September - October 2022

School Daze

The school year is back already and you can hear the mixed emotions of parents everywhere. The cheers of a little peace and quiet and the boos of the mountain of school supplies that need to be purchased. Here are some things that you may have to budget for throughout the school year.

A lot of attention has been focused on the escalating gas prices this year. Setting up a carpool is an efficient way to ease the burden on your gas tank. The more people in the carpool the less you will have to drive.

If you are fortunate enough to live close to the school then you can walk your children to school. You may even let them ride their bikes to school. You will want to go over all the bike safety rules though.

Watch the circulars and paper for tax-free shopping days. Many states allow a week where all clothes and supplies can be bought tax-free.

Many students in college are pursuing a degree that requires extensive computer use. The problem is that you may not have a computer or yours is very outdated. You may be able to include those costs into your financial aid and student loans. This can be easier than financing through the computer company because student loans generally carry a lower interest rates.

For other big purchase items like furniture and electronics, search for display models. These are things that were used for in-store displays and demonstrations. They may be a little dinged up but can save you a ton when the store is looking to get rid of it.

Avoid buying pre-packaged lunches from the grocery store. Instead buy the ingredients to make sandwiches. You will be saving yourself a considerable amount of money by taking a few extra minutes each night to prepare a lunch for the next day. You can also pack leftovers for your child's lunch. Find out beforehand if there is a way for them to reheat it, if not than just stick to food that does not need to be reheated.

You may also purchase school lunch tickets. There are also programs that are aimed at assisting families who have a limited income. Contact your school to find out what options may be available for school lunches.

Use cash when making purchases. Save extra throughout the summer if you have to but you don’t want to have to use your credit card on supplies so that you are paying them off over the next few months.

The beginning of the school year should come as no big surprise for anyone that has kids. This should allow you to properly budget for the upcoming school year. Continue to keep an eye on sales throughout the year and enjoy your child’s education.

Budget Boosters

I'm assumming that any extra money coming into the household is a good thing. The holiday season will sneak up on us faster than we think or it may be nice to cut away some of your debt. Many people are reluctant to take on the commitment of taking on an extra part time job, but there are some jobs that you should explore that can actually be enjoyable and not take away any extra time. There are also some jobs that you can do from your home.

A new popular choice for many people is using eBay to make money. You may have a collection of sorts that you don’t have much use for and can collect some bonus bucks. If you are an avid yard sale treasure hunter and know your way around the Internet then this may be a way to earn a little extra cash. There are easy-to-follow steps and tips on how to use eBay on their website.

Be careful though because you don’t want to buy a bunch of things and not get a good return on your money.

Some of you may have dreamed about getting paid to shop; now you may have a chance. Secret or mystery shoppers test and evaluate a company’s customer service. It would be pretty difficult for you to turn this into a full-time job with steady income, but it is a good way to make some additional money. You will want to make sure that you go through someone legit. Don’t pay someone promising to provide you with a list of companies. This information is available free on the Internet through registering with a mystery shopper group. Here are a few other things to consider before you agree to be a secret shopper.

(1. Make sure you know exactly what you are supposed to do on the job and how to fill out all the forms correctly. (2. Don’t agree to a job that you feel uncomfortable with. (3. Find out how much travel is involved. (4. Many companies take up to two months to get your money sent out to you. (5. Jobs can be very sporadic.

Here are two sites where you can search for legitimate secret shopper jobs.
www.mysteryshop.org/
www.ncpmscenter.org/

If you have any restaurant experience you may want to check out a popular restaurant looking for a part timer. One night of week earning tips waiting tables or serving drinks can always come in handy, especially if it is on the weekend.

There are also some work-at-home jobs that sound too good to be true, and they usually are. They flood your email everyday or they stick out of the classified ads with a lot of capitalization and exclamation points. They claim you can make $1,000 a week without leaving the couch. These not only won’t make you any money they more often than not cause you to lose your money. Any job listing that asks you to pay for the startup is usually not a legitimate program.

Never feel embarrassed by taking a second job. There is nothing wrong with wanting to earn a few more dollars.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

HERE IS OUR PENNY PINCHER FOR THIS MONTH

"In the past year, I have started buying the Sunday paper. The main reason for my purchase is for the coupons. Growing up I watched my mother clip coupons, and then organize them in her coupon book. I used to think that was such a waste of time, boy was I wrong. I know most stores now have their own savings cards that act like coupons but if you use your card coupons you would be amazed at how much money you really do save. Last week while I was grocery shopping I used my store card which saved me $28.93 and my coupons saves me $18.69 for a total savings of $47.62. 

