Education

FEATURE ARTICLE:  Buried under your dead relative’s debt?

Death is a fact of life, and when someone dies, the deceased’s family naturally may wonder what will happen to his or her mortgage, auto loan, credit card bills, unpaid income taxes and other debts.

The simple answer is that debts become part of the deceased’s estate and typically should be paid before the remaining assets are distributed to the heirs.

Beyond that, debts after death are a very complicated subject, best approached with professional help, says Martin Shenkman, an estate and tax planning attorney in Paramus, N.J.

“When somebody dies, the executor or personal representative, different lingo is used depending on which state you’re in, is charged with marshaling the assets for the estate and paying all the debts.” Shenkman says.

Finding debts

Exactly how debts should be paid depends on the nature of the debt, the terms of the deceased’s will and state law. For example, a loan collateralized by an asset usually stays with the asset, which means someone who inherits a house might get a mortgage as well. Someone who receives a car might get an auto loan to go with it. However, sometimes a debt may be paid off by the estate.

Executors and heirs also need to consider the possibility of hidden debts. To find out about undisclosed loans — or to ensure there aren’t any — an executor can monitor the deceased’s mail, search for P.O. boxes in the local area, review recent bank statements and speak with the deceased’s financial advisers, Shenkman says.

Credit card bills can be among the easier debts to resolve, unless the estate is insolvent. That’s because credit card companies may reduce or stop the accumulation of interest and fees on an account once they’re notified of a death. They might even, as Shenkman says, “accept a flat payment and call it a day” since they know resolving an estate can take months.

Debts also can come to light when a legal notice is published, as required by law in most states, says Michael Halloran, a wealth management adviser at Estate Strategies Group in Jacksonville, Fla.

“Before the estate can go through the court system, you have to publish, ‘Mike Halloran died, and I’m the executor or personal representative of the estate, and if we owe you anything, you need to tell me,'” Halloran says.

Creditors usually have a 60- or 90-day period in which to respond to a notice.

Jointly owned assets

Debts after death can become even more complicated if the deceased owned a business or guaranteed or co-signed someone else’s loan, Shenkman says. The estate may be responsible for such debts, depending on the ownership structure of the business and the legal wording of any loan guarantees. Again, legal advice is a wise investment.

Another complication is some assets may be shielded from certain creditors. For example in Florida, a life insurance policy is safe from most creditors, Halloran says. In other states, no assets are protected. Again, the word “may” should be emphasized due to differing state laws.

Assets transferred through joint ownership or community property generally don’t escape the rules, though collection may be more difficult for creditors, in some cases. In other cases, the asset may simply be repossessed. “Say I own a car jointly with Sue, and I die,” Halloran says. “If the bank has the collateral on the car, they can say, ‘Sue, you have a choice. Mike died, but if you don’t pay us, we are taking the car back.'”

Not enough money

If an estate is insolvent, meaning the assets aren’t enough to pay off the debts and the bequests in the will, the executor must sort out some tricky and sensitive issues. Shenkman says he’s seen an increase in such situations due to the poor economy.

“If there is insufficient money to pay off all the debts being claimed, you need to know legally what the priorities are of who gets paid or who doesn’t,” he says.

Such situations can get ugly because people may be grieving the death of the relative.

“When someone dies, it’s a very emotionally charged event for the family and loved ones. When you combine that with the potential of not getting an inheritance but instead having to deal with debt, you’re really talking about a hypercharged situation,” Shenkman says.

www.bankrate.com

MONEY SAVING TIP:  Keep your car as long as possible.

When possible, try to keep your car as long as possible. Find the balance between the money spent on repairs versus the monthly installment on another vehicle and choose to run your old car as long as the repair costs are low.

DID YOU KNOW…why clearance items are in the back of the store?

The clearance racks are placed in the back of almost every mall store on purpose — so you’ll be tempted by everything else more expensive in your path.

You have to pass all the new trends and displays, all the sales and promotions. Retailers are betting that your hands may be full by the time you reach that clearance area, so you will not be able to stay there and search for the better deals, says Underhill in his book.

Resist the urge: “Head to the clearance area first to find the best deals,” says Kay. “This way, you will have a frame of reference for comparing prices of similar items in other parts of the store and will be able to make smarter choices.”

www.bankrate.com

Debt Management Credit Counseling Corp (www.dmcconline.org), a nonprofit charitable organization (“DMCC”), has been designated an Approved Housing Counseling Agency by the U.S. Department of Housing and Urban Development. Initial housing counseling services to include budget counseling and financial management workshops. Individuals and families who are interested in creating a budget or attending a workshop, and organizations interested in scheduling an onsite workshop, should contact the DMCC Education Department.

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FEATURE ARTICLE:  8 Things You Should Shred Right Now

According to financial  services consulting firm Javelin Strategies and Research, identity theft affects 11 million people a year, at a cost of $54 billion.

