On Thursday the Obama gang put on the brakes to the extremely popular "cash for clunkers" program. The White house had set aside $1 billion for new auto purchase rebates, which has been doing so well officials are concerned the funds have been already exhausted. The program had just begun last Friday.
The CARS program had been offering owners of older, fuel inefficient vehicles rebates of $3,500 to $4,500 towards the purchase of a new more fuel efficient car or truck.
As of late Wednesday, a whopping 22,782 vehicles had been sold through the program and nearly $96 million had been spent. But dealers began getting concerned about backlogs of the processing of the deals in the government system, which prompted the suspension.
To me, unless my math is wrong, it seems there is still $900,000,000 to spend towards the rebates. It seems as if an economy boosting program is finally working and they want to pull the plug. If they set aside a billion to spend then they must have expected to spend it. Right? Even if the entire billion is spent in a week who cares? Whether 200,000 cars are sold in month, week, or day, a total 200,000 cars are still being sold. I just saw an interview on the news with an auto dealer whose sales were up 30% this week. If the program is working why should they stop? I know of a owner of carpet sales company who refused to sell his entire inventory to a gentleman stating, "If I sell my entire inventory I won't have anything to sell to anyone else." Who cares? If you are selling to one or all it is the same.
I don't get it. It's like it's all bologne. They tell us they are going to do this and that and then stop when something works. Am I crazy or does any one else think putting the brakes on a program that is taking off and really helping out the auto industry BS?
Thursday, July 30, 2009
Sunday, July 26, 2009
Deadbeat Renters Can Cause You to Have Your Rental Foreclosed On.
Being a rental property owner can we rewarding. It's a great way to build equity, when economic times are good of course, and the tax deductions are a great way to cut down on your tax bill too. But a deadbeat renter can ruin you.
Many lenders are beginning to require borrowers who own multiple properties to have at least six months of mortgage payment reserves to qualify for a loan. This means six months reserves for each property. So say you have a $1,500 mortgage payment on just one of your rentals. That would mean you need $9,000 in reserves. So imagine if you need to have that set a side for several homes. Although, this will undoubtedly continue to slow the mortgage industry, I can understand why this is being done.
We recently had a renter break their lease and move out. We have now had to scramble to get the property cleaned up and begin showing the house. No matter how much you take as first and last down, run a credit and back ground check, and screen your renter things happen. We have had problems with this particular renter from time to time. Even though she had good credit and a steady job she had been late several times on paying her rent. She always made good and even paid our somewhat high late fees. We charge $50 a day in late fees. Not to make a profit, but to deter renters from being late. Whenever the renter was late we had dish out the money from our own funds to make the mortgage payment. If you have to make the payments on your own, whether it is because the renter is late or the home isn't rented yet, it can cripple your finances.
We have gotten off pretty easily compared to other landlords we know. Our friends, who own the rental next door to ours, had to put $5,000 into their rental after their dead beat renter skipped out on the rent and left the house basically trashed. Leaving the the entire carpet to be replaced and the entire interior re-painted. Other friends have had to put mortgage payments on credit cards to keep defaulting on the the mortgage. We had to pay $300 to have our rental cleaned, $100 in spackle, paint, light bulbs, etc. and $100 to clean up the landscaping. So the $500 we spent was a drop in the bucket for what it could have cost us.
It is a prime time for scooping up investment properties, but be ready to have a few bucks in the bank to be able to qualify for a loan. Not to mention money sent a side with things that may need fixing: air conditioning/heater, hot water heater, garbage disposal, etc or cleaning up after the renter moves out.
People rent for different reasons. Some need a place to live while their waiting for their new home to be ready, some have recently lost their homes and some just don't want the hassle of maintaining a home. But some people don't own a a home for a reason. Some might be not only be deadbeat renters just plain debtbeat.
Many lenders are beginning to require borrowers who own multiple properties to have at least six months of mortgage payment reserves to qualify for a loan. This means six months reserves for each property. So say you have a $1,500 mortgage payment on just one of your rentals. That would mean you need $9,000 in reserves. So imagine if you need to have that set a side for several homes. Although, this will undoubtedly continue to slow the mortgage industry, I can understand why this is being done.
We recently had a renter break their lease and move out. We have now had to scramble to get the property cleaned up and begin showing the house. No matter how much you take as first and last down, run a credit and back ground check, and screen your renter things happen. We have had problems with this particular renter from time to time. Even though she had good credit and a steady job she had been late several times on paying her rent. She always made good and even paid our somewhat high late fees. We charge $50 a day in late fees. Not to make a profit, but to deter renters from being late. Whenever the renter was late we had dish out the money from our own funds to make the mortgage payment. If you have to make the payments on your own, whether it is because the renter is late or the home isn't rented yet, it can cripple your finances.
We have gotten off pretty easily compared to other landlords we know. Our friends, who own the rental next door to ours, had to put $5,000 into their rental after their dead beat renter skipped out on the rent and left the house basically trashed. Leaving the the entire carpet to be replaced and the entire interior re-painted. Other friends have had to put mortgage payments on credit cards to keep defaulting on the the mortgage. We had to pay $300 to have our rental cleaned, $100 in spackle, paint, light bulbs, etc. and $100 to clean up the landscaping. So the $500 we spent was a drop in the bucket for what it could have cost us.
It is a prime time for scooping up investment properties, but be ready to have a few bucks in the bank to be able to qualify for a loan. Not to mention money sent a side with things that may need fixing: air conditioning/heater, hot water heater, garbage disposal, etc or cleaning up after the renter moves out.
People rent for different reasons. Some need a place to live while their waiting for their new home to be ready, some have recently lost their homes and some just don't want the hassle of maintaining a home. But some people don't own a a home for a reason. Some might be not only be deadbeat renters just plain debtbeat.
Friday, July 24, 2009
Top 12 Indicators of a Bad Economy
12. CEO's are now playing miniature golf.
11. I got a pre-declined credit card in the mail.
10. I went to buy a toaster oven and they gave me a bank
9. Hot Wheels and Matchbox car companies are now trading higher than GM in the stock market.
8. Obama met with small businesses- GE, Pfizer, Chrysler, Citigroup and GM, to discuss, the Stimulus Package.
7. McDonald's is selling the 1/4 ouncer.
6. People in Beverly Hills fired their nannies and are learning their children's names.
5. The most highly-paid job is now jury duty.
4. People in Africa are donating money to Americans.
3. Motel Six won't leave the lights on.
2. The Mafia is laying off judges.
And my most favorite indicator of all:
1. If the bank returns your check marked as "insufficient funds," you have to call them and ask if they meant you are them.
11. I got a pre-declined credit card in the mail.
10. I went to buy a toaster oven and they gave me a bank
9. Hot Wheels and Matchbox car companies are now trading higher than GM in the stock market.
8. Obama met with small businesses- GE, Pfizer, Chrysler, Citigroup and GM, to discuss, the Stimulus Package.
7. McDonald's is selling the 1/4 ouncer.
6. People in Beverly Hills fired their nannies and are learning their children's names.
5. The most highly-paid job is now jury duty.
4. People in Africa are donating money to Americans.
3. Motel Six won't leave the lights on.
2. The Mafia is laying off judges.
And my most favorite indicator of all:
1. If the bank returns your check marked as "insufficient funds," you have to call them and ask if they meant you are them.
Wednesday, July 22, 2009
I Can't Afford My Mortgage Payments. Should I Take a Withdrawal or Borrow Money From My 401K?
Resist the temptation to make the withdrawal from your 401K. Many people are doing this these days. I know you may desperate. Especially, if you are falling behind on your mortgage payments or are trying to avoid foreclosure. Do whatever you can to avoid taking a withdrawal or a loan. If you make a withdrawal you will be hit with a 10% penalty for taking money out if you are under 59 1/2. Then a few months later chances are you will find yourself right back in the same hole you were in before. But this time all of your 401K money will be gone and you will undoubtedly fall behind on your mortgage again.