-Shannon M. WA

Mutual Funds for Beginners

The world of stocks and bonds can be intimidating and cause many people to avoid it at all costs. There is an easier way of investing that has fewer risks than conventional trading. Mutual funds allow you to invest in the stock market without having to be an expert.

When it comes to beginners, they may think of the stock market as picking a company and then buying some of their stock watching it radically fluctuate while they second-guess themselves. By investing your money into a single stock you are taking about a fifty-fifty chance of either losing or making money. Mutual funds have less risk because you have your money spread out or diversified among a group of specific companies.

With mutual funds, an investor is putting their money/faith into a company that invests that money into a number of different companies in which they believe are good investments. The mutual funds have experts on staff that stay current on all pertinent information and trends and then trades based upon that knowledge.

A mutual fund has the option of investing your money in different ways. They may choose to only invest in bonds while some may choose stocks. Others may invest in both. The good thing is that there are thousands of mutual funds to choose from so you are bound to find one that you are comfortable with.

The fee you pay the mutual fund is called a load. Front-end loads are charged when you deposit money, while back-end loads are extracted when you withdraw your money. A load is generally around 3% and is used to pay for brokers who manage the accounts. There are also no-load mutual funds that charge different fees based on account management. Whether you choose a front or back-end load or a no-load fund, it is based on your own specific situation and can be something you look for when choosing the right mutual fund.

One important thing with investing is patience. You have to commit this money over the long term. There is no way to make a quick buck. Only when you have the money to invest is it a good idea. If you are struggling with making payments or are behind on credit payments you may want to wait until you have the necessary means to invest with.

You also do not want to panic when one of your investments is having a down period. It may be hard to trust someone else with your money, especially when the chosen market is suffering, but it is important that you have confidence in what they are doing.

Like all investing there are some risks. The mutual fund company that you have entrusted may be investing in higher risk companies than you agreed upon.

It is harder to follow the status on your own because there can be a large number of companies that your mutual fund is investing in.

You will have minimal control over your investment options. The professionals will be the ones choosing on your behalf.

You may also find that the amount of money that you are paying the mutual fund money is too high compared to the return you are getting from the investments.

Like most everything you want to shop around to find the company that offers the best deals with minimal fees.

This article is just an introduction to the possibilities of investing. It is important that you do more research and ask as many questions as possible so you fully understand how your money is going to be used. Below are a few more resources for you to explore.

RESOURCES

WEB:
www.mutualfunds.about.com
www.moneycentral.msn.com/investor
www.bankrate.com/brm/news.advice

BOOKS:
Neatest Little Guide to Mutual Fund Investing, Jason Kelly
An easy to read guide to get you started.
David Scott’s Guide to Investing in Mutual Funds, David Scott

COMPANIES:
Vanguard - www.vanguard.com
Fidelity Investments - www.fidelity.com
Franklin Templeton - www.franklintempleton.com

Picking Up the Pieces

Last month we featured some chores you needed to do to prepare for and make it through divorce proceedings. This month we will include some things that you will want to do after the divorce. Here are a few things that you want to consider.

If you have kids than you will want to make arrangements for child support or alimony. Alimony is given to the spouse who was dependent upon the other. Each alimony case will be different and the amounts awarded are dependent upon a number of factors.

Child support is given to the parent who has taken custody of the children and is used to pay for costs associated with raising the child. If you are having difficulties collecting child support there are groups that will assist you in getting it. Alimony and child support can be agreed upon between the two parties or if there is no agreement reached it will be determined by a judge according to your state’s specific laws.

Some people may be in for a bigger lifestyle change if they were previously a stay at home parent. It may have been awhile since you have had a full-time job. It is important that you get your resume together and start applying for qualified positions. It is a rare occasion where you can survive off of your former spouse’s alimony.

There are online resources and people-for-hire that will assist you with putting your resume together. If you want to save some money ask a friend who has recently looked for a job. Even if you have little experience there are job opportunities out there for everyone. It may not start out with a dream job, but it will help you with the bills.

If you are currently working, you will want to contact your HR department so that you can make changes to all of your tax and insurance information. With your insurance you will want to drop your former spouse off of your plan. You can adjust the amount of coverage you have leaving you with less money being taken out of your check.

