Family Services, Inc. Blog

Its Official!

2012-01-23T13:53:00.002-05:00

2012 Youth Financial Literacy Summit. Check it out!

Consumers Remain Committed to Using Credit Cards

2012-01-04T07:50:00.004-05:00

National Foundation for Credit Counseling Poll Reveals Top Financial Resolutions

Washington, DC – According to the National Foundation for Credit Counseling (NFCC) December online poll, consumers remain very connected to their credit cards. When asked to rank their 2012 financial resolutions, only six percent of more than 2,300 respondents indicated that decreasing dependence on credit cards was their number one goal.

“At first glance, that statistic could appear to be a warning sign of future trouble. However, credit is not the problem. Instead, it is the misuse of credit that leads people into financial distress,” said Gail Cunningham, spokesperson for the NFCC.

Balancing the continuing reliance upon credit, an encouraging statistic from the poll is that the overwhelming majority, 62 percent, selected decreasing debt as their focus for 2012. “If consumers are able to decrease their debt load, continuing to use credit responsibly will help them meet the goal selected by 24 percent of respondents, that of increasing their credit score,” continued Cunningham.

While decreasing debt is always a positive, consumers should not neglect savings, yet that is exactly what respondents appear to be doing. Only eight percent of those weighing in ranked saving as their most important resolution. Without the security of a well-funded emergency savings account, consumers are living without a financial safety net, as unplanned expenses will occur, usually at the worst possible time.

The poll also revealed some interesting trending from 2010 when the identical question was posed. Showing the largest percentage difference between the years, the 2010 poll noted 69 percent of respondents were most interested in decreasing debt, compared to 62 percent in 2011.

The second largest year-over-year difference involved improving the credit score, with that category posting a six percent increase. In 2010, 18 percent of consumers chose increasing their credit score as their main goal, while in 2011, 24 percent selected that category as most important in the New Year. This increase indicates that consumers understand the relationship between the credit score and obtaining credit, confirming their interest in continuing to have access to credit.

“The poll suggests that consumers have recognized the importance of achieving financial stability, and intend to action. Nonetheless, even though paying down debt and improving the credit score are positive steps, the low priority placed on savings is disturbing,” said Cunningham.

The actual poll question and answers are as follows:

My #1 financial New Year’s resolution for 2012 is to:

A. Decrease debt 62% (December 2010 poll = 69%)

B. Increase savings 8% (December 2010 poll = 7%)

C. Improve my credit score 24% (December 2010 poll = 18%)

D. Decrease my dependence on credit cards 6% (December 2010 poll = 7%)

Note: The NFCC’s December Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from December 1 - 31, 2011 and was answered by 2,319 individuals.

How much will you spend on Christmas?

2011-12-02T14:19:00.000-05:00

NFCC POLL REVEALS FORTY PERCENT OF AMERICANS WILL SPEND ZERO ON HOLIDAY PURCHASES

Washington, DC – The November poll hosted on the National Foundation for Credit Counseling (NFCC) website, www.DebtAdvice.org, revealed that 40 percent of respondents do not intend to spend any money on holiday purchases, as they anticipate experiencing further financial distress in the future.

The poll sends a strong signal that in spite of the increase in sales during Black Friday and Cyber Monday, a significant number of people lack enough confidence in their financial future to begin spending, even on traditional holiday expenses.

“Historically, consumers have put aside their financial concerns during the holidays, even if to their detriment, and spent at some level,” said Gail Cunningham, spokesperson for the NFCC. “These figures provide a snapshot of the desperate situation in which consumers find themselves, and how seriously they are taking their situation.”

Of note is the statistically significant increase reflected in the year-over-year trend. The NFCC posed the identical set of poll questions in the same month one year ago. Between November 2010 and November 2011, there was a six percentage point increase in the number of consumers who indicated they will spend zero dollars during the holiday season, evidence of the depth of the financial despair in the country.

Also disturbing is that slightly more than half of all poll respondents indicated they would cut back on holiday spending, as their financial situation is worse this year than last. Combining those who will cut back on spending with those who will not spend at all, a full 91 percent of consumers are clearly concerned enough about their financial circumstances that they will remain on the spending sidelines this holiday season.

Looking at the two categories with the lowest responses, seven percent revealed that they will spend as they did in 2010, and a modest three percent will spend more than they did last year.

“Consumers are doing themselves a disservice if they do not reach out to a legitimate credit counseling agency for help surviving these difficult economic times, as there may be solutions available that have not been considered,” continued Cunningham.

For professional assistance regarding your financial questions, consider an appointment with a certified consumer credit counselor at an NFCC Member Agency. To be automatically connected to the Agency closest to you, dial (800) 388-2227, or to locate a counselor online go to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832.

The November poll question and results are as follows:

This holiday season I will…

A. Spend as I did last year because my financial life is stable = 7% (2010 = 7%)

B. Cut back on spending, since I am worse off financially this year = 51% (2010 = 57%)

C. Spend more than last year because I am in a better financial position = 3% (2010 = 2%)

D. Not spend at all, because I anticipate further financial distress = 40% (2010 = 34%)

FIVE THINGS TO DO BEFORE LEAVING HOME ON BLACK FRIDAY

2011-11-22T11:35:00.001-05:00

Washington, DC – For many, shopping on Black Friday has become as much of a Thanksgiving tradition as turkey, with friends and families whipping up a shopping strategy along with the dressing and gravy.

The National Foundation for Credit Counseling advises consumers to shop smart by planning ahead. Following are five steps consumers should take before hitting the stores on Black Friday, helping them enjoy their shopping excursion without harming their pocketbook.

· Beware of special credit card offers – Issuers are tempting consumers by offering incentives such as no interest balance transfers, extra perks by meeting certain spending levels, and increased cash back in specified categories. However, no deal is a good deal if you can’t afford it. Responsible shoppers will commit to spending no more than what they can repay in full when the bill arrives, regardless of how many bonuses are tacked on.

· Know what you currently owe – Review all existing debt obligations, tallying what you’ve already spent and committed to repay. This reality check may put a temporary damper on your holiday mood, but that’s better than digging the financial hole even deeper.

· Create a plan – Knowing who you’re shopping for, what items you hope to find, and most importantly, how much you intend to spend is critical to a successful shopping day. Commit in advance to stick to your plan, and enlist an accountability partner if necessary, as it is very easy to be caught up in the excitement of the moment and get off course.

· Find the best deals at home – Shop from home before heading for the stores. Compare prices online, as well as local circulars for sales in your area. Be aware of time restrictions, as some prices may only apply during certain time periods throughout the day. Once the actual shopping begins, going directly to the store which has your item at a good price will save you time, gas, money and frustration.

· Remove all unnecessary cards from your wallet – Spreading purchases across multiple cards makes you feel as though you’re charging less and can trick you into overspending. Designate one card for holiday spending, and remove all others from your wallet. This will not only help you stay within your budget, but will also lessen the damage in case of loss or theft.

“It is important for consumers to shop with their head, not their heart,” said Gail Cunningham, spokesperson for the NFCC. “Preparing in advance will help you stick to your budget, in spite of the decorations, carols and Santa himself beckoning you to spend.”

The Great American Smokeout on November 17th

2011-11-16T13:39:00.001-05:00

ARE YOU ADDICTED TO YOUR BAD FINANCIAL HABITS?

Washington, DC - The Great American Smokeout on November 17^th is a day dedicated to helping consumers overcome their addiction to the smoking habit. The nationwide event encourages people to put down their cigarettes in favor of a healthier lifestyle.

The National Foundation for Credit Counseling (NFCC) also supports a healthy lifestyle, one which includes financial health. “In addition to the known health risks associated with smoking, it is also damaging to your pocketbook,” said Gail Cunningham, spokesperson for the NFCC. “A pack-a-day- habit can easily cost $150 per month, often taking money from priority expenses such as housing, groceries or gasoline.”

Smoking certainly isn’t the only habit that can be costly to your financial well-being, nor is it the only one that can become addictive. In this economic environment where consumers often struggle to make ends meet, they may resort to desperate measures when in need of money. Since quick fixes are often habit-forming, the NFCC recommends evaluating the following behaviors, giving consideration to kicking your own financial addictions.

Payday Loans - On the surface, getting the cash you need may seem worth it at any cost. But it’s that cost and the addictive nature of seemingly easy money that can become financially back-breaking. To obtain a payday loan, you write a post-dated check for the amount of the loan plus any fees the lender tacks on. You then receive the amount of money you initially needed to borrow, promising to pay back that amount plus the fees. The term of the typical payday loan is one to two weeks, at which point the lender cashes your post-dated check. Most payday lenders will charge a certain dollar amount per $100 borrowed. For example, they may charge $15 for every $100 they loan you. Thus, if you needed $300 until your next paycheck arrived, your post-dated check would be for $345. What’s $45 when you desperately need $300? Here’s the catch…that $45 represents an Annual Percentage Rate of 390 percent. You wouldn’t dream of taking out any other type of loan with triple-digit interest. And, if this isn’t bad enough, many consumers cannot repay the loan at term, and end up rolling it over, thus adding on more fees and interest.

Pawn Shops – People can do several things at pawn shops. They can borrow money by putting up something of value as collateral in exchange for cash, they can sell their merchandise outright, or they can buy the merchandise that is for sale at the shop. There are bargains at pawn shops, but only for those buying the merchandise, not for the sellers. Typically, the person pawning the merchandise receives a sum of money (usually nowhere near the true value of the item) which he or she agrees to repay with interest. If the loan is repaid by the end of the term, the merchandise is returned to the owner. If the loan is not repaid, the consumer can renew the loan, or the merchandise is forfeited. What’s the problem? Again, it’s the interest and fees, with APRs typically in the triple-digit range once all charges are included. Further, some studies have shown that only 60 percent of pawners end up reclaiming their merchandise, thus they have essentially sold an item for cents on the dollar, something they wouldn’t otherwise do.

Rent-to-Own – Everyone wants nice things, and if the family is coming over for the holidays, you may be tempted to spruce up your home. A quick trip to the furniture or electronics store could confirm that a new living room set and flat panel TV are out of your price range. Then you notice an ad for similar items with affordable monthly payments. It seems too good to be true, and guess what, it is. The problem once again lies in the interest and fees. For instance, if you bought a $200 item and agreed to make the seemingly affordable weekly payments of $15 for 78 weeks (basically one and one-half years), you’d end up paying $1,170 for that $200 item at an APR of 388 percent. Adding insult to injury, it is likely that you could have purchased the same item at a traditional store for a fraction of the overall cost.

“People wonder why anyone would agree to the terms imposed by payday loan companies, pawn shops and rent-to-own businesses. The answer is that consumers who utilize such concerns typically do not qualify for loans from banks or credit unions, and would not be approved for in-store lines of credit. Nonetheless, people need to understand that even though there is always a cost to credit, when that cost becomes unreasonable, the consumer is better off considering other options or doing without. The real answer lies in breaking your addiction to these easy money solutions by probing to understand the root of the problem and resolving it,” Cunningham continued.

If you need assistance breaking your financial bad habits, reach out to an NFCC Member Agency where you’ll find legitimate help through a trained and certified credit counselor. To be automatically connected to the agency closest to you, dial (800) 388-2227, or to locate an agency online, go to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832.

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help more than three million consumers through close to 800 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.

South Carolinians Are Getting Out of Debt with Help From Family Services, Inc.

2011-11-04T10:35:00.000-04:00

Individuals and families should be advised that there is help available to clean up personal financial wreckage fueled by the recession. Michaele Pena, Director of Family Services, Inc’s Consumer Credit Counseling Services encourages consumers to be proactive and seek free credit counseling. Family Services, Inc.’s Debt Management Program is designed to help reduce high interest rates and set up a payment plan to pay back unsecured debt. There is no minimum debt that is required to participate in the program, “You do not have to be in a delinquent status to explore the debt management program or enroll,” advises Pena, “Get help early rather than later. One of our licensed financial counselors will work with you and outline options that may help you improve your financial situation.”

Family Services, Inc.’s Debt Management Program works to help credit burdened consumers pay off their unsecured debt within five years and receive free financial literacy education. Consumers are invited to attend free counseling over the phone or in person to learn where their money is spent unnecessarily, develop a personal budget that they can live with, how to take the initial steps towards improving their credit by paying their monthly bills in a timely/consistent manner, and determine if they qualify for the Debt Management Program. In 2011’s third quarter, 9 previously credit burdened individuals successfully completed Family Services, Inc.’s Debt Management Program and collectively paid back $223,176 while they were enrolled in the program. Year to date, 45 credit burdened individuals successfully completed the program and collectively paying back $1,241,499; an average of $27,588.

“Clients who successfully complete the program are always very thankful for our help. The debt management program provides an alternative to filing bankruptcy.” Pena states, “I am quick to remind our clients that they did the hard work, with guidance and encouragement from their counselor and the Debt Management Program staff. Graduates of the Debt Management Program prove that financial hardships can be turned around to the positive. It takes dedication to live within your means financially and following the program to be debt free from all unsecured debts.” For information on how you may benefit from Family Services, Inc.’s Debt Management Program contact Michaela Pena at 843735.7840 or visit www.fsisc.org

OVERWHELMING MAJORITY OF CONSUMERS WOULD CHANGE FINANCIAL INSTITUTIONS TO AVOID PAYING DEBIT CARD FEE

2011-11-02T09:13:00.000-04:00

OVERWHELMING MAJORITY OF CONSUMERS WOULD CHANGE FINANCIAL INSTITUTIONS TO AVOID PAYING DEBIT CARD FEE

NFCC Advises Consumers to Talk Before They Walk

Washington, DC – The October online poll conducted by the National Foundation for Credit Counseling (NFCC) revealed that only three percent of more than 2,400 respondents would continue using their current debit card as usual if a fee were imposed.

“People have become very aware of how they spend their money, even small amounts, and that’s a good thing,” said Gail Cunningham, spokesperson for the NFCC. “The poll results send a strong message, but at this point that message remains a sentiment. Only time will tell if people will follow through and actually change long-ingrained habits.”

As financial institutions evaluate their options, consumers should do the same and be prepared for any changes that might impact their accounts. The NFCC offers the following pros and cons of financial decisions based on the poll results:

· Find a bank that doesn’t charge debit card fees = 62 percent

o Pro – Keeps the availability of a debit card while avoiding fees.

o Con – Changing financial institutions is difficult, particularly if you have direct deposits or drafts associated with your checking account. If you elect to change, don’t close the old account until three months after you open the new one, thus allowing time for all transfers to be in place. Check out the convenience of that bank’s ATM machines and usage fees, along with the cost of new checks.

· Begin paying with cash = 22 percent

o Pro – Controls spending, as you can’t spend beyond what you have.

o Con – Carrying large amounts of cash can be dangerous and inconvenient.

· Begin paying for purchases by check = 8 percent

o Pro – Maximizes the use of the existing checking account which may already have a fee associated with it.

o Con – Using checks can be inconvenient, with some places not accepting that form of payment. Additionally, there is the chance of over-drafting the account and incurring penalties.

· Begin charging purchases = 5 percent

o Pro – Charging creates a credit file and resulting credit score. If handled responsibly, this can work in a person’s favor for future financial needs.

o Con – Credit makes overspending easy. If not handled properly, charging goods and services can result in financial disaster.

· Keep using my debit card as usual = 3 percent

o Pro – Avoids the potential hassle of changing banks.

o Con – Adds a new fee per the terms of the financial institution.

“As with any financial decision, consumers need to do their homework and evaluate all options to determine which is best for their lifestyle,” continued Cunningham. “The bottom line is that banks have the right to assess fees, and consumers have the right to choose who they do business with. Before leaving, however, consumers should ask the bank to waive the fee, citing how long they’ve been a customer, how many bank products they are using, and associated balances. No one wants to lose a valuable customer, so be sure to talk before you walk.”

The October poll question and results are as follows:

If my bank were to impose a fee related to debit card use, I would…

A .Keep using my debit card as usual = 3%

B. Find a bank that doesn’t charge debit card fees = 62%

C. Begin paying for purchases with cash = 22%

D. Begin paying for purchases by check = 8%

E. Begin charging my purchases = 5%

Note: The NFCC’s October Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from October 1 - 31, 2011 and was answered by 2,404 individuals.

The Dangers of Co-Signing Credit Applications

2011-10-18T16:22:00.003-04:00

by: John Ulzheimer

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires that people under 21 have a co-signer or a job in order to open a credit card. Further, the same law requires lenders to confirm an applicant's capacity to pay their debt for any other loan. This has thrust the prospect of co-signing for loans (or asking for someone to co-sign for you) into a new light of popularity.

When you co-sign for a loan or a credit card you are taking on equal responsibility and equal liability for the repayment of the debt. This means you are essentially responsible for payments if the loan goes delinquent. And, your credit reports will reflect the status of the account, which can include any negative credit reporting.

There's a fairly popular misconception that you can co-sign for a loan and not be liable for its repayment. This so-called "co-signer for credit only" designation doesn't exist in any legitimate lending environment and is not recognized by lenders. You either are or are not liable for payment, and when you co-sign you are definitely liable.

Notwithstanding the dangers of the debt going into default, co-signing can be problematic even if the debt's payments are always made on time. Simply being in debt is half the problem when you co-sign. Almost all lenders pull your credit reports and credit scores when you apply for credit and co-signed debts will appear on your credit reports. This means they will influence your credit scores and can cause them to be lower than if you had not co-signed.