A 401K loan can be just as risky. If you get laid off you will have to pay back the loan within a few months. Unemployment continues to go up and is already at a 26 year high. So, if you get laid off and can't pay back the money, you will most likely have a tax problem. The loan will be treated as a withdrawal and you will be paying tax and a early withdrawal penalty of 10%. A loan also has drawbacks because the markets may rally at any time while you have an outstanding loan, which you are missing an important opportunity to recoup your losses.
Also, you should know any money that you have in a 401K or IRA is protected if you ever file for bankruptcy. That money is yours no matter what.
I think you should search in ever nook and cranny of your financial life and find other income sources for making your mortgage payments.
A 401K loan can be just as risky. If you get laid off you will have to pay back the loan within a few months. Unemployment continues to go up and is already at a 26 year high. So, if you get laid off and can't pay back the money, you will most likely have a tax problem. The loan will be treated as a withdrawal and you will be paying tax and a early withdrawal penalty of 10%. A loan also has drawbacks because the markets may rally at any time while you have an outstanding loan, which you are missing an important opportunity to recoup your losses.
Also, you should know any money that you have in a 401K or IRA is protected if you ever file for bankruptcy. That money is yours no matter what.
I think you should search in ever nook and cranny of your financial life and find other income sources for making your mortgage payments.
Monday, July 20, 2009
Should I Use My 401K to Pay Off My Mortgage?
If you are planning on staying in your home I am all for you paying off your mortgage. But if you are getting a company match on your 401K from your employer, you must continue to invest the minimum amount to qualify for the maximum match. This is free money that you should not pass up. What you can do is cut back on your contribution to the point of the match so you will have more money in paycheck to put towards paying off your mortgage before you retire. You are probably thinking, "I will have less money in my 401K if I do that." But if you don't have a mortgage to worry about when you retire then it will probably more than offset the difference. For most retirees mortgages are the biggest income concerns.
Sunday, July 19, 2009
Imagine Having a $2 Billion Emergency Fund.
If contributing to your 401K isn't keeping you busy enough. Think about your IRA, savings, credit card debt, and paying down your mortgage. What's left for me after all that? There are a couple of other ways to help you save more money out there. Bank of America customers have saved more than $2 billion with the Keep the Change program.
The U.S. household savings rate in May rose to a 15 year high, according to the latest Commerce department report. Bank of America customers contributed to that rate by using the Keep the Change program as an effortless way way to save while making everyday purchases. In fact, since the program's launch in 2005, customers have save more than $2 billion.
When consumers sign up for the program, every debit card purchase is automatically rounded up to the nearest whole dollar, and the difference is transferred from their checking into their savings account. Bank of America matches 100% of transfers for the first three months and 5% thereafter, up to a maximum total of $250 per year.
"We've seen an incredible impact in our customers' savings as a result of their participation in Keep the Change, especially customers who are just starting to save for the first time," said Jon Wilk, Balances and Rates executive at Bank of America. "Helping customers save more than $2 billion illustrates how change can add up over time."
In addition to Keep the Change, the newly introduced Add It Up program, a secure online shopping site that allows enrolled customers to earn up to 20% cash back on their purchases, is also helping customers stretch their money. By using both Add It Up and Keep the Change, Bank of America customers can receive the combined value of saving while they are spending.
"Even with today's economic environment, consumers are finding ways, to get more from their money, and our innovative Keep the Change savings program is one example of the advantages of being a Bank of America customer," Wilk said.
The U.S. household savings rate in May rose to a 15 year high, according to the latest Commerce department report. Bank of America customers contributed to that rate by using the Keep the Change program as an effortless way way to save while making everyday purchases. In fact, since the program's launch in 2005, customers have save more than $2 billion.
When consumers sign up for the program, every debit card purchase is automatically rounded up to the nearest whole dollar, and the difference is transferred from their checking into their savings account. Bank of America matches 100% of transfers for the first three months and 5% thereafter, up to a maximum total of $250 per year.
"We've seen an incredible impact in our customers' savings as a result of their participation in Keep the Change, especially customers who are just starting to save for the first time," said Jon Wilk, Balances and Rates executive at Bank of America. "Helping customers save more than $2 billion illustrates how change can add up over time."
In addition to Keep the Change, the newly introduced Add It Up program, a secure online shopping site that allows enrolled customers to earn up to 20% cash back on their purchases, is also helping customers stretch their money. By using both Add It Up and Keep the Change, Bank of America customers can receive the combined value of saving while they are spending.
"Even with today's economic environment, consumers are finding ways, to get more from their money, and our innovative Keep the Change savings program is one example of the advantages of being a Bank of America customer," Wilk said.
If you had started the Keep the Change Program when it started you could have potentially built your emergency fund to $1,000 by now. If you you bank with Bank of America and haven't started this program now is the time. Money is being lost. If you don't bank with Bank of America, maybe you should.
My Employer is Reducing or Going to Stop it's Matching Contribution. Should I Stop Contributing to My 401K?
You need to decide how to manage your money best if your employer is no longer going to make matching contributions. If you have credit card debt, you may want to stop your contributions to your 401K so you have a bigger paycheck to put towards paying off your credit card balances. If you don't have credit card debt and don't have at least an eight month emergency fund, be sure to start putting money aside right away. If you don't have any credit card debt and you already have an eight month emergency fund, then the next step would be to stop contributing to your 401K and see if you qualify for a Roth IRA. Since certain income restrictions will prevent you from starting a Roth IRA your next best option would be to open a traditional IRA. If you have already made a contribution to your Roth or traditional IRA you then you can put the extra money towards paying down your mortgage if you think you will be staying in the home for quite some time or just keep contributing to your 401K. Even if you are not getting an employer match, contributing to your 401K is still one of the best ways to save tax deferred towards your retirement.
Saturday, July 18, 2009
If My Company Goes Bankrupt Will I Lose All the Money in My 401K?
You should have nothing to worry about if you can confirm your money was sent from your employer to your 401K plan. Any money you invest in a 401K is your money, not your employer's. Generally employers hire a third party like Fidelity or a brokerage, fund company, or insurance company to run the 401K, and that company will separate your money into another account that is all yours; even if that brokerage company gets into trouble.
Friday, July 17, 2009
I am Not Fully Vested in My 401K. Will I Lose Money If My Company Goes Bankrupt?
It is a good chance you will lose your employer matched contributions. If you are not fully vested, the money is not entirely yours. If your company goes bankrupt it has no legal obligation to pay you the unvested portion of your 401K. The money you contribute to your 401K is always 100% yours.
Thursday, July 16, 2009
Which States Have The Highest Credit Card Default Rate?
When it comes to credit card defaults not all states are created equal. The state I live in is one of the worst.
According to TransUnion the five states that pose the biggest credit risk are:
- Mississippi (credit risk index of (166.45)
- Texas (162.59)
- Nevada (158.76)
- South Carolina (158.76)
- Louisiana (153.84)
But like everything else there is a lighter side. The least risky states are:
- North Dakota (82.02)
- Minnesota (88.53)
- Vermont (91.82)
- South Dakota (94.75)
- Iowa (95.26)
TransUnion global chief scientist Chet Wiermanski says,"It is apparent that many of the states experiencing the highest increase in credit risk are the same when looking at the Credit Risk Index static on both a quarterly and yearly basis," said Wiermanski in the release that accompanied the data. "this leads TransUnion to believe that consumers in these states will experience prolonged systemic difficulties in both their ability to satisfactorily repay their existing credit obligations and in their ability to acquire new credit."
