JP Morgan Chase and Goldman Sachs, have since both repaid their borrowed TARP Money, but not until they used the free investment capital to generate profits allowing them to pay the most big bonuses on Wall Street. Goldman gave 953 workers bonuses of at least $1 million. JPMorgan gave 1,626 employees at least $1 million. The two banks each gave more than 200 employees bonuses in excess of $3 million.

Needless to say, this goes over really well in American households that are struggling to keep the lights on. Note you did not receive any bonus from your Credit Card company. In fact, you likely received an increased interest rate and higher fees as your bonus. Well, they've got to come up with the money somewhere and while your tax money is nice, they could always use a little more. And they know where you keep it! Hold on tight.

Stay in touch!

Mike Schiano

The DebtBuster

www.MoneyTalkNetwork.com

Cash for Clunkers...back on the road?

2009-07-30T03:48:00.000-07:00

Ask the DebtBuster

Q: Is the government's new "Cash for Clunkers" program going to be successful?

DebtBuster: Everyone is thinking about the Cash for Clunkers program these days and it sounds good on the surface. But, like all government programs, and car dealer sales offers, you've got to read the fine print and understand the real details!

Lena Pons is a Policy Analyst for Public Citizen's Congress Watch Division and says the "Cash for Clunkers" Program "yields dubious benefits." According to Ms. Pons,

"The program has been touted as a way to get cleaner cars on the roads while restarting sluggish auto sales. But the program is unlikely to be effective at achieving either goal. Its fuel economy benefits are vague, and NHTSA estimates that the increase in sales for each dealer will be only 12 vehicles. This number is probably an overestimate, since NHTSA has not attempted to account for purchasers who would buy new vehicles anyway.

Under CARS, consumers who trade in cars and light trucks that get less than 18 miles per gallon up will receive $4,500 to buy a new vehicle from the program. A car may be traded in for a new car that gets as little as 22 miles per gallon; the owner of a large pickup truck that gets 15 miles per gallon or less may be eligible for a $3,500 voucher to purchase another large pickup truck of no better fuel economy if it is smaller or similar in size.

Already, dealers are jockeying for Congress to provide the program with additional funds. Auto dealer analysts estimate that the $1 billion already allocated will be exhausted by Labor Day. Appropriations for the program were deliberately limited so that NHTSA and lawmakers could determine whether the program is working before spending any additional funds on it. That approach from Congress is sound.

Before providing another giveaway to an industry that has received $66 billion in bailout funds, we need to evaluate whether the program has any benefits. The only way to do that is to evaluate the trade-ins as they occur-but NHTSA's regulations do not permit this. NHTSA's regulations outline dozens of pieces of information it will collect to track how the program is working and to avoid fraud. But the regulations do not require it to make any of this information available to the public immediately. Instead, advocates will need to request the data from the agency, which will prevent timely analysis of the trade-ins by independent organizations before Congress considers additional funding for the program.

NHTSA's regulations also attempt to prevent fraud by requiring dealers to label vehicle titles with the words "Junk Automobile," and requiring that the National Motor Vehicle Title Information System (NMVTIS) provide a classification for vehicles in this program. NHTSA will fine dealers or individuals $15,000 for each fraudulent transaction. Public Citizen has been involved in efforts to prevent fraud in the used car market and will continue to watch how this program interacts with NMVTIS."

The real irony, in my opinion, is the fact that those so called "clunkers" will be resold to the public completely erasing any beneficial environmental effect. I mean, what are dealers going to do with them but wholesale them to "buy here-pay here"used car lots or sell them from their own used car lots. With consumer credit in terrible shape, these cheap cars will be a haven for those who need transportation they can buy without having to qualify for a car loan, or with a minimal amount of financing.

What do you think?

Mike

www.moneytalknetwork.com

Mike About Money is now Tweeting

2009-07-21T08:33:00.000-07:00

We love Twitter for giving us the capability to shoutcast quick thoughts about Money to our followers, subscribers and fans. Stay tuned for some big news coming soon.

Please join us on.
If you are already following us on Twitter, now you will get updated when we post to MikeAboutMoney.

Mike

Revolving Consumer Debt going Down!

2009-07-17T05:54:00.000-07:00

Really good news from the Consumer Debt front is in for the 9th straight month.

As reported by Karen Shuggart for CardTrak.com, since peaking at $977 billion in the third quarter, Americans have chopped-off about $49 billion in revolving credit. According to new and revised data released by the Federal Reserve, revolving credit now stands at $928.0 billion and declining at an 3.7% annual rate. In April, revolving credit declined to a revised $930.9 billion, reflecting an annual contraction ratio of 11.1%. February posted the largest contraction over the past eight months, dropping nearly $13 billion. read the full story

This decline is a function of our lack of confidence in the economy and continued job losses, as well as workers uncertainty about their own financial future, but it is forcing us to lower our revolving debt loads.

Of course this does not bode well for the economy which relies heavily on consumer's buying things, especially on credit. So the vicious cycle will likely continue its downward spiral for the forseeable future. Companies have no choice but to continue to trip payroll as sales decline.

Less consumer debt means less interest and fees so expect to see the banks bottom lines hurt by this. Given the choice though, I prefer to see consumers, and the government, with less and less revolving debt at high interest rates. If you are not paying down debt right now and you have income, join the party. And if you need help, I am here for you.

Mike
mike@moneytalknetwork.com

Follow me on Twitter

The New GM's New Car

2009-07-10T05:56:00.000-07:00

Government Motors (GM) is born today and inside sources say the company, 60% owned by American Tax Payers, will soon unveil its newest Green Car which has been named "The Obama" after the company's new Chief Executive.

Engineers who worked on the project report that "The Obama" looks really good and runs on Hot Air.

Mike
www.moneytalknetwork.com

Mike in the Morning

2009-07-06T02:40:00.000-07:00

Join me this morning from 6-9am Eastern on 540 WFLA AM as I host Bud Hedinger Live.
You can listen online.

Let's Talk!

Mike

The Founding Fathers and Money

2009-07-02T14:34:00.000-07:00

Benjamin Franklin may have coined the phrase, “A penny saved is a penny earned.” But, as it turns out, a few other founders of the United States of America had something to say on the subject of personal finance, too.

In the spirit of the Fourth of July, Kiplinger’s Personal Finance presents the timeless financial advice of our forefathers, echoed by the magazine’s own advice. Side-by-side, their suggestions and Kiplinger’s might just help you forge financial independence.

1. John Adams … On the Importance of a Financial Education:

“All the perplexities, confusion and distress in America arise not from the defects of the Constitution, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.” – From a letter to Thomas Jefferson in 1787

Kiplinger wrote: “Isn't it amazing that so many people have barely a clue about how to handle their own money? Amazing maybe, but no mystery: Americans typically manage to navigate 12, 16 or more years of very fine formal education without ever learning how to balance a checkbook, size up
a stock or resist a fast-talking salesman of bad financial
ideas.” – From “How to Create a Budget,” July 2007

2. George Washington … On Getting Rich Quick:

“Few men have virtue to withstand the highest bidder.”

Kiplinger wrote: “With the housing market this decade, people were worried that they'd be left out, so their egos compelled them to take part in the housing boom ... I wish investors would focus more on fundamentals.” – From "How We Can Escape This Mess", June 2009

3. Thomas Jefferson … On Living Within Your Means:

“But I know nothing more important to inculcate into the minds of young people than the wisdom, the honor, and the blessed comfort of living within their income, to calculate in good time how much less pain will cost them the plainest stile of living which keeps them out of debt, than after a few years of splendor above their income, to have their property taken away for debt when they have a family growing up to maintain and provide for.” – From a letter to Martha Jefferson Randolph in 1808

Kiplinger wrote: “Budgets aren't straightjackets to keep you from spending your hard-earned money. Rather, they are the key to financial freedom... Knowing how much money you have and where it's going is liberating.” – From “The Trouble with Budgets,” May 2009

4. Benjamin Franklin … On the Magic of Compounding:

“Remember that Money is of a prolific generating Nature. Money can beget Money and its Offspring can beget more, and so on. Five Shillings turn’d, is Six: Turn’d again, ‘tis Seven and Three Pence; and so on ‘til it becomes an Hundred Pound. The more there is of it, the more it produces every Turning, so that the Profits rise quicker and quicker.” - From “Advice to a Young Tradesman, Written by an Old One,” (1748)

Kiplinger wrote: “When you save or invest, your money earns interest or appreciates. The next year, you earn interest on your original money and the interest from the first year... It's like a snowball -- roll it down a snowy hill and it'll build on itself to get bigger and bigger. Before you know it ... avalanche!” –
From “Behold the Miracle of Compounding,” November 2008

5. Alexander Hamilton … On What Constitutes a Sound Economy:

“Industry is increased; commodities are multiplied; agriculture and manufacturers flourish; and herein consists the true wealth and prosperity of a state.” – Report on Manufactures, 1790

Kiplinger wrote: “Who knows today what world-changing technologies might boost the U.S. and global economies in the next decade and beyond? Alternative fuels and vehicles? Biotech and medical devices? Desalination of water? Retrofitting an energy-wasteful world? Probably all of these and more … Prophecies of doom have always underestimated the ingenuity of humankind – our ability to meet new challenges with unforeseen solutions.” – From “Beyond the Lost Decade,” August 2009

Source: Kiplinger’s Personal Finance and Kiplinger.com.