Your debt to income ratio, the amount you owe relative to the amount you make, is also a key factor in mortgage financing. The more you owe the less attractive you're going to look to other lenders, even if all of your payments have been made on time.

There's a reason why someone has asked you to co-sign for them. They either don't make enough money to qualify for the loan on their own or their credit isn't good enough to stand on its own. Either way, you're getting involved with a co-applicant who isn't an acceptable credit risk on their own. Keep this in mind before you sign the dotted line because once you do, you've fully committed.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.

2nd Annual Youth Financial Literacy Summit

2011-10-10T10:28:00.000-04:00

FOR IMMEDIATE RELEASE – October 10, 2011

UPCOMING NON-PROFIT EVENT PROMOTES 2^nd ANNUAL YOUTH FINANCIAL LITERACY EDUCATION SUMMIT DURING THE AFTERNOON.

North Charleston, South Carolina – The Homeownership Resource Center, a division of Family Services, Inc.’s financial literacy education programs are designed to improve the financial literacy and budgeting skills of individuals and families to help them learn how to more effectively manage their money, improve their credit and make smart spending decisions. Financial Literacy Education is particularly critical for teens and young adults. Teens that learn to budget and save their money are able make smart spending decisions and build healthy financial behaviors that will positively impact their future “We have noticed an increase in requests for financial literacy education from parents and students alike” states Carolyn Lecque, Family Services, Inc.’s Facilitator and Trainer, “it is so important that young adults learn about the value of money and how to manage their money so that they will become responsible consumers who are not at risk from financial pitfalls such as predatory lending or abusing credit cards.”

To educate and create awareness of the benefits and importance of managing money and credit to youth in the Charleston area, The Homeownership Resource Center in collaboration with Junior Achievement will host their 2^nd Annual free “Youth Financial Literacy Education” Summit on Saturday, March 10, 2012 at Charleston Southern University in North Charleston from 1:00 p.m. until 5:00 p.m. The Financial Literacy Summit will conclude with two popular Christian bands (TBD) beginning at 6:00pm. The concert is free for anyone to attend.

YOUTH FINANCIAL LITERACY EDUCTION SUMMIT DETAILS:

WHAT: Day of financial workshops for youths 13-22.
Evening of live Christian music for youths and adults (TBD)

WHEN: Saturday, March 10, 2012

Financial Literacy Education Classes 1:00 p.m. – 5:00 p.m.

Christian Rock Concert will begin at 6:00 p.m.

WHERE: Charleston Southern University, 9200 University Boulevard, North Charleston, SC 29406

WHY: Help our youth reach the peak of financial literacy and success

HOW MUCH: FREE

For additional information, to register for summit contact:

Lauren Jonas, AmeriCorps VISTA Volunteer

The Homeownership Resource Center, a division of Family Services, Inc.

Direct: 843.735.7846 Email: ljonas@fsisc.org Online: www.fsisc.org

MyMoneyCheckUp

2011-10-04T14:36:00.002-04:00

National Foundation for Credit Counseling Launches MyMoneyCheckUp™

by Gail Cunningham

Comprehensive financial self-assessment tool to help consumers evaluate financial health,
make positive changes

Washington, DC – The National Foundation for Credit Counseling (NFCC) today launched a new online financial resource tool for consumers, MyMoneyCheckUp™. This free tool, available on the NFCC Web site, www.NFCC.org, or at www.MyMoneyCheckUp.org, is designed to provide an assessment of a consumer’s overall financial health and behavior in four designated areas of personal finance: budgeting and credit management, saving and investing, planning for retirement, and managing home equity.

This new tool was created to align with the U.S. Treasury’s Financial Education Core Competencies, and is an example of successful collaboration between community-based nonprofit organizations, academic institutions, and the public and private sectors.

“The NFCC is proud to bring this new financial education resource to consumers,” said Susan C. Keating, president and CEO of the NFCC. “People are eager to take control of their financial well-being, and the MyMoneyCheckUp tool is definitely the place to start.”

The tool provides customized feedback to users, allowing individuals and families to monitor and assess their financial lives, and consequently, adjust their behaviors in order to maximize their economic empowerment.

After answering a series of topic-specific questions, a personalized assessment of the individual’s overall financial health and associated behaviors is generated. With areas of concern identified, the analysis suggests changes that consumers are encouraged to implement in order to become more financially independent. The traditional red, yellow and green traffic light colors signal whether the consumer should continue on their current money path (green), proceed with caution (yellow), or stop and make a change (red). Individuals can also complete an optional budget to further help them assess their financial health.

NFCC’s implementation of this tool was made possible by a contribution from Citi Community Development.

-more-

“Online platforms that permit underserved people to monitor their economic progress are extremely valuable in making financial empowerment sustainable,” said Natalie Abatemarco, Director of National Programs for Citi Community Development. “Citi has developed and supports similar tools in conjunction with other programs that provide access to savings and credit-building, and we will continue to work with our partners to enable people to remain actively engaged in their own economic empowerment.”

The original version of this tool – created for research purposes - was developed through the support of the Social Security Administration’s Financial Literacy Research Consortium as well as an Engagement Impact grant from The Ohio State University’s Office of University Outreach and Engagement, in partnership with the following researchers: Stephanie Moulton & Cäzilia Loibl, The Ohio State University; J. Michael Collins, University of Wisconsin, and Anya Savikhin, University of Chicago.

Although the tool is now available to any consumer on www.NFCC.org or www.MyMoneyCheckUp.org, it will also be offered through NFCC Member Agencies and partners beginning in the fourth quarter of 2011, thereby increasing awareness and participation.

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HOT TOPIC! Do's and Don't for telling your spouse about debt

2011-10-03T14:43:00.003-04:00

NFCC PRESS RELEASE

For Immediate Release

Contact:

October 3, 2011 Gail Cunningham

(202) 677-4355 - direct

(240) 672-2700 – cell

gcunningham@nfcc.org

ONE IN FOUR AMERICANS WOULD NOT INFORM SPOUSE

OF FINANCIAL DIFFICULTIES

Washington, DC – The National Foundation for Credit Counseling (NFCC) September online poll revealed that twenty-four percent of more than 1,400 respondents would not tell their spouse if experiencing financial difficulties.

Reasons given for withholding the information included the fear that it would worry the spouse (nine percent); that the spouse is unaware of the debt (eight percent); that it would damage the relationship (seven percent).

“Even if well-intentioned, withholding financial information from a spouse is not a sign of a healthy relationship, either emotional or financial,” said Gail Cunningham, spokesperson for the NFCC. “It is encouraging that the majority, 76 percent, would share the information with their spouse so that they could work together to resolve the situation.”

Even though having a discussion around money can be difficult, particularly if it is long overdue, it is a topic that ideally should be addressed early in a relationship, preferably before tying the knot. “People bring financial baggage into a relationship that they often don’t deal with until there is a problem, making it challenging to have a constructive conversation,” continued Cunningham.

To help facilitate a positive conversation about financial issues, the NFCC recommends the following Do’s and Don’ts of a successful discussion:

· Don’t approach the subject in the heat of battle. Instead, set aside a time that is convenient and non-threatening for both parties.

· Do make it a casual conversation about a serious subject, respecting the fact that each person has valid opinions and concerns.

· Do be honest about your current financial situation. If things have gone south, continuing the same lifestyle that was possible before the change in income is simply unrealistic.

· Do be open to adjusting your lifestyle. If spending cutbacks or second jobs are necessary, resist whining. It’s likely that your situation will be temporary, and you could end up regretting the pity party you hosted.

· Don’t hide income or debt. This is known as financial infidelity. Instead, bring financial documents, including a recent credit report, pay stubs, bank statements, insurance policies, debts and investments to the table.

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Don’t point the finger of blame. That’s a real conversation stopper.

· Do probe to understand long-held financial attitudes, often present since childhood and ingrained by observing how parents addressed money issues.

· Do acknowledge that one may be a saver and one a spender, understanding that there are benefits to both mindsets and agreeing to learn from each other’s tendencies.

Once everything is out in the open, it is time to make decisions about how to handle your finances in the future:

· Do make a plan to deal with any skeletons that came out of the financial closet. Such surprises can greatly compromise your ability to obtain future credit opportunities. Now is the time to deal with them.

· Do construct a new joint budget that includes savings. Emergency situations drop into your life at the most inopportune times. Without a rainy day fund, the financial hole becomes even deeper.

· Do decide which person will be responsible for paying the monthly bills. It is likely that one person will be a good fit for this task, while the other finds it burdensome.

· Do allow each person to have independence by setting aside money to be spent at his or her discretion.

· Do decide upon short-term and long-term goals. It’s ok to have individual goals, but you should have family goals, too.

· Do talk about loaning money to family members and friends. Decide if it’s something you’re each comfortable with, or should be taboo.

· Do talk about caring for your parents as they age, and how to appropriately plan for their financial needs, if necessary.

“Court records show that financial stress is one of the main causes of divorce. Taking action now could prevent a disaster later,” commented Cunningham.

For professional assistance working through financial problems that have never been addressed, consider an appointment with a certified consumer credit counselor at an NFCC Member Agency. To be automatically connected to the Agency closest to you, dial (800) 388-2227, or to locate a counselor online go to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832.

The September poll question and results are as follows:

If I were experiencing financial difficulties, I

A. Would tell my spouse so that we could work together to resolve = 76%

B. Would not tell my spouse, as they have no idea about the debt = 8%

C. Would not tell my spouse, as it would worry them = 9%

D. Would not tell my spouse, as doing so would damage our relationship = 7%

Note: The NFCC’s September Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from September 1 - 30, 2011 and was answered by 1,430 individuals.

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The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help over three million consumers through close to 800 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.

The Changing Debt Relief Industry – One Year Later

2011-09-30T10:51:00.000-04:00

by Andrew Housser – Freedom Financial Network, LLC – September 26, 2011

New Federal Trade Commission (FTC) rules regulating the debt relief industry took effect one year ago – changes that included the well-known advance-fee ban, prohibiting debt relief companies from collecting any fees until after a result has been negotiated for and accepted by a customer. Because of these FTC rules, the entire industry has changed – and continues to evolve – dramatically. In fact, combined with an uncertain economy, fears of another recession, and rising consumer debt, the industry is experiencing the most rapidly changing business environment in its short history.

Consumer debt is not going away. The latest statistics on U.S. debt, issued in July by the Federal Reserve, show that Americans owe $2.45 trillion in consumer debt – the highest level since 2008. Of that amount, $792.5 billion is revolving debt – and although significantly lower than its peak of $972.2 billion in August 2008, it is still an enormous number. Recent data also has shown that the average American who carries credit card debt has a balance of nearly $15,000. While this figure is down slightly from the previous quarter, the fact remains that many Americans are in serious debt hardship and, in many cases, must look to obtain help in resolving that debt.

The FTC rules seek to protect those very consumers from predatory businesses looking to take advantage of them. This is considered a major step in the right direction. Over the past year, the regulations have made it easier to distinguish companies that get results for their clients from those that don’t. This result helps consumers as well as benefits the entire debt settlement industry. It levels the playing field. In addition, the regulations are an asset for the creditors with whom the industry negotiates by allowing consumers to accumulate funds more quickly in order to resolve their debts.

Pre-FTC Industry Evolution
In order to understand the impact of the rules on the industry and on consumers today, it is helpful to understand the climate – and problems – that led to the changes.

The debt settlement industry initially formed out of an unmet need of consumers struggling with debt. These consumers who have turned to debt settlement come from all economic strata. All, however, share two common characteristics: they suffer from unmanageable levels of consumer debt, primarily credit card debt; and they have few, if any, debt resolution alternatives available to them.

Unlike consumers with stable financial foundations, the typical debt settlement client either does not own a home, or cannot refinance his or her home due to lack of equity. The client also generally has a high debt-to-income ratio and a severely damaged credit score. For this most distressed consumer constituency, making minimum monthly payments, or paying their bills through a debt management program, which typically provides only modest monthly payment relief, has been out of reach. This has historically left bankruptcy as the only alternative for many.

While some mom-and-pop operations began offering debt settlement services as early as the 1990s, it was not until the early 2000s that the industry took off. As the economy sputtered in the wake of the dot-com crash, and as consumer debt exploded, the number of firms selling or providing debt settlement services began to grow dramatically. Then, three significant catalysts unfolded, leading to an explosion in the industry:

1. Many non-profit credit counseling companies began facing regulatory problems, in part due to misuse of their non-profit status.

2. The 2005 bankruptcy reform made it more difficult and expensive for consumers to qualify for bankruptcy (in particular, Chapter 7).

3. The mortgage market imploded, making it next to impossible for a consumer to use home equity as a way to pay down credit card debt.

This led to a significant decline in options available to consumers, and the gap was filled in by debt settlement companies. The industry grew from a dozen participants in 2002 to more than 1,000 firms by 2009. This rapid growth, not unexpectedly, had consequences. The practice of charging monthly fees before debts were actually resolved worked relatively well when the industry was in its nascent stage: a small number of companies, most of which took pride in their work, and maintained a strong focus on customer results. But the extraordinarily low barrier to entry and the ability to charge upfront fees led to an influx of competitors who did not share the same commitment to customer results as did the industry’s early participants.

Ultimately, consumers could not tell a good results-oriented company from a less-scrupulous one because all of the marketing claims, websites and advertisements looked the same. Many consumers signed up with companies whose results did not back up their claims. Creditors and collectors became frustrated with the industry because so many companies were collecting significant upfront fees from their clients and leaving little money for actual resolution of debts. The good players in the debt settlement industry suffered as the entire industry began to be painted with the same negative brush.

The New Regulations

Against that landscape came increased regulation at the state level, and finally, federal regulation in the form of the FTC’s debt relief amendments to the Telemarketing Sales Rule. In summary, the new rules, which the FTC details at http://www.ftc.gov/opa/2010/07/tsr.shtm, seek to protect consumers with these key provisions:

Debt relief providers must accurately represent the results consumers can expect to achieve.
Debt relief providers must make specific disclosures.
Debt relief providers cannot charge any fees whatsoever before negotiating a resolution on a customer’s credit card or other unsecured debt. Specifically, companies cannot collect fees for debt relief services until the debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts. Furthermore, the customer must approve the negotiated resolution before any fee can be charged.

For debt relief businesses, this advance-fee ban has had serious consequences. Since most of these companies relied on monthly or upfront fees to cover the cost of acquiring new customers and running their businesses, the delay in cash flow has had a significant impact.

The ban has forced many companies out of business. While this includes most of the unscrupulous players, it also has created significant challenges for the principled companies that remain. The first challenge they face is continuing to invest in customer service and negotiations with creditors when no revenue is coming in the door. These firms must find ways to be as efficient as possible while maintaining the highest level of customer service and performing high-level negotiations with creditors.

Another challenge that remaining debt relief companies face is keeping their customers committed to their programs when they have no initial up-front investment, or no “skin in the game.” Whether debt relief or other business, when consumers invest in their own well-being at the beginning of a program, chances are higher they will continue and see the process through. For the debt relief industry, this is especially true.

Now, however, debt relief companies must find other ways to engage customers and maintain their commitment. Providing successful resolution as early as possible in the program and keeping steady contact with customers as they progress through the program are key factors. Companies also are seeking to negotiate individual debts earlier in the program to generate revenue and to provide the customer confidence and motivation.

The good news is that the companies remaining in the debt relief business are ones that are here to stay for the long term, willing to invest effort and resources, and willing – and able – to lose money for at least a few years in order to build a sustainable business model with no advance fees. The upside: An industry filled with companies that operate with a responsible, long-term view is more viable from a business perspective, and better for consumers.

Benefits

For the consumer, the advance-fee ban means that enrollees pay no fee of any sort whatsoever unless and until the debt settlement company negotiates a settlement – and the consumer accepts the negotiated settlement. The new regulations give consumers the confidence to know that they will pay only for results.

As a result of the advance-fee ban, the debt settlement industry has been purged of most of the unscrupulous players, leaving a core of compliant, professional debt settlement companies serving consumers well. These companies understand that if they are not meeting their customers’ needs, they will not be in business for long.

On the flip side, however, buyers must still beware. As with most rules, there are those who look to exploit the loopholes and/or exceptions, and find ways to do so. Consumers today must be able to discern whether a debt relief company is one of the ethical players or not. To help, the American Fair Credit Council (AFCC), formerly The Association of Settlement Companies, has publicly endorsed the FTC rules and is limiting membership to those companies that have agreed to adopt the no-advance-fee model.

Consumers dealing with an AFCC member can have confidence of a fair deal, and gain assurance that the company is conducting honest and fair negotiations without any incentive of any kind. They clearly are benefiting from this change; AFCC members are on pace to settle more than $1 billion of unsecured debt this year alone.

Despite the challenges, providers are seeing many benefits from the rules as well. Debt relief companies are experiencing greater acceptance by the collection and recovery communities. In this time of economic uncertainty and lingering effects of the recession, collectors are realizing that it often makes more sense to negotiate a reasonable settlement for a consumer than to spend time filing a suit, recording a judgment and then trying to enforce it.