If you don’t want to become a statistic, a good place to start is to get a shredder.

Shredding documents isn’t just for accounting firms and people with something to hide — every day working Americans have houses full of documents containing potentially compromising information, from Social Security numbers to bank account information. To dispose of them, security experts recommend getting a good cross-cut shredder (which makes your documents into confetti, as opposed to the long strips that a determined thief could reconstruct).

Old Tax Returns:  As a general rule, you should save your tax returns on the chance you get audited. But after three years, you’re in the clear — that is unless the IRS suspects you are guilty of fraud, in which case the agency can audit you as far back as it likes. “Keep three to four years of tax returns in a firebox,” says Brent Neiser, senior director of the nonprofit National Endowment for Financial Education. Shred anything older than that.  The biggest concern here is Social Security numbers. Yes, that’s numbers, plural. “Your dependents’ Social Security numbers are on those, too,” points out Gabby Beltran of the nonprofit Identity Theft Resource Center.

Bank Statements:  Anything with bank account numbers should be shredded, and that obviously includes your paper bank statements. That’s especially true for that box of old bank statements you just found in your attic that you don’t know why you kept in the first place. To avoid having to shred your statements every month, some experts recommend just making the switch to online statements.  “We recommend people turn off bank statements and get as many as you can via email,” says Phil Blank, managing director of security, risk and fraud for Javelin. “The most commonly perpetrated means of defrauding people is to steal things out of their mailbox.”

Credit Card Offers:  Unless you’re going to actually take the bank up on its offer and open an account, you should destroy these mailed offers right away. “A lot if identity theft happens within families, so don’t leave them lying around,” warns Neiser. “Somebody in the house who knows your basic information could fill it out.”  Whether you need to shred or simply rip up the offer is a matter of disagreement among advisers though. The priority is making sure someone doesn’t open a card in your name, but since there shouldn’t be any information like your Social Security number on these offers, you probably don’t need to obliterate them into tiny pieces.  Still, tearing it up may not be enough to stop someone from opening up a credit card and shredding your credit rating. A couple years ago, MainStreet reported on someone who tore up a credit card offer, then taped it back together, sent it in and got a credit card from Chase.

Old Photo IDs:  Maybe you like to save your old college ID and security badges from previous employers for sentimental reasons; we won’t begrudge you a little scrap booking. But if you want to dispose of them, consider using a shredder. While a photo ID alone isn’t enough to steal your identity, keep in mind that the ID — and the information it contains — could be used as part of a larger identity theft scheme to bypass fraud prevention measures. “A driver’s license has height, weight and date of birth — biometric information they can use to verify an account,” says Beltran.

Pay Stubs:  It might not seem like it at first glance, but your pay stub is rife with information that can be used by a skilled identity theft.  “Absolutely shred your pay stubs,” says Blank. “Some [financial] institutions will ask you as validation the amount of your last deposit; if they have that pay stub, they can give the bank that information.”  He adds that the information contained there can also provide a fraudster with other targets. “They’ll know who your health care provider is, and what bank accounts you have,” he says.

Credit Card Convenience Checks:  Credit card companies often send so-called “convenience checks” to cardholders, which are basically checks you can use to borrow against your line of credit for quick cash. Needless to say, you don’t want these to end up in the wrong hands. “The worst thing people get in the mail are these convenience checks,” says Neiser. “It looks like a credit card bill, but if you open it up, there are checks in there that are live loans … that to me is very dangerous.” If you don’t plan on using these, shred them immediately.

Canceled Checks:  Just because you write “void” on it doesn’t mean a canceled check can’t be a ticking time bomb. Remember, your account and routing numbers are listed on the bottom of every check. “Not only is the bank account number on there, but there’s also your address and possibly your phone number,” says Neiser. “And some people write their full credit card number on the check [to pay their bill].”  As for duplicate checks, those should have the checking account number omitted for your security. But if you have any security concerns, but still want proof of payment, Neiser points out that you can usually request a receipt from the recipient (for your property tax payment, for instance), then shred the duplicate check.

Canceled Credit Cards:  Sometimes you need to cancel a debit or credit card — maybe you want to rein in your spending, or you’re leaving your bank, or you suspect the number was stolen. So do you need to shred the old one? “Theoretically it’s not supposed to be problem, but we recommend that people cut through the magnetic stripe, as there’s encoded information on there,” says Blank. “Also, you don’t want people to know where you bank.” If your shredder can’t handle plastic, Blank recommends cutting it into four pieces, and then throwing the parts into at least two different trash bags. Hey, you can’t be too careful.

MONEY SAVING TIP:  Consolidate and pay off debt as soon as possible.

If you carry any debt, focus on consolidating it to a lower interest and paying it off as soon as possible. Money paid in interest is money thrown away! Why spend your hard-earned cash to make the financial institutions rich?