Happy Independence Day! Again.

Mike

Independence Day Free Gift

2009-07-02T05:30:00.001-07:00

As our country faces unprecedented challenges, I find it invigorating and calming, as well, to read and reread the words of our Founding Fathers. They put their lives on the line to create our great country and we should remind ourselves at every opportunity of the legacy we've been left to care for and pass on to our children.

It all started with Thomas Paine's Common Sense. And we've arranged for you to get an absolutely FREE Download of the full version of this book. Visit the homepage of the MoneyTalkNetwork.com to link to this free download.

Enjoy the free audio and enjoy Independence Day!

God Bless America.

Mike

mike@moneytalknetwork.com

Ask the Debtbuster

2009-06-29T07:20:00.000-07:00

Q: How long does it take for things to show up on my credit score? I am not sure what criteria are important. Can you please guide me. Please point me in the right direction.

Mike: It really depends on what your credit report looks like now and what actions you take to improve things. For example, if you have some negative items on your report that are more than 7 years old, by requesting that they be removed, as the law requires, your score would improve by 10 to 20 points once those items are removed.

However, if you had a credit card chargeoff last year, it will take longer to see improvement in your score.

The fastest way to increase your score is to reduce any credit card balances to below 50% of the available balance. For example, if you have a Visa card with a $5000 limit and you have a balance due on the card of $3000, you are using 60% of the available balance. Any usage over 50% brings your credit score down. So reducing your debt balance to $2000 asap would improve your credit score.

Start by reviewing all three of your credit reports and scores. Then, decide what actions are needed to start to improve things. I can help you further once you review your reports.

Stay in touch!
Mike
mike@moneytalknetwork.com

Worst Used Cars

2009-06-20T12:29:00.000-07:00

While deals are incredible on New vehicles these days, Used Cars are selling better. But, not all used cars are worth even the most deeply discounted price. Thank goodness many of these models will disappear along with the companies that built them.

According to a report from U.S. News and Business Report, here is a list of the Worst Used Cars:

GMC Canyon
Consumer Reports cites the Canyon's troubled reliability history as the reason it makes their Worst Used Cars list. According to Consumer Guide, Canyons from 2004 through 2008 are "underpowered for anything other than daily commuting."

Chrysler Sebring

Shaky reliability, poor cabin quality and disappointing performance lead most reviewers to say the Sebring was never a great buy to begin with. Consumer Reports chose the Sebring Convertible as one of the Worst Used Cars based on reliability data from vehicles from 1999 through 2008.

Ford Explorer

This pick may surprise many since the Ford Explorer ranks mid-pack among affordable midsize SUVs, and is praised for its off-roading capabilities and a spacious cabin. But according to CarComplaints.com, the 2002-2005 models have issues.

Dodge Intrepid
Consumer Guide notes the Intrepid's most commonly reported mechanical problems include electrical problems with the cabin lights and headlights, plus an engine tapping noise when driving a V6 Intrepid.

Pontiac Aztek
The Pontiac Aztek's brief four-year run in Pontiac's lineup is a testament to this midsize crossover SUV's unpopularity.

read the entire story

Carcomplaints.com offers lots of interesting information about used cars including its list of the 20 Worst Problem Vehicles.

British Airways asks employees to work without pay

2009-06-16T13:31:00.000-07:00

If they don't pay you...is it really a job?

Who wants to line up to fly on the airline that is not able to pay its employees. Assuming this is a final, last ditch idea to stay afloat, one wonders what expenses the airline may have already cut, i.e. maintenance cost...prior to the "stop paying employees idea." Anyone for a flight over the Atlantic??

Do you think the managers of large corporations today understand that we go to work in order to generate income to feed and house our families. The "work for no pay" plan was fine when we were 8 years old and Dad needed some help in the yard. As adults with financial responsibilities, this plan is a loser.

Once again I'm reminded of the fact that if you can't afford to be in business, maybe you shouldn't be in business.

Catch you at MoneyTalkNetwork.com

Mike

GM out of Gas with continuing Sponsorships!

2009-06-16T06:42:00.000-07:00

General Motors is going to continue to pump millions in sponsorship money into NASCAR and other racing sports according to Ed Peper, GM North American vice president of Chevrolet.

Peper told the Detroit Free Press , "we race to win, and we get a great return on it." Really? How's that working for you and GM, Ed?

Peper said "President Barack Obama's auto task force had not gotten involved in GM's racing programs during the company's Chapter 11 bankruptcy filing. "They concentrated on the core business -- they didn't get into marketing and advertising," Peper said. "They just wanted us to use good judgment with our promotions."

Had good judgement existed anywhere at GM, the company would not be insolvent and in bankruptcy. More evidence that we are pumping bailout money into a failed company that has no plans to change its direction and begin managing to the current economic reality. As an investor in GM along with all of you, this riles me up the same as the AIG bonuses did. Marketing and Advertising is a major part of the operational expenses of any company. How can you leave this big chunk of expenses intact?

Reality Check for GM! The NASCAR audience is out of work and struggling financially like the rest of America. There were an estimated 40,000 empty seats two weeks ago at Dover. I like auto racing, but I don't buy vehicles or anything else based on watching a race and seeing the sponsor logos. Maybe that type of marketing worked in 1960 when the U.S. Automakers were the only game in town and were trying to separate brands and 400 hp was cool, but today it is that type of "good old days" thinking that has put GM in the desperate situation it finds itself in.

Here is a free tip Mr. Peper, and, by the way, I've been making this suggestion for years, build cars that actually LOOK like the NASCAR race cars and they will sell like hotcakes! They don't have to have the horsepower, but they need to look like the cars... right down to the sponsor logos and numbers. In fact, let me further suggest an even better financial model and marketing plan. Have the racing sponsors subsidize the cost of new cars in return for putting their logos on those cars bought by us regular folks. If you build a car that actually looks like a NASCAR Race Car, complete with numbers and logos, I guarantee you will get alot of interest. And, with sponsorship lowering the prices of those cars, consumers can afford to buy them. Plus, the sponsors get a lot more visibility in towns across America increasing their ROI, not to mention the goodwill they'd gain from making cars more affordable for you and I.

What red-blooded American Male wouldn't want to drive a car that looks like this?
I am working adding content and seeking talent for the MoneyTalkNetwork.com. Let me know what you think of the site and if you have an interest in being part of MTN.

Mike

Welcome to the Summer of GOV

2009-06-02T11:16:00.001-07:00

It's Summertime and my fond memories of childhood come streaming back to me with the first summer breeze...warm weather, the beach, family gatherings, great music, cookouts ... and an OVER INTRUSIVE FEDERAL GOVERNMENT??? Wait a minute. This is not the Summer of Love redux...This is the Summer of GOV, man.

In my adult life I have never felt so much government intervention so directly. The Feds are taking full advantage of the economic mess and acting swiftly to stretch their tenticles into every part of our daily lives. The scary part is that so many are now anticipating government assistance in some form or fashion for each and every problem. "Bank of America got theirs...so it's only fair that I get mine," is the new way of thinking. Where it used to be a disgrace to take a government handout. It is now chic and good business.

Get ready, we now have Government "For Big Business, Instead of the People and by the Federal Government." No matter how untenable your business plan or inept your management, if you have billions in debt and no way to stay in business, Uncle Sam wants you.

This government presence is growing like a California wave and is destined to scorch us all worse than that summer sun burn.

The Federal Government's plans to make and sell you your vehicles, handle your banking and credit, manage your insurance providers, manage your health, and mortgage your home and give you a job are just getting started.

Where will this unprecedented U.S. Government takeover of major industries lead? Most writers would point to the failed industrial takeovers of despots and dictators in various countries over the past 200 years of world history and the current failing Government takeovers in Venezuela and Cuba, as perfect examples of failed government intervention.

However, in the interest of blog space and your time, I thought I would simply cut to the chase and take stock of some of the things our multi-trillion dollar investments have provided for us so far:

Higher Gas Prices

Higher Credit Card interest rates

Higher Bank fees

Higher unemployment

Higher stress

Higher crime

Higher foreclosures

Smaller 401k's and investment portfolios

Smaller Savings interest

Smaller home values

smaller workforce

smaller job market

a smaller dollar

and smaller paychecks

and soon, higher and higher inflation that will make last summer's inflated prices look like a bargain.

There's somethin' happenin' here...and what it is, IS exactly clear... The mortgaging of the American way of life and our future stability as an economic world power. Yes, I am very concerned and call on you to join me in getting as involved in this political process as possible. We must be present and accounted for at each and every upcoming Local, State and Federal election. There have been few times inour nation's great history as important as this for citizens to take part and our power resides at the ballot box.

Just as the Summer of Love kicked off a cultural and political rebellion in 1967 that made us take a good hard look at ourselves and our management of this country, The Summer of GOV is another call to action...just without the beards and with soap and showers!

All together now...Peace, Love, & GOV!