In addition, collection and recovery professionals now have a much easier time distinguishing the truly compliant debt settlement companies from the advance-fee “loopholers”; a single “secret shopper” call to ask how the company’s fee structure works will typically tell the caller all he/she needs to know. The good news is that debt relief companies that are complying with the advance fee ban allow funds to get to creditors much more quickly. This makes both the creditors and the customers happy – a true win-win.

Conclusion

The new FTC regulations have effected more changes on the debt relief industry in just the past year than most industries experience over their lifetimes. And the changes will continue, as companies become more efficient, and develop and expand services. But the needs of the consumers who need debt relief services have not changed. They care about solving their debt problems, getting back on solid financial footing, and finding advocates who will help them, ethically and honestly. The debt relief businesses that focus on these issues will be those that thrive.

Andrew Housser is the co-founder and CEO of Freedom Financial Network, LLC (FFN), based in San Mateo, Calif., which provides comprehensive consumer finance resolution services. Freedom Debt Relief, LLC (FDR), a wholly owned subsidiary of FFN, provides consumer credit advocacy, also known as debt settlement, services. Working as an independent advocate for consumers to negotiate with creditors and lower principal balances due, the company has resolved more than $1 billion in debt for nearly 100,000 clients since 2002.

Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College. He was awarded the Northern California Ernst & Young Entrepreneur of the Year Award in 2008.

Americans Strongly Value Paying Down Debt Over Saving

2011-09-01T11:45:00.000-04:00

Washington, DC – According tothe August poll hosted on the National Foundation for Credit Counseling (NFCC)website, 89 percent of more than 2,900 respondents value paying down debt oversaving money.

“People often debate which ismore important, to be debt free or to have a robust savings account, and theanswer is both,” said Gail Cunningham, spokesperson for the NFCC. “As important as it is to handle debtresponsibly, the truth of the matter is that the unplanned emergency isinevitable, and savvy consumers will recognize this and prepare for it.”

January 1959 was the firstmonth that the Bureau of Economic Analysis provided savings data. According to that initial report, thepersonal savings rate in the United States at that point was 8.3 percent ofdisposable income, equating to the average person saving approximatelyone-month’s take-home income per year.

History has shown that therate of savings increases during difficult economic times, as consumers beginto cut back on their purchases. Correspondingly, savings typically decline during good economic times asis evidenced by the rate of savings falling below 1.0 percent before the lastrecession which began at the end of 2007. Even though the savings rate has recently climbed to approximately 5percent, it is far less than the savings in some years past.

Admittedly, it is difficultto save during times of inflation and job loss. The fact of the matter is that each person only has a certain amount ofdisposable income, and when he or she has to pay more for everyday commodities,it cuts into the amount available for saving, making a bad situation evenworse.

Making people feel morecomfortable with their lack of savings has been access to credit, with someusing credit not only as a convenience, but as a piggy bank. “Credit replaced savings as the family’ssafety net, with some arguing that savings was unnecessary since they couldcharge or borrow their way out of any unplanned event,” continued Cunningham.

Times are different now, andconsumers know it, with the new normal for credit shaping up before oureyes. Access to credit has diminishedtotally for some, while credit lines have been lowered for others, making relianceon credit as a rescue tool in an emergency not an option for many.

Further, as the NFCC’s surveyreflects, controlling debt has become paramount for consumers, with studiesindicating that new purchases are more likely to be paid for with a debit cardthan credit, thus keeping personal debt at a manageable level and freeing upmoney for savings.

Consumers appear to havelearned their lesson about over-spending. Now they need to focus on the other side of the equation: saving. The best use of the money that was previouslygoing to pay off creditors is to begin or build up personal savings in thefollowing five key areas:

Rainy day fund - covers the everyday lifeemergencies such as home or vehicle maintenance, insurance co-pays anddeductibles, etc.

Income replacement account - sustains you in the event of a jobloss, major medical event, divorce, etc.

Downpayment for a mortgage – a significant downpayment will putyou in a better buying position, as well as lower the amount you have to borrow

Known future expenses – plan in advance for upcoming majorexpenses such as education, vehicles, vacations, etc.

Retirement – start planning today to secure yourtomorrow, as even small amounts of money invested over time can make thedifference in how you live during your senior years

“In bad times, people saveout of a fear of tomorrow, and in good times they spend as if there were notomorrow,” said Cunningham. “To turnthis savings/spending cycle into financial stability, consumers should recognizethe unarguable importance of savings and develop a systematic plan to meettheir personal savings goals.”

If you need help gettingstarted, reach out to your local NFCC Member Agency. To be automatically connected to the Agencyclosest to you, dial (800) 388-2227, or to locate a counselor online go to www.DebtAdvice.org. Forassistance in Spanish, dial (800) 682-9832.

The August poll question and results are as follows:

Which is more important to you?

A. Paying down debt = 89%

B. Increasing savings = 11%

Note: The NFCC’sAugust Financial Literacy Opinion Index was conducted via the homepage of theNFCC Web site (www.DebtAdvice.org)from August 1 - 31, 2011 and was answered by 2,928 individuals.

Should I Buy a House Because the Rates Are So Low?

2011-08-18T16:01:00.010-04:00

By: John Ulzheimer

Home values have plummeted across the county. Mortgage interest rates continue to hover between 4 and 5%, a historical low. Both seem to suggest it's a good time to buy a house. So is now the time to pull the trigger on a new mortgage?

There are a few things you should consider before you start looking for a house. First, how comfortable would you be if you were to become "upside-down?" That means you would owe more on the home than it's actually worth.

Property values continue to fall and there's really nothing to indicate they will stabilize anytime soon. Point being, you might be buying on the way down rather than at the bottom or even on the way up. Today some 28% of homeowners are in that same position and trust me, most of them wish they weren't.

Second, don't buy a house simply because the rates are low. Too many people are focusing just on the interest rates and that's a bad idea. Remember, when you borrow $250,000 to finance a home, you still owe someone $250,000. Just because the loan has a very low interest rate doesn't make you any less in debt than someone who has a horribly high interest rate.

If you're going to buy a house then do so because you want the home, you love the neighborhood, the school district is good, or you're tired of renting. Don't do it just because the rates are low. Think of the low rate as being the cherry on top, not the ice cream on the bottom.

Just because you're hearing advertisements for incredibly low interest rates it certainly doesn't mean that you'll actually qualify for those rates. You better have killer FICO credit scores and you better have them at all three of the credit reporting agencies. Remember, mortgage lenders pull all three of your credit reports and all three of your FICO scores and then use the middle of your three scores on which to base their decision.

And finally, you may have to pony up a 20% down payment to get those really low rates. The world of mortgage lending has changed dramatically since the end of 2007. There are no more "liar loans" (when you would tell someone how much you made and nobody verified the accuracy). There are no more "110 LTVs" (loan that were 110% of the appraised value of the home). Sanity has worked it's way back into the mortgage lending environment, which means better credit is required and income has to be, well, real income.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.

Majority of Americans Do Not Have Money Available To Meet An Unplanned Expense

2011-08-10T09:47:00.002-04:00

This article is courtesy of the National Foundation for Credit Counseling.

The National Foundation for Credit Counseling's (NFCC) July online poll revealed that 64 percent of Americans would utilize a source other than their savings account to satisfy a $1,000 unplanned expense.

The largest number of close to 2,700 respondents, 36 percent, said they would tap their savings account to fund the unplanned expense. Utilizing rainy day funds for an emergency is exactly why a person saves, to protect them against the unknown. However, the remaining 64 percent are in a much different situation, living on a slippery financial slope.

"Without adequate savings, consumers have poor resolution choices when an emergency arises," said Gail Cunningham, spokesperson for the NFCC. "People often say that can't afford to save, but the truth is that they can't afford not to."

The survey revealed that to resolve the problem, 17 percent of respondents indicated they would borrow the money from friends or family. Asking those close to you for a loan can be awkward, and potentially negatively impact the relationship. Further, it can lead to "serial borrowing," with the borrower always leaning on someone else to solve his or her financial problems.

Perhaps even more troubling is that another 17 percent said that they would neglect existing obligations in order to satisfy the emergency need. This option can easily snowball out of control and have serious consequences. Skipping the rent or mortgage payment and neglecting to pay credit cards or loans will cause late fees to be added to the debt, putting negative marks on the credit report, resulting in a lower credit score. Well-meaning individuals who are already living on the financial edge may never be able to catch up, exacerbating the problem for months or years down the road.

The next highest number of responses was in the category of selling or pawing assets, with 12 percent choosing this option. Disposing of unwanted or unused items can be a positive way to raise funds. However, no one ever wants to be in a position of having to sell items at a bargain basement prices out of desperation. If you have items you can do without, the time to liquidate is when you're in charge of the sales price, putting the proceeds into a savings account.

The resolution options of taking out a loan or obtaining a cash advance from a credit card were each selected by the least number of respondents, nine percent. The low number of individuals choosing these categories could indicate a lack of access to credit, which might be a good thing, as taking on new debt would put stress on existing obligations, the last thing someone in a financial crisis needs to do.

"Selecting any option other than taking the money from savings should be a red flag," continued Cunningham. "If saving money has always seemed out of reach, there is no better time than now to get to the root of the problem and protect yourself, your family and your financial future."

If you need help finding hidden money in your budget, reach out to a trained NFCC Certified Credit Counselor at Family Services, Inc., a NFCC Member Agency serving South Carolina. To be automatically connected to the NFCC Member Agency closest to your, dial 800.388.2227, or go online to www.DebtAdvice.org. For help in Spanish, call 800.682.9832.

The July poll question and results are as follows:

If you needed $1,000 for an unplanned expense, where would you turn to find the money?

Your savings account= 36%

Take out a loan= 9%

Borrow from friends or family= 17%

Cash advance on your credit card= 9%

Disregard other monthly expenses= 17%

Sell or pawn assets= 12%

Note: The NFCC's July Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from July 1-31, 2011 and was answered by 2,667 individuals.

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help over three million consumers through close to 800 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call 800.388.2227, (en Español 800.682.9823) or visit www.nfcc.org. Visit the NFCC on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and on their blog: http://financialeducation.nfcc.org

Downgrade Your Debt

2011-08-09T13:45:00.004-04:00

This article is courtesy of Feed the Pig. Copyright 2011 American Institute of Certified Public Accountants.

Credit and debt are two of the nation's hot topics this year. And, as you may know, the two are closely related. Last Friday, Jme McCoy asked via Facebook, "In trying to pay off credit card debt, is it better to pay off the highest interest card first or the highest balance card first?" Here is the answer, along with other tips for managing your credit and debt.

Minimize interest. In general, if you have more than one credit card, you want to pay off the card with the highest interest rate first. Pay the minimum payment due to your lower interest rate card(s) and then put the rest of your payment resources toward the card with the highest interest rate. This strategy will help minimize your interest expenditure.

Max it out. You payment, that is. You should always try to pay more than the required minimum payment. Often the minimum payment due is barely more than the finance charges that month, which means consistently paying the minimum can lead you to carrying your balance for years and barely putting a dent in it.

Think before you close. When working to get out of debt, many immediately want to close their credit cards once they are paid off. Although it can hurt you to have too many credit accounts, cancelling a credit card could negatively affect your credit utilization rate, a major component in the calculation of your overall credit score. Your credit utilization rate is the amount of credit you are currently using in comparison to how much you have available. If you close one credit card while still carrying a large balance on another, it can actually lower your credit score, since you appear to be close to maxing out your total available credit.

Know your limits. Most credit card companies report your balances and payment history to credit reporting agencies, but some may not report your credit card limits. When your credit limits aren't reported, as is sometimes the case if you have no-limit credit cards, your scores may drop. This is because without knowing your credit limit, most credit scoring models don't know how to accurately calculate your credit utilization rate; the lower your credit utilization rate the better.

Remember the sooner you pay off your credit cards the better. Check out this Credit Card Pay Off Calculator to help determine what it will take to pay off your balance, and what changes you can make to meet your repayment goals. Visit http://www.feedthepig.org/ for more money saving tips.

Learn how to you can downgrade your debt through Family Services, Inc.'s Debt Management Program by clicking here.

If You Want to Improve Your FICO Scores…Paying Off Credit Debt Reigns Supreme

2011-07-18T08:24:00.001-04:00

When it comes to boosting your FICO credit scores there are a variety of strategies that will yield varying amounts of improvement. Many people believe that getting negative information removed from your credit reports is the number one way to increase your scores. This is correct but only if the consumer is successful at getting most, if not all, of the negative information removed. Getting one of your twelve collections removed isn’t going to do anything for your scores.

A much more actionable (and realistic) way to increase your scores is to pay off debt. Not only is this a proven way to earn better scores but also it’s practically immediate. Paying down debt can result in a better score in less than 30 days, which is lightening fast in the slow moving credit-reporting environment.

But before you crack open your checkbook you’ll want to consider WHICH debt you’re going to eliminate. Why? Because when it comes to improving your credit scores not all “debt elimination” is created equal. In fact, paying some huge debts will yield little to no score improvement while paying smaller debts can result in meaningful score boost.

Using a scoring tool built by FICO, I recently simulated the following “pay off” scenarios and measured their impact to a FICO score of 630, which is clearly one that you’d like to improve. Nothing other than the following actions changed on the credit report.

1) Paying off a $250,000 mortgage

2) Paying off a $35,000 auto loan

3) Paying off a $5,000 credit card

The results are as follows…

Paying off a mortgage loan of $250,000 improved FICO 630 to FICO 635

I’ve been telling people for many years that installment debt, even in large amounts, doesn’t have much of an impact to your scores. This is the quantification of that advice. And while this is just a simulation, in 2010 I sold a house and eliminated a $249,000 mortgage and my FICO scores went up four points.

Paying off an auto loan of $35,000 improved FICO 630 to FICO 635

An auto loan is an installment loan (like a mortgage) and the effect of paying it off is equally unimpressive from a scoring perspective. Don’t get me wrong; it’s nice not having a monthly car payment. And, it’ll save you big bucks not paying interest on a $35,000 loan any longer.

Paying off a credit card balance of $5,000 improved FICO 630 to FICO 665

Eliminating the credit card debt resulted in the largest improvement to the credit score, and really it wasn’t even a close race. Credit card debt is scientifically proven to be a riskier type of credit for lenders to extend, which means even smaller amounts like what was used in the simulation can have a significant impact to your FICO scores. It also means if you can pay it off your scores will improve a lot, and very quickly. And even if you can’t pay off your credit cards 100%, your scores will still improve by paying it down as much as possible.

Now, where’s my checkbook?

Poll Reveals Consumers Committed to Retaining Cell Phone and Internet Service

2011-07-14T16:25:00.000-04:00

When trying to save money, consumers choose to keep technology and cut back in other areas

Washington, DC – The June Financial Literacy Opinion Index poll hosted on the National Foundation for Credit Counseling (NFCC) website revealed that in order to save money, people are willing to give up eating out, shopping, fancy coffees and cable TV, but they remain very attached to their cell phone and Internet services.

When asked to select the last thing they would give up in order to save money, only one percent of the 3,148 poll respondents insisted on keeping their designer coffee, one percent couldn't do without online or catalogue shopping, four percent would have trouble eliminating eating out, while eight percent were reluctant to pull the plug on their cable TV.

By contrast, 32 percent said they would be least likely to discontinue their home Internet service, while the majority, 53 percent, would refuse to say goodbye to their cell phone.

“It appears that Americans love their technology and are determined to stay connected,” said Gail Cunningham, spokesperson for the NFCC. “However, they may still have the opportunity to save money in those areas by examining their current cell phone and Internet plans. People often have plans with bells and whistles they seldom use, and discontinuing such services can save a significant amount of money.”

The poll results indicate that consumers are making logical choices when determining where to cut back, as they elected to eliminate spending in the areas where the lifestyle change would be least noticed, thus increasing the likelihood of sustainability. For instance, they can brew coffee at home, prepare meals at home, and control their shopping. Giving up cable seemed doable possibly due to the many viewing options available online or via a cell phone.

It is not surprising that consumers are reluctant to part with their Internet service and cell phones, as the poll confirms that Americans consider these as must-haves. Computer use has become ingrained as a part of people’s everyday activities as they rely on their Internet access to, among other things, search for a job, connect with friends, research a project, trade stocks, for entertainment and to stay up to date on breaking news.

Today’s consumers may be reluctant to give up their cell phone, not only due to convenience, but because they have disconnected their land line in favor of their cell as the main source of verbal communication. Considering the capabilities of today’s smart phones, tech-savvy consumers have begun to rely on their cells to perform many of the same tasks as their computer.

“It is encouraging that consumers appear to have thought through their cost-cutting decisions, and have made wise choices,” continued Cunningham. “This level of awareness will not only help people ride out the difficult economic times they’re currently experiencing, but result in a more stable financial future.”

If you need help finding realistic ways to control spending, reach out to a trained and certified housing counselor through an NFCC Member Agency. To be automatically connected to the location closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, call (800) 682-9832.

The June poll question and results are as follows:

In order to save money, the last thing I would give up is

A. My cell phone = 53%

B. Cable TV = 8%

C. Designer coffee = 1%

D. Eating out = 4%

E. Internet/catalogue shopping = 1%

F. Home Internet service = 32%

Note: The NFCC’s June Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from June 1 - 30, 2011 and was answered by 3,148 individuals.