DID YOU KNOW…You’re not supposed to turn right when entering the store?

“Retail shopping studies have found that most people turn right when they enter a store. That’s because the majority of the population is right-handed and right-oriented,” says Underhill.

Knowing this, stores highlight tempting new items and trends to the right of the entrance. You’ll find that the music is louder and the displays are brighter to attract you where you will look and turn first. This is also where the most expensive items in the store are generally displayed.

Resist the urge: “Shop with blinders on,” says Kay. “Stick to your list with the cash in your hand. Avoid credit card debt at all costs, and head straight to what you came for.”

www.bankrate.com

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), provides businesses in the State of Florida with a custom Partner Program in order to increase employee financial education, work productivity and revenue, at no cost to the employer or their employees. Companies and providers of employee assistance programs interested in partnering with DMCC to construct an individualized educational program should contact the DMCC Education Department. This valuable employee benefit will teach employees about managing money and dealing with financial issues, so that their personal financial stress does not affect the overall quality of their work.

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Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), provides consumers free help assessing available options for debt relief. Certified credit counselors educate consumers on three major options for the satisfaction of unsecured debts when budgeting is not enough; debt management plans, debt settlement plans and filing bankruptcy. Consumers considering one of these options should contact DMCC for free help determining what is best based on their personal situation.

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FEATURE ARTICLE:  Save now or save later?

FEATURE ARTICLE:  Why Purchase Life Insurance? 

We have all heard about the importance of having life insurance, but is it really necessary? Usually, the answer is “yes,” but it depends on your specific situation. If you have a family who relies on your income, then it is imperative to have life insurance protection. If you’re single and have no major assets to protect, then you may not need coverage.

In the event of your untimely death, your beneficiaries can use funds from a life insurance policy for funeral and burial expenses, probate, estate taxes, day care, and any number of everyday expenses. Funds can be used to pay for your children’s education and take care of debts or a mortgage that has not been paid off. Life insurance funds can also be added to your spouse’s retirement savings. 

If your dependents will not require the proceeds from a life insurance policy for these types of expenses, you may wish to name a favorite charity as the beneficiary of your policy. 

Whole life insurance can also be used as a source of cash in the event that you need to access the funds during your lifetime. Many types of permanent life insurance build cash value that can be borrowed from or withdrawn at the policy owner’s request. Of course, withdrawals or loans that are not repaid will reduce the policy’s cash value and death benefit.

When considering what type of insurance to purchase and how much you need, ask yourself what would happen to your family without you and what type of legacy you would like to leave behind. Do you want to ensure that your children’s college expenses will be taken care of in your absence? Would you like to leave a sizable donation to your favorite charity? Do you want to ensure that the funds will be sufficient to pay off the mortgage as well as achieve other goals? Life insurance may be able to help you meet these objectives and give you the peace of mind that your family will be taken care of financially.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the claims-paying ability of the issuing insurance company.

If you are considering the purchase of life insurance, consult a professional to explore your options.

MONEY SAVING TIP:  Buying brand names.

People are finally wising up to this one – generics have been gaining market share since 2006. While prescription drugs have the biggest price tags versus generics, the dollars add up at the grocery store too. In many cases, the only difference between generic and brand name is price. Can you really tell the difference between name-brand and generic when it comes to water, cleaning supplies, or spices?

www.moneytalksnews.com

DID YOU KNOW…about the Electronic Transfer Fund Act?

This law caps out-of-pocket expenses for consumers in cases where a thief charges up their debit, ATM or credit card, provided consumers meet time constraints. Consumers also have the right to dispute charges on their bank statement.

• Limits your liability to $50 if you report your credit card lost or stolen. 
• Limits your liability to $50 if you report your debit card lost or stolen within two business days. 
• After two days but within 60 days after you receive your statement, limits liability to $500. After 60 days, you could owe all fraudulent charges. 
• Fraudulent signature-based purchases will only run you up to $50. If you report the missing or stolen card before someone uses it fraudulently, you shouldn’t be liable for the charges. 
• Liability periods should stretch if consumer had extreme circumstances that prevented prompt notification. 
• If state law or issuer’s terms and conditions provide lower liability limits, then the lower limits apply. 
• Provides for a record of all electronic transfers in the form of receipts at ATMs or point-of-sale terminals and periodic bank statements showing all electronic transfers. 
• If you find an error in a bank statement you can contact your bank and dispute charges. The bank generally has 10 business days to investigate your claim and report back to you, but may request more time. The consumer has 60 days from the date the statement was sent to report errors to the bank. 
• ATMs that charge fees to process transactions must disclose the fee amount before the transaction completes.

If a bank is in violation of the ETF Act, try complaining to the bank first. Beyond that, you can file a complaint with the federal agency that regulates that bank.

Cards with predetermined values such as gift cards may not apply to the ETF Act.