Stay in touch,

Mike Schiano

mike@mikeaboutmoney.com

P.S. WE are officially launching MoneyTalkNetwork.com on July 4th.

This week's important Money News

2009-05-29T05:55:00.000-07:00

Stock Markets
Stocks ended a volatile session higher Thursday as the government's most recent debt auction saw solid demand and a rise in oil prices boosted shares of energy producers. Dow up 103 points.

Durable goods orders enjoy biggest gain in 16 months
Up 1.9% in April –vs- March’s 2.10% decline.

Claims for first time Unemployment benefits dropped 13,000 to 623,000 last week.
Continuing claims at an all time high of 6.78 Million.

10 Year Treasury bond rates increased pushing Mortgage rates up:
Mortgage rates
-30-year fixed-rate mortgages, with fees averaging 5.45% Up this week
-15 year fixed mortgage rates moved up to an average of 4.86% UP
-The average jumbo 30-year fixed rate rose to 6.6% Up

Mortgage applications dropped 14.2% this week- Refinance applications down 19%.

New home sales increased .3% in April. The median sales price fell to $209,700, a 15% drop from this time last year.

The Mortgage Bankers Association reported the largest quarter-over-quarter increase in foreclosure starts since it began keeping records in 1972. Lenders initiated foreclosures on 1.37% of all first mortgages during the quarter, a 27% increase. more than 616,000 mortgages were hit with foreclosure actions.

Mortgage Delinquencies also hit record highs, with the seasonally adjusted rate at 9.12% of all loans.

Gold prices up $8 Thursday to $963.20 an ounce.

Oil prices for July delivery rose above $66 Friday to $66.05.

OPEC decided to keep production at the current level of 25 million barrels a day.
New report shows US Oil reserves down 2 million barrels.

General Motors moves closer to a Bankruptcy filing after making a deal with its bondholders for a 15% stake in the company and the opportunity to buy another 10% at low stock prices.
Fiat may close on the purchase of Chrysler Friday.

Get a copy of Mike’s book Spend Your Way to Wealth for Free – no shipping – no handling – no cost.

Mike on the Radio...again!

2009-05-21T11:59:00.000-07:00

Mike Schiano will return as a guest today on Financial Lifeline Radio on May 21 from 3:30pm to 4:pm eastern time talking about today's hottest economic and personal finance issues.

Join us talking about MONEY!!

Mike
Mike@mikeaboutmoney.com

Mike on the Radio

2009-05-18T12:42:00.000-07:00

Be sure to tune in to 540 WFLA on Friday May 22 from 3-6pm as I sit in for Bud Hedinger on The Bud Hedinger Live Radio Show.

If you are out of the listening area, tune in at www.540wfla.com.

It's our chance to talk about more than money including today's hot topics. If you have some ideas let me know.

See you on the Radio!

Mike

P.S. I am also sitting in for Bud on May 28 and 29th! Don't miss the shows.

mike@mikeaboutmoney.com

Consumer Friendly Credit Card Statements Anyone?

2009-05-15T07:26:00.000-07:00

The Senate is debating and finalizing a bill that promises to, at its core, stiffen Credit Card Industry regulation in an attempt to make the use of credit more consumer friendly.

Key provisions of the most recent version of the bill included:

Bringing back and extending the grace period to give consumers realistic time to mail payments.
Eliminate the Universal Default Penalty - I've said in the past that this was the worst scourge on consumers in history, where, if you were late on a car payment your credit card interest rate could double.
Get rid of teaser rate spikes - 0% to 22% after a six month promotional period should be a thing of the past.
Cap penalty periods - OK you missed a payment, you pay a higher interest rate penalty. Congress wants your sentence to end eventually.
Regulate student borrowing - Will they keep credit card companies off campus? Likely not. Too much money to be made by now financially hurting Universities and Colleges. But, those under 21 who want a credit card will have to either prove income or have a co-signer. Credit limits will be capped at either $500 or a percentage of their stated income, and any increases to the credit limit will have to be approved by the co-signer before taking effect.
Set rules for how banks manage overpayment allocations - If you make a payment above your minimum payment, the card company will have to apply that overage to the portion of the balance that's being charged the highest interest rate.

Also included are comprehensive changes to credit card statements to ensure that consumers both have and can understand the terms of their cards. An online bank recently introduced a two page mortgage loan application form proving that complex documents can be boiled down to something most people can read and understand.

Bank regulation is the flavor of the day the president wants a comprehensive bill by Memorial Day. So we will get laws. The byproducts will be less credit availability for people who should not be using credit anyway, like young people, low income earners, and people who have low credit scores due to past issues. The real benefit of this bill as I see it is to help consumers extricate themselves from a system they should not be in but, under the current system's rules, cannot get out in one financial piece. The system is designed to squeeze every penny out of delinquent consumers before they go bust and to force borderline credit users into default to boost the profit potential on them as well.

The banks will see lower profits from their credit card divisions as a result of this new regulation, at least for a while. But, to keep the federal bailout funds flowing, it's apparently a trade-off bankers must be willing to make right now.

Avoiding ID Theft Still Common Sense!

2009-05-11T08:57:00.000-07:00

With the economy still in tatters, economic theft is on the rise. ID Thieves are working overtime so are some tips from Richard Adams to help you avoid this awful crime.

Identity Theft - Easy Tips To Stay Safe

Author: Richard Adams

Identity theft keeps on growing at a worrying rate and stories abound of people who have had their identities stolen only to find themselves later getting refused for credit cards, mortgages and the like. The reason, of course, is that someone else has already applied for such things in their name and then not paid them back. You end up credit blacklisted - sometimes literally leading to massive financial problems as you try to explain away the unpaid loans - while the criminal often gets off without trouble because they are so hard to trace.

So what common-sense things can we be doing to avoid this unfortunate situation?

The first and most important element that I personally have implemented is the use of a paper shredder. Use a good quality shredder to destroy any paperwork with sensitive information about you before disposing of it. Good examples of what you should shred include bank statements, receipts, any letters related to your finances (loan offers, credit card statements etc.) and personally I even go to the extra point of shredding anything with my full name and address on.

This means that most envelopes I receive are shredded too, though I believe this small amount of additional time spent on protecting myself is well worthwhile.

Next, try not to give out your details wherever possible. For example, try to stay off mailing lists that may sell your information to other companies. After all, the fewer copies of your full name and address there are around, the less chance there is of someone getting hold of your details for malicious uses.

A common problem that has been outlined in the press is companies ringing you up at home or on your cell phone and claiming they are from a legitimate organization and just need a few details. In the UK at present, this often reveals itself as a cell phone upgrade. A call on your phone tells you that you are entitled to another new phone, they just need to take a few details from you. Typically these people never see a new phone, but many see charges they never expected on their bank statement or credit record. So take care with these details.

Speaking of credit reports, as credit report are so easy and cheap to come by these days, consider getting a copy of your own records just to check them for an inaccuracies. Take note of anything suspicious so you can follow them up. Awareness of the problem - and how to control it - is vital.

Take care when using your details online and ensure that you only enter them into a secure form as evidenced by your internet browser, and regularly check your computer for viruses and spyware that may be keeping a log of all your details as you type them in, posing a risk for the future.

Lastly, be aware that there are now a number of banks and credit card companies that offer identity theft protection. These institutions not only help to offer you more protection but will also assist you in resolving issues with identity theft if and when they occur.

About the Author:

A great first step to protecting your identity is to buy a paper shredder

Article Source: ArticlesBase.com - Identity Theft - Easy Tips To Stay Safe

Stay vigilant during this unprecedented time in our economic history.

Mike
mike@mikeaboutmoney.com

Stop Whining and Manage Your Credit!

2009-05-01T07:51:00.001-07:00

I've received countless emails from people asking about the new "Government Credit Card Bailout." Here comes the icewater in the face...there is no Credit Card bailout on the way. Your outstanding balance is yours to deal with.

Pending congressional legislation, if it passes the Senate and is signed by the President, and new Federal Reserve rules, neither of which go into effect for another year, will only temper the policies Credit Card issuers use to raise interest rates and give notice to account holders about pending increases. At best, we may see some interest rate caps at something under 25%, but nothing is certain.

The banks are crying that these new regulations will cost them $10 billion a year in lost interest and curtail their ability to loan money, further exacerbating the current lending crisis. The bank lobbying armies are in full attack mode calling in all chits in an effort to soften the legislation.

It's our opinion that the banks are acting in a very shortsighted fashion. As reported, they have raised interest rates, cut credit availability, and changed terms in their favor in an effort to squeeze current card holders for increased profits while they are free to do it before any legislation takes effect. If you follow the bank's apparent logic forward 12 months, what will be left for them? The credit delinquency rate, now above 5% will surely be higher as more consumers are forced to miss payments or make less than minimum payments. 12 months from now the banks will have drained the well dry leaving a smaller pool of on-time payers. What is the plan then?

For those consumers waiting for Uncle Barack to come in and payoff their credit cards their wait may be longer than they think. The administration has chosen to bail out delinquent mortgages and mortgage lenders. Yesterday announcing an expansion of the mortgage bailout program to include Second mortgages, often used by home buyers to avoid coming up with a downpayment during the mortgage boom of the past several years. The government will subsidize the interest rates on those loans down to 1%-2%. Billions more in mortgage bailout underscores the fact that there will be NO BAILOUT for Credit Card holders!