Consumer Credit Soars On Largest Card Debt Jump In Three Years

2011-07-12T16:22:00.001-04:00

Consumer credit rose by $5.08 billion in May, marking the eighth straight monthly increase, as credit card debt had its largest gain in three years, according to the Federal Reserve's monthly G.19 report.

Revolving credit, 98% of which is credit card debt, soared by $3.36 billion after declining by $876.7 million in April. It marks the biggest increase in credit card debt for any month since mid-2008.

The figures suggest a willingness to keep borrowing despite a tight job market and unstable economy. It's possible the rise is occurring as consumers facing limited job prospects turn to credit cards more often to pay bills. (emphasis mine)

Non-revolving credit, which includes categories such as student loans and auto loans, expanded by $1.7 billion in May after shooting up by $6.54 billion in April.

The total of all consumer credit outstanding in May reached $2.432 trillion, up from a total of $2.427 trillion in April.

Spending money on what you value brings real happiness

2011-06-28T09:35:00.001-04:00

By Carey Denman

My husband and I have a good life. We have flexible work schedules and a home in the country where we grow a large garden and keep a few chickens. We’ve been known to float homemade rafts and dangle our toes in the nearby creek with our four children, and to eat s’mores made in our fire pit for dinner.

In general, I’d say we live a slow, deliberate life. We don’t have television reception where we live, and we have no cable. And we have pay-as-we-go cell phone plans because we don’t get service in our area. Our two cars have a combined total of over 330,000 miles on them, and we do almost all of our shopping for clothes and other household needs at thrift stores.

Now, it’s quite possible that the idea of going without cable, weeding a garden and paying 10 cents a minute for cell phone calls might literally sound like torture to you. And that’s OK—because my definition of a good life cannot (and should not) be the same as yours.

Too often, people look around at what others are doing and buying, and decide that those things are necessary for a good life. And so begins a vicious (and often debt-ridden) cycle, where other people’s lives and possessions become the measure of our happiness. The result is that happiness becomes elusive, always just one purchase or activity out of reach.

This isn’t to say that material possessions don’t have the potential to improve your happiness quotient. In fact, I unequivocally believe they do—as long as the things you buy reflect what you sincerely value. My husband and I, for example, value nature and look for ways to spend more time outdoors.

Accordingly, we invested in a 1978 pop-up camper last summer. It’s got brown plaid seat covers, gold linoleum and a few dents here and there, but it suits our family well right now. We also saved for and built a screened porch last winter. We knew we wanted a room that, for three seasons of the year, would shelter us from the weather and keep us sequestered from mosquitos. Both the camper and the porch have improved the quality of our lives by giving us more ways to enjoy the outdoors.

Figuring out what you value isn’t always easy, but it’s worth the effort to do it. Begin by asking yourself a simple question: What is important to me? If you can, list at least five things. The things you list will be your unique values. When you identify them, and start making decisions based on them, you will be happier and more satisfied with your life.

My own list includes beauty, creativity, family, flexibility and, as I already mentioned, nature. With this list at the top of my mind, I am better equipped to make decisions about how I do and do not wish to spend my time and money. Sure, I may still admire a friend’s new car or the fashionable way she dresses, but I don’t value driving a new vehicle or wearing trendy clothing. I have learned that I get genuine satisfaction from spending my money to outfit our camper with the supplies we need for a weekend getaway, or to create a playhouse for our children.

When you understand what you value, you’re more prepared to create a budget that actually works. Your budget will help you focus on spending your money in ways that will help you achieve the good life that you – not your friends or neighbors – really desire.

FATHER KNOWS BEST – OR DOES HE?

2011-06-14T16:15:00.004-04:00

Survey Reveals Definite Lack of Financial Skills

Washington, DC – As Father’s Day approaches, many dads begin reflecting on the life skills they’re teaching their children. Nice manners, discipline and a good work ethic top many lists. Not to be overlooked, however, are financial skills, because regardless of whether they are taught formally or by example, parents pass along their financial habits to their children.

This concept is confirmed by the National Foundation for Credit Counseling’s (NFCC) 2011 Financial Literacy Survey in which the majority of respondents, 42 percent, indicated that they learned the most about personal finance from their parents. At first glance, this appears to be a good thing, as the home should be the ideal place for children to learn skills and habits.

However, the same survey also revealed that 41 percent of adults gave themselves a grade of C, D or F regarding their knowledge of personal finance. This is a disturbing decline in financial literacy, as one short year ago “only” 34 percent of Americans gave themselves a low grade. Further, five percent of U.S. adults, or about 11.5 million people, indicated that the failing grade of F best represented them, marking a sharp increase from previous years when less than three percent of adults self-identified at this level.

Taken together, these results suggest that many parents are ill-prepared to teach their children sound financial principles.

“The good news is that Americans recognize and are willing to admit their financial deficiencies,” said Gail Cunningham, spokesperson for the NFCC. “Now it is up to them to do something about it, particularly if they have children who will invariably model their parent’s financial behavior.”

There are many resources available to consumers desiring to improve their level of proficiency in personal finance, including self-help books, the media, the Internet or financial professionals. Interestingly, the survey showed that while Caucasian and Hispanic adults are more likely to identify the home as the primary learning ground for personal finance, African-Americans are more than twice as likely as Caucasians to garner such information from self-help books, the media or friends.

Looking at gender, men were more than four times as likely as women to give themselves failing grades for their knowledge of personal finance, eight percent versus two percent, respectively.

“During these painful economic times, it can be argued that keen personal finance skills are more important than ever,” continued Cunningham. “The NFCC calls on parents to stop the cycle of financial illiteracy by improving their own level of financial expertise, thus enhancing the likelihood that their children will some day be able to give themselves a grade of A in this important life skills category.”

If you want to improve your level of personal financial skills, reach out to an NFCC Member Agency where you can meet with a counselor one-on-one, or participate in group workshops on a variety of financial topics. The services are free or low-cost and are open to the public. To be automatically connected to the NFCC Member Agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832. OR, if you're in the Charleston Area contact Family Services, Inc at (843) 735-7802

Kitchen vigilante wages war against wasting food, money

2011-05-23T07:57:00.001-04:00

By Carey Denman

Some recent number crunching confirmed my nagging suspicion: we are once again breaking our monthly food budget. In fact, a closer look revealed that our spending has gone up incrementally during the first four months of this year.

On one hand, hearing my husband rattle off those numbers made me cringe. On the other, it reaffirmed that I want to be more diligent than ever about avoiding food waste. After all, if I suggested you withdraw $100 in small bills from your bank account and drop them one by one into the trash, you’d think I’d lost my mind. Yet when we waste food, that’s essentially what we’re doing.

Avoiding food waste lets me be a good manager of what I have and helps save me money. Still, little to no food waste is only possible with a lot of diligence and creativity. So I am publicly declaring myself as a kitchen vigilante with this pledge: I will do all within my power to ensure I use the food I have. I will not be deterred by the likes of stale bread or languishing apples. I will resourcefully repurpose the food in my kitchen to create delicious and satisfying meals.

You might be wondering if the words “delicious and satisfying” can rest comfortably alongside “resourcefully repurpose.” Can using up bits of leftovers and past-its-prime food actually result in something worth preparing—and more importantly—eating? I believe the answer is unequivocally “yes.”

With a little practice, you can transform all of your kitchen bits into something better. A good place to start is by learning the many uses for stale bread. Who hasn’t had slices of bread or bagels that have lingered a bit too long?

Bread crumbs, croutons and stuffing are all common uses for stale bread. I’m much more likely to cube it and throw it in a freezer bag to use for dishes sweet and savory: egg strata, baked French toast, or bread pudding. A strata is particularly good use for old bread, and you can toss in other foods you need to use up, as well. Leftover vegetables, small amounts of meat, and a variety of cheeses are all good compliments to strata.

Fresh produce is another kitchen staple that seems to spoil faster than I can use it. I’ve gotten in the habit of freezing overripe bananas in their skins for smoothies, breads, and muffins. If berries get mushy, I throw them in the freezer, too, or I use them to make syrup for pancakes or waffles. Grapes that have softened can be frozen and used for snacks. We’ve also been known to grate mealy apples for muffins, pancakes, and oatmeal or to sauté slices with a little butter and brown sugar for a tasty side dish.

Soured milk generally works well as a replacement for buttermilk in baked goods such as pancakes and biscuits. Single servings of yogurt that are approaching their expiration dates can be thrown into the freezer and eaten later; the result is similar to sorbet. Leftover rice can be used in soups, to make fried rice or for rice pudding. Small servings of pasta can be used in frittatas, while the extra spaghetti you have hanging around in the fridge can be reinvented into a baked dish; just add ingredients such as cured meat, sun-dried tomatoes and a strong cheese, like fresh parmesan.

With some creativity, nearly any food you have on hand (unless it has spoiled) can be transformed into a recipe that will make you wonder why you ever thought of throwing that food away in the first place.

What is a Representative Payee?

2011-05-18T08:00:00.002-04:00

By Aaron Heath

What is a Representative Payee?

I was talking to a friend the other day who was asking me about what we do as a company. I said ‘Well, we do financial literacy and first time homebuyer education, foreclosure prevention, credit and bankruptcy counseling, debt management, behavioral health services, homeless prevention, conservatorship and have a representative payee program.’ To which he said, more or less, ‘representative what?’ causing me to realize that representative payee really is a strange combination of words to describe what it actually entails- although this is exactly what the Social Security Administration (SSA) calls it. So, as my third blog posting I have decided to explain exactly what it means to be a representative payee and why they are important.

A representative payee is someone who handles an individual’s Social Security benefits in the case that that individual is deemed to be incapable of handling the benefits themselves. Or more mundanely, I mean eloquently, defined by the Social Security website:

Social Security's Representative Payment Program provides financial management for the Social Security and SSI payments of our beneficiaries who are incapable of managing their Social Security or SSI payments.

These benefits include Retirement, Survivors and Disability Insurance (RSDI) and Supplemental Security Income (SSI). (More info about how to receive and who receives these benefits can be found here and here.) There are three basic reasons why SSA would assign a payee to a beneficiary:

They are a minor- under 18
They are deemed legally incompetent (by a doctor)
SSA determines that they are incapable of handling their money

Payees are responsible for ensuring that the beneficiary’s basic needs are met- food, shelter, spending money, etc… and that they have “a stable living environment.” The full list of their responsibilities can be found here. Their responsibilities include helping to make sure that these individuals stay off the streets, that they are reasonably housed, that they don’t get taken advantage of or spend all of their benefits on illicit substances, and that they have access to basic necessities. The stability that this program provides also results in a lower overall burden on public resources such as medical care and law enforcement.

In working with some of the payees from our department, I have seen what a tough job it can be. Payees DO NOT have power of attorney, so they often have to negotiate, compromise, explain, talk down, work with and make deals with our clients to help them understand what is going on with their money. After all it is THEIR money, and they let you know it. You can probably see how it can get pretty heated sometimes.

Here in Charleston, Family Services, Inc. has about 500 Representative Payee Clients. We work with the local social security office as well as several others from around South Carolina and in some cases Georgia. From what I can find there more than seven million Americans who have a representative payee, most of them minors.

Hopefully this was somewhat enlightening for you.

Life’s messy, risky adventures can bring great satisfaction

2011-05-16T10:05:00.001-04:00

By Carey Denman

Drippy snow cones, unwieldy light sabers and crowds of people aren’t exactly a prescription for a parent’s happiness. But it’s a gleeful combination if you’re a kid at the circus.

Our 3- and 5-year-old boys waved those light sabers with wild abandon, and our 6-year-old joyfully wore remnants of a sticky snow cone from her neck all the way down to her toes. Even our youngest babe watched dancing dogs and horses with rapt attention, jabbering about the raucous display in front of her.

I wasn’t exactly looking forward to sitting through the two-hour show with four small children. In fact, I would have rather been at home, where there was at least the possibility of relative quiet. But had we stayed home, I would have missed the gleam in my children’s eyes as they took in the high wire act or each relished having a snow cone all to themselves.

There’s no question that the circus is messy. But being afraid of life’s messes and clinging to the safety of the ordinary can deprive us of some of life’s best moments. The point of stagnation, when we aren’t willing to embrace new and unfamiliar experiences, can be a major roadblock to happiness.

I find positive change often happens when I’m a little uncomfortable and when I’m willing to take a risk. Sure, there have been many times when I literally don’t have a clue what I’m doing, like when I decided to take a solo (and somewhat impromptu) backpacking trip to Europe. I’d never been outside the country, but when the opportunity to travel abroad presented itself, I took a leap.

I’ll never forget sitting in London’s Heathrow Airport, staring at the ticket desk and wondering if I should just purchase a return ticket and go home. Despite my fear (and not having a single plan made), I stayed for the entire month and trekked across three countries. I made new friends, saw some of the most amazing sites of my life, and learned a tremendous amount about myself and my abilities.

I’ve experienced the same kind of satisfaction from doing something as simple as planting my first garden. I’d never grown a single thing before that first venture, but that year, I ended up with a bountiful harvest and a new passion for cultivating the earth that has stuck with me ever since.

I even count learning how to make my own hamburger buns as a rewarding experience. Homemade buns aren’t a revolutionary idea, but this small kitchen success has buoyed my confidence and encouraged me to make more food from scratch. My family eats better food, and we save money in the process.

Even if you can’t plunge head-long into a new adventure right now, you can tackle a small hill - even a hill as small as making homemade buns. That adventure may not turn out quite as you had planned. But this doesn’t mean that the unexpected (and often messy) moments aren’t worthwhile. In fact, they often end up being the very best moments of your life. What small hill can you tackle today?

South Carolina Making Moves to Head Off Electronic Waste

2011-05-09T09:59:00.007-04:00

By Aaron Heath

After July 1, electronics MUST be recycled

A new South Carolina state law will come into effect on July 1 banning the waste disposal of electronic equipment. South Carolina will join 25 other states in their efforts to cutback on wasteful disposal of electronics. Specifically:

- Computers

- Monitors

- Printers

- Televisions

All equipment will have to be recycled from now on. Landfills caught accepting the equipment could face fines of up to $1000.

With technology progressing at an exponential rate, more and more electronics are being introduced into the marketplace while the rest simply go out of date faster. As this is happening the amount of plastic waste that is piling up is becoming unmanageable. Electronic waste is actually accumulating at three times the rate of normal household trash. These types of plastics and the materials contained in electronics are extremely toxic. Worst, these electronics account for over 70% of all toxic waste found in landfills. (See also this article on eWaste) Not only is manageability an issue, many of these electronics, while out of date for you or me, are usually still in working condition and could be donated and refurbished for use by others.

This will be a great way to cut down on unnecessary waste and make us more conscious of the materials that we do throw away. Here is a list of locations in South Carolina by County where you can dump your old electronics for recycling.

Would also like to cite the Post and Courier for help with this post.

A simple plan cuts the cost of wasted food

2011-05-09T07:18:00.001-04:00

By Carey Denman

For the past two weeks, I’ve been staring down a small container of cherry tomatoes. They haven’t spoiled, but they are definitely past their prime. I don’t want to throw them away, but a dozen lackluster tomatoes aren’t inspiring my inner chef. Plus, I feel a twinge of guilt when I think about wasting food, particularly when we devote such a large portion of our budget to feeding our family.

Having a trio of backyard chickens has made it possible to redeem almost all of our kitchen scraps, and I work hard to use up the food we have. Still, I know I could do better with things like the aforementioned languishing cherry tomatoes. I’ve even been known to avoid opening food storage containers in my refrigerator because I’m afraid of what might be lurking inside.

What’s even more frightening than unearthing furry food is the cost of wasting it. According to the USDA, Americans throw away about 14% of the food they buy; some other independent estimates put that amount closer to 25%. If my family’s experience rings true—even to the more modest estimate—we’re literally throwing away $70 every month, or $840 a year.

I could think of a lot of ways I’d like to spend $840 this year—but wasted food doesn’t make the list. Becoming more intentional with my food dollars and my cooking habits will help ensure that more food gets used, and less is discarded. There’s nothing revolutionary about the plan I’ve sketched out for my family, but it will help me make the most of what I have.

First, I will recommit to creating a weekly meal plan and writing it on the family calendar. Doing so allows me to take stock of ingredients I already have, and plan meals accordingly. (Plus, a meal plan avoids “what’s for dinner?” tension at the end of the day.) For example, I have some small pieces of ham and a bunch of boiled eggs leftover from Easter, so I’ll prepare a chef salad. I also have a large tub of ricotta cheese (and those leftover tomatoes) lingering in my fridge; I’ll put both to use in lasagna.

Second, I want to have a specific purpose in mind for everything I buy. Contrary to traditional budgeting advice, I don’t shop with a strict list. My grocery list includes staple items I need, such as spices and baking ingredients. Otherwise, I shop for what looks good at the best price. Last time I went shopping, for instance, organic beef was on sale for half price. I hadn’t planned to buy beef that day, but I scooped up the last four packages, knowing that I could freeze it or use it to make sloppy joes and taco pizza.

Designating a specific spot for leftovers in the refrigerator is another easy-to-implement strategy that I’ll employ. If I know that all leftovers are on the top, right-hand shelf, then I’ll be able to look past the tubs of homemade playdough and the cartons of eggs to see what we need to eat first.