FEATURE ARTICLE:   Better management of your short-term cash

For the vast majority of people, it is essential to keep a portion of their assets in liquid form in order to meet monthly commitments.

For example, most families have to meet their mortgage or rent payments, grocery, utility, and transportation bills out of their monthly paychecks. There are a host of other expenses that arise from month to month, such as auto insurance, that help keep the pressure on the family cash flow.

If people are fortunate enough to have anything left over once all the expenses have been met, then they can worry about saving or investing for the future.

The paychecks that you deposit in your checking account, which seem to swiftly disappear as you pay monthly expenses, constitute a portion of your short-term cash. The money is no sooner in your bank account than it flows out again as payment for goods and services.

However, because the money that we use to meet our monthly expenses is so liquid, there is a tendency to simply look at it as a method of payment. We often leave more than we need in our checking accounts, gaining little or no interest until we need it for a future expense.

By actively managing the short-term cash that passes through your hands, you can provide a means of saving for the future. You can use this money to increase your net worth with little or no additional risk to your principal.

Short-term investment instruments, such as Treasury bills, certificates of deposit, and money market mutual funds, can provide you with the liquidity needed to meet expected and unexpected expenses and to increase your short-term investment income.

There are numerous alternatives available to enable you to get your short-term cash working for you. The key to successfully managing your short-term cash lies in understanding the alternatives and choosing the one most appropriate to your particular needs and circumstances.

Treasury bills are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest. Bank CDs are insured by the FDIC for up to $250,000 per depositor, per institution in interest and principal.

Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in money market funds.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

This material was written and prepared by Emerald.
© 2011 Emerald Connect, Inc.

MONEY SAVING TIP:   Try not accepting initial offers. Many people pushing for a sale are willing to negotiate because they want your money as much as you want the product. In Confessions of a Serial Haggler, I explained how I have personally gotten discounts on cable service, hotels, doctor bills, and more. It never hurts to ask.

moneytalksnews.com

DID YOU KNOW…debt collectors may not reach you at odd hours, such as before 8 a.m. or after 9 p.m., unless you grant permission for them to do so?  Under the Fair Debt Collections Practices Act you are protected from aggressive debt collectors. The law holds collectors to strict conduct rules.

• Debt collectors may not contact you at work if they know your employer dislikes such calls.
• Debt collectors must go through your attorney, if you have one, in regard to your debt. They can only contact a third party once about where and how to find you.
• Consumers must receive written notice five days after first contacted by a debt collector. It must detail the amount owed and provide instructions on how to dispute the amount if the consumer believes it to be wrong.
• A collector may not contact you if within 30 days after you receive the written notice, you fire off a letter to the collection agency stating you do not owe the amount. However, a collector can resume collection procedures if they send proof of the debt, such as a copy of a bill for the amount owed.
• Collectors may not threaten harm, harass the debtor or third parties, make repeated calls to annoy the debtor or use profanity during the calls.
• Collectors may not misrepresent themselves as attorneys, government agents, credit bureau workers or any other entity other than debt collectors, nor may they lie about the amount owed or what will happen they don’t receive payment.
• If you have a complaint, file it with the FTC and your state’s attorney general.

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), is now providing bankruptcy certificates for the pre-filing counseling and pre-discharge education required under the U.S. Bankruptcy Code. Consumers are not required to pay for the counseling or education course in advance. Open accounts are provided to attorneys to expedite the issuance of bankruptcy certificates for their clients.

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FEATURE ARTICLE:  A safe way to invest

A relatively safe investment instrument is the traditional certificate of deposit (CD) that you may purchase from your local bank. Federally insured for up to $250,000 per depositor, per institution in interest and principal, CDs offer you a fixed interest rate for depositing your money for a specific period of time. If you withdraw your money before that period is up, you may be subject to interest rate penalties.

CDs may also be purchased through most brokerage firms. The brokerage firm will shop the market and find the most attractive rate for you, even if it is out of state. This is something you might find difficult to do on your own. CDs purchased this way are called Brokered CDs.

CDs are most suitable for purchasing and holding to maturity. However, you may find it necessary to dispose of CDs prior to maturity. An important distinction between Brokered CDs and Bank CDs is the different means for early redemption. With a Bank CD, should you redeem your CD early, you will typically be assessed an early withdrawal penalty. Brokered CDs trade in the secondary market which provides you with the opportunity to sell your CD at prevailing market prices, which may be worth more or less than the original amount you invested.

Brokered CDs are more complex and carry more risks than CDs offered directly by banks. Brokered CDs may not be suitable for all investors. Before you purchase a Brokered CD, make sure you fully understand all of its terms and carefully read its disclosure materials provided by your financial professional.