With that understanding, it is important to protect your credit as much as you financially can afford to do. If you are out of work, expenses must be prioritized and that may push credit card payments down the list. If you have income and credit card debt, you've got to plan to pay that debt off asap! I am here to help.

Mike

mike@mikaboutmoney.com

Watch your Credit Card interet rates!

2009-04-29T08:46:00.000-07:00

The good news is that some of the most consumer "unfriendly" practices that Credit Card issuers have been punishing card holders with for 30 years will be curtailed with new Federal legislation. The bad news is that the new laws don't go into effect until July of 2010. So, in the meantime, banks are raising rates and
profits.

Banks that issue credit cards are gauging their good customers to make up for their growing portfolios of "toxic assets." It was once the practice to raise interest rates as punishment only on people who missed a payment, were late with a payment, exceeded their available balance or whose Credit Score dropped below a certain number because they took out a new loan or applied for too many other credit cards or loans.

Now, however, even people who have never missed a payment, pay their bills on time all the time and stay well within their balance allotment are receiving letters informing them that their interest rate has been increased. In spite of the fact that banks are now able to borrow money for free from the Federal Reserve to loan to consumers, the banks have chosen to boost profits by raising interest rates on non-delinquent customers as an additional profit center.

This practice is even more maddening because the interest rate is raised on your entire, current outstanding balance, not just on future purchases. This means if you used your credit card to make a purchase last year at 9.9% interest and you are still carrying some of that balance on the card, the new interest rate is effective on that old purchase.

And this could not be a worse time to hit consumers with higher costs of borrowing. This is sapping the last of the disposable income consumers have when they need it most.
"Consumer credit delinquencies in the fourth quarter reached its highest level ever" reaching 5.52% as reported by CardTrak.com according to the the American Bankers Association.

Ultimately, you have the choice of not accepting the higher interest rate but your account will be closed. If you choose this option, be sure your credit report reflects that the account was closed by you and not your creditor. You want future lenders to know YOU chose to close the account vs. having them think the creditor closed the account for some reason like non-payment. If necessary, add a notation into your credit file.

If you need help managing your credit and debt, I am always an email away.

Mike
mike@mikeaboutmoney.com

Mike is Available to Answer your Money Questions Today!

2009-04-24T09:58:00.000-07:00

Mike is Chatting Live Today from 1pm Eastern to 1:30pm.

Ask your money questions or just talk about the economy. It is your show.

Visit MikeaboutMoney.com then click on the Blog Talk Radio link at the top of the page.

Chat with you soon!

Mike

Thank you FreeBirthday.com

2009-04-03T15:32:00.000-07:00

It's Your Birthday...Everything Should be FREE!

Visit this site and have a great FREE Birthday celebration.

Mike

"We paid a Fee and didn't get any Results!"

2009-03-11T10:42:00.000-07:00

As we've reported and MarketWatch.com is verifying, "Regulators in several states are cracking down on some loan modification companies. The number of loan modification cases investigated by the California Department of Real Estate soared to 232 at the end of January from about 10 six months ago, says Tom Pool, a department spokesman. In general, California requires that those performing services for borrowers or lenders in connection with home loans must have a real estate broker's license (this doesn't apply to lawyers). Plus, each employee needs an individual license.

Under California licensing laws, contracts that require advance fees -- charges collected before services are performed -- must at least be reviewed by the Department of Real Estate.
California's Department of Real Estate already has issued a number of orders halting the collection of advance fees in conjunction with loan modifications.

"The large number of foreclosures has created an opportunity for legitimate and illegitimate operators," Pool warns. "The typical complaint is that we paid a fee and didn't get any results."
Read the entire story

Contact me before you agree to pay any Debt Relief organization!!
Mike
mike@mikeaboutmoney.com

Ask the Debtbuster...First!

2009-03-06T11:53:00.000-08:00

Before you pay anyone to help you get out of debt or help you avoid foreclosure, contact me!

Scams have popped up everywhere designed to separate you from what little money you might have. Most lenders have stopped foreclosing on homes while they sort through the Obama Rescue plan. This is your chance to regroup and possibly save your house and you don't need to pay anyone thousands of dollars to do it. The same goes for getting out of Credit Card Debt. There has never been a better time to get out of debt but creditors are not making it easy for you.

I am here to help you. I will counsel you on the best ways to deal with your Credit Card Debt, Mortgage Debt, Foreclosure, and other debt problems. Is Debt Settlement a better option for you than Credit Counseling? Is the Foreclosure Assistance company legit? I can tell you. There is no charge to contact me.

Just send an email with your contact information, a brief description of your situation and best time to call you and I will contact you promptly!

Mike Schiano - mailto:mike@mikeaboutmoney.com

Thank You Talkers Magazine!

2009-03-02T10:11:00.000-08:00

Talkers Magazine has elected Mike to the 2009 Talkers 250.

It is a great honor to, once again, be recognized as one of America's Top Talk Radio Personalities. Our commitment to helping families make smarter financial decisions everyday has clearly kept us ahead of the pack and we will continue to put listeners and readers first during these difficult financial times.

Thank you Michael Harrison for including me in this special group again this year.

Mike Schiano
www.mikeaboutmoney.com

Debt Elimination Scams are growing!

2008-12-02T13:38:00.000-08:00

I was reminded by the Texas Attorney General Greg Abbott that Debt elimination scams continue to grow. These “Debt elimination” schemes, falsely promise to eliminate consumer debt within just a few short months.

Frequently, these scams charge large, up-front fees and then fail to deliver any valuable services to customers.

According to the Texas AG, to become enrolled in the program, customers were required to wire a one-time $5,000 deposit to an unidentified “bank.” The scam’s operators claimed the bank would initiate a debt elimination process and use the deposit to defray the costs of that process. Once all the customers’ cumulative debt reached $100 million, the bank promised to make loans that would pay off individual customers’ debts.

However, the $5,000 fee was actually deposited to an account that Texas investigators traced to Panama. The operation’s owner never offered any evidence that a “bank” even existed.

You might say no one in their right mind would ever fall for a scheme like that, but those facing severe debt issues often act irrationally in seeking help. As a result, the already struggling customers lost their $5,000 deposits.

Legitimate financial assistance for families facing debt problems is available out there but these days sifting through the possible options in a growing industry can be a daunting task.

Before you or anyone you love does business with a debt relief organization, whether they claim to be a non-profit or not, contact me first and I will do my best to make sure you are dealing with a repuatable company.

All my best,

Mike Schiano
mike@mikeaboutmoney.com
www.mikeaboutmoney.com

More Mortgage Help - This time from Citigroup

2008-11-11T08:20:00.000-08:00

As reported by MarketWatch, Citigroup Inc. on Tuesday released details of a plan that it said will help mortgage borrowers remain in their homes.

Citigroup said that under the Citi Homeowner Assistance program, it would preemptively contact 500,000 mortgage holders -- involving $20 billion of mortgage balances -- to try to ensure that they can pay their loans. It said it is focusing on borrowers who live in areas that are likely to face "extreme economic distress."

Reports suggest Citi will recast mortgages so that the mortgage loan is no more than 38% of your gross monthly income. This is a big reduction in the monthly payment for many with ARM's that exloded to double digit interest in the past few years.

If you are already facing foreclosure on your Citi Mortgage loan, here is some great news for you if you want to stay in the home:

"Citi also extended its moratorium on foreclosures, saying it won't begin or complete a foreclosure sale on a home on which it owns the mortgage if the borrower wants to stay in the home, which is his or her principal residence."
To qualify you'll nee to prove that you are working and have enough income for affordable mortgage payments. This is your chance to make a deal if you really want to stay in the house.

Still no word on any relief for those of us who have done what it took to pay our mortgages on time all these years.

Mike
www.mikeaboutmoney.com

See you in Baltimore

2008-10-21T08:20:00.000-07:00

Greetings from Dallas, Texas.

Consider this your personal invitation to see me speak at the Four Points Sheraton in Baltimore this Wednesday starting at 10:15 am.

I'm looking forward to, once again, speaking to the great people from the U.S. Office of Personnel Management Wednesday at the Four Points Sheraton at, Baltimore International Airport. It's always an honor to be invited to speak to our friends in the Federal Government.

We will be talking to CSRS Federal Employees about smart ways to plan for retirement. Actions you take today are crucial and time is of the essence. As we've seen in recent weeks, even the best laid financial plans can be disrupted in a meaniningful way. I'll go over some basic, but extremely important strategies you can use right away to build a more solid financial footing for you and your family.

If you miss me Wednesday, I'll be back on November 5th talking to FERS employees.

Hope to see you there and keep the emails coming in. To date we've helped thousands of people get out of debt and learn to manage their family finances better.

All my best,
Mike
mike@mikeaboutmoney.com

Mike on KXRO Radio

2008-10-13T10:00:00.000-07:00

A big thank you to Pat Anderson and Rich D. for having me as a guest again this morning on their "Live at 9" show on 1320 AM - Grey's Harbor Washington.

