The Crafty Dollar » Personal Finance

How Will Credit Card Reform Affect You?

Kerri — Tue, 23 Feb 2010 01:40:22 +0000

There are a number of ways the new laws restrict credit card companies. Credit card companies have had constraints placed on them in certain ways and have had to figure out new ways to rip people off. Yes, I said it. I guess it’s plain to see that this is how credit card companies work. They’re sneaky, they like fine print, and they will do things to harm you when you least expect it. Here are some bullet points about the new rules:

Credit card companies can no longer raise rates on existing balances
Companies can no longer charge a fee for going above a credit limit unless you sign up for a service
Bills must be mailed at least 21 days before the payment is due
Companies must provide 45 days notice prior to changing fee amounts or other substantial account characteristics or term
Credit card companies can still cancel you or lower your limit without giving you notice

There are also a number of other changes and other things that have not changed. I recommend reading the below links to read all about the changes. One thing is for sure – when you deal with credit card companies, you are playing with fire or you are playing with snakes. In either case, the fire can become out of control or you will be bitten.

USA Today story on Credit Card Changes

US Credit Card Charge Offs Up, Deliquencies Down

New Credit Card Rules Allow for Maneuvering

Dave Ramsey’s Valentine’s Day Cheap Date Ideas

Kerri — Sun, 07 Feb 2010 05:15:05 +0000

Dave Ramsey has posted a brief list of ideas for cheap dates on his website. If you aren’t familiar with Dave Ramsey, he is a personal finance guru. He isn’t the type of guy talking about advanced high finance or anything along those lines. The main principles he talks about are simple – avoiding debt by saving, using good behavior with your money, and doing what you love. He is also a Christian although you’d need to listen to his radio show or podcast for a while to really hear that. His books are very encouraging if you are looking to pay down credit card debt or debt in general. Follow this link here for his Valentine’s Day date ideas. I highly recommend listening to his free podcast that you can get at the iTunes store as a free download.

Request Your Free Credit Report – But Watch For Strings

Kerri — Wed, 03 Feb 2010 05:31:27 +0000

I’m sure you’re familiar with the odd commercials done by FreeCreditReport.com, I try to resist the urge to watch them because they are so annoying, but yet, they are entertaining. What’s not completely apparent is that the free credit report isn’t entirely free. I wouldn’t call it false advertising, but it is just a tad misleading. The commercials are powered by Experian, one of the three major credit bureaus, and while you do receive a free credit report, do be careful about the strings attached to the offer.

Requesting the free credit report through FreeCreditReport.com actually enrolls you in their Triple Advantage Credit Monitoring program. If you don’t request to cancel your free 7-day trial membership, you will be billed $14.95 for each month that you continue in the program. Their monitoring program watches the three major credit bureaus (Experian, Equifax, and TransUnion) for any key changes that occur in your credit, while allowing you unfettered access to your Experian credit report any time you want.

Save yourself $15 every month and do the monitoring yourself. The federal government allows by law a free credit report from each of the three credit bureaus each year at http://annualcreditreport.com. You can spread these three reports out through the year. You can do it yourself! Monitor your credit yourself and don’t fall for the sales pitches.

Paying a Mortgage Off Early

Kerri — Mon, 01 Feb 2010 05:59:40 +0000

If you have a mortgage, you have probably considered the path of paying additional payments, bi-weekly payments, or some sort of accelerated plan to pay it early. The question is: does it make sense? Financial gurus of all walks say that if you have a very low interest rate, do not pay your mortgage early. The conventional wisdom is that if you can invest your money at 10% in the stock market via mutual funds over the long haul, it doesn’t make sense to eliminate a 6% or 7% interest rate on debt. The concept is that your money can earn more invested. However, many of us just want to be out of debt. We want to own a home free and clear as soon as possible. The numbers crunching CPA stuff makes sense to me, but I’d just prefer to own the home or have the most equity.

I have a few links here so you can make up your own minds:

Wisebread – 30 year mortgage breakdown

Early Mortgage Pay-off Calculator

Don’t Rush To Pay Off That Mortgage – MSN Article

AARP – Should You Pay Your Mortgage Early

Dave Ramsey – Mortgage Options To Avoid

Periodic Look at Our Budget – Starting 2010 off Right

Kerri — Sat, 23 Jan 2010 05:37:06 +0000

We stopped to look at our budget for 2010 and figure out where we’re going this year and what our goals are. This is a little tough to put on the internet. However, I’m pretty confident that we’re doing things pretty well. This budget allows for some things we must do – save, finish off the last few months of my student loan, and of course regularly set aside money for important things like church camp, clothing, and life insurance. I guess I should note that really several things in our budget are essentially saving: clothing and church camps. This also gives you a glimpse into the life of living in the second largest city in America in terms of area. We spend a lot on gasoline and tolls getting to church and back as well as to my husband’s jobs. By putting everything down on paper, we know where everything is going and what we’ve got at any time.