Lastly, I want to find more uses for leftovers and food past its prime. I’ve always thrown away broccoli stalks, but I know they’re suitable for stir frying, soups, and frittatas; I just need to get in the habit of using them. Carrot and onion peels, wilted celery ribs and other vegetable miscellany will be put to use in homemade broths, rather than going to the chickens.

This plan will take effort, but I’m looking forward to less spoiled food, less cherry tomato guilt, and to stretching my food dollars further.

Start when you are young… Credit Cents

2011-05-03T12:38:00.002-04:00

Those first few years completely free from parental supervision and financial support bring some very exciting firsts. First apartment, first job, first budget . . . It can all be very overwhelming. With everything happening all at once, it can be hard to know what is best for your finances. Here are a few basics to keep in mind.

Make a budget. If you've heard it once, you've heard it a thousand times, constructing a budget can be your greatest ally when it comes to managing your finances. Those first paychecks may inspire you to make rash spending decisions. Impulse purchases can throw you into debt, which is never a good starting point.
Prioritize. While you're putting together your budget, it's important to prioritize your monthly expenses, and your debt. Bills–rent, utilities, etc–need to go first; those are costs that you cannot avoid. Next come any loans (student, car, etc.) or other debt repayment. For the sake of your credit score, it is crucial that you make your payments on time. And if you have credit card debt, make sure to pay more than the required minimum whenever possible, and always put any extra funds toward paying off the one with the highest interest rate. Consider paying yourself each month one of your necessary financial obligations each month; saving just $20 a month can make a huge difference.
Ensure you're insured. Health, disability and life insurance are often offered through employers, so make sure you're covered for life's "in case" events. Recent health-reform legislation allows you to stay on your parents' health insurance until age 26. After that you're on your own. Make sure you fully understand and are signed up for the insurance policies most beneficial for you.
Look down the road. It may sound ridiculous to be planning your life ten years from now, but having an idea of where you want to be can help you form a plan for your spending and saving today. Do you want to own a home? Get married? Have kids? Your credit score and savings have a tremendous impact on all of these milestones, and you don't want to be looking back thinking, "If I'd only had a financial plan . . ."

Need budgeting help? Already have more credit card debt than you can manage?

Contact our non-profit Consumer Credit Counseling or Homeownership Resource Center for FREE budgeting, credit card counseling, home ownership opportunities and foreclosure counseling. info@fsisc.org phone 800-232-6489

Family Services, Inc. is a non-profit organization with HUD certified and South Carolina licensed consumer credit counselors.

Groans of regret echo long after impulse purchases are made

2011-05-02T08:05:00.003-04:00

By Carey Denman

Somehow, we’d managed to stuff a live Christmas tree, a large dog kennel, and all of our luggage in our small, two-door sedan. Getting stuck in our driveway when we arrived home from our trip, however, became the proverbial straw that broke the camel’s back.

I don’t remember who made the pronouncement that “we need a bigger, four-wheel drive vehicle,” but one of us did. We found ourselves cruising through car lots the next day. If I remember correctly, we test-drove three vehicles. A few hours later, we were signing the loan papers on a new-to-us SUV.

Though we drove away congratulating ourselves on the new purchase, it didn’t take long for a wave of regret to roll over us. We had been just a few payments away from paying off our sedan. Now, we had a loan for a gas guzzler with an unknown history and high miles. What’s more, we’d gotten a pittance on our trade-in, and because we didn’t shop around, we didn’t really know if we’d gotten a good deal on our new car.

We drove the vehicle for several years, but always with a lingering taste of regret. Interestingly, the word regret literally means, “to groan long after.” For anyone who has regretted making a particular purchase, “to groan long after” is a fitting definition.

In fact, when I asked friends and acquaintances to tell me about the purchases they most regret making, it was almost as if they let out a collective groan. One friend that told me that she regretted the $1,200 vacuum she bought from a very convincing in-home salesman. She even went so far to say, “I hated that vacuum every day it took to pay it off and until the day I sold it.”

Garish wallpaper (that took a great effort to hang and therefore stayed up for a long time), an oversize leather coat, a pricey engagement ring, a used car bought out of frustration, an expensive purse, and a collection of other, smaller buys made the list.

My favorite response came from a friend who bought an expensive aromatherapy wrap from a slick salesman. She recalls, “The last thing I remember hearing was, ‘Hey, pretty lady.’ The next sound I heard was the register dinging. I had immediate buyer’s remorse.”

For all the responses I received, one major theme emerged. The purchases that most often lead to “long groaning” are those bought on impulse. This applies to purchases big and small, on everything from the shirt that didn’t quite fit right to the $8,000 piece of jewelry. Even so-called bargains can lead to regret when you buy them impulsively.

We’ve all made impulsive purchases. But the best way to prevent ourselves from getting caught up in a cycle of impulse buying is to create a filter that we can hold up to anything we might want to buy. The most basic question should be this: Will it make my life better? If it will, and you can afford it, then go ahead and make the purchase.

Next, ask yourself, “Is it fabulous?” Too often, we end up buying things because they’re on sale or because they’re so inexpensive that we think we can’t possibly pass them up. The result is that we end up with a bunch of things that we only marginally like and that clutter our closets and all the recesses of our homes.

If it won’t make your life better and you can’t honestly say that it’s “fabulous,” then you’d be better off leaving it at the store (or on the table at someone’s garage sale).

Irony, Scams, Theft, and Protection

2011-04-28T09:51:00.007-04:00

Identity theft is one of those buzz phrases that you constantly hear passed around the office, on TV, your parents, friends, etc, etc… It is also one of those buzz phrases that you casually ignore until “you or someone you know” goes through the experience- although usually it takes you being the one. As a 24 year old I am one of those people who doesn’t learn vicariously through other people, but rather, I wait to “experience” things myself (hints of sarcasm?). In other words I can be hard headed and naïve, and in this case it was to the reality of account theft.

Last Sunday I go to check my bank account and I see a $15.62 hold on my account at McDonald’s. I have not visited or bought anything at McDonald’s but maybe once in the past year. So I called up my bank and they told me to hang in to see if the charge actually goes through- maybe it was a gas station or other restaurant or something. Again insert naïve Aaron- “hmm well must have just been some gas station or bar.” No red flags or anything.

On Tuesday I had to fill up on gas on the way to drop a printer off for work. My card was denied at every pump at the station. I knew I had money on it. Strange. Once again I called up my bank. I am transferred over to fraud protection and told that my card had been “compromised,” and that my card was shut down and a new one was on the way. Very strange. But, I inquire and apparently it was shut down because I reported the McDonald’s charge. So, at this point I just had to wait for a new card, but all was ok.

On Wednesday I attended a “Fraud Protection and Identity Theft Seminar” presented by Synovys. I learned a lot of cool things about the present state of identity theft (a couple of which I will cover below), but one in particular was the importance of password choice. Basically- don’t use the same password for your all of your logins, mix lower case and uppercase characters, use “$%&@” characters, and numbers. Upon reflection I realized that I couldn’t violate these rules any better if I was trying. Same passwords across my accounts, simple words, and few if any non-letter characters.

When I got back to the office, in light of what I had learned, I at least decided to change my Online Bank Account password to be different from my Facebook Password. Well, good timing because as soon as I logged in, I saw that my account had been spent down to $10. Oh the irony! I go to an Identity Theft Seminar and come back to see that my identity had been theft-ed.

Back on the phone with the bank. After being passed between departments for a while, I landed in the fraud department. “Sir, this card was used in person for all of the charges that you are citing.” Me: “There is no way I made those purchases! And, I have my card right here; I just used it to give you all my number!” (**internally questioning myself. “Wait. Did I spend $150 bucks at Exxon on Sunday?”**) Fraud Dep.: “Sir have you been to Chicago anytime recently?” Me: “Whaaat?! I live in Charleston, SC!”

Frad Dep.: “Well these things happen, counterfeit cards are becoming a common occurrence.”

While I still have no idea how my number got out, luckily the fraud department is working with me and will be crediting my account. Needless to say I think it is appropriate and enlightening to consider some of the dangers out there. Here are the top 10 scams for 2011 that I learned about at the seminar. Some are quite surprising. I will also show you what a good password is and a way to remember it.

Top Scams for 2011

From scambusters.org

1. Phishing and identify theft. The growth of malware mentioned above, coupled with hijacking of social networking accounts and more sophisticated hacking technology, means that identity theft will remain the Number One Internet crime for the foreseeable future.

2. Malware. As many as 60,000 new pieces of malicious software appear every day, says McAfee. The growing use of USB drives to store and transfer data may also contribute to the spread of malware.

3. Economy related scams. The economy is taking much longer to recover than hoped, so expect to see foreclosure and load modification scams to continue. Plus, as mentioned above, we now include work-from-home scams in this category.

4. Nigerian scams. In their report referred to earlier, PandaLabs points out that the latest version of the Nigerian scam claims that a compensation fund has been set up and invites previous victims to put in a claim. Then, of course, the scammer requests a fee before the supposed compensation can be released. Nigerian crooks are also muscling in on the bogus girlfriend scam previously dominated by the Russians. Victims, befriended online, end up paying supposedly for airfares and other expenses for their new but non-existent sweetheart.

5. Lottery and gaming scams. We've also broadened this category to include online gaming scams, featured in an earlier Scambusters report. We expect to see significant growth in bogus gambling-related sites, and a continuing stream of phony lottery schemes.

6. Bogus and fraudulent Internet sales. As mentioned above, this category now embraces bogus retail sites selling nothing but thin air, as well as online auctions and classified ads. We think this will be more than enough to push this category up one further place in our Top 10 scams list.

7. Skimming. European banks report a huge increase in debit and credit card information theft, especially at ATMs that have been rigged either to collect card details or to trap the card so the crook can use it. Expect to see a similar trend in the US during 2011.

8. Doorstep scams. With the Census out of the way, this crime drops two places, but bogus contractors, charity collectors, utility workers and others who knock at your front door bent on crime keep it strongly in the charts. And, of course, a major natural disaster, such as hurricane, earthquake or floods, could push this higher.

9. Investment scams. Investors have become more cautious about Ponzi schemes, which draw in new money to pay earlier investors until the whole scheme collapses. But low interest rates will continue to push investors into high-risk and shaky projects. Expect also to see more computer trading programs with dubious claims that they can "beat the market."

10. Travel and vacations. Americans are still vacationing at home in the weak economy and amid safety fears about traveling to Mexico. But with the world economy still unsteady, scammers are more desperate than ever to catch out those who do journey abroad. Watch out especially for a huge ticket scam for the forthcoming London Olympics 2012.

Another great site that I learned about is fightidentitytheft.com. Its got great resources and information regarding how to protect against scams and the steps to take once you think that you have a problem.

DEFINITELY NOTIFY YOUR BANK AS SOON AS YOU THINK YOU HAVE CHARGES WHICH AREN”T YOURS!!!!

also, CHECK YOUR ACCOUNT BALANCE DAILY IF YOU USE A DEBIT CARD!!!!

or, SIGN UP FOR ALERTS!!

Here is another good article from CNBC on the riskiest places to use your Credit Card.

What makes for good password protection?

1. Don’t use the same password across multiple accounts! Especially between Facebook and your Bank account for example.

2. Make it at least eight characters long.

3. It should not contain your user name, real name, or company name.

4. It should not contain a complete word.

5. Is should be significantly different from previous passwords.

6. Make sure that it contains characters from each of the following four categories:

Character category	Examples
Uppercase letters	A, B, C
Lowercase letters	a, b, c
Numbers	0, 1, 2, 3, 4, 5, 6, 7, 8, 9
Symbols found on the keyboard (all keyboard characters not defined as letters or numerals) and spaces	*` ~ ! @ # $ % ^ & ( ) _ - + = { } [ ] \ \| : ; " ' < > , . ? /**

NOTE: A password might meet all the criteria above and still be a weak password. For example,Hello2U! meets all the criteria for a strong password listed above, but is still weak because it contains a complete word. H3ll0 2 U! is a stronger alternative because it replaces some of the letters in the complete word with numbers and also includes spaces.

So, how the heck am I going to remember these passwords?

Try using pneumonic devices:

Example:

1. A sentence you would remember:

a. I Attended North Carolina State University For My Undergraduate Degree

2. From that we can assemble:

a. iancsufmud

3. Now we can replace some of the letters which logically look like numbers:

a. 1anc5ufmud

b. i = 1 and s = 5

4. Next we can add non-numeric and non-letter symbols

a. 1@nc5ufmud

b. a = @

5. Finally, capitalize a couple of letters

a. 1@NC5ufmuD

b. NC- the natural abbreviation for North Carolina

c. D- just the last letter, easy to remember to capitalize

6. Done!

a. We now have a strong password that is easy to remember:

b. 1@NC5ufmuD

Here is some more info from Microsoft.

As always let us know if we can assist you with anything. Michaele, our Debt Management Director is very knowledgeable on scams and very accessible. Email her at mpena@fsisc.org

Preparedness eases stress when the unexpected strikes

2011-04-25T08:50:00.001-04:00

By Carey Denman

A few weeks ago, I awoke at 5 a.m. to a peculiar humming sound. I trundled out of bed to investigate, but I already knew that something was amiss. The sound was caused by a problem with our water system; our cistern wasn’t filling, and we had no water.

While I waited for a reasonable hour to call for help, I contemplated making my morning coffee. Without running water, the small carafe of water in the refrigerator became precious, and so did the notion of being able to flush the toilet.

Thankfully, I had a couple of five-gallon containers of water stored in our crawlspace. They became necessary for preparing meals and for priming our pump when the water was finally restored. Being without water for half a day was a minor inconvenience, but having a source on hand eased the frustration of not being able to use the faucet.

The situation reminded me how important it is to be prepared for the unexpected. Preparedness isn’t needless worry or frenzied stockpiling; it acknowledges that disruptions in normal services can and do happen. A little bit of advanced planning can reduce the stress and discomfort of these disruptions and can make it easier to cope with unusual circumstances.

When you make preparedness a habit, instead of a reaction to bad news, you can make sensible choices that can protect you in case of a disaster. You can also keep your budget intact when you gather supplies over time, and when they are readily available.

The most successful way to build a preparedness plan is to start with a few small goals. I suggest you start by creating a simple communication plan. Knowing the answers to a few key questions can help you make contact with your family following a disaster.

In the event that you cannot contact your family after a disaster, have a plan in place to meet at a specific location. Where will you meet if you cannot go home? Who will pick up the kids if you are faced with an emergency? If your children are old enough to be left alone, what should they do if they are separated from you?

Once you have a plan to ensure you know how to find one another, a good second step for preparedness is to create a financial binder. By gathering your most important personal and financial documents, you have a set of data that can help you restore order following a disaster.

Next, consider how you will ensure that you have enough food and water if you aren’t able to get to a store or if supply chains are disrupted. The Federal Emergency Management Agency (FEMA) advises that individuals and families should have enough food and water to last a minimum of 72 hours.

FEMA recommends that you store at least one gallon of water per person per day. For our family of six, this means that we should have 18 gallons of potable water on hand. As for food, what you store will depend on your family size and any specialized needs you may have. If you have an infant, or any dietary restrictions, then you should plan accordingly. If you have pets, they will need food and water, as well.

A well-stocked first aid kit, flashlights and batteries, a basic toolkit, a hand-crank radio, and weather-appropriate clothing for everyone in your household are other essentials you should have readily available.

Disasters and disruptions are never easy, but being prepared can relieve some stress until life returns to normal

Careful planning creates a more carefree vacation

2011-04-15T10:44:00.001-04:00

By Carey Denman

Planning a vacation on a budget for two adults and four kids ages 6, 5, 3 and 1 is no easy feat, but it’s an endeavor my husband and I recently undertook. With or without small children, travel is often expensive and complicated.

One way to minimize expenses and keep complications at bay is to plan your vacation with a clear purpose in mind. What are your main priorities? How do you want your getaway to feel? Adventurous? Relaxing? How much are you willing to spend to achieve those priorities? Your answers will help to ensure that you make the most of your vacation.

In the case of our family, our upcoming trip is to celebrate my in-laws and their 40 years of marriage. Accordingly, we determined that our vacation priority was to spend time in a relaxing atmosphere, doing activities that we could enjoy together as family.

Determining our purpose was the easy part. It was a little trickier planning a vacation that would suit our budget and our small children. We knew our destination had to be family-friendly, and that we wanted to avoid harried airport transfers and rental car desks. Those guidelines narrowed our search tremendously.

We also needed to consider how luggage fees would influence the overall price of our trip. After all, we’re still toting things like diapers, sippy cups and ear thermometers, so we knew we wouldn’t be able to skate by with carry-ons, even for a short getaway. With the cost of one checked bag coming in near $40, we decided that we’ll be packing lighter than usual.

Once we had a destination in mind, we started looking for a hotel that could accommodate us. After searching multiple sites and comparing room rates, we found a two-bedroom suite—with a full kitchen—for $160 a night. (The suite sleeps eight, so we’ll be splitting the cost with my husband’s parents.) The hotel is outside the most popular part of our destination city, but it still has plenty of amenities. And with a full kitchen, we’ll be able to save money by preparing some meals in our suite.