MONEY SAVING TIP:  Don’t buy new

There’s no two ways about it – getting something in the original packaging often means paying twice the price. This mistake is most costly when it comes to cars, but it applies to many things: furniture, clothing, textbooks…the list is endless. So whenever practical, skip the stores and showrooms and choose thrift stores, yard sales, eBay, and Craigslist.

Source: moneytalksnews.com

DID YOU KNOW….Many employers use credit history as a tool in their pre-employment screening?  It is used as a measure of judgment and character. If you can’t manage your financial obligations, employers may think it’s a sign of irresponsibility. Some employers think that if your monthly debt payment is higher than your salary, it may distract from your performance.

To make sure you know what employers will be looking at, check your credit reports before they do.  Consumers can check their credit report as often as they would like, without it affecting their score. Everyone is entitled to one free report from each of the bureaus every 12 months. Visit www.annualcreditreport.com for more information.

FEATURE ARTICLE:  What advantages does a biweekly mortgage offer?

One of the most precious assets that you are likely to possess as you progress through life is your home. Owning their own homes is something that most Americans strive for.

Unfortunately, for the vast majority of people, one of the major drawbacks in owning a home is the long-term mortgage that must be paid off. Mortgages often stretch out 30 years with interest and principal repayments.

Most mortgage repayments are made on a monthly basis. However, arranging to make payments biweekly can have a dramatic effect on the amount of money you have to pay and the time frame before it is all paid off.

Under a biweekly mortgage, instead of making the payments once a month, you make half the payment every two weeks. If your mortgage is $1,000 per month, under a biweekly system it would be $500 every two weeks.

You make 26 payments per year, which is the equivalent of 13 monthly payments rather than 12. The extra payment should be taken directly off the principal, reducing the payment schedule accordingly.

The effect of biweekly mortgage payments can be dramatic. For example, if you currently have a $150,000 loan at 8 percent fixed interest, you will have paid approximately $396,233 at the end of 30 years.

However, if you use a biweekly payment system, you will pay $331,859 and have it completely paid off in 21.6 years. You save $64,374 and pay the loan off 8.4 years earlier!

The savings you realize using a biweekly payment schedule can save you nearly half of what it cost to buy the house in the first place.

An increasing number of mortgage companies are now offering a biweekly payment option. It is even possible to convert your current monthly payments into a biweekly schedule.

Some companies will attempt to charge you to refinance the loan. However, this is not always the case and shopping around can save you money in refinancing charges.

Be wary of independent companies offering to do this for you for a fee — you can do it for yourself for free.

You should receive professional financial advice when considering switching to a biweekly mortgage payment schedule.

MONEY SAVING TIP:  Got Milk?

Unless you are a vegan, look for generic brands of cow’s milk no matter where you shop. It’s packed with the same nutrients as name brands, and is produced following the same guidelines. The only difference is the higher price tag.

DID YOU KNOW…that with your car loan, you may also need gap insurance?

After you got rid of that old car, you purchased a shiny new car complete with that brand new car smell that everybody loves. You took out a loan for $25,000 and drove home. Two weeks later your car was totaled and the insurance company offered to pay you $21,000 for the car. The bank is going to still want the $25,000 you owe, so you’ll be on the hook for the other $4,000.

Without gap insurance, you have to pay it out of your pocket. Bottom line, if you have a loan for your car, you should also consider gap insurance

FEATURE ARTICLE:  How long will it take to double your money?

Before making any investment decision, one of the key elements you face is working out the real rate of return on your investment.

Compound interest is critical to investment growth. Whether your financial portfolio consists solely of a deposit account at your local bank or a series of highly leveraged investments, your rate of return is dramatically improved by the compounding factor.

With simple interest, interest is paid just on the principal. With compound interest, the return that you receive on your initial investment is automatically reinvested. In other words, you receive interest on the interest.

But just how quickly does your money grow? The easiest way to work that out is by using what’s known as the “Rule of 72.”¹ Quite simply, the “Rule of 72” enables you to determine how long it will take for the money you’ve invested on a compound interest basis to double. You divide 72 by the interest rate to get the answer.

For example, if you invest $10,000 at 10 percent compound interest, then the “Rule of 72” states that in 7.2 years you will have $20,000. You divide 72 by 10 percent to get the time it takes for your money to double. The “Rule of 72” is a rule of thumb that gives approximate results. It is most accurate for hypothetical rates between 5 and 20 percent.

While compound interest is a great ally to an investor, inflation is one of the greatest enemies. The “Rule of 72” can also highlight the damage that inflation can do to your money.

Let’s say you decide not to invest your $10,000 but hide it under your mattress instead. Assuming an inflation rate of 4.5 percent, in 16 years your $10,000 will have lost half of its value.

The real rate of return is the key to how quickly the value of your investment will grow. If you are receiving 10 percent interest on an investment but inflation is running at 4 percent, then your real rate of return is 6 percent. In such a scenario, it will take your money 12 years to double in value.