Braces	3.53%
Tolls	2.09%
Church Camps 2010	1.31%
Elec & Gas	5.22%
Water	1.96%
Gasoline	9.14%
Cable, Internet, Phone	3.29%
Cell phone	3.21%
Prescription	0.39%
Life Insurance	2.59%
Car Insurance	1.30%
Mortgage	22.55%
Haircuts	2.46%
Groceries	7.84%
Household Miscellaneous	1.57%
Student Loan	8.36%
Chiropractor Co-pay	0.68%
School lunches & Allowances	2.25%
Clothing	2.61%
Total Scheduled Expenses	82.33%
Leftover Money	17.67%

Thriving on Less: Simplifying in a Tough Economy (Ebook)

Kerri — Thu, 21 Jan 2010 05:22:21 +0000

Thriving on Less is a nice e-book I found online yesterday. Click here for a free download in PDF format.

From the introduction:

The recent economic recession has a lot of people worried, about their jobs, their businesses, their homes and their bills. When your income is dropping or in jeopardy and you still have a mountain of bills to pay, things can get pretty scary.

However, tough economic times do not have to be a time of struggles! If you look for the opportunity in the middle of difficulty, as Mr. Einstein suggested, then tough economic times become an opportunity to transform your life.

Table of Contents

Introduction
1. A Simple Lifestyle
2. Focus on the Essentials
3. Thriving on Less, Not Struggling
4. Focusing on Enough, Not More
5. Make Small Financial Changes First
6. Look at Large Expenses for the Long Term
7. Changing Your Spending Habits
8. A Guide to Getting Out of Debt
9. Tools for a Frugal Life
10. Resources

Check your Credit Card Statements!

Kerri — Tue, 05 Jan 2010 05:35:02 +0000

Be sure to check your credit card statements. Since a new law goes into effect next month dictating new terms to credit card companies, these companies are pulling all sorts of tactics to raise fees and rates prior to the changes going into effect. We are not big on credit cards for several reasons – (1) you spend more when you use them, (2) interest costs you money, and (3) credit card companies tend to do sneaky things to harm you financially. Do you have a story about how a credit card company did something to you? There are a number of stories about companies raising rates or fees before the final phase of the Credit Card Act of 2009 kicks in at the beginning of February 2010. See below:

Interest raised from 12% to 24% to 28% with no reason or explanation

Beall’s, Ann Taylor, Victoria’s Secret and others charge $1 per month for paper statements

Credit Card Companies Increasing Rates to Bypass Reform Act?

New Credit Card Practices Costing Consumers

Frugality to the Extreme

Kerri — Tue, 22 Dec 2009 20:16:40 +0000

I came across this Youtube video of the family that won the Dave Ramsey Bahamas vacation contest for paying off the most debt. They have some very interesting methods including bartering, sewing, and of course inventive and conservative cooking. Check out the big deep freeze. I would probably stop short of the reusable toilet cloths!

Sales after Christmas

Kerri — Sat, 19 Dec 2009 13:43:12 +0000

We have begun to talk about what type of goods we might target in a few of the Christmas sales. There are the obvious things that are heavily discounted: Christmas lights, wrapping paper, bows, Christmas candy and other holiday oriented decorations. However, with three kids in the house we always think about what we could possibly buy for them as well. Winter clothing is generally discounted after Christmas, especially in January. Additionally, there are sales on turkeys and hams after Christmas so there are opportunities to stock up on food. Online shopping is one area that you need to read up on before deciding where to shop. Of course, people have fun going to stores, but since online shopping has begun to be so huge many retailers have special deals online after Christmas. I’ve posted some links that aggregate Christmas and after Christmas sales below:

Christmas and After Christmas Sales at Dealio

Online Christmas and After Christmas Sales

Cutting Costs in a Recession: What to Cut & What NOT to Cut

Kerri — Sun, 15 Nov 2009 05:21:37 +0000

Although many articles focus on the recession and how you should react to it in your personal behavior, I think that many of the topics being discussed are relevant regardless of economic conditions. I decided to make a short study of what one might cut and what wouldn’t make sense to cut. It’s amazing to me to think of some of the things that are cut in the budget of the average person.