You also may want to change your beneficiary in your life insurance plan. With taxes you will obviously have to change your marital status. You may have to change your withholdings. Some companies may have a way to have child support or alimony automatically withdrawn from your paycheck.

If you haven’t yet, you will want to make a visit to your bank. You may have to close a previous account or open a new savings and checking account. If there were any decisions about banking investments made during the divorce negotiations than you will have to make the appropriate changes. If your former spouse’s consent is needed you can go to the bank together or you can do it through lawyers.

Setting up a meeting with a personal banker can be beneficial as they are more than happy to answer any questions you might have. They can also share investment options that may help you in the long run.

If you were the person in the relationship that did not handle the finances, bill paying and budgets can be overwhelming. Consulting with a credit counselor or private banker can help assist you. There is plenty of educational material that can teach you how to budget and pay bills.

You can also contact your utility providers and other creditors who may have easy to pay programs. Automatic payments are an easy way to assure that your bill gets paid on time and in full each month. If you are on a tight budget however you may want to be cautious because you do not want to be overdrawn.

You may have to downsize some. If you are struggling with the car or house you will want to strongly consider trading out for something more affordable.

Another thing that some women might consider is whether or not they are going to change their name back. For some this helps them regain their own identity. If you choose to do so than you will have to contact the companies that have your old name as their contact information. You will probably have to provide documentation of the divorce.

Though we have focused on some of the financial aspects that come with divorce there are obviously emotional issues and strains that accompany divorce. It is important to consult with support groups or a doctor if you are having a difficult time with your new lifestyle.

Questions & Answers

Q: I'm trying to catch up on
my bills and was thinking
of either a home equity loan or borrowing against my 401(k).

A: Neither decision is the best for borrowing from. You are putting either your home or your retirement at risk. I would explore more options first. Take a look at your budget and find some areas
that you can reduce or eliminate all together.

Q: I'm 15 years old. Can 1
open my own checking
account?

A: Many banks won't allow
you to open your own
checking account until you turn 18. Shop around because there are some who allow 16 year olds to sign up.

You could also sign up for a joint account with your parents. They would hold authorization over it until you were 18 and could get your own account.

You can still open a savings
account though. Many banks allow you to open a savings account at any age. You could also ask for an ATM card that is linked to the savings account.

In the News

Bank issued gift cards will soon have some changes. The Office of the Comptroller of the Currency (OCC) has come up with guidelines for gift cards. These include:

• The expiration date on the front of the card.
• Fees for monthly maintenance, dormancy or usage.
• A toll-free number or a Web site where consumers can get other
  information about their cards. They will also provide a form when
  issuing the card that includes the following information.
• The name of the issuing bank.
• Other fees that may apply to the gift card, such as replacement fees
  and foreign currency conversion, and how the fees will be charged.
• Whether the card can be used in conjunction with another method of payment.
• How consumers can make complaints about their cards.
• Whether the issuer can change the terms of the gift card.

My Financial Journal

I have to admit that I am getting excited for the fall. Not much beats the cool weather, beautiful fall scenery, and of course football.

A few months ago I was offered a job running a poker tournament for a lounge. It was every Monday night from 5:30-10:30. I would get paid per person that would play that night. I also kept track of points for all the players. It figured out to around $50 every Monday night. Nothing to write home about, but it was an extra $200 each month. The money has come in very handy to pay the extra doctor’s bills or other baby necessities.

Even though I may have moaned and groaned about having to work on Mondays from 8 am to 10 pm it was never that bad and it was pretty easy money. If any of you do pursue some extra hours somewhere I encourage you to find something that you enjoy. I can’t lie, retail is just not for me full time, and I have nothing but the utmost respect for those who have been doing it most of their professional life. It takes great patience and a good attitude… anyways before I stray too much. I think that I would enjoy one night a week or weekend day assisting customers at a music or electronic store. I enjoy electronics and entertainment and could happily relate to the customer.

My point is that it is a win-win situation when you are making money and enjoy using that free time. There is no point in doing something if it is going to make you miserable. For example, If you don’t like smelling like smoke and getting harassed, don’t look for a job as a bartender, but if you enjoy reading books maybe inquire at the local bookstore. (Disclaimer: If the previous paragraph has confused you because of the rambling it is to be blamed on the enthusiasm of the writer who is anxiously awaiting the birth of his first child. Thank you.)

I have mentioned before about my misuse of credit cards throughout my college years. It’s hard because I never held any value to the amount of money that I was spending. It was like it wasn’t even money at all and that I would never have to pay it back. Maybe I was hoping that I would magically come across some money to pay it off.