This is a great time for families take a very close look at their finances from top to bottom and look to cut expenses, reduce debt and start to save money!
Also a good time to dust off your resume and be ready for the unthinkable. Businesses of all sizes are struggling right now and will struggle for 6 to 12 months. Be prepared by networking with friends and colleagues in your industry.

Keep warm and keep an eye on your Money! Visit me at www.mikeaboutmoney.com

Mike

Unemployment UP...Prices UP - What YOU must do!

2008-09-05T06:05:00.000-07:00

Financial Planning for your family is more important than ever!! The economy has been weak and inflation has been putting pressure on your household income. But now we see a transitioning of the economy to a place where it can begin to hurt your family financially in a more profound way.

Today's horrible unemployment news of 84,000 jobs lost in August and a new unemployment rate of 6.1%, a five year high, means companies are in defensive mode, more layoffs will happen in response to downsizings, putting lots more people in the job pool willing to work for less to get income. Your job may be in jeopardy from at least two fronts: a slowing economy and unemployed replacement workers willing to work for much less than you make.

Those of you with higher salaries are especially at risk. And please don't fool yourself into thinking just because you've been at the job for nine years you are safe. Your high salary and benefits cost puts a target right on your back!

There has never been a more important time for you to take defensive action both with your personal finances and with your career.

Here are some important must do's:
1. Dust off your Monthly Spending Plan and update the numbers. Take a very hard look at every expense and focus on increasing savings for your emergency fund! An Emergency fund is 3-6 months of take home pay in a savings account or other easily accessible account. If you have not created a monthly spending plan yet, get a copy of my book and get to work. Your financial future depends on it!

2. Tightly manage your expenses for the next 6 months as if you were preparing for the worst. Work on all the expenses you can control, groceries, utilities, entertainment, etc. Can you live with a little slower internet connection for six months?? Most of us can.

3. Get everyone in the family on-board with working to preserve capital and thinking about financial safety. This will be more difficult as we head into the holiday season where spending more is the order of the day. But starting sooner than later will give everyone more time to plan for success.

You know I hate to preach a "Do without" lifestyle like so many of my colleagues in the Financial Advice business like to do... but with a fast declining economic outlook, it is best to be prudent and smart with your money. If you've survived so far, you've done well. But the roughest months are still ahead of us.

4. Careerwise, Update your resume now! Start networking if you haven't been keeping in touch with friends and colleagues. Most people wait until they need a favor before reaching out to people they know. By staying in touch you will build better relationships and should not only seek help, but provide it to others.

The key to good networking is to help others in their time of need so they will be happy to help you should you ever need it...Reach out to 5 people you haven't said hello to in the past three months today.

Get in touch with some recruiters and start checking out the job boards. Ask anyone who has lost a job and they will tell you that they wished they would have started their search months before a layoff. Remember, we are in defensive mode. By the way, you might actually find a better job for yourself. Now is always a good time to get out of the Rut you feel you are in.

4a. By the way, this is also a perfect time to work harder to make yourself more valuable at your current job. Find ways to boost your importance and value. Start by being the best person doing your job in America. Make yourself virtually impossible to replace by doing your job 1000% better than you are doing it now.

5. Start looking for additional sources of income now. The time for procrastinating is over. When you have income is the best time to consider starting a small, home- based business. The toughest time to start a business is when a person is out of work and in survival mode with little or no income.

This is just a start. Stay tuned for more ideas and stay in touch.

"Don't be scared of the future...be prepared for it and you can begin to manage it to your advantage!"

Mike

www.mikeaboutmoney.com

Double Check Your Credit & Debit Card Accounts

2008-08-06T06:50:00.000-07:00

You've no doubt heard the news that 11 people have been charged by Federal Authorities in connection with one of the biggest known cyber-crimes ever. This crime is much bigger than first thought when it was found out over a year ago with the retailer TJ Maxx forst reporting the breach of its computer systems. As many as 94 million Visa and Mastercard accounts may be affected according to reports, and American Express and other credit product users may also have had information stolen.

This is a world wide information and identity theft ring so, even though the suspected perpetrators have been caught, the credit and debit card information is still out there having been allegedly sold across the globe.

You must defend yourself. Don't wait for a letter in the mail alerting you that you may have been a victim. Check all of your accounts now! Call your creditors and/or go online to your accounts and make sure, especially on accounts you do not use very often, that there has not been any suspicious activity. Double check everything! This is very serious. It remains to be seen how the creditors and credit card processors will respond to assist us, if at all.
Read the story at USA Today

Be safe...keep in touch.
Reporting from Dallas this week,
Mike Schiano
www.mikeaboutmoney.com

FDIC Insurance of Your Acounts

2008-07-21T15:34:00.000-07:00

The questions about account insurance keep coming in so I want to be very clear and give you information directly from the Federal Deposit Insurance Corporation an independent agency of the United States government.

FDIC insures deposits at member institutions "PER DEPOSITOR," not per account! If you have 5 accounts in your name at the same bank that equal $50,000 each, you may feel you are well insured against bank failure because all of the accounts are below $100,000. However, in reality, only two accounts totalling $100,000 are fully insured in this case leaving $150,000.00 of your money at risk.

The smart money move is to open accounts at different FDIC insured institutions so that you don't have more than $100,000 in your name in any one institution. Speak to your Financial and/or Legal Advisors about the best ways to structure your accounts! Yes, if you have in excess of $100,000, you should have Financial and Legal advisors! Don't risk a fortune to save a few hundred dollars in advisor fees.

From the FDIC web site:
What Does the FDIC Insure?
The FDIC insures all deposits at insured banks, including checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs), up to the insurance limit.

The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank.

Basic Insurance Amount Is $100,000
The basic insurance amount is $100,000 per depositor per insured bank. Certain retirement accounts, such as Individual Retirement Accounts, are insured up to $250,000 per depositor per insured bank.

keep in touch,

Mike
www.mikeaboutmoney.com

Are your Bank Accounts Safe?

2008-07-17T16:26:00.000-07:00

As you can imagine I've received many inquiries over the past few months regarding the safety of bank accounts. Since Federal Regulators took over the failed IndyMac bank and visions of bank customers in long lines waiting to withdraw their money have been front page news, my email volume has really increased.

Since many emails are coming from customers of smaller, regional banks, I thought this information might help allay some fears among customers of big and small banks.

According to the Independent Bankers Association, "No one has ever lost a penny of FDIC-insured deposits held in community banks. The FDIC insures deposits up to $100,000 per depositor and $250,000 for certain retirement accounts. If you have more than $100,000 at a community bank, you can still be fully insured if your accounts meet certain requirements. For example, accounts owned by a single person are separately insured from joint accounts or retirement accounts owned by that person. The FDIC’s Electronic Deposit Insurance Estimator (on the Web at http://www.fdic.gov/edie) can determine your coverage.

If you manage the size of your deposits correctly and deal with FDIC insured accounts, you should have no problems even if your bank becomes insolvent.

Keep in touch.

Mike
www.mikeaboutmoney.com

Go Dr. Phillips Little League

2008-07-15T10:57:00.000-07:00

Yes, I am a proud father today. My son Brice(second from left) and his 10-11 year old All Star Team, Managed by Coach Dave Aniello, won the District 14 Championship yesterday with a big win over arch-rival Windermere.

Next up the Sectional Tournament.
GO DP!!
I'll keep you posted.

Mike

Bailing out homeowners or fueling more speculation?

2008-07-11T18:21:00.000-07:00

Today the Senate passed a Foreclosure bailout bill 65-3 that includes, believe it or not, $3.9 billion for buying and rehabilitating foreclosed properties. Lenders will use this money, your money and my money, to subsidize the bad loans they've already made by covering the cost of the foreclosure and lost market value, then resell the homes for a profit. Even worse,, lenders could give the money to new speculators. Outrageous missuse of our tax money. If you are working 3 jobs to pay your bills and keep your mortgage current, there couldn't be a worse spit in the face from your elected officials.

Instead of bailing out speculators and people who should not have been allowed to buy a home to begin with, how about giving a bigger tax break to those of us who work hard to pay our mortgage each month. How about a little incentive for those who repay their loans rather than an incentive to those who knowingly get in over their heads. Uncle Sam to the rescue.

According to the AP, "The measure includes a long-sought modernization of the FHA and would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored mortgage giants. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time home buyers." What???

Instead of giving first time homebuyers free money, how about funding a 6-month course on how to manage money, including their mortgage and all the other expenses that go along with owning a home. Then, once a potential borrower passes the course, they could get an automatic 50-point increase in their credit score and a discounted interest rate on their 30 year fixed rate loan. Otherwise, we are giving someone free money for simply buying a home? For the past five years, anyone has been able to buy a home thanks to the lenders loan schemes. That easy lending and incenting of "wet behind the ears" homebuyers, has torn the housing and lending markets to shreds and chopped our home equity 50% in some markets.

Keeping the mortgage payments and other housing costs current month after month, year after year is the hard part! Not getting the mortgage. And it will only get harder as the economy continues to decline at a rapid rate forcing businesses to cut payrolls and continue to shut down new hiring.