The “Rule of 72” is a quick and easy way to determine the value of compound interest over time. By taking the real rate of return into consideration (nominal interest less inflation), you can see how soon a particular investment will double the value of your money.

1 The Rule of 72 is a mathematical concept, and the hypothetical return illustrated is not representative of a specific investment. Also note that the principal and yield of securities will fluctuate with changes in market conditions so that the shares, when sold, may be worth more or less than their original cost.The Rule of 72 does not include adjustments for income or taxation. It assumes that interest is compounded annually.Actual results will vary. 

MONEY SAVING TIP:  Master the 30 day rule

Whenever you’re considering making an unnecessary purchase, wait thirty days and then ask yourself if you still want that item. Quite often, you’ll find that the urge to buy has passed and you’ll have saved yourself some money by simply waiting. If you want, you can even keep a “thirty day list” where you write down the item and the day you’ll reconsider it, but I prefer just to keep this one in my head – that way, I often just forget about the unimportant things.

DID YOU KNOW…you may not need collision insurance?

So you purchased an older model car. It’s only worth $2,500 and is seven or more years old. As your car depreciates, it gets closer and closer to your deductible. Remember that the insurance company won’t pay you any more than the value of your car, so if the value is the same or less than your deductible, you won’t get any money. If you’re driving an old car, consider not getting collision insurance. The minimum policy required by law is enough in your case. Don’t count on your insurance agent to tell you, though.

Yahoo.com

PORT ST. LUCIE – “Be frugal with your money,” “Don’t dig a hole of debt” and “There’s good credit cards and bad credit cards,” are all pieces of good financial advice.  What makes them even better is they came from high-school students.

The Allied Health Assisting students at St. Lucie West Centennial High School recently completed a financial literacy program that consisted of 12 modules throughout the school year.

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FEATURE ARTICLE:  When to use a Credit Freeze or Credit Alert

One of the strongest protection tools available to a credit consumer today is a credit freeze.

Consumers have the ability to “freeze” their credit files which are provided by the 3 main credit bureaus, Equifax, Experian and TransUnion. Putting a freeze on your credit file prevents creditors, lenders and most of all, identity thieves from having access to your credit information. These files will stay frozen or locked until you  thaw or unlock them.

You can still use your credit cards but without access to your credit files, thieves cannot establish new credit in your name, even if they have obtained your identity elements such as your Social Security number and date of birth. Consequently, you will not be able to secure new credit unless you remove the freeze from your credit file. You can temporarily “thaw” your credit file any time you want and allow authorized parties to access your credit report when you are applying for new credit. You can reactivate the freeze after receiving your new credit and lock up your credit again.

Freeze vs. Alert

It is important not to confuse a credit freeze with a fraud alert, which tells new creditors that you may have been a victim of fraud in the past and asks them to take additional verification steps before issuing credit. Problem is these additional steps may include asking social security numbers or birthdates which the thief may already have. Fraud alerts will also remove your name form prescreened offers for credit and insurance, while a credit freeze does not. To get the most security for your credit file, a credit freeze is the best alternative.

What does it cost to freeze your account?

All three of the major credit bureaus adopted rules to allow credit freezes naturally for a small fee. Below we are including a table of fees for the State of Florida, but these fees vary from State to State. Important to note that Florida law requires credit bureaus to provide credit freezes at no charge to anyone over 65 and victims of identity theft.

Keep these points in mind regarding a credit freeze:

• You must freeze your credit report at each credit bureau
• A freeze must be made via the company website or in writing. If in writing we suggest you use registered mail with a return receipt.
• It usually takes at least three days for you to “thaw” your credit file.
  

MONEY SAVING TIP: Connect your entertainment center and/or computer setup to a true smart power strip.

A device like the SmartStrip LCG4 basically cuts power to all devices on the strip depending on the status of the first item on the strip. So, if you have your workstation hooked up to this, every time you power down your workstation, your monitor powers down, your printer powers down, your scanner powers down, and so on. You can do the same thing with your entertainment console – when you turn off the television, the cable/satellite box also goes off, as does the video game console, the VCR, the DVD player, and so on. This can save you a lot of electricity and significantly trim your power bill.

DID YOU KNOW…Your credit card can be skimmed? It’s so easy.

The result of a criminal investigation in Florida should service as a cautionary tale about how easy it is to skim credit and debit cards.

FEATURE ARTICLE: The data they don’t want you to see

Despite opposition from manufacturers and some members of Congress, a new database could provide crucial safety information to consumers.

For a database that some say will destroy what’s left of U.S. manufacturing, SaferProducts.gov looks pretty benign.

The database, which was launched March 11, includes recall notices and reports from people who’ve had bad experiences with products: light bulbs that exploded, dishwashers that caught fire, diapers that appeared to cause rashes, a crib that trapped a baby’s leg.