What NOT to cut:

Nutrition. If you want to cut your food budget, stop eating out in restaurants. When cutting your food budget there is a tendency to switch to the worst cuts of meat and the cheapest foods. Your health is so valuable. Good foods can still be purchased on a budget. Buy a bag of frozen chicken breasts, cans of albacore tuna, and of course you can buy healthy pastas on a budget as well. I recently saw a bag of a dozen apples for $2.29. Do cut the junk food lunches at fast food restaurants and frivolous food spending on peripheral snack items. Good breads can be purchased at the bread maker’s discount store. We buy great Orowheat breads all the time at our local bread outlet store. We have some friends in Anthem, AZ outside of Phoenix and they recently had to make a decision about drinking water. Their city’s drinking water is very bad. They made the decision to continue purchasing drinking water.
Vitamin supplements. If you feel better when taking vitamins and supplements – keep buying them. My husband takes a fish oil tablet and a niacin tablet and doesn’t feel right unless he has them.
Insurance – Health, Auto, and Life. If you have assets to protect, by all means maintain the proper limits of liability coverage on your auto insurance. Don’t be tempted to reduce your limits. If you are the breadwinner for your family, don’t cancel your life insurance. Also, don’t be tempted to go into high deductible health insurance plans unless you have significant personal savings. It’s so tempting to go with lesser insurance plans when you see that you might save $50-$100 per month. However, consider the cost you could ultimately pay for going with a bargain basement insurance plan.
Exercise. If you absolutely must cancel a gym membership, make plans immediately to put together some sort of home routine and this may require a small investment in a few DVDs, a mat, and some small weights. Your health will suffer if you’ve been going to the gym for a long time and then suddenly quit altogether. I would recommend cutting cable or satellite TV before cutting your health club membership.
Home Air Quality. Don’t buy the cheap filters for your furnace or air conditioning unit. Spending just a few extra dollars keeps your air clean and helps your furnace or air conditioner to run efficiently.
Automotive Maintenance. Changing your oil, air filter, or other wear items helps your vehicle to run efficiently and safely. Don’t put off a brake job. Your safety is at stake. Don’t avoid rotating your tires – it could result in your tires wearing out more rapidly.
Land Line Phone. This is probably a big surprise since most people think it’s just a waste of money if you’re carrying a cell phone. Nobody calls you on it anyway, right? But, what about the emergency services 911 capability you lose when you cut a landline? Do you have children? If you must, call your phone company and tell them you don’t use your landline phone but want to keep the ability to make emergency outgoing calls to 911. Our local provider has a discounted plan for this type of customer.
Employer Match Retirement Plans. This is a big mistake to cut if your employer is giving you free money in the form of a match. Your contributions are also pre-tax, so you reduce your taxable income. If you must cut this, only cut the amount of your contribution that isn’t matched by your employer.

What to Cut:

Fast Food Lunches. Cut these immediately. It’s bad for you and also just flat out lazy. If you’re in an office environment and lunches are an essential part of business, figure out a way to do them only when necessary. On days when you can, just take your lunch.
Cable or Satellite TV. This is one of the first things to cut. Either step down to a package of lesser cost or eliminate it altogether. $60 per month is $720 per year!
Name Brand Foods. I’ve done taste tests on my family between Cheetos and the ALDI store brand and nobody could tell the difference. We just decided that at least half of what we’re eating could go away.
Name Brand Cleansers and Detergents.
Unnecessary Energy Spending. Slight adjustments to your home’s thermostat can result in big savings. Could you stand to sleep with your thermostat on 66 degrees instead of 72? My husband grew up with his parents putting the thermostat on 60 degrees at night.
Traditional Light Bulbs. We’ve made the switch to Compact Fluorescents in every spot we possibly can. Maybe you might not want to put curly Q fluorescents in your living room or where you have guests and want nice warm lighting, but you could certainly use them in your garage or your closets. Be careful where you use them though – they can heat up if you have them on for a long time in an upside down setting. You may say that the initial cost is high, but your energy savings will be significant. These bulbs also last a long time. Compact flourescents are also now available for exterior lighting.
Entertainment. Stop buying DVDs and CDs. Rent DVDs from kiosks like Redbox and download songs you like individually from Rhapsody or iTunes. Don’t go out to movies. Wait until the movie comes out on DVD.
Transportation. Are you driving a newer car that is worth $25,000 and has a $384.00 loan payment? Maybe you could sell it and buy something more reasonable that has no payment. Is your $25,000 car really more reliable than a $8,000 car that is well maintained? Do you have somebody you could carpool with to work? Make a contact! Do you live in a city with efficient and safe public transportation? Use it.
Beauty and Style. Do you have a high maintenance hairstyle with coloring? Maybe you could go with something a little more basic. I used to have highlights but decided to move away from coloring my hair due to the cost. My husband has decided to go with simple clothing for work and avoid the fashion show.
Expensive Coffee at Starbucks or other similar places.
Spending Money at Vending Machines.
Sodas and Candy