AP reports, "The White House Friday renewed its warning that Bush would veto the Senate-passed bill without revisions, citing $3.9 billion in the measure for buying and rehabilitating foreclosed properties it said would help lenders, not homeowners." Wow, some smart thinking from the Whitehouse. These are strange times.

Shoot me your thoughts at mike@mikeaboutmoney.com

Mike
www.mikeaboutmoney.com
Now part of the Money Talk Network™

Wireless Goes MLM !!!

2008-06-23T11:05:00.000-07:00

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Your Gas Station may soon Ban your Credit Cards

2008-06-18T18:37:00.000-07:00

Gas stations across the country are beginning to post signs banning credit card use. Shocked buyers who don't have cash may find they are out of luck next time they stop in to fill up. Why? Are gas station owners hoping to help consumers avoid high interest debt? Not a chance!

read more

Big news is coming soon. Stay tuned.

Mike Schiano
www.mikeaboutmoney.com

Only one thing to do with Your Government Check

2008-05-06T07:59:00.000-07:00

There is so much speculation about what everyone should do with the government stimulus payments which start arriving this week.

There are some good ideas like, paying down debts, investing the money, or putting it in a savings account. These are all wonderful ways to use the money...if only we could put the money to such logical and financially fiscal use.

Alas, there is only one thing to do with the money, which, by the way, is actually your money to begin with. The goverment is returing some of it to you in the hopes that you will rush out and spend it at the mall. Which, I fear, most people will end up doing.

But, what you should do with the money is earmark it for the extra gasoline and diesel costs you are facing now and into the future. That really is your only option. See today's Oil price headline here .

As Oil hits $122 a barrel, gasoline and diesel fuel prices, already at historic highs, will soon be even higher, hitting the average family with a shocking and almost insurmountable mountain of extra monthly costs.

Even if you don't drive at all, higher diesel fuel costs are going to hit your wallet when you buy anything because the cost of trucking things to market is skyrocketing and must be passed on to you, the consumer. Again, earmark your found money toward the extra costs associated with higher fuel prices. One way or another, you are paying more for the high costs of oil, gasoline, and diesel. And, depending on the size of your check, it might cover an extra tankful or two of gasoline or diesel each month over the next 3 to 6 months.

Then what?

Keep in touch!

Mike
mike@mikeaboutmoney.com

Figuring out the Real Cost of Your Retirement

2008-04-29T12:48:00.000-07:00

You don’t need a degree in Finance, or to pay a professional financial planner to calculate the amount of money you will need for retirement.

Many people ignore the importance of retirement planning either because retirement seems many years away, or they feel overwhelmed with what seems like a very daunting task. This needless procrastination can lead to financial disaster soon after retirement begins.

The best way to prepare for retirement financially is to perform a financial-needs assessment. This may sound difficult, but it simply means sitting down and realistically estimating what life will actually cost during your retirement years and what income you will have to pay those costs.

Common advice among financial planners is to take the total household income you will be earning the year before your retirement and multiply that number by 80% to calculate the amount you will most likely need for each year in retirement. In other words, if you earned $60,000 in your final year before retirement, you would need 80%of that amount, or $48,000 a year to live on. Some find this calculation too simplistic and it assumes that life will become less expensive than it is now.

Denise Appleby, a retirement plans consultant says, “to get a realistic determination of how much you will need for your retirement, your retirement-needs analysis must take a holistic approach. This means your analysis must take into consideration all aspects of your finances, including items that could affect your cash flow and/or expenditures.”

Appleby suggests that you breakdown your retirement finances in much greater detail to get to a more realistic picture of future income and expenses.

Start by estimating how many years you will spend in retirement; how much Social Security you will receive each year; and how medical, insurance and certain, other costs might jump unexpectedly during those years. According to the 2008 Retirement Confidence Survey from the Employee Benefit Research Institute, (EBRI), 44% of retirees surveyed said they “spent more on health care than they expected.”
Think about everyday living costs like utilities, housing, auto, food, etc. If you plan to travel more, or pursue other hobbies, those costs should be part of your assessment.

Many people forget to plan for inflation. Historically, prices increase for consumer goods around 3% each year. Remember what your parents paid for their first home and car? How about what you paid for gasoline or a loaf of bread just five years ago. Imagine what things might cost in twenty or thirty years. Inflation eats into the future spending power of your savings and income.

Another thing that can take a big bite out of retirement finances is taxes. While it is difficult to know what changes Congress will make to the tax code in the future, paying some percentage in taxes should be part of the financial assessment.
The retirement experts at www.Boulevardr.com, a retirement planning Web site, say figuring out if you have enough money for retirement is not only highly individual, but it's also a moving target and a specific number really doesn't tell you enough.”

Further, understanding how much you need to save for retirement is crucial, but even more important is figuring out how much you can actually save for retirement while you are working. Since most people are way behind on their retirement saving, the amount that will need to be saved starting now to meet retirement goals might seem completely impossible, leading many to throw their hands up and never start. In fact, the last thing someone behind in retirement saving should do is give up. They should plan to be more aggressive with saving than others.

A great place to get a quick idea of how much you should be saving is with the American Savings Education Council’s (ASEC) “Ballpark Estimator.” The Ballpark E$timate, at www.choosetosave.org/ballpark, provides an easy-to-use, two-page worksheet that helps you quickly identify approximately how much you need to save to fund a comfortable retirement.

According to the Women’s Institute for a Secure Retirement (WISER), www.wiserwomen.org, women retirees have an especially difficult task ahead of them. WISER states that “although women have entered the labor force in record numbers, their access to retirement benefits has not followed at the same level.”

WISER suggests this checklist of questions:
 How much will you need? Make an estimate of how much monthly or annual income you will need in retirement.
 What are your sources of retirement income? Think about what sources of retirement funds will be available and how much you will receive from each, including Social Security, employer retirement plans and your own personal savings.
 How long will you live? In planning for retirement, it is important to consider how long you might live. While on average people who reach 65 live into their 80s, a few live to 90 and beyond.
 What if your spouse dies first? If you are married, find out which benefits will continue if you or your spouse should die first.
 How will the cost of living change in the future? When you estimate your retirement income needs, remember to include the impact of inflation. Costs are likely to rise each year, and the impact of these increases over time can be quite large.
 How will you pay for healthcare? Consider how you will pay your medical bills. Are you eligible for Medicare or other medical insurance?
 How do you handle the unexpected? Be sure to take into account how you would handle potential emergencies, such as home repairs, unexpected medical bills or family emergencies.
 What if you need assistance in your retirement? Consider how your retirement income would be affected if you needed long-term care, assistance at home or special housing.
 What will you do in your golden years? If you have specific plans for retirement, such as travel, consider how you plan to pay for it.
 How will you manage your retirement money? Consider how you will be able to manage your funds and what the right mix of investments is for your retirement needs. Investments include stocks, bonds, annuities, money market funds, your home, other real estate and other savings.
 Have you thought about estate planning? Estate planning is an important part of your plan for retirement. Seeking expert advice in this area can greatly assist you.

Retirement planning is not easy nor is it completely enjoyable. It requires us to think about many uncomfortable topics like healthcare, estate planning, and death. But, some detailed planning now will provide more financial confidence, reduce stress, and ensure you have a better chance of avoiding financial surprises during your golden years.

Suggested Web sites:
http://www.choosetosave.org
http://www.wiserwomen.org/portal/
http:www.boulevardr.com

Sources:
Appleby, Denise. A Five Year Plan for Retirement
http://www.forbes.com/investoreducation/2007/06/07/retirement-budget-pension-pf-education-da_in_0607investopedia_inl.html

EBRI Retirement Confidence Survey
http://www.ebri.org/surveys/rcs/2008/

Boulevardr.com
http://www.boulevardr.com/br/landing/articles/How-Much-Is-Enough-For-Retirement.jsf

The Ballpark Estimator
http://www.choosetosave.org/ballpark/

WISER Retirement Income Checklist
http://216.70.87.179/portal/index.php?option=com_content&task=view&id=96&Itemid=41

Watch out for Country Wide Financial!

2008-04-09T06:49:00.000-07:00

A site visitor asked me about investing in Country Wide Financial, the embattled Mortgage company which is in the process of being acquired by Bank of America.

I realize the stock price as been beaten down substantially by the subprime mortgage implosion but, as the investing gurus say, "a stock is usually cheap for a reason."

Moody's is certainly not happy with what it sees at CFC:
NEW YORK (MarketWatch) - 9:42am 04/09/2008
Countrywide Financial Corp. had its bank's financial strength rating reduced to "D," or default, by Moody's Investors Service (MCO:Moody's Corp., Thursday after the ratings service said the bank faces substantial liquidity issues.
Read the entire story here

One has to wonder, though, what does BOA see in this company that it is willing to invest billions. Investing gurus also tell us to "buy when others are selling." This is definitely a chance to buy LOW...will you be able to sell HIGH in the future? That is the million dollar question.

Let me know what you think. Will Country Wide rebound in the future??
e-Mail: Mike@mikeaboutmoney.com

Always invest with your eyes wide open!!

Mike

Thank you OPM

2008-04-09T06:41:00.000-07:00

The Cherry Blossoms were beautiful as I visited Washington, DC to speak about Credit, Debt and Saving money for the great team at the U.S. Office of Personnel Management. This is one of my favorite places to speak in the world because everyone is so interested in making smarter financial decisions.