Manufacturers can respond to the reports before they’re posted on the site, and some do:

• Bosch, for example, noted that the fiery dishwasher had already been the subject of a recall.
• Dynacraft, a bike manufacturer, said “a long history of no maintenance” on a 10-year-old bicycle is probably what caused a part to fall off, resulting in a report of a cut to the rider that required seven stitches to close.
• Pampers thanked the parents who reported rashes for “taking time out of your busy day to contact” the U.S. Consumer Product Safety Commission, which runs the database. The diaper-maker provided links to a report by the commission and its Canadian counterpart, Health Canada, announcing that they did not find a link between Pampers’ Dry Max design and diaper rash.

Some people’s reports don’t ever see the light of day. If people complain about a quality issue, rather than something that did or could cause harm, the report won’t make it into the database, safety commission spokesman Alex Filip said. Neither will reports that target the wrong manufacturer, that don’t list a manufacturer or that are otherwise “materially inaccurate.”

All in all, the database so far looks pretty restrained, especially when compared with the free-for-all commenting and reviews you can find on many other sites, from Amazon.com to Yelp.

At least with SaferProducts.gov, manufacturers will be notified of complaints within five days of the reports and have 10 days to respond. Businesses don’t get any prior notice of complaints or reviews on other sites, and any response they make can get lost in the din of comments.

Congressional opposition

But this Internet thingy — where people actually have a right to express themselves and have their comments seen by others — still seems to scare a lot of lawmakers.

U.S. Rep. Mike Pompeo, R-Kan., led a drive to eliminate funding for the database. During a House floor debate on his amendment to scrap SaferProducts.gov, Pompeo said the Web tool would drive jobs overseas — although it’s not clear how, since consumers are just as free to complain about foreign manufacturers as domestic.

Nevertheless, the amendment passed the House in February with the approval of 224 Republicans and seven Democrats. It’s unlikely to prevail in the Democrat-controlled Senate, however, so at least for now the database will continue.

The database is making public the same kind of information that the safety commission has always collected but that has long been kept from consumers’ sight. Before now, the only way to see commission reports of defective products was to file a public-records request, which manufacturers could sue to stop. Recalls have to be negotiated with manufacturers, which takes awhile, so you could easily wind up buying a product that the commission and the manufacturer know is dangerous.

So now, at least, you can see the reports and make up your own mind.

Safety commission underfunded

One of the weirder arguments being made against the database is that the “.gov” suffix — and the fact that the database is run by a government entity — will give people the idea that all the reports being made are true and complete, despite the clear disclaimers that litter the site.

Some critics have said the commission should investigate, and validate or dismiss, every report before it’s posted. But that requires staff, which requires money, which lawmakers haven’t been willing to cough up.

Will the database become a repository for people who lie about products, businesses that try to undermine competitors and those with axes to grind? Maybe. But in the absence of adequate safety enforcement, it may also become the best way to get a heads up on products that could hurt us or our children.

Liz Weston, MSN Money

MONEY SAVING TIP: The art of couponing

Today is a time when saving every dollar helps. There are many sources that help consumers save.  Here are some couponing sites:

• Your local Sunday paper is your best way to begin.  Coupons are usually with the magazine section inside the funnies.  You will find coupons and savings for food, electronics, clothes and furniture.  You can have your morning cup of coffee as you search for the coupons that can help you save.

• If you are computer savvy, here are some websites that are safe to visit:
  • Spoofee.com – Best deals and freebies from food, clothing and, technology.
  • Retailmenot.com – Coupon codes for on-line shopping and section for printable coupon by category for groceries, restaurants, clothing and many household products.
  • Hotcouponworld.com – Grocery coupons
  • Newegg.com – Daily shell shocker deals on all electronics and tech gear.

Couponing helps save; It won’t make your bank account grow overnight, but it’s a great place to start.

DID YOU KNOW….that you should make sure all your electrical devices are on a surge protector?

This is especially true of your entertainment center and your computer equipment. A power surge can damage these electronics very easily, so spend the money for a basic surge protector and keep your equipment plugged into such a device.

The traditional overdraft programs, which may charge up to $25 or more to automatically cover purchases or transactions when you don’t have enough money in your bank account, are expensive and fees can add up quickly. You can avoid overdraft charges by recording all of your account transactions, knowing your current balance, and making sure you have enough money in your account to cover purchases and other withdrawals. However, if you struggle with overdrafts, you can still minimize the fees.

Start by asking your bank about the lower-cost alternatives. One option may be to pre-arrange for an automatic transfer from your savings account to your checking account when the balance falls below zero. Another may be to link your checking account to an overdraft line of credit, so a shortfall in your account would trigger an automatic loan that may cost less than incurring overdraft fees.