Oh, no. This means people will continue to default not only on their credit cards, but on their mortgages. When will this madness ever stop?
According to TransUnion the five states that pose the biggest credit risk are:
- Mississippi (credit risk index of (166.45)
- Texas (162.59)
- Nevada (158.76)
- South Carolina (158.76)
- Louisiana (153.84)
But like everything else there is a lighter side. The least risky states are:
- North Dakota (82.02)
- Minnesota (88.53)
- Vermont (91.82)
- South Dakota (94.75)
- Iowa (95.26)
TransUnion global chief scientist Chet Wiermanski says,"It is apparent that many of the states experiencing the highest increase in credit risk are the same when looking at the Credit Risk Index static on both a quarterly and yearly basis," said Wiermanski in the release that accompanied the data. "this leads TransUnion to believe that consumers in these states will experience prolonged systemic difficulties in both their ability to satisfactorily repay their existing credit obligations and in their ability to acquire new credit."
Oh, no. This means people will continue to default not only on their credit cards, but on their mortgages. When will this madness ever stop?
Tuesday, July 14, 2009
Is Your Bank Protecting You From Identity Theft?
Identity theft and stolen credit card or debit card information can be devastating to your credit. Credit card charges racked up in your name can ruin your credit score and may take months or even years to fix.
I know many people who have had their credit card information stolen and all have had their fraudulent charges resolved very quickly. More and more banks continue to strength their security. Some more than others.
For the third year in a row, Bank of America has been named No. 1 among the top 25 U.S. card issuers in Javelin Strategy & Research's annual Card Issuers Identity Safety Scorecard.
"Our customers consistently tell us that issues related to fraud and identity safety are of the utmost importance to them," said Bob Shiflet, Bank of America's Global Consumer Fraud Prevention executive. "That's why this achievement is so important for us. We know how much fraud protection matters to our customers and we're proud of all we do to help keep our customers safe."
Bank of America works hand in hand with customers to protect their entire relationship against fraud, rather than focusing on individual products and channels. Working together, lines of businesses such as Global card Services and eChannels & Customer Solutions are able to provide industry leading prevention, detection and resolution practices across the enterprise.
For example, among those practices noted in the Javelin scorecard are Bank of America email and mobile alerts, which an increasing number of customers choose to take advantage of each year. In fact, recent Javelin survey data indicates 65% of U.S. households rate financial alerts as useful in helping detect fraudulent activity or in managing their finances.
"We know more and more customers are turning to eSolutions to help them manage their accounts," said Kirk Lindsey, Channel Delivery and Execution executive for eChannels and Customer Solutions. "That's why we are continually making improvements and adding new online alerts to notify our customers when activity occurs on their accounts. Our bankofamerica.com site truly offers all our customers the ultimate online and mobile banking experience with safety, security, convenience and control."
Javelin Strategy & research is the leading independent provider of nationally representative, quantitative research focused exclusively on the financial services industry. In its annual Identity Safety Scorecard, Javelin scores 25 of the top U.S. credit card issuers against a benchmark of criteria for customer safety features essential to fraud prevention, detection and resolution.
This year's scorecard ranked Bank of America highest, 80 points out of a possible 100. More Information about the scorecard is available on Javelin's website. Check it out and see how your bank ranks.
HOW TO PROTECT YOURSELF AGAINST FRAUD
-Make sure your computer always has up-to-date versions of both anti-spyware and anti-virus software.
-Install all security updates offered by your software providers.
-Reduce the amount of mail you receive containing personal information.
-Make sure requests for sensative personal, financial, or account information are legitimate, particularly if they are made in an urgent or threatening tone.
-Do not share IDs or passcodes with anyone, and use a different passcode for each of your online accounts.
I know many people who have had their credit card information stolen and all have had their fraudulent charges resolved very quickly. More and more banks continue to strength their security. Some more than others.
For the third year in a row, Bank of America has been named No. 1 among the top 25 U.S. card issuers in Javelin Strategy & Research's annual Card Issuers Identity Safety Scorecard.
"Our customers consistently tell us that issues related to fraud and identity safety are of the utmost importance to them," said Bob Shiflet, Bank of America's Global Consumer Fraud Prevention executive. "That's why this achievement is so important for us. We know how much fraud protection matters to our customers and we're proud of all we do to help keep our customers safe."
Bank of America works hand in hand with customers to protect their entire relationship against fraud, rather than focusing on individual products and channels. Working together, lines of businesses such as Global card Services and eChannels & Customer Solutions are able to provide industry leading prevention, detection and resolution practices across the enterprise.
For example, among those practices noted in the Javelin scorecard are Bank of America email and mobile alerts, which an increasing number of customers choose to take advantage of each year. In fact, recent Javelin survey data indicates 65% of U.S. households rate financial alerts as useful in helping detect fraudulent activity or in managing their finances.
"We know more and more customers are turning to eSolutions to help them manage their accounts," said Kirk Lindsey, Channel Delivery and Execution executive for eChannels and Customer Solutions. "That's why we are continually making improvements and adding new online alerts to notify our customers when activity occurs on their accounts. Our bankofamerica.com site truly offers all our customers the ultimate online and mobile banking experience with safety, security, convenience and control."
Javelin Strategy & research is the leading independent provider of nationally representative, quantitative research focused exclusively on the financial services industry. In its annual Identity Safety Scorecard, Javelin scores 25 of the top U.S. credit card issuers against a benchmark of criteria for customer safety features essential to fraud prevention, detection and resolution.
This year's scorecard ranked Bank of America highest, 80 points out of a possible 100. More Information about the scorecard is available on Javelin's website. Check it out and see how your bank ranks.
HOW TO PROTECT YOURSELF AGAINST FRAUD
-Make sure your computer always has up-to-date versions of both anti-spyware and anti-virus software.
-Install all security updates offered by your software providers.
-Reduce the amount of mail you receive containing personal information.
-Make sure requests for sensative personal, financial, or account information are legitimate, particularly if they are made in an urgent or threatening tone.
-Do not share IDs or passcodes with anyone, and use a different passcode for each of your online accounts.
Sunday, July 12, 2009
Do I need To Get a Lawyer If I am Having Trouble Paying My Debts?
You do not need a lawyer if you are experiencing credit or debt problems. You can negotiate debt re-payment with credit card companies or creditors yourself without any help from an attorney. You can work making changes to your credit report on your own. Especially now a days you are probably seeing TV commercials, hearing radio ads, and even magazine and newspaper ads every where you turn with attorneys who are offering you help reducing your debt and helping you avoid bankruptcy. Most of what they offer you can do yourself by following the suggestions in this blog.
I had a friend who I had helped clear up her credit report and she had consulted a credit counseling agency after we had cleaned up her report pretty good just to see if it could be cleaned up any further. The credit counseling company just about offered her a job after seeing how well she had done on her own. They admitted she had done everything they would have done for her. So repairing your credit can be done on your own. It may be time consuming, but it is worth the work to get your credit report cleaned up. There are times when an attorney can be helpful to you though. If you have been dealing with credit reporting agencies about entries that are incorrectly being reported on your credit report and you have sent letters and made phone calls for several months with little progress, it could be a good idea to see an attorney. As I said it can be time consuming, but if you have been diligently working on getting your credit report cleared up and are getting no where an attorney may be your next step. This does not mean that you should be paying a fat retainer and getting billed by the hour. Start by finding an attorney who will write a simple letter on your behalf to the credit reporting agency. Usually letterhead from an attorney will get much more attention from creditors than another letter from you and just might get you to where you need to go. If other services are needed from the attorney see if you can negotiate pricing upfront.