Thank you for the great questions and making feel at home as usual.

See you all soon!!

Mike

HFTPA is Awesome!

2008-03-26T11:10:00.000-07:00

Thank you to all of my friends at the Hospitality Finance and Technology Professional Association, Mid-Florida Chapter, especially Judy and Mark for making me feel so welcome last night.

It was wonderful to see so many familiar faces and to make new friends as well. You asked great questions and made my presentation very enjoyable. A speaker really feeds off of an audience and you make it easy to do my job!

Thanks again and I'll see you soon.

Mike

Yet another reason to Check Your Credit Reports Regularly

2008-01-17T07:31:00.000-08:00

It has been reported that

79% of Credit Reports contain errors

so we constantly remind our readers, listeners and workshop attendees of the importance of reviewing credit reports on a regular basis. Here is but another reason to keep a close eye on your credit reports.

As reported in the Orlando Sentinel today:
A computer foul-up at one of the region's fastest-growing banks has left potentially thousands of Central Florida customers in a financial jam.

Fifth Third Bank acknowledged to the Orlando Sentinel this week that a computer glitch related to the recent acquisition of another bank spilled false information into "several thousand" customer accounts, in some cases generating credit-history errors and incorrect credit scores.

Read the entire article here.

Mike

The New Year has started...have you?

2008-01-07T07:30:00.000-08:00

Ok, you promised yourself and maybe some others that you would start making some changes in how you manage your money in 2008. We are seven days into the new year and I want to ask about your progress so far.

It is not so easy to start on any new year's resolution whether it is money or weightloss, in spite of the best intentions, people tend to fail or give up totally on their resolutions shortly after the new year begins. Why? Because most people lack direction. A roadmap. A plan. Without a plan, a resolution is just a dream. To make your resolution reality, you must have realistic goals and a detailed plan for getting to the place you want to be.

For better money management this year, start with a Spending Plan. This is a detailed, month by month accounting of your income and planned expenses for the next 12 months. A Spending Plan is the perfect place to start because it helps you to think about your money, your income and especially your expenses. And, if you do a complete and honest spending plan, you will see, maybe for the first time ever, how much you are spending and where the money is going. The plan will help you make money management decisions that will help you get to your goals more quickly and easily. A spending plan will also point out areas where you may be "mystery spending." Mystery Spending is a common habit where people take money out of the bank via the ATM but can't account for where they spent the cash. It is reported that the average American family has over $2000 a year in this "mystery spending."

You work hard for your money so you must take care to manage every penny with care, especially if you are responsible for taking care of others, like children. They are counting on you.

A spending plan requires no fancy software. It can be completed with some paper, a pencil, a calculator, copies of your bills and some time. If you need help with your spending plan, email me at mike@mikeaboutmoney.com.

We are seven days into 2008...let's get going!!

Talk to you at 4pm today on the radio.
Mike

Happy New Year

2008-01-02T09:09:00.000-08:00

Hello everyone and welcome to 2008.

I've taken a few days off and recharged my batteries...I will be back on the air today at 4pm eastern Mike About Money Radio Show

Won't you join me to kick of 2008 Debt Free and In control of your Money...

email your questions directly to mike@mikeaboutmoney.com

No matter what your current financial situation is, we can make it better by working together.

Talk to you soon.

Mike

Sometimes it pays to ride the bus!

2007-09-16T18:16:00.000-07:00

A recent email from my column:

Q: Mike, I am having a very hard time getting a car loan mainly because of my low income. I work part-time, go to school full time, which results in a $400 monthly income. I cannot control my hours at work because they are cutting everyone’s hours. I need to get a better job, but in order to do that I need a car. Also, I need the car for transportation to practicums located off campus.
I live in a city where the public transportation isn’t very useful at all. I live on campus, so the only expense I have is a cell phone bill of about $50 per month. I have parents who are willing to help me pay for the car payments and insurance.

Unfortunately, this seems to mean nothing to car financing companies. As far as a co-signer goes, it is difficult because my parents are stationed overseas. All I need is a reliable source of transportation. How can I go about getting a car so I can be more independent?

A: You present a difficult scenario. From the lender’s point of view you can understand that giving a loan to someone with only $400 a month income would be very risky. Based on that income, your loan amount should be no more than $100 which is very hard to do these days…even with a used car.

Have you compared the cost of taking a cab to your off campus classes to the monthly payment on a car loan? It may be cheaper to take the cab plus you would not have insurance, maintenance and gas costs.

If a cab won’t work, have you looked at a vehicle under $1,000, such as a scooter. If you are not traveling far, a scooter, or small motorcycle may be an option for you. Not good in the rain, I know.

Regarding your parents helping you with a loan; what I would recommend is that one of them or both together take out a loan and put YOU on as a co-signer. This helps you build your credit but lets them stay in control of the loan since they would be paying all or most of the monthly payments.

I don’t believe it is a problem to close an auto loan even if they are overseas. You could help them choose the vehicle here and they 0would apply for the loan. If they are in the military, they can get help on base with the transaction. Just as with a mortgage loan, everything can be done with fax, email and phone.

Good luck and please keep me posted.

Mike
mike@mikeaboutmoney.com

Should I Freeze my Credit?

2007-08-29T08:24:00.000-07:00

Many states have laws that let consumers “freeze” their credit – in other words, letting a you restrict access to your credit report. If you place a credit freeze, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze. This means that it’s unlikely that an identity thief would be able to open a new account in your name.

Be sure to check the cost! The cost of placing, temporarily lifting, and removing a credit freeze varies from state to state. Many states make credit freezes free for identity theft victims, while other consumers pay a fee – typically $10. And remember, each of the three major credit bureaus is independent so the $10 fee is per credit reporting agency ($30).

Placing a credit freeze does not affect your credit score – nor does it keep you from getting your free annual credit report , or from buying your credit report or score.

While a credit freeze can help keep an identity thief from opening most new accounts in your name, it’s not a solution to all types of identity theft. It will not protect you, for example, from an identity thief who uses your existing credit cards or other accounts. There are also new accounts, such as telephone, wireless, and bank accounts, which an ID thief could open without a credit check. In addition, some creditors might open an account without first getting your credit report. And, if there’s identity theft already going on when you place the credit freeze, the freeze itself won’t be able to stop it. While a credit freeze may not protect you in these kinds of cases, it can protect you from the vast majority of identity theft that involves opening a new line of credit.

Learn more at www.ftc.gov

Bank of America Invests in Countrywide

2007-08-24T07:01:00.000-07:00

Here is another example of how to become rich taught beautifully by one of the largest financial institutions on earth. With our faces buried in book after book about "how to get rich," it is easy to miss real world lessons playing out right in front of our eyes.

Countrywide announces it is on the ropes and taps into an $11.5 Billion credit line to stay in business. The Federal Reserve lowers its discount rate to 5.75% to keep banks borrowing and loaning money. Bank of America and three other major banks line up immediately, and borrow $500 Million each. Bank of America then immeditately invests $2 Billion in Countrywide.

No mention of passing on the lower interest borrowing costs to their customers by the way.

To further drive home the point of learning to get rich by watching what the rich do, Warren Buffet is also rumored to be mulling over pieces of the Countrywide pie for possible investment or purchase. Let's all say it together, "buy low and sell high?"

The real lesson is that Countrywide must be a pretty good investment. Food for thought.

We will talk about this on the radio show if you'd like to join us this week.

Meet Mike at Barnes & Noble Saturday Night!

2007-05-25T11:06:00.000-07:00

I hope to meet many of you Saturday night, May 26 from 5-7pm at the Barnes & Noble in Orlando located at Sand Lake Road and Dr. Phillips Boulevard. 7900 W. Sand Lake Road, Orlando, FL 32819.

We will be discussing the secrets of credit reports and credit scores!
If you’ve every asked the question, “How do I improve my credit score? You will be very interested in attending our presentation. 79% of credit reports contain mistakes! Those mistakes can lower your credit score costing you money.

I will show you how to:

Thoroughly review and understand your credit reports and credit scores.

Understand how credit reports and credit scores are used by banks, employers, utility companies, insurance companies and others to make important decisions about your financial future.

We'll talk about the proper steps to correct mistakes on your credit reports that may be lowering your credit score.

Rebuild credit after a divorce or bankruptcy

Get credit for the first time.

Get out of debt more quickly.

Boost your credit score so it can work for you instead of against you!

Saving on Airfare...or just not paying more... this summer

2007-05-18T09:24:00.000-07:00

In spite of 21 airline fare increases since January of 2006, this summer may bring some discounts for those of you needing to travel by air.

Softening demand for air travel is forcing some larger airlines into making more seats available at lower price levels. Don't confuse this with paying less. Simply, more seats that would normally be sold at higher prices will be sold at prices that are still about 3-4% higher than last year according to industry experts. they are just won't be as expensive as they could be. So, I guess, in a technical sense, they are cheaper...confused...me too.

The bottom line is this...offering discounts this early in the heavy summer travel season is a good indicator of a soft market and the good possibility that price levels will have to come down to keep seats filled. So, keep your eyes open for deals on airfare to cities you plan to go and places you might like to go.