While we were trying to decide if this suite was the right choice, the price increased from $160 to $195 a night. The increase wasn’t a deal breaker, but it was disappointing, nevertheless. We did learn a valuable travel lesson, though. If you find a deal that fits your budget, it’s best to book it, rather than hope that the price might go down.

Now that we have booked our hotel suite and paid for our tickets, we have turned our focus to planning our trip activities. We’re planning a loose itinerary that sketches out some specific places that we’d like to visit and restaurants where we’d like to dine. We won’t be scheduling every waking moment, but we’ll use our itinerary to help us anticipate expenses and to ensure that we’re making the most of our getaway. Of course, we’ll include plenty of downtime in our plan, too.

In the end, we plan to spend a total of $1,500 for a resort-style vacation for our family of six. While our vacation is an investment, we feel it’s one worth saving for. We’ll build precious memories as a family and enjoy a respite from our everyday routine.

As the summer months approach, I encourage you to consider your vacation priorities. Thinking about your vacation and carefully considering what activities you hope to do will help keep your budget intact. It’s much easier to return home feeling relaxed when you know your vacation is already paid for.

Birthday boy reminds me of the best gifts in life

2011-04-08T11:25:00.000-04:00

By Carey Denman

For weeks, I’ve been asking my soon-to-be 5-year-old what he wants for his birthday. He’s never wavered from his initial response: “Balloons, and party hats, and peanut butter sandwiches.” In fact, he rather convincingly maintains that “it isn’t a party without balloons and party hats.” And you have never seen a boy so enthusiastic about eating peanut butter.

I assure him that his dad and I can meet those requests, but I try to reframe the question by asking, “What would you like inside your presents?” He flashes me his signature grin and says, “Jelly beans and a package of balloons.” After asking the same question several times in different ways, it eventually dawned on me that I was making a simple situation far more complicated than necessary.

Amazingly, my son was focused on the experience of celebrating his birthday, and on the way he wanted his special day to “feel.” I, however, kept trying to boil down the celebration to something to unwrap. This boy has always relished simple pleasures, including things like jelly beans and curvy straws. His birthday requests reminded me, once again, that even as children what we most want and cherish in life are heartfelt experiences, not “stuff.”

So, the party itself will be our gift to him. This party will consist of a cake, made by grandma, in the shape of a hot air balloon. He’ll be sharing his cake and a platter of PB&J sandwiches cut into balloon shapes with our extended family. Bottles of soda, bunches of grapes and a few bags of chips will round out his birthday meal

In keeping with the balloon theme, we’ll hang our birthday wreath on the door (a straw form with 72 balloons pinned to it) and fill our dining room with dozens of free-floating helium balloons. I’ll also hang the pennant bunting we used for the last round of birthdays at our house. And we’ll pass out party hats, of course.

He will have one small gift from us to open, though technically I consider it part of the overall experience. That present will be a t-shirt bearing a drawing he made a few months ago. He’d drawn it after I’d asked him to make a picture of something that made him feel happy. Not surprisingly, he drew a picture of himself, wearing a party hat and holding a bunch of balloons. (As funny aside, his drawing bears his sister’s name, because he can’t quite write his own.)

When I look at the details of his drawing, I see a moment captured in time, a moment when my little boy finds pleasure in the smallest of things. I want to do the same. I am so grateful for this balloon-loving boy who shows me that many joys in life are found in simple things. Planning a party that celebrates him and what he loves reminds me that, in any season of life, our lives can be rich in pleasures that cost very little.

Simple pleasures are even better when shared with family and friends. Planning my son’s party also reminds me that, despite my repeated attempts to find out what to buy him, this celebration isn’t about presents. Having people to celebrate with is perhaps the best gift of all. What I most want, and what I most want to give my son, are experiences that can be enjoyed with the people we love. And if those people happen to be wearing party hats and holding balloons, it will be a perfect birthday indeed.

Majority of Americans are ready to change banks of fees increase

2011-04-01T12:40:00.002-04:00

Washington, DC – The National Foundation for Credit Counseling (NFCC) March online poll queried consumers regarding what they would do if their bank raised the fees on their checking account. The majority, 51 percent, indicated they would shop for another bank.

“Even though banks are considering ways to recoup monies lost due to recent regulations, they nonetheless need to retain customers,” said Gail Cunningham, spokesperson for the NFCC. “The results of the survey send a strong signal that consumers are ready to walk if fees are imposed. Money is still tight in many households, with consumers watching how every penny is spent, including even seemingly small amounts such as bank fees.”

A disturbing result from the survey revealed that 16 percent of those polled would probably never notice if the fee increased, indicating a definite lack of attention paid to basic personal finance skills such as reading the monthly bank statement. Equally unsettling is that 11 percent would simply grin and bear it, perhaps fatalistically accepting the fees as a part of today’s financial reality.

Sixteen percent of respondents will at least let their opinion be known by complaining to the bank if fees are hiked.

Only six percent of those weighing in indicated that they would show their displeasure by closing their account and begin using a pre-paid debit card. Such cards can be useful tools, particularly for those who have a tarnished credit file or need to control their spending. Although many do not check the applicant’s credit prior to issuing the card, consumers choosing to utilize this option should read the agreement’s fine print, as pre-paid debit cards may assess monthly fees, thus not offering the desired safe haven from checking account fees.

The actual survey question and results are as follows:

If my bank raised the fees on my checking account, I would

A. Probably never notice = 16%

B. Grin and bear it = 11%

C. Shop for another bank = 51%

D. Complain to them = 16%

E. Close my account and begin using a pre-paid debt card = 6%

If you have questions about your personal finances, reach out to a trained and certified credit counselor. Call Michaele Pena at Family Services, Inc. if you would like more information, (843) 735-7802, or go online to www.fsisc.org.

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Small steps toward my dream cultivate happiness

2011-03-29T13:14:00.000-04:00

By Carey Denman

For as long as I can remember, I have loved old, white farmhouses. I moon over their clapboard siding and steeply pitched roofs, their mullioned windows and gracious front porches. I love them even more when they are surrounded by white picket fences, with red barns nearby.

Fueled by my farm infatuation, I have spent many hours trolling real estate sites looking for my own little white house with a big red barn. I have also been known to endlessly blather to my very patient husband about apple orchards and milking goats.

However, I began to realize that the more time I spent imagining my life in a white house, tending to my Nubian goats, the more restless and discontented I became. In fact, focusing on what I didn’t have was making me noticeably unhappy.

When I look closer at the situation, I recognize that I’d unconsciously gotten caught up in the “I’ll be happy when” mentality. I’d made my happiness conditional, believing that somehow being there—wherever there might be—was better than being here. What’s more, my conditional happiness was based more on romantic fantasies than the gritty realities of farm life.

Unfortunately, getting caught in the trap of conditional happiness is easy. What isn’t so easy is learning how to quiet the “I’ll be happy when” messages we send ourselves. These are the messages that say, “I’ll be happy when I get a promotion.” Or, “I’ll be happy when I get a new car.” The fact is that if you were unhappy before you got the promotion or the new car, you’ll very likely feel the same way after the initial buzz of achieving these things wears off.

For me, acknowledging that I was postponing happiness for a pipe dream was essential. (Again, enter my very patient husband, who helped me realize this.) Once I did this, I was better able to appreciate what I have right now, which includes a small acreage with a creek running through it, a neighborhood filled with people willing to help one another, and a sizeable garden that produces hundreds of pounds of produce every summer. I’m continuing to expand this list in a gratitude journal I have been keeping.

Although I may not be able to have a full-blown farm right now, I recognize that there are some intermediary steps I can take in the meantime. Building a small chicken coop out of reclaimed cedar and getting a few laying hens was one of those steps. We’ve been collecting over a dozen of our own farm- fresh eggs every week, and we have enjoyed watching our hens strut around the yard – a pastime we have dubbed “chicken TV.”

Other plans include ordering some dwarf fruit trees for our existing garden and expanding the variety of other produce we grow. (One of those new varieties we’ll be planting is stevia, an herb known for being a potent sweetener.) We also bought a bundle of posts that we plan to use on the back portion of our property to build a fence for some animals (which are yet to be determined).

Instead of feeling stuck because I am waiting on happiness in my white farmhouse, I’m focusing my energy on creating a farm-like atmosphere for myself and my family right now. I’ll take satisfaction in the flowers and vegetables that emerge from my garden this year, and in delicious eggs from my own hens. This kind of happiness costs me very little. It only takes determination to look for the good in what I have now.

My simple garden gives us beauty, food without fuss

2011-03-25T10:53:00.000-04:00

By Carey Denman

My life is complicated, with four kids and one very stubborn hound dog, and so I resist things that require fuss. I don’t buy clothing that needs to be dry cleaned, or even ironed for that matter. I don’t grow finicky houseplants or prepare recipes with long lists of ingredients. I won’t even wear a hairstyle that requires frequent trips to the salon.

In general, I make choices designed to keep my life as simple as possible. Not having to run clothing to the dry cleaner, for example, means I save myself time and money. The same is true for preparing uncomplicated meals at home.

My garden is no exception to my keep-it-simple mantra. Sure, it’s possible—even easy—to make gardening complicated, by growing varieties of plants that need pampering and by worrying about things like soil temperature and PH, for instance. But again, I avoid all the fuss. Instead, I get seeds in the ground when the weather becomes pleasant, and I grow tough-as-nails plants that can tolerate a little neglect.

I work with simple and inexpensive tools—a hand trowel, a spade, a hoe, and a rake—and use composted manure I collect from my neighbors’ horses to fertilize my garden. As for my garden beds themselves, they are built with rocks foraged from our property, and the paths are lined with reclaimed woodchips.

When I started gardening, I didn’t exactly know what I was doing. Though I had read a few primers and absorbed garden wisdom from my parents over the years, I had no formal instruction of any kind. Instead, I literally just dug in and got my hands dirty, learning as I went.

I quickly discovered which plants thrived in my garden, and I decided to “love what grows,” abandoning specimens that didn’t perform well or that seemed to require extra care. I also recognized that perennial herbs and fruits are good investments; my chives and rhubarb come up in early spring and produce all summer long.

Now six years later, I have a large garden filled with sturdy perennials and with beds devoted to growing fruits, herbs, and vegetables. And from May until September, I am able to gather fresh produce by taking a few steps outside my back door. (As an added bonus, my children will eat anything that comes from our little plot—even onions.)

This year, I spent $48 on new heirloom garden seeds, which I’ll plant alongside seeds leftover from past years. For the first time, I’ll be collecting and saving the seeds from these heirloom varieties, which means I’ll have an even larger return on my initial investment. I’ll also be devoting more time to learning about companion planting—placing certain plants next to one another to improve plant growth and to repel pests.

I started gardening with only a willingness to learn and a desire to use the resources available to me. Together, these two things have made it possible for me to enjoy a frugal hobby that is good for me and for my family. By keeping my garden plan simple, I enjoy the benefits of homegrown food, without having to spend more time or money than I want to.

If blooming flowers or picking garden-fresh tomatoes seem alluring, I encourage you to dig in and try it this spring. Start with the space and resources you have; perhaps a friend or family member will even give you some seeds or transplants. Investing in a garden, big or small, can bring you a lot of satisfaction without breaking your budget.

Some Great News from a Great Organization

2011-03-17T10:54:00.002-04:00

Some Great News from a Great Organization Which We are Proud to be a Part of!

Via NeighborWorks: NeighborWorks® Helps More Than 16,700 Families Become Homeowners

Washington, DC - NeighborWorks America, one of the largest community development corporations and the sponsor of one hundred full-service Home Ownership Centers around the U.S., today announced that more than 16,700 families became homeowners last year through the efforts of NeighborWorks organizations.

Despite a tough housing market in 2010, NeighborWorks organizations succeeded in helping homebuyers navigate the complicated process and obtain mortgages that they could afford for the long-term.

“Last year was a tough one for working families who dreamed of homeownership,” said Eileen Fitzgerald, acting CEO of NeighborWorks America. “But with the help of NeighborWorks organizations, many families who stayed on course were able to purchase their own homes. And they’ll be able to stay in those homes for years to come.”

NeighborWorks organizations help families attain homeownership in a variety of ways including homebuyer education and grants for down payment assistance. NeighborWorks organization homeownership efforts are supported through grants from NeighborWorks America, state and local government programs and the support of the private sector.

A list of NeighborWorks HomeOwnership Centers can be found at:

http://bit.ly/nw-network-neighborworksProgs-homeownershipcenters

Healthful snacks can be good for you and your budget

2011-03-14T07:16:00.001-04:00

By Carey Denman

At our house, it’s not uncommon for our children to be eating one meal and already asking about what I’m serving for the next one. And my family’s food-centric ways aren’t limited to meals. Snacks are supremely important, too—even for the baby who doesn’t yet talk but who pounds on her highchair when she’s hungry between meals.

With four children, who each eat at least two snacks a day, I’m serving up a minimum of 56 snacks a week. Providing this many snacks stretches my creativity—and my budget. An extra challenge is providing healthy snacks that don’t require a lot to time to prepare. (Serving 56 snacks over the course of a week already takes a significant amount of time.)

Though the kids moon over blue yogurt in tubes and little boxed lunches with cheese and crackers, we try to avoid prepackaged (and expensive) snacks like these. Instead, we try to focus on giving them whole foods—although to be honest, they aren’t exactly gobbling up celery and carrot sticks when I serve them.

To help us keep our budget in check and to encourage the kids to eat more healthy foods, popcorn has become our go-to snack. I simply heat a tablespoon or two of canola oil in my 8-quart stock pot and drop in a half-cup of popcorn kernels. I put the lid on and stick close to the stove, shaking the pan on the burner when the popping begins to slow.

In less than five minutes, I have a bowl of warm popcorn that costs about 25 cents to make. Even drizzled with butter and a little salt, homemade popcorn is far cheaper than any microwave popcorn—and much better for us.

Popcorn also lends itself to many easy additions. These include dried cranberries, a tablespoon of apple or pumpkin pie spice, a few tablespoons of powdered sugar mixed with a little cocoa, freshly grated parmesan cheese and Italian seasoning, cinnamon and sugar, mini chocolate chips and—our current favorite—a few handfuls of mini marshmallows. Dropping the marshmallows on warm popcorn makes it taste like a popcorn ball, without any of the work.

Fruit and yogurt smoothies are another household favorite that meet the criteria of inexpensive and healthy fare. I scoop up past-their-prime bananas when my local grocery store discounts them to 25 cents a pound and store them in the freezer in their skins until I’m ready to use them.

When I need to prepare a quick snack, I defrost a banana long enough so that I can remove its skin. I drop it, along with a few spoonfuls of plain yogurt, into the blender. Sometimes I add other frozen fruit or fruit that needs to be used up, with a little honey or raw sugar. Smoothies are flexible enough that I’m generally able to use what I have on hand. Last time I made them, in fact, I even dropped in some spinach, which was stealthily camouflaged by the blueberries I added.

When my own ideas for snacks run low, I can turn to sites online for a wealth of healthful snack ideas. The Mayo Clinic site (www.mayoclinic.com), for example, suggests stringing chunks of fruit on wooden skewers to make fruit kebabs. Parents magazine’s site (www.parents.com) touts cheese as an excellent snack, and suggests serving chunks of it to children on “skewers” of pretzel sticks. Or, if your children are reluctant to eat fruits and vegetables, Parents’ site recommends preparing zucchini bread or carrot muffins.

With a little imagination, snack time can be fun, delicious and budget-friendly for you and your children.

Warmth and better meals some rewards of cutting our food budget

2011-03-04T10:55:00.000-05:00

By Carey Denman

Last summer, after my husband and I did some honest budget-crunching, I revealed that we were spending an average of $800 a month on food for our family of six, with approximately $200 of that amount going toward meals out. (Some months, we discovered, we spent close to a $1,000 on food. Ouch! )

At first when we realized what we were spending, we decided to cut our food budget in half. It was a drastic move that forced us to rethink how we were using our food dollars. We started using cash and reconsidered buying many of the items we thoughtlessly threw into our cart. While I’m glad we reached a new level of consciousness, we all ended up feeling deprived—and crabby.

We realized that, while were capable of spending half as much as we once did, we honestly didn’t want to make such a sweeping change. Instead, we decided to slowly increase the amount we were spending on food, until we arrived at a level comfortable for us. As of now, we’ve determined that we’re comfortable with spending about $500 a month on groceries.

Two notable changes have taken place since our food budget revelation. First, by shopping more carefully, we have freed up cash to help us reach one of our financial goals, which was our original motivation for changing how we shopped. That goal was to install a source of backup heat, which we were able to accomplish in early fall. We now have a small gas stove in our living room, a place where we’ve been curling up and spending lots of time together on cold winter nights.

Second, as we’ve become more aware of how we’re spending, we have become more conscious of what we’re eating. We’re eating out less and preparing more satisfying and nutritious foods at home. We’ve also cut out most prepackaged foods, including things like frozen pizza and pudding cups, and we have switched to an almost all-organic diet.

Seeing our food budget through new eyes has definitely been a learning experience. Not only have I had to learn to shop differently, but I’ve also had to sharpen my skills in the kitchen. The first time I made cooked chocolate pudding from my mother’s old recipe, it was so runny that it was more like chocolate sauce than pudding.