I have friends who had charge offs and all of a sudden years later get a knock at the door to be handed a court summons regarding their unpaid debt. If you get served with court papers, you may want to consult an attorney to at the very least review them and help understand them. If you are being sued for nonpayment of a debt and have no defense, you will probably be throwing away good money after bad to hire an attorney to defend you in the case. If you find you are unable or don't know how to reach a settlement with the creditors attorney yourself, you can hire a lawyer for the specific purpose of working out a settlement.
If you are really considering filing for bankruptcy, you should contact an attorney for a free consultation. Ask an attorney you have dealt with in the past for a referral or contact your state, county, or city bar association for a referral to an attorney in your area who specializes in bankruptcy law.
I had a friend who I had helped clear up her credit report and she had consulted a credit counseling agency after we had cleaned up her report pretty good just to see if it could be cleaned up any further. The credit counseling company just about offered her a job after seeing how well she had done on her own. They admitted she had done everything they would have done for her. So repairing your credit can be done on your own. It may be time consuming, but it is worth the work to get your credit report cleaned up. There are times when an attorney can be helpful to you though. If you have been dealing with credit reporting agencies about entries that are incorrectly being reported on your credit report and you have sent letters and made phone calls for several months with little progress, it could be a good idea to see an attorney. As I said it can be time consuming, but if you have been diligently working on getting your credit report cleared up and are getting no where an attorney may be your next step. This does not mean that you should be paying a fat retainer and getting billed by the hour. Start by finding an attorney who will write a simple letter on your behalf to the credit reporting agency. Usually letterhead from an attorney will get much more attention from creditors than another letter from you and just might get you to where you need to go. If other services are needed from the attorney see if you can negotiate pricing upfront.
I have friends who had charge offs and all of a sudden years later get a knock at the door to be handed a court summons regarding their unpaid debt. If you get served with court papers, you may want to consult an attorney to at the very least review them and help understand them. If you are being sued for nonpayment of a debt and have no defense, you will probably be throwing away good money after bad to hire an attorney to defend you in the case. If you find you are unable or don't know how to reach a settlement with the creditors attorney yourself, you can hire a lawyer for the specific purpose of working out a settlement.
If you are really considering filing for bankruptcy, you should contact an attorney for a free consultation. Ask an attorney you have dealt with in the past for a referral or contact your state, county, or city bar association for a referral to an attorney in your area who specializes in bankruptcy law.
Saturday, July 11, 2009
Time Line For The Credit Card Accountability, Reponsibility, and Disclosure Act
The Credit Card Accountability, Responsibility, and Disclosure Act will go into effect in phases over the next year and here's what it means for you:
As of August 2009
1. Statements must be mailed 21 days before the bill is due (the current time limit is 14 days)
2. Issuers have to give 45 days notice for a change in interest rate (current is 15 days)
As of February 2010
3. Issuers can no longer raise the interest rate on an existing balance, unless the balance is more then 60 days late or a teaser rate expires.
4. Teasers rates must be in effect for at least six months.
5. Except for expiring teaser rates, the rate on new purchases cannot be hiked for the first year.
6. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate,and then to other balances in descending order.
7. Over limit fees may only be applied if the consumer opts in for approval on going over the credit limit.
8. Applicants under the age of 21 must have an adult co sign , or show proof of income for approval.
9. Issuers cannot offer free sign up gifts near college campuses.
10. Issuers can no longer practice "universal default" that is raise your rates if they learn you were late on another account.
11. Issuers must indicate on statements how long it will take to pay off a balance if the minimum payments are made.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.
As of August 2010
13. Cardholders assessed a penalty APR for late payments can reclaim the lower rate if they pay on time for six consecutive months.
This good news, but watch for credit card companies really trying to sock to you for as long as they can. In the long run this will be a great thing and should help people from heading down the road to bankruptcy.
As of August 2009
1. Statements must be mailed 21 days before the bill is due (the current time limit is 14 days)
2. Issuers have to give 45 days notice for a change in interest rate (current is 15 days)
As of February 2010
3. Issuers can no longer raise the interest rate on an existing balance, unless the balance is more then 60 days late or a teaser rate expires.
4. Teasers rates must be in effect for at least six months.
5. Except for expiring teaser rates, the rate on new purchases cannot be hiked for the first year.
6. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate,and then to other balances in descending order.
7. Over limit fees may only be applied if the consumer opts in for approval on going over the credit limit.
8. Applicants under the age of 21 must have an adult co sign , or show proof of income for approval.
9. Issuers cannot offer free sign up gifts near college campuses.
10. Issuers can no longer practice "universal default" that is raise your rates if they learn you were late on another account.
11. Issuers must indicate on statements how long it will take to pay off a balance if the minimum payments are made.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.
As of August 2010
13. Cardholders assessed a penalty APR for late payments can reclaim the lower rate if they pay on time for six consecutive months.
This good news, but watch for credit card companies really trying to sock to you for as long as they can. In the long run this will be a great thing and should help people from heading down the road to bankruptcy.
Thursday, July 9, 2009
How Bad Is The Economy When a Debt Consolidation Co Files Bankruptcy?
"One of the unfortunate consequences is that you are left without the service you have paid for," its Web site no reads, directing current clients to reach out to their own attorneys.
How can you help others if you can't help yourself? Debt Relief USA, also known as No Debt USA, couldn't even help itself any longer. Last month the debt consolidation company filled for Chapter 11 bankruptcy protection. The company has not only filed for Chapter 11, it is completely shut down, leaving customer without help, while it files for protection with $5 million in total liabilities and $4.65 million in assets.
The company may be facing investigations from the Federal trade Commission and by the Attorneys General of several states according to their Website.
Isn't crazy when those who are there to help with your debt go out of business?
How can you help others if you can't help yourself? Debt Relief USA, also known as No Debt USA, couldn't even help itself any longer. Last month the debt consolidation company filled for Chapter 11 bankruptcy protection. The company has not only filed for Chapter 11, it is completely shut down, leaving customer without help, while it files for protection with $5 million in total liabilities and $4.65 million in assets.
The company may be facing investigations from the Federal trade Commission and by the Attorneys General of several states according to their Website.
Isn't crazy when those who are there to help with your debt go out of business?
Wednesday, July 8, 2009
Saving Money Going To The Movies
If you are anything like me and my wife you will spend lots of summer nights at the movies seeing all the latest summer blockbusters. But there is nothing wrong with saving money while you are out enjoying yourselves at the movies.
Theaters have kept price increases minimal amid the slowing economy, says Richard McKenzie, a University of California, Irvine economist and author of "Why Popcorn Costs So Much at the Movies, and Other Pricing Puzzles." For example, AMC and Regal Entertainment Group pushed up ticket prices in some areas by just 50 cents each.
The concession stand is where moviegoers are most likely to see price increases, although those are relatively small, as well. "Theaters want to keep the margin on concession items as high as possible, and on tickets, as low as possible," says Wesley Hartmann, associate professor of marketing at Stanford University. If $7 for a bag of popcorn shocks consumers, they'll most likely go without. But if ticket prices are too high, they may decide to skip the movie altogether and wait to see “The Proposal” when it comes out on DVD.
On other hand, discount opportunities are just as plentiful as they were last summer, and they can help you cut costs by as much as 70%. Here are nine ways to spend less on a trip to the movies:
Seek Out Freebies
Many theaters offer free showings of family movies during the summer. Regal hosts a Free Family Film Festival every Tuesday and Wednesday morning through the end of August, showing flicks like "The Tale Of Despereaux" and "Star Wars: The Clone Wars." Clearview Cinemas' Kid's Club kicks off an eight-week series of free movies starting July 2.
Clip Coupons
Your local Entertainment Book typically offers reduced-price movie tickets for as little as $6 apiece. Also, keep your eyes peeled for special promotions. Marriott is offering four free movie passes when you spend a weekend at a participating hotel or resort before Sept. 7.