Due to new federal regulations, consumers also have a choice in how they want their bank to handle overdrafts caused by debit card transactions. “Consumers now have a real choice on whether or not they want overdraft services for these transactions in advance. They can later change their mind and ‘opt out’ of this coverage,” said Mark Pearce, Director of the FDIC’s Division of Depositor and Consumer Protection. “Consumers living paycheck to paycheck should be especially wary of the high total cost of frequent overdrafts.”

Many banks also offer e-mail and text message alerts for customers, so ask the bank if it can send you an alert when your account balance gets low.

The FDIC has published a new brochure called “Your Guide to Preventing and Managing Overdraft Fees.” You can read and print English and Spanish versions online at www.fdic.gov/consumers/overdraft.

How to protect your money, your credit record — and your sanity — if you become a victim

Consider this: Your wallet is stolen. You immediately call your bank and credit card company to report the problem, close old accounts and open new ones. You even remember to call the Social Security Administration to notify them that you had your Social Security card in your wallet. At the end of the day, you feel fairly confident that the incident is behind you.

But weeks later you receive past-due notices on bills for merchandise you never purchased, and a few months later your application for an auto loan gets rejected because someone has used your name and Social Security number to open new accounts and run up thousands of dollars in debt. The good news: Your actual liability for these unauthorized purchases is limited by law or industry standards. The bad news: It’s likely that you’ll spend many frustrating hours trying to clear your name and straighten out your credit history.

Here are safety tips from FDIC Consumer News that can greatly reduce the chances of becoming a victim.

Limit the amount of confidential information in your wallet. Only carry the identification, checks, credit cards or debit/ATM cards you really need. The rest, including bank account numbers, personal identification numbers (PINs), passwords, and most importantly, Social Security cards, are best kept elsewhere in a safe place. Likewise, don’t pre-print your Social Security number or driver’s license number on your checks, because either one could help a thief apply for a loan, credit card or bank account in your name.

Keep good backup information about your bank and credit card accounts, just in case your wallet is lost or stolen. You’ll want account numbers and phone numbers that can be used to report your losses or request new cards. “Some people make copies of the front and back of all the cards or important notes in their wallet to help jog their memory,” said FDIC Regional Ombudsman Janet Kincaid.

Review your credit card bills and your checking account statements as soon as they arrive. Make sure that no fraudulent activity is taking place.

Periodically request your credit reports. Look for signs that someone may have obtained loans or tried to commit other fraud in your name. By federal law, you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit bureaus — Equifax, Experian and TransUnion. Go to www.AnnualCreditReport.com or call toll-free 1-877-322-8228 to order your free credit reports.

Experts often suggest that, to maximize your monitoring capability, you spread out your requests and receive a report from each of the three credit reporting agencies at separate times rather than all at once.

If you’ve already been victimized, take steps to limit your liability. Immediately call your bank (to report a lost debit/ATM card) and your credit card companies. And if you spot an unauthorized charge on your credit card, you must follow up on any phone calls to your card issuer with a letter disputing the transaction.

“Under the Fair Credit Billing Act, you must dispute unauthorized charges appearing on your credit card statement in writing within 60 days after it was sent to you,” noted Joni Creamean, Chief of the FDIC’s Consumer Response Center. “The letter also must be sent to the bank’s designated address for billing inquiries, not to where you’d mail your payments.”

Be on guard against “urgent” requests and unsolicited “deals” on the Internet.   

FDIC Consumer News has reported how criminals masquerading as legitimate businesses or government agencies have tricked consumers into divulging valuable personal information over the computer, phone or fax in order to drain bank accounts. Here are our latest tips for protecting against new schemes using electronic devices.

Think twice before responding to “urgent” text messages. One recent scam involved a text message sent to cell phones and smartphones (a hand-held device to access the Internet and make calls) warning bank customers that their debit or credit card had been blocked for security reasons. The message urged users to call a hotline to unblock their card, but instead they reached an automated response system asking for their card number, personal identification number (PIN) and other information.

“Unfortunately, this was enough information for thieves to create counterfeit cards and commit fraud,” said Michael Benardo, Chief of the FDIC’s Cyber-Fraud and Financial Crimes Section.

Why are smartphone users now being targeted by scammers? “Smartphone users almost always have their phone handy and tend to respond to calls and e-mails quickly, so the expectation is that many of them may not realize that a message is fake until it’s too late,” Benardo explained. “Not only that, but fake Web sites are also harder to spot on a small screen.”

• Are you or someone you know on active duty with the US Armed Forces?  You are entitled to relief from the Servicemembers Civil Relief Act.  Under the Act interest rate charges are
  to max out at 6%.  The benefits do stop once the active duty is completed.
• GE Money Bank has changed their name to GE Capital Retail Bank as of October 1, 2011.
• Springleaf is changing account numbers for their 19 digit account numbers to make them 12 digits.  If you receive such notice, contact DMCC immediately with the new account number.