Listen to Mike about Money every Saturday from 1-3pm Eastern right here. Give us a call with your money question.

Mike

Stock Market is up...and so are Gas Prices...what's the connection?

2007-04-26T07:21:00.000-07:00

Hopefully you are celebrating yesterday's historic new highs on the stock markets with some growth in your investments!

The Dow Jones Industrial average closed above 13,000 for the first time in history. Things are good over at the tech heavy NASDAQ which reached a six year high and the S&P 500 closed at a 7 year high.

If you are invested in a qualified retirement account, be sure to check your IRA, 401(k) and other mutual fund investments to see where they closed yesterday. You should be seeing growth in your funds. If your fund is not making you money now...it may never make you money. You should review your investments and perhaps make some well though out changes.

On a sour note, gas prices are also reaching for the stratosphere as the average price per gallon drives towards $3.

I don't have to tell you this news as you've no doubt felt it at the pumps. However, the news of higher gas prices may be the very thing that is 'fueling' the stock market records. You see, higher gasoline costs are keeping our shopping in check. We don't have extra money to spend elsewhere. Therefore, retailers have no ability to raise prices which keeps inflation in check. If the threat of inflation, an increase in prices for the goods we buy is not decreased, then the Federal Reserve is not likely going to raise its target interest rate. Wall Street hates when the Fed raises interest rates so these new market highs can be seen as Wall Street's way of acknowledging their belief that the Fed will not raise rates the next time they meet.

A last word of caution...it is easy to get caught up in the excitment of new market highs and want to dump lots of money in the market. Amateurs jump in when prices are high and sell when the market is going down. The pros buy low and sell high. Be very careful about which investments you decide to buy especially when choosing stocks. Do your homework, make smart choices and leave the emotion out of it.

We will talk more about this topic and much more Saturday on my radio show, Mike about Money heard every Saturday from 1-3pm EST. Listen online at www.inchargeradio.com.

The Hidden Costs of College

2007-04-12T11:58:00.000-07:00

The hidden costs of College

Tuition, housing and books are just the start for parents.

Recent surveys paint an expensive picture for parents of college students. More than half of students accumulate credit card debt of $5000 or more before graduation. 30% end up with more than 10 thousand dollars in debt.

What’s driving this borrowing besides easy credit and higher prices? College students are four times more likely than the general population to download music online. 8% of male college students download daily.

Cell phones, PDA’s, internet connections cable TV, and daily trips to the coffee house are now “MUST Have’s” for students. Plus, more students than ever have their own vehicles and the costs associated with them.

And who pays for these expenses? Either by parents or students with credit cards…or both. In this gadget driven, easy-to-spend online world, parents must plan for these added costs of a higher education.

Urgent Post: More than 45.7 million Credit and Debit Card records stolen

2007-04-03T14:15:00.000-07:00

As recently reported by the company that owns more than 2500 discount brand stores including TJ Maxx and Marshalls, TJX Cos., hackers were able to perpetrate what is being called the largest theft of consumer information in history over a several year period including 2005, 2006 and 2007.

TJX Cos., which owns more than 2500 of these discount stores, says information from at least 45.7 Million credit and debit cards was stolen from transactions dating back to January 2003. Information from 455,000 customers who provided driver’s license information to make a return and checking information was also stolen by the hackers.

It should be noted that the company is working with federal and international authorities to fully investigate the theft and working to further secure shopper’s personal information.

If you have shopped using a credit or debit card, wrote a check, or provided your driver’s license number to return a purchase at discount stores owned by TJX Cos. Including TJ Maxx or Marshalls, HomeGoods and Bob’s Stores in the U.S., Canada or Puerto Rico, since 2003, your information may have been stolen and you may be at higher risk for fraudulent use of your identity and account information.

It is always important to be over-defensive when it comes to protecting your identity and personal financial information, but in this case it is more important than ever for you to be vigilant and willing to take the extra effort to keep an eye on your personal financial data and accounts to make sure a criminal does not use it illegally.

If you have shopped at any of the TJX stores or their affiliates, I urge you to do the following to protect yourself:

Order your credit reports today if you’ve not seen them in the past 3 months and then monitor them at least every six months for the foreseeable future. You are entitled to your three credit reports at no cost once every 12 months from www.annualcreditreport.com

Ask the creditors whose credit cards you used at the stores to change your account numbers.

Contact your state’s Department of Motor vehicles if you’ve ever provided your driver’s license to make a return at one of the stores in question.

Set up online access to all of your credit accounts and monitor the accounts on a weekly basis to catch any unauthorized use. Especially if you don’t use the card much and don’t get monthly statements from your creditors.

If you suspect any fraudulent activity on any of your accounts or fraudulent use of your name or other personal information, the Federal Trade Commission directs you to do the following:

-Contact the fraud departments of any one of the three consumer reporting companies, Experian, Equifax, or TransUnion, to place a fraud alert on your credit report. A fraud alert tells creditors to follow certain procedures before open any new accounts...
-Close the accounts that you know or believe have been tampered with or opened fraudulently. The Federal Trade Commission provides an ID Theft Affidavit available for download at its Web site for your use in disputing any new, unauthorized accounts.
-File your complaint with the Federal Trade Commission. (www.ftc.gov). You may print a copy of your complaint to provide important standardized information for your police report.
-File a report with your local police or police in the community where the identity theft took place. Give the police a copy of your FTC ID Theft complaint form. Get a copy of the police report (or, at least, the police report number).

The convenience it provides to us as consumers also makes us more vulnerable to ID Thieves. But in the end, in spite of valiant efforts by retailers to protect and secure your information, you are ultimately responsible for detecting, reporting and stopping misuse of your most personal and valuable information.

Should I close old credit card accounts I don't use much?

2007-02-27T07:47:00.000-08:00

According to research, closing credit card accounts, especially accounts that have been open and in good standing for several years, can actually hurt your credit score. How? Well, according to Fair Isaac and Co., creator of the “FICO score,” 15% of your credit score comes from calculating the length of time that you have had accounts open. The longer you have had accounts open and in good standing, the more it helps your credit score to rise.

Another reason not to close accounts is to protect your ‘Utilization Ratio.’ Sounds complicated but here is what it means. 30% of your credit score is calculated by analyzing what percentage of your available credit balance you are using. The higher your usage ratio, the more of your balances you carrying as debt, the more of a negative impact it will have on your credit score. . It is important to keep your usage ratio at 40% or less to make sure there is no negative impact on your credit score. That goes for individual accounts as well as for all of your accounts.

To illustrate, suppose someone has 3 credit cards with a $3000 balance available on each card for a total available credit balance of $9000. Over time they charge purchases on two of the cards totaling $4,500. Since $4500 is half of $9000, this person’s Usage Ratio would be calculated as 50%. At this level of usage, the credit score would go lower.

One day, the person in our example decides that they never use the third credit card so they cancel the account. Suddenly, their available balance decreases from a total of $9000 down to $6000 (2 credit cards with a $3000 balance on each). Since they still have a balance due of $4500 on the other two cards, their usage ratio now rockets up to 75%. Very high by credit scoring standards and their credit score will come down.

My advice is to keep those long time accounts open and in good standing and let this work to benefit your credit score. Just be sure to keep a close eye on the accounts you don’t use regularly to make sure no one else is using them

Mike Schiano

Mike on the Radio and TV Across America

2007-02-16T08:53:00.000-08:00

All my friends in Cincinnati can hear me Monday February 19th at 11am on the Lincoln Ware show on WDBZ AM 1230 The Buzz. We will be talking about boosting your credit, managing debt and creating a richer lifestyle! And our new book, CreditBooster: Ultimate Guide to a Better Credit Score. I will tell you how you can get the book for half price!

Friday, February 23rd, I will be a guest on NBC Universal Television's new show iVillage Live which airs live from noon to 1pm (eastern). Check the web site for the time the show airs in your city or watch the segment online. We will be talking about the best ways to Teach Kids About Money. See you then.

Mike

Today's Money Minute with Mike

2007-01-29T11:37:00.000-08:00

Have you Moved? LET THE IRS KNOW

If you changed your home or business address, notify the IRS to ensure that you receive any refunds or correspondence. While the IRS uses the Postal Service’s change of address files to update taxpayer addresses, notifying the IRS directly is still a good idea.

There are several ways to do this.

On your tax return: You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file.

Form 8822: You may use Form 8822, Change of Address, to submit an address change at any time during the year.

Verbal Notification: If an IRS employee contacts you about your account, you may verbally provide a change of address.

Written Notification: Write to the IRS center where you file your return and provide your new address. The mailing addresses for the IRS centers are in the tax instruction booklet. In order to process your address change, you will need to provide your full name, old and new addresses, your social security number or employer identification number, and signatures. If you filed a joint return, you should provide the same information for both spouses. If you filed a joint return and have since established separate residences, you should each notify the IRS of your new addresses.

In addition to notifying the IRS directly you should notify the U.S. Postal Service.

Get our new book CreditBooster:Ultimate Guide to Better Credit Score for Half Price! Visit Creditbooster.com and use discount code: mikeblog2007.