To be honest, it’s taken some adjusting on the part of our children, as well. We don’t buy the super-sweet 8-ounce containers of yogurt or microwave popcorn anymore. But we do enjoy plain yogurt sweetened with a little honey, and popcorn made in a kettle on our cook stove. Finding suitable substitutes for the pricier convenience foods we once ate has helped with the transition. Getting my children more involved in meal preparation has helped, too.

Having my children work alongside me does take extra time (and patience), but when they’ve made an investment in what they’re preparing, I’ve found they’re much more likely to eat it. I suppose you could say buying and preparing wholesome food is the same for me: it takes time and a little bit of patience.

Still, even while I may be devoting more time to shopping or spending a few more minutes in the kitchen, we’ve enjoyed the tangible (our new gas stove) and intangible (increased energy, improved health) rewards in a way that makes this kind of conscious spending feel like a worthy pursuit.

Before you buy it, ask yourself if you really need it

2011-02-25T12:15:00.001-05:00

By Carey Denman

Our 4-year-old son is obsessed with baseball. His face lights up when he catches a snippet of a game on television, or even when he sees a drawing of a ball and bat in one of his activity books. He winds up like a pro and has the kick-the-dirt action of baseball players down pat.

Several months ago, while we were walking through the sporting equipment aisle, he announced, “I need a baseball mitt.” I reminded him that a baseball mitt wasn’t a need, but a want. He cleverly countered with, “If I’m going to play baseball, I do need a mitt.” He was right. He couldn’t play baseball without a mitt, but I was amazed by how quickly and adeptly he was able to spin the situation in his favor.

Of course, it isn’t only children who confuse their wants with their needs; my husband and I are sometimes guilty of doing the same thing. What’s interesting about co-mingling our wants and needs is that we often do so unconsciously. What starts out as a want unwittingly turns into a need.

Take the situation with our home computer, for example. After the hard drive died, we basically had two options: invest in a new hard drive and spend about $200 for the repair, or buy a new computer, which would cost us $400 to $600. At first, we had planned on spending the lesser amount and repairing what we had, but as we looked at new computers and the dizzying array of options available, we slowly began to shift our focus. We started saying things like, “We could really use a computer with more memory.” “A faster computer would be nice.” And, “With a bigger monitor, our kids could watch movies in the kitchen.”

Without really noticing, we had changed our dialogue. When discussing our plans with family and friends, we started saying, “The hard drive in our computer is bad. We need a new computer.” In reality, we wanted a new computer because we got caught up in the idea of all the extras we could enjoy.

I wouldn’t say we’re kicking ourselves over buying a new computer. We had the money set aside to buy it, and we will certainly appreciate increased browsing and download speeds, along with a larger, clearer monitor. Nevertheless, the experience reminds us that it’s difficult to make wise financial decisions when we let our wants become our needs.

Part of that difficulty arises because wants and needs in a consumer-driven society are often relative. Where you live and who you spend time with helps shape what constitutes a “need” in your life. If all your friends tend to communicate with each other via text messages, for example, then you’re more apt to believe you need a cell phone with texting capabilities, too.

A pervading sense of entitlement is another reason we blur the line between wants and needs. When you work hard, you might feel that you “deserve” a vacation, or a massage, a new set of tools or some other special reward. It’s easier to spend money unconsciously with an attitude that says, “I am owed this.”

It’s not always easy to be honest about our wants and needs. Our needs are simple. What isn’t simple is learning to look carefully at our lives and sort through the messages—our own and others—that tell us to do and buy and upgrade. Thoughtfully spending money on what we truly need and want – instead of buying to keep up with trends – can help us keep our budgets focused on what’s most important to us.

Investing your time, creativity can build richer relationships

2011-02-14T06:57:00.001-05:00

By Carey Denman

Of our four children, one is particularly “spirited,” which is another way of saying that the boy is an expert at sniffing out trouble. Just yesterday, he was happily occupied with a small, battery-operated vacuum cleaner. When I looked away for a moment, he decided to take the brush attachment from the vacuum I was using, dip it into the toilet, and “help me” by “scrubbing” the floor.

Moments like these often leave me frazzled and worn out, a familiar state for virtually anyone in the trenches of parenthood. This is true whether you’re tending to a newborn, chasing a toddler, running a tween to baseball practice or dealing with teenage angst.

In the midst of the chaos and the fatigue, the busyness and the routines, my husband and I have learned how difficult it can be to connect with our children in deep and meaningful ways. But we have also learned that, above all else, connectedness is what we want and what our children need.

Still, connectedness doesn’t always come naturally for us; honestly, we’ve found that it can be easier to divert or distract our children than to connect with them. In our home, movies often end up being our go-to diversion. Television, video games, the Internet, cell phone apps, a barrage of extracurricular activities, or buying new material possessions can just as easily serve as distractions and time fillers that keep us from building the relationships we really want.

Although diversions do give us an occasional break from the demands of parenthood, my husband and I want to invest in the relationship we have with our children. We try to do this by spending our time and our money in ways that enrich our family.

We often spend time together on simple activities. We pull out board games, do artwork at the dining room table together, include our children in meal preparation (as painful as it might be to wait for a 6-year-old to finish peeling three carrots), and try to engage in the things they love. We drive Matchbox cars and sword fight, sip water from tiny tea cups and swaddle dolls.

In the evenings when we’re all home together, we gather in the living room to read. One of the tangible investments we’ve made in our children is a library of beautiful and engaging books. We’ve received some as gifts; the others we’ve picked up at rummage sales and secondhand stores for a dollar or less.

We prefer investing our money in books and playthings that encourage our children to use their time creatively – and that sometimes allow us to jump in and play with them. We like simple, low-tech items such as new cookie cutters that can be play dough tools, wooden bowls for their little kitchen, thrifted dress-up clothes or paint sets and sketchbooks.

Finding ways to connect with older children can be challenging, but it is just as essential. Start by committing to 30 minutes of uninterrupted time with them. Resist the urge to send a quick text message, answer the phone, send an e-mail, or start dinner. Challenge your children, too, to take a break from their electronic devices to spend time with you.

Being wholly present may take some practice and effort, but investing in your children, regardless of their age, has rich rewards.

Banish winter blues with flowers, friends and fun projects

2011-02-04T12:32:00.001-05:00

By Carey Denman

When I pad down the stairs in the early morning light, l instinctively head to the thermostat. On this morning, it reads 11 below zero. I shiver and let the familiar sense of dread settle in, wondering how we’ll spend another day together indoors.

Faced with perpetual gray skies and freezing temperatures, I battle the impulse to hunker down and wait for winter to pass. It’s almost as if I am holding my breath, waiting for spring’s return. Despite these feelings, however, I know I don’t want to let one day blur into the next. I want to do my best to celebrate what I have right now.

In Calvin Coolidge’s words, “We cannot do everything at once, but we can do something at once.” So even if I can’t eradicate all my winter angst in a single swoop, I can make small, deliberate choices to find joy. It’s even possible to do so without breaking my budget.

One budget-friendly way to lift your spirits, according to research from Rutgers University, is with a bouquet of fresh flowers. According to a series of published reports from Professor Jeanette Haviland-Jones and her colleagues, flowers have an “immediate and long-term effect on emotional reactions and social behavior,” for both men and women. In other words, flowers are clinically proven to reduce stress and make people happier. Investing in a small supermarket bouquet can cost as little as $5, but it’s a simple and cost-effective way to improve your mood.

Similarly, making an effort to cultivate relationships is a low-cost way to beat the winter doldrums. Try gathering friends to share a meal or enjoy a game night together. You don’t have to put on a full spread for everyone; you can make a big pot of soup and ask guests to bring bread and dessert to share. Or you can gather after meal time and serve a light snack.

You can easily elevate simple, inexpensive fare to impressive party food. For example, a bowl of popcorn topped with crumbled bacon (and some of the pan drippings) makes a crowd-pleasing snack. Pair this with rich candy bar hot chocolate and gather around the fireplace or the coffee table for a game or good conversation.

Getting outside is another easy, inexpensive way to squeeze some joy out of winter – even if it’s difficult to find the motivation to do so. Take a brisk walk, go sledding, or build a snowman. When you’re engaged in physical activity, your brain is releasing endorphins. These chemical messengers reduce your perception of pain, boost your immune system, and generally promote physical and emotional well being.

Learning a new skill or reviving an old interest can have a similar positive effect on your mood, as I found out when I recently pulled out the pasta maker I inherited from my grandmother. The process of rolling out pasta dough, and then slowly turning the crank on the machine, was almost meditative. I stood in the kitchen and surveyed the long strands of pasta with great satisfaction.

If you’re looking for ways to banish winter doldrums, make a list of three things you’ve always wanted to do or that you haven’t been able to finish. Perhaps you have a craft or cleaning project that has gone undone; now may be the perfect time to finish that novel or reorganize your closet.

When you make it a point to enjoy what you have right now, you might find that, instead of the winter blues, you have a warm sense of satisfaction—and that’s something worth celebrating.

Investing in good kitchen tools has some delicious rewards

2011-01-31T08:56:00.001-05:00

By Carey Denman

As a child, I remember restaurant pizza being expensive and a rare treat for my family. Store-bought pizza was pricey, too, and it didn’t taste that good. And then there was the homemade variety: hamburger pizza made on a giant, blackened cookie sheet and always a little too doughy for my taste.

These days, it’s easy to get a decent pizza at a reasonable price, but I’ve found it more difficult to prepare pizza at home that excites my family— in the same ways that store-bought or restaurant pizza might, at least. In fact, until quite recently, I’ve had moments of “homemade pizza anxiety,” because my pizza doesn’t behave precisely as it should. It sticks to the pan, or won’t slide onto the pan, gets too puffy, or browns too quickly on top, leaving me with the kind of too-doughy crust I don’t like.

Convinced that pizza should never make me crabby, I decided to invest in some tools that will help me make truly good pizzas at home. First, I bought two baking stones and some cornmeal. The idea is that you preheat the baking stones to 500 degrees; then slide the prepared pizzas onto them. The stone meeting the crust is supposed to be a little bit of magic—that is, if you can manage to slide a 12-inch pizza onto a crazy hot piece of ceramic.

As you might have guessed, this process did not work as well as I hoped. I tried sliding the pizza from the back of a cookie sheet onto the hot stones, and I also tried not preheating the stones as suggested. More than once, I dropped my pizza on the oven rack or sent a shower of cornmeal into the bottom of my stove, or ended up with subpar pizza.

My mother, having observed—and sympathized—with my frustration, gave me what is known as pizza peel, the flat shovel-like object used in pizzerias. The result has been nothing short of a miracle, as it relates to the quality of pizza we’re eating. This homemade pizza is better (and far cheaper) than what we can eat out or buy at the store. Plus, we’re happily trying different kinds of toppings: spinach and goat cheese, caramelized onion and fresh mozzarella, and chicken apple sausage with feta.

The lesson, as it relates to finances, is that it pays to invest in good-quality kitchen tools that you will actually use. I got my pizza stones on sale for $10 each, and I’m guessing that the cost of the pizza peel was about $20. With $40 worth of appropriate tools, I can make meals that fit our budget and our lifestyle.

On the other hand, a kitchen full of unused—even wacky—gadgets is money sitting on your shelves. This means that as interesting as an automatic peppermill with a light might be (yes, such a product does exist), if you don’t need to light up your salad while you’re grinding pepper on it, then you shouldn’t buy it.

The only way to know what tools you need is to be honest about how you use your kitchen. Start with a kitchen inventory and pull out anything you haven’t used in more than a year; sell or donate those items. Then, consider which tools you believe indispensable to the way you live. For our family who eats pizza at least once a week, we’ve already gotten our money’s worth out of the pizza-making equipment. Over time, we’ll save ourselves hundreds of dollars we might have spent buying pizza, without depriving ourselves of the pleasure of a dinnertime favorite.

Distractions can be hard on your finances

2011-01-24T08:25:00.000-05:00

By Carey Denman

I can easily get distracted when I’m at home with our four young children. The level of my distraction is well illustrated by the story of the missing cheese. Recently while making dinner, I somehow misplaced a two-pound brick of cheddar cheese (yes, two pounds). Try as I might, I couldn’t find it anywhere. After much fuming, I finally gave up, imagining that I’d unearth a moldy mass of cheese months later.

I eventually found the cheese (in our large chest freezer, thankfully), but the experience reminds me of the dangers of not paying attention to what I’m doing. When the cheese “disappeared,” I’m reasonably certain I was multi-tasking – probably talking on the phone or tending to a child – and I wasn’t in tune with the task at hand.

It’s humorous that I lost (and then found) a block of cheese, but it isn’t so funny when I find myself losing money because I’m preoccupied. While at the drugstore recently to pick up teething medicine for my fussy 1-year-old, I grabbed what I needed and headed to the register. I laid out my purchases and handed over my debit card, signed my receipt and lugged my now-sleeping daughter to our van. It wasn’t until later that I realized I’d been overcharged by $8.

Had I been paying closer attention, I would have saved myself the hassle of having to return to the store for a refund. And while $8 isn’t what I’d consider a lot of money, I don’t want to be cavalier about losing any amount of cash. If I’m not looking out for my best interests, no one else will. This is true whether I’m overcharged a few bucks at the pharmacy or thousands of dollars on a major purchase.

Paying close attention to the details of your financial transactions is the only way to ensure that someone hasn’t made a mistake or isn’t trying to take advantage of you. This can sometimes mean taking on tasks that you may find mundane, or even unpleasant. You may not be in the habit of balancing your checking account, for example, relying instead on the online details of your account. Nevertheless, if you’re not taking the time to reconcile your account, it’s easy to let mistakes or errors go unrecognized.

This is true for other kinds of financial business you conduct, too. When we received a $25 bill for a well-child visit, my husband believed that our insurance should have covered the service. He dug out and read the policy to be sure, then called our insurance company to dispute the charge. If he hadn’t been familiar with the particulars of our insurance coverage, and done the work of reading the specifics, we could have unnecessarily spent $25.

It might take some practice, but you can train yourself to pay closer attention. The next time you’re in a retail store, make a mental list of prices and keep a loose running total as you shop. Before you leave the store, review your receipt for accuracy. If you’re taking advantage of an advertised sale, bring along the sale flyer so you can verify the price if there’s any dispute. When you receive your credit card statements this month, look at all the charges carefully and take note of the interest rate you’re paying (nearly a third of cardholders don’t know their interest rate).

Avoiding distractions could add up to a lot of “found” money. If, by paying closer attention, you saved yourself even $50 or a $100 this year, just imagine how much you’d enjoy some extra cash in your wallet.

Investing in each other, not things, brings lasting happiness

2011-01-18T07:24:00.001-05:00

By Carey Denman

A few nights ago, I sat with my children, husband, and parents in our living room. We’d just shared a pot of chili and homemade blueberry muffins and were sprawled out on couches and chairs. Soon after, my 6-year-old daughter brought over a bowl of small, smooth “story stones.” (Our story stones are rocks decoupaged with pictures of woodland creatures I clipped from an old children’s book.)

She sidled up to my mom, handing her the bowl and pleading for a story. I sat back and listened as my mother plucked stones from the bowl one by one and wove a story about a wayward chipmunk looking for a new home. My daughter listened, too, with rapt attention, and then took the bowl of stones and told her own story. It was the simplest form of entertainment—a meal shared together, followed by a time of storytelling and conversation—and an evening I won’t soon forget.

Such shared experiences, according to scientists, have a significant influence on individual happiness. In fact, several published studies have concluded that time spent building relationships makes people far happier than getting any new material possessions, even so-called luxury items. In part, this is because the initial pleasure of getting something new, such as a computer or car, fades so quickly.

Just how quickly a person’s exuberance over a new purchase wanes is astonishing. Psychologists report that we typically get used to seeing a new purchase, and therefore adapt to it, in a matter of six to eight weeks, or three months at best. This phenomenon, known as “hedonistic adaptation,” explains why lottery winners return to their original level of happiness not long after they’ve collected their winnings.

On the other hand, when we invest our time in relationships and in collective experiences, we create memories that we can draw on for many years to come. Unlike material possessions, our memories generally make us feel more alive, according to assistant professor of psychology Ryan Howell.

It seems that investing in other people’s happiness pays dividends, too. A 2008 study from Harvard Medical School and the University of San Diego concluded that your happiness is not only influenced by the people that you know, but by people they know. In other words, you’re more likely to be happy if your friends are happy, and even if your friends’ friends are happy.

It’s amazing to think that happiness has this kind of domino effect, indirectly spreading to a vast network of people, even influencing someone whom you may have never even met. It makes sense, then, for you to cultivate relationships in deliberate and meaningful ways.

The beauty of being intentional with your relationships is that it doesn’t have to be a costly endeavor. For example, you might host a neighborhood potluck or write a hand-written note to a friend with whom you’ve been out of touch. Play a board game with your spouse in the evening, or take a child on an individual “date” and share a piece of dessert. You could invite a group of friends to start a supper club or undertake a volunteer project together. Or you might consider joining a group that is devoted to something you enjoy, such as gardening, archery or French.

No matter how tight your budget is, you have the ability to create a richer, happier life - right now - by simply investing your time, love and talent in those closest to you. Happiness doesn’t depend on more money or the latest gadget. In tough economic times, that’s refreshing, encouraging news for us all.

Questions?