Head to the Drive-In
If there's a drive-in in your town, then get behind the wheel. Moviegoers accustomed to state-of-the-art theaters may see these venues as old-fashioned novelties, but most drive-ins show new releases — and at the bargain price of about $7 a person for a double feature, says Jennifer Sherer Janisch, co-creator of Drive-ins.com, an online directory. (The Laurel Drive-In in Hazelton, Pa., for example, is currently showing "The Hangover" and "Taking of Pelham 123" for $7 per adult and $3 per kid.) Some drive-ins don't even charge for kids, while others offer bargain per-car pricing. Concession fare is often cheaper, too, Janisch says.
Check Out Independent Theaters
Wait a month or so for new movies to show up at a local independently-owned theater, and you can save more than 70%. The Kleeburg Marketplace Cinemas in Winston-Salem, N.C., is showing features like "X-Men Origins: Wolverine" and "Sunshine Cleaning" for just $2.50. Prices at Cinemark Movies 10 in Plano, Texas, range from $1 (early-bird first matinee, which can start as early as noon) to $2 (Friday and Saturday evening showings).
Buy in Bulk
At AMC Theatres, avid moviegoers can buy tickets in increments of 50 for $6 to $7.50 each. The tickets don't expire. There is one catch, though: the cheaper tickets cannot be used for special engagements (i.e., the first two weeks of a movie's release). You can also purchase bulk tickets at warehouse clubs. For example, Costco sells a five-pack of Regal tickets that can be used at any showing for $37.50. At a Regal theater in Chicago, that could translate to a savings of up to $12.50.
Avoid Reservation Sites
Go online and you'll end up paying more for your ticket. Movietickets.com charges a $1 surcharge; Fandango.com tacks on 75 cents to $2, depending on the area.
Trade Up on Snacks
If you're going to buy popcorn or soda, go big. "Per ounce, the smallest size of popcorn is twice the price of filet mignon," says McKenzie. Trade up for the larger size and you're paying less per ounce — plus, many theaters still offer free refills. Although that's not much of a deal for a solo viewer, larger groups will find it more cost effective than buying snacks individually.
Go at Off Times
Heading to the theater on a Friday or Saturday night is the most expensive time to go. In San Francisco, Cinemark charges an extra 50 cents per ticket on those nights. Theaters are also restricting matinee hours. New York's AMC Theaters offer matinee pricing ($6 instead of $12.50 for an adult ticket) only before noon.
Be Loyal
Joining the loyalty club at your favorite theater can pay off, even if you don't go to the movies that often. AMC Theaters' AMC Movie Watcher Rewards offers coupons for a free small popcorn each week, plus two points per ticket purchased. After you've earned 30, you'll get a free ticket. The Regal Crown Club awards one point per $1 spent. Rack up 150 points and redeem them for a free ticket.
These are just more examples of how to save more money and put the extra savings towards your debt. Remember you can still have some fun once in a while when you are working on paying off your debt. Be creative and fun. Paying off debt doesn't always need to feel like a chore.
Theaters have kept price increases minimal amid the slowing economy, says Richard McKenzie, a University of California, Irvine economist and author of "Why Popcorn Costs So Much at the Movies, and Other Pricing Puzzles." For example, AMC and Regal Entertainment Group pushed up ticket prices in some areas by just 50 cents each.
The concession stand is where moviegoers are most likely to see price increases, although those are relatively small, as well. "Theaters want to keep the margin on concession items as high as possible, and on tickets, as low as possible," says Wesley Hartmann, associate professor of marketing at Stanford University. If $7 for a bag of popcorn shocks consumers, they'll most likely go without. But if ticket prices are too high, they may decide to skip the movie altogether and wait to see “The Proposal” when it comes out on DVD.
On other hand, discount opportunities are just as plentiful as they were last summer, and they can help you cut costs by as much as 70%. Here are nine ways to spend less on a trip to the movies:
Seek Out Freebies
Many theaters offer free showings of family movies during the summer. Regal hosts a Free Family Film Festival every Tuesday and Wednesday morning through the end of August, showing flicks like "The Tale Of Despereaux" and "Star Wars: The Clone Wars." Clearview Cinemas' Kid's Club kicks off an eight-week series of free movies starting July 2.
Clip Coupons
Your local Entertainment Book typically offers reduced-price movie tickets for as little as $6 apiece. Also, keep your eyes peeled for special promotions. Marriott is offering four free movie passes when you spend a weekend at a participating hotel or resort before Sept. 7.
Head to the Drive-In
If there's a drive-in in your town, then get behind the wheel. Moviegoers accustomed to state-of-the-art theaters may see these venues as old-fashioned novelties, but most drive-ins show new releases — and at the bargain price of about $7 a person for a double feature, says Jennifer Sherer Janisch, co-creator of Drive-ins.com, an online directory. (The Laurel Drive-In in Hazelton, Pa., for example, is currently showing "The Hangover" and "Taking of Pelham 123" for $7 per adult and $3 per kid.) Some drive-ins don't even charge for kids, while others offer bargain per-car pricing. Concession fare is often cheaper, too, Janisch says.
Check Out Independent Theaters
Wait a month or so for new movies to show up at a local independently-owned theater, and you can save more than 70%. The Kleeburg Marketplace Cinemas in Winston-Salem, N.C., is showing features like "X-Men Origins: Wolverine" and "Sunshine Cleaning" for just $2.50. Prices at Cinemark Movies 10 in Plano, Texas, range from $1 (early-bird first matinee, which can start as early as noon) to $2 (Friday and Saturday evening showings).
Buy in Bulk
At AMC Theatres, avid moviegoers can buy tickets in increments of 50 for $6 to $7.50 each. The tickets don't expire. There is one catch, though: the cheaper tickets cannot be used for special engagements (i.e., the first two weeks of a movie's release). You can also purchase bulk tickets at warehouse clubs. For example, Costco sells a five-pack of Regal tickets that can be used at any showing for $37.50. At a Regal theater in Chicago, that could translate to a savings of up to $12.50.
Avoid Reservation Sites
Go online and you'll end up paying more for your ticket. Movietickets.com charges a $1 surcharge; Fandango.com tacks on 75 cents to $2, depending on the area.
Trade Up on Snacks
If you're going to buy popcorn or soda, go big. "Per ounce, the smallest size of popcorn is twice the price of filet mignon," says McKenzie. Trade up for the larger size and you're paying less per ounce — plus, many theaters still offer free refills. Although that's not much of a deal for a solo viewer, larger groups will find it more cost effective than buying snacks individually.
Go at Off Times
Heading to the theater on a Friday or Saturday night is the most expensive time to go. In San Francisco, Cinemark charges an extra 50 cents per ticket on those nights. Theaters are also restricting matinee hours. New York's AMC Theaters offer matinee pricing ($6 instead of $12.50 for an adult ticket) only before noon.
Be Loyal
Joining the loyalty club at your favorite theater can pay off, even if you don't go to the movies that often. AMC Theaters' AMC Movie Watcher Rewards offers coupons for a free small popcorn each week, plus two points per ticket purchased. After you've earned 30, you'll get a free ticket. The Regal Crown Club awards one point per $1 spent. Rack up 150 points and redeem them for a free ticket.
These are just more examples of how to save more money and put the extra savings towards your debt. Remember you can still have some fun once in a while when you are working on paying off your debt. Be creative and fun. Paying off debt doesn't always need to feel like a chore.
Tuesday, July 7, 2009
How Do I Remove Incorrect Information From My Credit Report?