It wasn’t until I was getting calls everyday and was denied a school loan when I realized that I was in trouble. But still I made little effort to improve my situation. I would send them twenty bucks a month hoping that keep them mildly satisfied. I avoided the creditors at all costs and a couple of times would just end up in shouting matches that didn’t go anywhere.

So like the myth I avoided talking to the creditors because I thought they would think that I was a liar. (Probably because the few times I did talk to them I lied.)

I finally did speak with a particular representative who was about my age and knew my situation as a college student in over my head. He assisted me in a payoff setup to help my standing with them. (Basically getting me off their Severe Delinquency Red List) He even helped and congratulated me when I told them that I was going to be setup on a debt management plan.

So, even though it took awhile I found someone there willing to help me and without yelling we found a solution instead of blaming each other. (For awhile I blamed THEM for MY misuse of their card.)

I’m sure next month I will be able to continue to rant on about numerous financial blunders and remedies. Until next month, Good luck and spend wisely.

Student Loan Relief

Search online for your college textbooks. You can save over 50% off the price that they sell in the college bookstore.

Here are some sites where you can search for your books.

www.half.ebay.com
www.amazon.com
www.bn.com
www.campusbooks.com
www.bigwords.com

Use these sites to compare prices and choose the lowest price. Still compare it with the bookstore as they may have a special deal to help them compete with the popularity of online purchasing.

Credit Card Myths

For amny people who are in financial distress credit cards play a major role. Here are a few misconceptions and myths about credit cards.

Myth: I wouldn’t be pre-approved for a credit card if they didn’t think that I would be a responsible customer.

Fact: Pre-approved offers are not based on your individual credit worthiness. Offers are sent to hundreds of different people based on a mailing list. So that special rate that you think you are getting is also going to a few thousand others. These offers usually lead people who are already in credit card debt to acquire another unnecessary card.

Myth: My credit is fine because I pay the minimum payment on time each month.

Fact: Even though you may be preventing any credit damage you are wasting a lot of money by only paying the minimum. By only paying the minimum you are allowing interest to continue to stack up on any remaining balance. The best thing you can do is to pay your amount in full each month. If you are unable to do so, any amount more than the minimum will help you cut your pay back timeframe and save you thousands in interest. If you pay less than the minimum than you can be charged with late fees on top of the accruing interest.

Myth: If I cut up my credit card the account is closed and there are no more worries.

Fact: Cutting up your card is a good way to physically restrain you from using the card, but that account will still be open. Sometimes an unused open line of credit can be damaging to your credit. You need to call the company and request that the account be closed. You are still of course responsible for any of the remaining balance and/or other charges associated with that card.

Myth: Card companies will contact you and ask for your credit card number and social security for identification.

Fact: You will never want to give this information to anyone that contacts you. You will sometimes be asked your social security number to bring up an account or to verify identification. If someone calls you and requests this type of information ask for their name and contact number. Then you will want to use the number you have for the company and call them back. Only give this information if you know exactly with whom you are talking to.

This is the same with any emails that you receive. Don’t send this information over the Internet. Again, use the phone number you have for them (either on the back of your card or on your statement) and contact them to confirm the information they requested.

Myth: If you can’t afford a payment it is useless to call them because they won’t believe you and will think that you are making excuses.

Fact: You may have had run-ins with less than polite collectors in the past, but don’t let this deter you from contacting them BEFORE your payment is due to discuss your options. Each company has different programs that can help you get back on track. If you do come across someone who is not helpful, request to speak with someone else until you can talk with someone who will reasonably discuss your options with you. Their ultimate goal is for them to get their money back and if they have to assist you they usually will.

Myth: If I’m heading to college I should never get a credit card.

Fact: Credit cards can actually be beneficial if used responsibly. By getting a credit card you are establishing your credit. So if you or a loved one is heading to school it may be a good idea to find a card with a low interest. By not having a credit history you may not be able to get a loan, a cell phone, or even an apartment, as these all require a credit report check and like the saying goes “no credit is just as bad as bad credit.” By using the card and paying it in full each month you will be establishing good credit that will benefit you in the future.

Myth: I should use cash advances on my card to help me pay for other bills.

Fact: Using cash advances to pay other bills is basically throwing away your money. With interest and fees that are charged cash advances cost you a lot more than the original amount that you take out. If you are using credit cards to pay other bills you may get caught in a continuing cycle of debt.