Michaele Pena

mpena@fsisc.org

(843) 735-7840

Resolve, and a plan, are keys to achieving your goals

2011-01-07T13:28:00.001-05:00

I would never want to underestimate the power of resolve, that state of mind where tenacity and firm determination help you accomplish something difficult or out of the ordinary. I would say I had resolve, for example, when I earned my college degree – and paid for my education myself. But I have to admit that I wouldn’t consider myself a resolute person.

That’s one reason I don’t make New Year’s resolutions. Another reason is that resolutions usually don’t lead to the success you hoped for. A resolution presumes you can change things in your life just by making the decision to do so. On the contrary, true and lasting change is most often the result of making a commitment, followed by series of deliberate choices.

Though resolutions can help you to identify areas of your life that you would like to improve, such as your health, your relationships, or your finances, they can’t give you any concrete measure of success along the way. This is largely because resolutions are typically expressed in broad, shapeless statements, such as, “I will enjoy life more this year.” Or “This will be the year I finally get my finances under control.”

Without a clear picture of what it means to enjoy life more or have your finances under control, you’ll likely abandon your resolutions. As a result, you’ll end up feeling discouraged—even powerless—to affect change in your life.

Thankfully, there is a more effective way to accomplish what you want to do in 2011. By setting goals, instead of making resolutions, you’ll be able to create a more realistic, successful plan for the year to come. Goal setting will let you take the statement, “I will enjoy life more this year” and turn it into a series of measurable steps.

To begin, you need to ask yourself this basic question: What will I need to do in order to enjoy my life more? Do you need to work less, carve out more time for hobbies, or reduce your debt? Will being better organized or cooking more meals at home help you reduce stress and improve your life? Or, will starting an exercise plan move you closer to the life you desire?

Next, you can set attainable goals. If you want more time to enjoy a favorite hobby, for example, what else are you willing to give up? If you want to devote more time to writing, you may need to get up a few minutes earlier, spend less time online, or commit to writing during your lunch hour. Your goal, then, might be something like this: I will get up early three days a week and write for at least 30 minutes.

With this goal, you’ll know if you’re making progress. You’ll also recognize when your plan isn’t working. If you end up hitting the snooze button four times, rather than getting up to write, you may want to adjust your goal and write for 20 minutes in the evening.

You can apply the same methods to other types of goals, as well. If you want to pay down your debt this year, determine how much you can realistically afford to repay. Then, consider ways you can reach your goal; taking a part-time job, selling an asset, or redirecting money you normally would have spent on eating out are all possible options.

Setting a goal as we start a new year is a worthy task. If you map out small steps to achieve your goal and resolve to stick with them, you can change your finances, or your life, for the better.

A family mission statement will help us shape our future

2011-01-03T09:23:00.000-05:00

When my husband and I recently took a small “life inventory,” we reflected on what went well during 2010. We also began identifying areas in our lives that we wanted to improve. For example, we acknowledged that we want to spend less time on the computer and more time engaging in focused activities that improve our relationship with each other and with our children.

In order to use what we learned from our “life inventory” and to define a clearer vision for our family, we decided to write a family mission statement. On a practical level, our statement will become a decision-making tool that helps us learn when to say “yes” and when to say “no.” More than that, it will define the kind of family we want to be.

To get started, my husband and I each answered a list of 20 questions that helped us to define our strengths, our priorities, and our desires for our family’s future. (Such lists are easily accessed online with a quick search using the words “family mission statement.”) The list included questions such as “What is the purpose of our family?” “What would we like people to say about our family as a whole 10 years from now?” “What is one way we are unique as a family?” “If our family could be filled with one emotion, what would it be?”

Working through the questions took a significant amount of time, particularly when we had to define what we want our lives to look like in the future. It forced us to think about how our lives will be different with a house full of teenagers, instead of one filled with preschoolers and toddlers. At one point, my husband paused and said, “This is hard. I keep realizing that I’m writing down one thing and that I’m living in an entirely different way.” I felt much the same way; writing down what I wanted made me think about the disconnect between how things are and how I want them to be.

Next, my husband and I shared our answers with one another. On the plus side, we immediately began to see some common themes emerge. For instance, we each defined similar strengths for ourselves and for each other. We also had similar answers to questions about how we want people to describe our home environment and the top four priorities we want our family to value.

Unfortunately, there was a downside, too. As we started talking more in-depth about our answers, our emotions flared up. The questions themselves were deeply personal, and we both felt fiercely attached to our responses, even a little vulnerable. We agreed that we wanted to let our emotions mellow a bit for now; we’ll return to the process of writing our family mission statement in January.

When we’re ready to begin again, our next step will be to take what we learned about each other and ourselves to shape a comprehensive statement about how we want to spend our time and our money. We’ll revisit the common themes that emerged, and we’ll start to write a mission statement that reflects who we are and who we want to be as a family.

At any stage of life, a mission statement can help you focus on what you really want. If, as you start a new year, you’re feeling like life isn’t what you want it to be, consider creating a mission statement for yourself or your family. It requires an investment of time and emotion, but the result could help you positively reshape your life and your family for years to come.

Comfort on the go makes traveling easier

2010-12-20T07:40:00.001-05:00

By Carey Denman

I often joke that the key to parenting four young children is to always have food. A stick of gum or a piece of candy works wonders in the grocery store. A sucker is a little bit of magic when we’re on the homestretch of a long trip. A few crackers can stall before-lunch anarchy.

In other words, small comforts, made possible with just a little bit of planning, can make life easier, and generally more pleasant, for our busy family. Our wee ones are less apt to melt down, and we do a better job of keeping our budget intact when we’re prepared for outings. This is true whether we’re heading out for a day of running errands, or taking a trip across the state, such as the one we’re planning this holiday.

No matter what your personal situation, you’ll be better prepared to deal with the stress of holiday travel when you plan ahead. You’ll also save money when you take time to make some relatively small travel preparations. After all, who hasn’t been so desperate in an airport that you resort to eating a $6 pretzel, or been so famished that convenience store beef sticks, packaged alongside unrefrigerated cheese, suddenly look appealing?

While it’s impossible to account for every possible travel glitch—lost luggage or sketchy roads, for example—you can be ready to deal with two inevitable aspects of traveling: hunger and boredom. We’re able to deal with the former by picking up special food items in the days leading up to our trip. These include treats like juice boxes and crazy-long licorice ropes.

Just the sheer anticipation of something out of the ordinary helps our children deal with the seemingly endless prairie stretched out before us. And though the idea of a foot of licorice may not be appealing to you, you can plan for your own kind of travel indulgences.

For road travel, for example, you could brew your favorite coffee at home and take it along in an insulated Thermos. Or you can buy yourself candy you love, or pack your own boxed meal for an airline flight. Make homemade granola or simply stock up on your favorite energy bars. With preparations such as these, you’ll make a small upfront investment, but you’ll save money and feel more satisfied in the long run.

As for dealing with travel boredom, we have our own specialized coping mechanisms. Namely, these include new or favorite books and CDs, stickers, and pocket-size notebooks and crayons. When the situation gets really desperate, we break out press-on tattoos and the aforementioned suckers. We’ve even been known to stop at a park and brave subzero temperatures, just as a way to get everybody out of the car and break up the trip.

Again, press-on tattoos and wintery romps in the park probably won’t suit you, but getting a free download for your digital reader or checking out books or back issues of a magazine from the library could be an appropriate (and budget-friendly) substitute. An audio version of a book is yet another way you can pass the time during your travels – especially if the plot is a thriller guaranteed to keep you alert during long hours of driving. Or you could even write a few handwritten notes or finish a knitting or embroidery project, if these kinds of pursuits interest you.

Amid the busyness of the season, take time to pack a few comforts to pamper yourself and your family. A little planning goes a long way toward making us calmer and happier during stressful holiday travels.

One simple change can make life, money management easier

2010-12-13T07:41:00.001-05:00

By Carey Denman

In a house with four children, I can easily become besieged by laundry. It mounts quickly, but takes hours to tackle all the tiny socks and spaghetti-stained t-shirts. On any given day, there is a load of laundry sitting somewhere, waiting to be stain-treated, washed, dried, folded, or put away.

Laundry isn’t complicated (unless you end up drying a piece of wayward gum, which has been known to happen at my house), but it is a process that can be overwhelming. That’s why I decided to remove the hampers from my children’s rooms and set up a canvas cart with three separate bins.

My children now drop off their dirty clothes in a centralized location, where it immediately gets sorted by color. When one bin gets full, I can do laundry without having to walk all over the house dumping out hampers and sorting clothing.

My experience with the laundry cart reminds me how valuable one small change can be. Though I’ll never be free of laundry, I have found a way to streamline the task. In the same way, you will always have to deal with money, no matter how much or little you have. Too often, people get overwhelmed by the idea of getting their finances under control. When they don’t know what to do first, they often end up doing nothing.

You can learn to manage your money effectively by making one small change at a time. Start by asking yourself, “What isn’t working well?” For example, do you have a habit of paying bills late and ending up with late fees? Do you scramble when the holidays approach, then overspend on your gift purchases? Do you eat out more often than you would like?

Once you identify one area you would like to improve, then you can consider a simple solution. Suppose you want to stop paying your bills late. Start by putting your bills in one place and setting aside one or two specific days every month to pay them. If necessary, set up e-mail reminders or ask a trusted friend to keep you accountable.

If you want to build an emergency fund, set a relatively small goal--$500 to $1,000—and sign up for an automatic payroll deduction. You’ll never miss what you don’t see, and you’ll be encouraged when your savings balance grows each month.

If you want to spend less eating out, pack your lunch the night before. You can also stock your desk or work area with hearty, non-perishable foods such as trail mix, dehydrated soup mixes, granola bars, juice boxes, beef jerky or almonds. In a pinch, you can eat what you have on hand, and you won’t be tempted to dash out and buy something instead.

Planning ahead can help you rely less on convenience foods, too. You could cook and freeze several meals for later. My husband’s thrifty 89-year-old grandmother does this, creating complete, individual meals for herself. Even learning how to cook one or two new dishes can help you to spend less on expensive, ready-made food.

Advance planning also can help you avoid the last-minute holiday crush. If you can’t avoid it this year, start fresh in January. Make a gift list at the beginning of the year. Then, commit to making or buying just one gift a month; come next December, you—and your budget—won’t be stressed.

Ultimately, you’re in the best position to decide what solutions will work for you. Starting small will let you build on your success, allowing you to get your finances under control one simple change at a time.

10 Expenses to Cut to Help Pay Off Credit Debt

2010-12-10T07:33:00.003-05:00

Even small cuts make a difference, so examine your costs in these 10 areas first.

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

Some trims may seem small, but if you package several of them together, you can soon get started on a respectable payment plan.

Here are some ideas for places to turn first.

1. Cell Phones

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

2. Cable/Satellite

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

3. Homeowners Insurance and Car Insurance

By increasing the deductible of your policy from $500 to $1,000, you can see big decreases on your premium, says Michael Barry, vice president of media relations for Insurance Information Institute in New York. "People pay about $880 a year, so if I can knock $88 off, it's a start." Regarding auto insurance, take a look at your collision insurance if you have an older car. If you have even a fender-bender, sometimes the cost to repair the car would be more than it's worth, so perhaps you could cancel the collision insurance altogether. First, look up the value of the car at Kelley Blue Book, Edmunds.com or the National Automobile Dealers Association, then check the collision line on your auto insurance bill and see what it's worth to you to keep that insurance. Also, if you don't drive that car much, look for a discount. "If you drive from 7,000 to 7,500 miles a year, you can often qualify for low-mileage discounts," Barry says.

4. Transportation

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

5. Utilities

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

6. Food

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

7. Gym Membership

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

8. Movies

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

9. Tax Relief

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

10. Health Insurance for Dependents

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

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

Happy Holidays from Family Services everyone!

Holiday Manifesto

2010-11-30T12:17:00.002-05:00

I’ve confessed before that I have a knack for making things far more complicated than necessary. It’s a trait that often leaves me scrambling and my husband tearing out his hair. “Why can’t anything just be simple around here?” he’s been known to ask. Though I’ve balked at his question over the years, I have to admit that my husband is right: simple is better than complicated.

Yet it’s easy to make things complicated, without fully realizing I’m doing it. Perhaps this is no more the case than when it comes to the holidays. Holiday schedules fill up too quickly, the gift budget gets stretched, the dinner menu keeps growing and the days seem to morph into one another, sometimes becoming one frenetic blur.

To help keep us focused on the simple things we enjoy, we’ve revived our manifesto idea from last summer and created a Holiday Manifesto. Together, we’ve made a list that will help us to be intentional with our time and money and to savor the best of the season.

List suggestions for our manifesto run the gamut from traditional activities, such as sledding and making snow angels to more unique ideas that include making super hero ornaments and homemade peppermint ice cream. At the urging of our stick-obsessed four-year-old son, we plan to play broomball on a local pond. We’ll also work on building a snow fort and roast marshmallows in our backyard.

Like our summer list, the suggestions our children offered tended toward the simple (except making super hero ornaments, perhaps). And almost all of the ideas we compiled will cost virtually nothing.

When my husband suggested we add “have a slumber party by the gas stove” to the list, for example, the kids got so excited that I thought they’d jump out of their skin. Their excitement had me recalling my own childhood memories of camping out on the living room floor, of waking up and seeing the twinkling lights of our Christmas tree. Dragging out sleeping bags and sprawling out on the floor couldn’t be simpler, but it’s very likely that we’ll be making memories that last a lifetime.

My own contributions to our Holiday Manifesto include sending out Christmas cards (the first time I’ve done so in more than 11 years), making candy bar hot chocolate with real whipped cream, and decorating our home with natural elements we already have or that we can forage from our property.

Some other items that made the list include decorating cookies, singing Christmas carols, and baking an apple pie. Perhaps my favorite suggestion came from my six-year-old who thought we should make sleeping in one morning a priority. For parents who almost always get woken by the sound of four pairs of stampeding fit, sleeping in would indeed be a welcome treat.

The point of our list isn’t to put pressure on us, but to give us a visual reminder of how we really want to spend our time this holiday season. To make your own list, you might try taking stock of what you did last year. What did you truly enjoy? What activities seemed to cause chaos and stress? What did you want to do but didn’t?

With answers to these questions, you can craft a list that will help you to prioritize how you want to spend your time and your money this year.

Need some free help? Let us know!

CCCS/ACCE –American Center for Credit Education

Carey Denman

acce@acce-online.com

(605) 348-4550

FIVE THINGS NOT TO DO AT THE MALL THIS HOLIDAY SEASON

2010-11-11T10:20:00.002-05:00

Retailers have their red mark-down pens out earlier than usual this year, meaning that many consumers will begin taking advantage of bargains in advance of the traditional Black Friday rush.

As consumers hit the malls this holiday season, some are experienced shoppers, having weathered many years of finding just the right gift at just the right price. Nonetheless, whether novice or seasoned veteran, it’s always smart to arm yourself with timely shopping tips.

Family Services, Inc. reminds consumers of five things not to do at the mall:

· Do not carry your checkbook or more credit cards than you will use during that shopping trip. If your wallet is lost or stolen, this will limit the damage. Tip: Make a copy of the front and back of all credit cards, and put the list in a safe place at home. In an emergency, you will have easy access to a list of all your cards, the account numbers, and the bank’s Customer Service number to report the incident.

· Do not carry large amounts of cash. Even if you are committed to paying for your purchases with cash, be aware that pick-pockets take advantage of crowded areas and distracted people. Tip: Instead, make frequent trips to the ATM to replenish your stash of cash. Or, consider using your debit card for transactions, being sure to hang onto receipts and record in your check register to avoid overdrafts.

· Do not shop while in a hurry or at the last minute. You’ll end up spending more than you should simply to be able to mark the item off your list. Tip: Block out a specific time for shopping. Make your first trip a leisurely one, simply getting an idea of what’s available this year and at what price. Take notes, and once back at home, get organized for the actual buying adventure.

· Do not shop without a list. Santa thinks it’s a useful tool, and so should we. Tip: Make your list specific. Don’t just include the names of those for whom you need to purchase a gift, but also include the specific item you’re looking for, and most importantly, the amount you intend to spend. Having an overall holiday budget floating around in your head isn’t good enough. Without a plan, you’ll likely get caught up in the hype and overspend in the blink of an eye.

· Do not pile new debt on top of old. Some people are still paying for 2009 holiday expenses as they enter the 2010 buying season. Don’t make your financial situation worse by being one of them. Tip: Think about it, you’re buying for friends and relatives who will be the first to understand if you need to cut back. If you are in a tenuous financial situation, it will only be made worse through irresponsible spending. Consider writing a heartfelt note to those on your list, being sincere about your feelings toward them and why they mean so much to you. Most people can’t recall what they received last Christmas, but this will be a treasured gift remembered for years to come.

“The holidays can be particularly difficult for those unemployed or facing foreclosure. However, even if your situation is not that serious, we’re living in tough economic times, and no one should be spending money they don’t have,” said Michaele Pena, Director of Consumer Credit Counseling Services division (a division of Family Services, Inc.). “Being financially responsible this holiday season is a gift to yourself and to those you care about.”

If you need help creating a holiday budget or paying off an existing debt load, don’t delay reaching out for help. To reach Family Services, Inc. dial 843-744-1348 ext. 7802, or go online to www.fsisc.org.