If you have reviewed your credit report and believe that some of the information it contains may be inaccurate, you can legally dispute it via mail or, for faster results, the Internet. Once notified of a mistake on your report, a credit bureau has thirty days to investigate and respond. If the information can't be confirmed, then the item or items should be removed.
For items that cannot be resolved online or that require copies of official paperwork or other supporting documents, use the sample Credit Report Dispute Letter below as a guide. Be sure to mail your letter and documents via Certified Mail for your records.
SAMPLE LETTER:
Your Name
Your Address
Your City, State Zip Code
Date
Name of Credit Reporting Agency
Dispute Department
Address
City, State Zip Code
Re: (Social Security Number & Date of Birth)
Dear Sir or Madam:
I am writing to dispute the following information in my file: (Identify disputed items by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) The items I am disputing have also been circled on the attached copy of the credit report I received.
This item is (inaccurate or incomplete) because (explain what is inaccurate or incomplete and why). I am requesting that the item be (deleted, changed, updated, etc.) to correct the information.
(If you are enclosing any documents, send copies only.)
Enclosed are copies of the following documents supporting my position: (List what you are enclosing, if applicable). I have also enclosed proof of my social security number and current address for your review. Please investigate and (delete or correct) the disputed item(s) as soon as possible, and inform me in writing of the outcome.
Thank you for your time and consideration,
Your name
For items that cannot be resolved online or that require copies of official paperwork or other supporting documents, use the sample Credit Report Dispute Letter below as a guide. Be sure to mail your letter and documents via Certified Mail for your records.
SAMPLE LETTER:
Your Name
Your Address
Your City, State Zip Code
Date
Name of Credit Reporting Agency
Dispute Department
Address
City, State Zip Code
Re: (Social Security Number & Date of Birth)
Dear Sir or Madam:
I am writing to dispute the following information in my file: (Identify disputed items by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) The items I am disputing have also been circled on the attached copy of the credit report I received.
This item is (inaccurate or incomplete) because (explain what is inaccurate or incomplete and why). I am requesting that the item be (deleted, changed, updated, etc.) to correct the information.
(If you are enclosing any documents, send copies only.)
Enclosed are copies of the following documents supporting my position: (List what you are enclosing, if applicable). I have also enclosed proof of my social security number and current address for your review. Please investigate and (delete or correct) the disputed item(s) as soon as possible, and inform me in writing of the outcome.
Thank you for your time and consideration,
Your name
Monday, July 6, 2009
Why Your Credit Score So Important
The first thing a potential creditor is going to look at when considering your credit application is your credit score. Unfortunately, looking at a credit report can be like judging a book by its cover. Your credit score directly impacts the credit and types loans such as: mortgages, car loans, credit cards, etc. that you apply for in the future. It can make difference with the current credit you have as well. bank are really checking these things these days. You could start to see your interest rates go up sky rate if your credit score starts to falter. Also, you may not qualify for a loan if your score is not high enough. The better your credit score is, the easier it is for you to obtain credit and it is more likely that the terms for that credit will be more favorable. A good credit score could reduce the amount of deposits required for utilities, have better insurance rates, and make it easier to get approved for an apartment.
Sunday, July 5, 2009
Bank of America is Making Payments To It's Loans. Are You?
Bank of America Corporation announced July 2, the Board of Directors has authorized approximately $713 million in demand payments to the U.S. government under the Troubled Asset Relief Program (TARP).
Dividends related to the government's investment in the company under TARP include the following:
The cash dividend of $312.50 per share, or a total of approximately $188 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series N, is payable on August 17, 2009 to the U.S. Department of the Treasury, the shareholder of record, as of July 31, 2009. This quarterly dividend payment relates to the government's $15 billion investment in Bark of America made under the Capital Purchase Program of TARP.
The cash dividend of $312.50 per share, or a total of approximately $125 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series Q, is payable on August 17, 2009 to the shareholder of record, the Treasury Department, as of July 31, 2009. This quarterly dividend payment relates to the government's $10 billion investment in Merrill Lynch & Co, Inc. made under the Capital Purchase Program of TARP.
The cash dividend of $500 per share, or total of approximately $400 million, on the Fixed Rate Cumulative perpetual Preferred Stock, Series R, is payable on August 17, 2009 to the shareholder of record, the Treasury Department, as of July 31, 2009. This quarterly dividend payment relates to the governments $20 billion investment in Bank of America on January 16, 2009 under TARP.
For those who thought the banks would not pay back the money they borrowed they definitely are. Living up to your financial contract is everyone's responsibility. Whether you borrower money to buy house or use your credit cards you need to make your payments. Where there is a will there is a way. The banks are leading by example. Are you?
Dividends related to the government's investment in the company under TARP include the following:
The cash dividend of $312.50 per share, or a total of approximately $188 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series N, is payable on August 17, 2009 to the U.S. Department of the Treasury, the shareholder of record, as of July 31, 2009. This quarterly dividend payment relates to the government's $15 billion investment in Bark of America made under the Capital Purchase Program of TARP.
The cash dividend of $312.50 per share, or a total of approximately $125 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series Q, is payable on August 17, 2009 to the shareholder of record, the Treasury Department, as of July 31, 2009. This quarterly dividend payment relates to the government's $10 billion investment in Merrill Lynch & Co, Inc. made under the Capital Purchase Program of TARP.
The cash dividend of $500 per share, or total of approximately $400 million, on the Fixed Rate Cumulative perpetual Preferred Stock, Series R, is payable on August 17, 2009 to the shareholder of record, the Treasury Department, as of July 31, 2009. This quarterly dividend payment relates to the governments $20 billion investment in Bank of America on January 16, 2009 under TARP.
For those who thought the banks would not pay back the money they borrowed they definitely are. Living up to your financial contract is everyone's responsibility. Whether you borrower money to buy house or use your credit cards you need to make your payments. Where there is a will there is a way. The banks are leading by example. Are you?
How Can I Possibly Build an Emergency Fund of 6 to 9 Months of Living Expenses?
Building an emergency fund is not going to happen overnight for most. Many people are stretched financially thin right right now. So it will take time. But you need to get started moving towards that goal. Every month you should be putting something aside for you and your family. If you start saving aggressively you may get to your goal in a couple months or it may take years. However long it takes it is OK. Just as long as you keep pushing to reach that goal. Every month you will be stitching more and more of your security blanket. Check out some of our examples on how to cut back on expenses.
One of the best ways to build savings and to pay your bills on time, for that matter, is to get set up for automatic payment. You can have money transferred right from your checking into your savings account. Your employer may even be able to transfer money to your savings from your paycheck too if they offer automatic deposit. Studies show when you are set up for auto deposit people tend to stick with it. This also works with a 401K. Chances are you won't even miss it.
How much can you afford to save? Well, that depends on you. You may think you can't save a dime, but you can. Where there is a will there is a way. There is always some place to cut back on your expenses. If you decide you are going to save $100 I bet you could even make it $120 if you really tried. Is it hard? Heck yes it can be hard. Will it require for you to cut back in spending? Most likely. You must treat yourself just like you would a bill and pay yourself too. Get started with your next paycheck. Your financial security depends on it.
One of the best ways to build savings and to pay your bills on time, for that matter, is to get set up for automatic payment. You can have money transferred right from your checking into your savings account. Your employer may even be able to transfer money to your savings from your paycheck too if they offer automatic deposit. Studies show when you are set up for auto deposit people tend to stick with it. This also works with a 401K. Chances are you won't even miss it.
How much can you afford to save? Well, that depends on you. You may think you can't save a dime, but you can. Where there is a will there is a way. There is always some place to cut back on your expenses. If you decide you are going to save $100 I bet you could even make it $120 if you really tried. Is it hard? Heck yes it can be hard. Will it require for you to cut back in spending? Most likely. You must treat yourself just like you would a bill and pay yourself too. Get started with your next paycheck. Your financial security depends on it.
Friday, July 3, 2009
When The Right Hand Is Unsure What The Left Hand Is Doing.
I think we take for granted that our friends are always on the same level us. Studies show that people generally have the same level of income as most of their friends or people they most frequently associate with. But is that always true in a down turned economy?
I have seen reductions in income, but I have always managed to pick up the slack by cutting back or developing other income streams. Such other business, spin off from others businesses I own, or even blogging. Do our friends take the measures as we do?
The amount of time I have been spending with my friends has diminished over the course of the past several months. Now granted I am extremely busy, but I will reserve some time to chit chat or even go out to dinner. It has seemed that my friends are just as busy as I am, but in some cases that might just not be true.
I came across an article entitled "The Recession Ruins Friendships" from the blog Double X by Emily Bazelon discussing how the recession can ruin friendships. "We often sidestep relationships in which spending habits don't match up exactly," Bazelon writes, "to spare ourselves feelings of inadequacy or insensitivity those awkward breaches that make that make intimacy feel like work."
This article got me thinking about why my outings and hanging out with friends has diminished. It could be that most of them are truly busy, it could be they just don't want to hang out with me, or it could just be for financial reasons.
I have friends who are always showing up late when we have dinner plans with other members of our circle of friends. Who don't even end up eating when they finally do arrive. Is this because they still want to hang out, but don't have the money to spend on dinner?
Other friends just ignore my phone calls to call back days or even weeks later to tell me "Sorry, I am just too busy." I know all about busy, having more than one business and writing this very blog have me going non-stop, but I can still pick up the phone real quick and say "I'll call you right back or later or tomorrow." At least let me know you are alive. Is it because they just don't want to be asked to go out in fear they may be financially embarrassed?
Are you experiencing similar situations with your friends? Or are you one of the friends avoiding your friends because you can't afford to go out? Let us hear from you.
I have seen reductions in income, but I have always managed to pick up the slack by cutting back or developing other income streams. Such other business, spin off from others businesses I own, or even blogging. Do our friends take the measures as we do?
The amount of time I have been spending with my friends has diminished over the course of the past several months. Now granted I am extremely busy, but I will reserve some time to chit chat or even go out to dinner. It has seemed that my friends are just as busy as I am, but in some cases that might just not be true.
I came across an article entitled "The Recession Ruins Friendships" from the blog Double X by Emily Bazelon discussing how the recession can ruin friendships. "We often sidestep relationships in which spending habits don't match up exactly," Bazelon writes, "to spare ourselves feelings of inadequacy or insensitivity those awkward breaches that make that make intimacy feel like work."
This article got me thinking about why my outings and hanging out with friends has diminished. It could be that most of them are truly busy, it could be they just don't want to hang out with me, or it could just be for financial reasons.
I have friends who are always showing up late when we have dinner plans with other members of our circle of friends. Who don't even end up eating when they finally do arrive. Is this because they still want to hang out, but don't have the money to spend on dinner?
Other friends just ignore my phone calls to call back days or even weeks later to tell me "Sorry, I am just too busy." I know all about busy, having more than one business and writing this very blog have me going non-stop, but I can still pick up the phone real quick and say "I'll call you right back or later or tomorrow." At least let me know you are alive. Is it because they just don't want to be asked to go out in fear they may be financially embarrassed?
Are you experiencing similar situations with your friends? Or are you one of the friends avoiding your friends because you can't afford to go out? Let us hear from you.
Thursday, July 2, 2009
Men, Women, Marriage and Money, Oh My!
Imagine that you and a partner own a business in which you've invested all your money and most of your emotional energy. Your financial security is wholly tied to the success of this joint enterprise.
But you face one major challenge: Your co-CEO is just, well, not like you.
The two of you prefer different movies, have different taste in clothes and can't ever seem to agree about what to do on Sunday. Money, in particular, tends to be a delicate topic. All too often, conversations end with one partner walking away, saying, "You just don't understand."
Now if this really were a business, and not just a metaphor for marriage, you'd have hired consultants a long time ago to figure out what was wrong. But since the real problem here is the ancient state of mutual incomprehension between men and women, we don't even try.
Well, when it comes to getting through to each other about money, spouses generally have some work to do.
Men and women may not exactly be from different planets, but many still operate in distinct financial orbits. For all our supposed financial sophistication and equality, the vast majority of married couples still divide the family's financial labors along traditional lines, with women handling everyday spending and budgeting decisions while men plan and invest for long-term security.
Across the divide, misunderstanding often rules. The typical couple can't even agree, other research shows, on how much they earn or owe.
Almost all of our respondents admitted openly that money is a cause of tension in their marriage. Seven in 10 actually owned up to arguing about it -- in fact, money causes more fights than sex or even in-laws. In the poll's most eye-opening findings, men and women had dramatically different ideas about who does what with the family finances, and what their partners care about.
Husbands were especially clueless, tending to underestimate how much women care about almost every financial issue, from investing and saving for retirement to paying off debt. A hundred years after Freud, men still don't know what women want.
The gap between the financial issues that people care about most and what their spouses think they hold important may not be the Grand Canyon. But some couples will need an awfully big bridge to get across it.
For instance, a survey found that only 27% of men believe their wives think having the right investments is very important. Yet nearly half of women say they do care (approximately the same proportion as men).
Likewise, only 45% of men say that having cash stashed for emergencies is very important to their spouse vs. 67% of women who believe it's crucial.
Women come much closer in gauging what matters to men. If anything, they tend to give guys too much credit, believing their husbands care more about paying off debt and saving for big purchases than men actually do.
In real life, though, there's nothing funny about the arguments that can flare when financial roles are so divided. Consider Mark Haase, 37, a helicopter flight nurse from Reno, and his wife Becky, 47, a pediatric nurse manager. Like man husbands, Mark is in charge of the family's investing and long-term planning; Becky does the everyday spending, buying clothes for their two children and items for the house.
They don't talk much about money, both spouses say, but when they do, the discussion usually ends in a fight, mostly over spending. Says Mark: "Do we really need a new bedspread? The closet is full of linens.... Sixty dollars on crayons and paper for the kids? I don't want to deny them, but...." Counters Becky: "He doesn't understand how much things cost." Adds Mark: "The only time we really talk about money is when there's a problem."
Talking about money may also be challenging for many couples because men and women seem to have different levels of enthusiasm for the topic.
Consider: While half of men surveyed say they like to talk about money at social gatherings, only 22 percent of the women say the same. For some wives, the problem may stem from how their husbands approach the subject.
"Men have been taught this golf course, locker room banter they use to talk about money," says financial planner Mary Claire Allvine, co-author of The Family CFO: The Couple's Business Plan for Love and Money. Just watch CNBC some morning. It's ESPN in a suit and tie.
Some economists argue that marriage makes financial sense precisely because it allows each partner to specialize in what he or she does best. But you can get into trouble if you use Mars and Venus notions as an excuse not to talk about what's up with the money.
"If you are in a marriage where your husband is handling the money and he's terrible at it, you feel you can't step in," says Caryl Rivers, co-author of Same Difference, a book about gender stereotypes. That is, if you even realize he's terrible at it. Fact is, there's little reason to suppose investing is really something men do better.
In the end, it was found that what husbands wanted and what wives wanted was pretty much the same; they just didn't realize it. Whatever they say in Hollywood, most great romances aren't a case of opposites attracting. In real life, we get married to people who share our goals: a family, a home, a secure future enjoying each other's company.
But you face one major challenge: Your co-CEO is just, well, not like you.
The two of you prefer different movies, have different taste in clothes and can't ever seem to agree about what to do on Sunday. Money, in particular, tends to be a delicate topic. All too often, conversations end with one partner walking away, saying, "You just don't understand."
Now if this really were a business, and not just a metaphor for marriage, you'd have hired consultants a long time ago to figure out what was wrong. But since the real problem here is the ancient state of mutual incomprehension between men and women, we don't even try.
Well, when it comes to getting through to each other about money, spouses generally have some work to do.
Men and women may not exactly be from different planets, but many still operate in distinct financial orbits. For all our supposed financial sophistication and equality, the vast majority of married couples still divide the family's financial labors along traditional lines, with women handling everyday spending and budgeting decisions while men plan and invest for long-term security.
Across the divide, misunderstanding often rules. The typical couple can't even agree, other research shows, on how much they earn or owe.
Almost all of our respondents admitted openly that money is a cause of tension in their marriage. Seven in 10 actually owned up to arguing about it -- in fact, money causes more fights than sex or even in-laws. In the poll's most eye-opening findings, men and women had dramatically different ideas about who does what with the family finances, and what their partners care about.
Husbands were especially clueless, tending to underestimate how much women care about almost every financial issue, from investing and saving for retirement to paying off debt. A hundred years after Freud, men still don't know what women want.
The gap between the financial issues that people care about most and what their spouses think they hold important may not be the Grand Canyon. But some couples will need an awfully big bridge to get across it.
For instance, a survey found that only 27% of men believe their wives think having the right investments is very important. Yet nearly half of women say they do care (approximately the same proportion as men).
Likewise, only 45% of men say that having cash stashed for emergencies is very important to their spouse vs. 67% of women who believe it's crucial.
Women come much closer in gauging what matters to men. If anything, they tend to give guys too much credit, believing their husbands care more about paying off debt and saving for big purchases than men actually do.
In real life, though, there's nothing funny about the arguments that can flare when financial roles are so divided. Consider Mark Haase, 37, a helicopter flight nurse from Reno, and his wife Becky, 47, a pediatric nurse manager. Like man husbands, Mark is in charge of the family's investing and long-term planning; Becky does the everyday spending, buying clothes for their two children and items for the house.
They don't talk much about money, both spouses say, but when they do, the discussion usually ends in a fight, mostly over spending. Says Mark: "Do we really need a new bedspread? The closet is full of linens.... Sixty dollars on crayons and paper for the kids? I don't want to deny them, but...." Counters Becky: "He doesn't understand how much things cost." Adds Mark: "The only time we really talk about money is when there's a problem."
Talking about money may also be challenging for many couples because men and women seem to have different levels of enthusiasm for the topic.
Consider: While half of men surveyed say they like to talk about money at social gatherings, only 22 percent of the women say the same. For some wives, the problem may stem from how their husbands approach the subject.
"Men have been taught this golf course, locker room banter they use to talk about money," says financial planner Mary Claire Allvine, co-author of The Family CFO: The Couple's Business Plan for Love and Money. Just watch CNBC some morning. It's ESPN in a suit and tie.
Some economists argue that marriage makes financial sense precisely because it allows each partner to specialize in what he or she does best. But you can get into trouble if you use Mars and Venus notions as an excuse not to talk about what's up with the money.
"If you are in a marriage where your husband is handling the money and he's terrible at it, you feel you can't step in," says Caryl Rivers, co-author of Same Difference, a book about gender stereotypes. That is, if you even realize he's terrible at it. Fact is, there's little reason to suppose investing is really something men do better.
In the end, it was found that what husbands wanted and what wives wanted was pretty much the same; they just didn't realize it. Whatever they say in Hollywood, most great romances aren't a case of opposites attracting. In real life, we get married to people who share our goals: a family, a home, a secure future enjoying each other's company.
Making Home Affordable Program Expansion Up To 125% LTV!
The Obama Administration announced yesterday that both Fannie Mae and Freddie Mac will support the expanded Making Home Affordable program. This will assist even more homeowners in sustaining homeownership through the Making Home Affordable Program. Consumers are now eligible for a LTV of up to 125% for both Fannie and Freddie programs. More soon...
Wednesday, July 1, 2009
Give a wedding gift they can really use.
With summer in full swing so is wedding season, and the invitations should be piling up on your kitchen table. Now if you are like everyone else that has been to a wedding, you think "what should I get for the bride and groom." Now instead of heading to your local Pottery Barn or Crate and Barrel to buy something off the ever boring bridal registry, why don't you give the couple something that they can really use, time with a financial planner.
Think about it, does the couple really need another picture frame or that set of steak knives? Or could they use some one on one time with a financial guru to help get their marriage off to a great financial start. So many couples do not have the money talk before the wedding and it's so important. Money is the most fought about topic in a marriage and the number one reason for divorce.
There is a down side in giving this gift, most financial planners tend to be more interested in long-term, rather than short-term, relationships with clients. However,
there are some planners willing to consider more flexible arrangements. For example, planners in the Garrett Planning Network will work for a flat fee per project or charge by the hour. Similarly, online services such as MyFinancialAdvice.com allow you to email or phone independent financial planners who are willing to answer questions on a wide range of financial topics. The hourly cost for these types of services varies from planner to planner, but $150 to $200 is typical.
Ideally, of course, you'll also want to find a planner who has experience in dealing with newlyweds and is familiar with the financial issues surrounding marriage and starting a new household. Now, some people might question whether much useful financial planning can get done in the course of a single hour and some might even suggest that giving them a one-hour gift is effectively setting them up to spend money on additional sessions on their own, sort of the financial equivalent of paying for the first book of a 32-volume encyclopedia set.
But I disagree. Granted, no one is going to put the bride and groom on the path to financial bliss in one hour. But a good planner should be able to help them create a budgeting and savings program, set up an emergency fund, get them signed up for 401(k)s and IRAs, suggest a few mutual funds, make sure their beneficiaries are up to date for any investment accounts and insurance policies they may already own, etc. In short, a planner should be able to help get them off to a good financial start.
By giving the happy couple a gift that they can not only use now but that will also pay them dividends in the years ahead you are giving the couple a head start in life as well as love, how many other wedding gifts can you say that about?
Think about it, does the couple really need another picture frame or that set of steak knives? Or could they use some one on one time with a financial guru to help get their marriage off to a great financial start. So many couples do not have the money talk before the wedding and it's so important. Money is the most fought about topic in a marriage and the number one reason for divorce.
There is a down side in giving this gift, most financial planners tend to be more interested in long-term, rather than short-term, relationships with clients. However,
there are some planners willing to consider more flexible arrangements. For example, planners in the Garrett Planning Network will work for a flat fee per project or charge by the hour. Similarly, online services such as MyFinancialAdvice.com allow you to email or phone independent financial planners who are willing to answer questions on a wide range of financial topics. The hourly cost for these types of services varies from planner to planner, but $150 to $200 is typical.
Ideally, of course, you'll also want to find a planner who has experience in dealing with newlyweds and is familiar with the financial issues surrounding marriage and starting a new household. Now, some people might question whether much useful financial planning can get done in the course of a single hour and some might even suggest that giving them a one-hour gift is effectively setting them up to spend money on additional sessions on their own, sort of the financial equivalent of paying for the first book of a 32-volume encyclopedia set.
But I disagree. Granted, no one is going to put the bride and groom on the path to financial bliss in one hour. But a good planner should be able to help them create a budgeting and savings program, set up an emergency fund, get them signed up for 401(k)s and IRAs, suggest a few mutual funds, make sure their beneficiaries are up to date for any investment accounts and insurance policies they may already own, etc. In short, a planner should be able to help get them off to a good financial start.
By giving the happy couple a gift that they can not only use now but that will also pay them dividends in the years ahead you are giving the couple a head start in life as well as love, how many other wedding gifts can you say that about?
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