I'm writing an article about investing in a bear market, and am looking to speaking to those in their 20s and 30s about whether they have cut back on investing or are putting even more money in the market because they have years for stocks to turn around.
Send me an email if you'd like to talk at eileen.ambrose@baltsun.com. Thanks.
(art by Regina Boyce)
Last night I had a fascinating discussion with attendees of a community conversation organized by Art On Purpose, a local arts organization.
The group had held art workshops at several library branches exploring themes from Edgar Allan Poe’s work, including love and loss, madness and obsession, and fear and terror.
Several Baltimore residents created pieces addressing fear about the economy, and so for last night’s talk at the Waverly branch library, we dug deeper into what money provides and what folks were doing differently in the face of economic uncertainty.
We talked about priorities, and I offered up my frugal philosophy for life: how money gives us choices, whether it’s the kind of food we eat, the place we live and the health care we can enjoy. It’s better to start saving early, because you can’t take a loan for retirement.
Several attendees talked about the struggle to budget, how jarring it can be to suddenly become aware of how little money remains after addressing fixed expenses such as rent and utilities.
Another guest spoke about blowing up fixed expenses such as utilities altogether and going entirely without gas and electricity for most of last summer.
An experiment like that would certainly make you appreciate the simpler things. Another guest shared a story about a group of pre-teen girls who put aside their fancy video cell phones for more than hour to play with an old-fashioned deck of cards.
What are you doing differently because of the recession/economy, whether it's finding more economical entertainment, or cutting back on extras and rethinking eessentials?
You can see more art from the Art On Purpose workshops at other branch libraries this month as well as at the Baltimore Museum of Art this fall. The events are free and open to the public.
More details are being trickled out on the Cash for Clunkers program that’s expected to get up in running on or before July 24.
Government officials say dealers can expect to be reimbursed in about 10 days after a consumer buys a car and trades in the clunker.
They also elaborated more on fraud issues, asking consumers to report suspected fraud at (866)-CAR-7891 or TTY at (800)-424-9153.
The government site at www.cars.gov adds:
“You may also call the Hotline of the Office of the Inspector General (OIG) at the U.S. Department of Transportation. The OIG Hotline is an important tool that is used to facilitate the reporting of allegations of fraud, waste, abuse, or mismanagement in the Department's programs or operations, including the CARS program. Allegations of fraud may be reported by DOT employees, grantees, contractors or the general public. The Hotline is set-up to receive allegations in variety of forms, including by email (hotline@oig.dot.gov), regular mail (DOT Inspector General, P.O. Box 708, Fredericksburg, VA 22404), fax (540-373-2090) or a toll free number (1-800-424-9071). OIG's Hotline is open 24 hours a day, seven days a week and is operated by a third party contractor.”
Hopefully the last time you saw your financial adviser, he wasn't in handcuffs, answering to federal investigators about Ponzi schemes he funded with your retirement money.
So how do you ensure that your broker or adviser isn't doing something shady with your cash? Personal finance columnist Eileen Ambrose offered some tips for making sure your financial advisor is no Madoff in her Sunday column.
The simplest way to protect your money stems from an old adage:
Continue reading "Finding a trustworthy financial advisor: Consumer Sundays" »
Hey, gang, I’m having a live chat on noon Tuesday at this site to discuss finding a trustworthy financial adviser after the Bernie Madoff scandal.
Or, we can discuss anything else on your mind.
Tune in at noon for the half-hour chat. You can also submit questions in advance and we’ll address those on Tuesday.
Cheers, and Happy Fourth. Eileen
And, with many businesses treating July 3 as a holiday (because July 4 falls on a weekend) hopefully you'll have a little more free time to chip away at some of those nagging tasks.
Here's a couple of ideas for some mid-year maintenance:
--- Check your credit reports: We've told you that Marylanders can check your credit reports twice a year, from each of the three credit reporting bureaus. With this set up, you could look at one report every two months --- but no worries if you haven't seen any, yet. Just review all three now, and put staggered reminders on your calendar to check one every two months from now on.
--- Start tucking away money for retirement. Have you set up your 401(k) payments? How about setting aside money through automatic withdrawals for an IRA? If it's one of those things you've been meaning to get around to, don't waste any more time.
--- Review your goals: If you made any promises to yourself to save money, take a look at your progress and make adjustments if necessary. Did you plan to brown-bag lunches instead of buying them, but find yourself on the cafeteria line instead? Examine what impediments are preventing you from achieving these goals (i.e. no time in the morning? Can you pack dinner leftovers the night before?) and make sure your expectations are both reasonable and quantifiable. Pledging to bring lunch three times a week can help you get into the habit.
Smart Money magazine also has other easy tips to avoid wasting money by procrastinating ...
Continue reading "Mid-year financial resolutions: Cheap Trick Thursday" »
Let's face it: it's often difficult for couples to talk about money, and that includes discussing retirement options, according to Eileen Ambrose's excellent Sunday column.
At least 82 percent of those surveyed disagree on at least one element of their futures together, according to her column.
This surprised me a lot, because I thought that people who had been married for years would have an easier time discussing their hopes and priorities than those just starting out.
In this era of credit crises and real estate dilemmas, it seems like financial intimacy is the new intimacy. People seem to have just as hard a time talking about their financial history as their sexual past (if not more so).
But knowing where your partner stands when it comes to money --- both his or her current situation along with their attitudes and habits --- can tell you a lot about his or her personal hang-ups and personality. And unlike when you're single, other people are affected by your money decisions.
It seems like marriage is all about learning to make compromises, particularly about limited resources such as money and time. So, the bottom line is, the sooner you start talking about what your goals for retirement might be (such as travel, where you'll live, whether one or both of you will work, etc.) the easier it will be to plan with those goals in mind.
And, surely, it's got to become easier over time.So how do you make those talks more interesting, no matter what stage you're in?
Here's one unusual recommendation:
Let’s hope my Sunday column about a significant number of couples not talking to each other about retirement issues got a conversation going among partners.
One reason mates don’t discuss these issues is they assume their partners want the same thing that they do so there’s no reason to talk.
But Jim D. of Perry Hall says couples need to talk more than just finances, though. He writes:
“I enjoyed the article you wrote in the June 21st edition of the Sun, Disparate Dreams. The topic is very timely for my wife and me. We are looking at retirement in the next four or five years. While the thrust of the article revolves around financial planning, a critical component for a happy retirement, I’m convinced an equally critical component is having a realistic plan to stay busy. I’ve seen too many colleagues retire with the idea they will stay busy “taking care of all the things around the house they haven’t had time for over the working years.” Then, two months later they’re asking … “o.k., what now?” Watching for the mailman becomes the highlight of the day. Likewise, I’ve seen other colleagues who think travel can occupy their retirement years, until they figure out the costs involved. The financial plan is critical so you don’t have to make meatloaf out of dog food, but having a realistic plan to stay active and engaged is equally important. Emphasis on the realistic.”
What do you think?
UPDATE: read more about financial intimacy with your partner.
Do you and your spouse agree on when you’ll retire, where or whether you’ll work part-time in retirement?
According to Fidelity Investments many couples don’t.
I’m looking to interview couples for an article about their views of retirement.
Are you both on the same page, or haven’t even broached the topic with each other yet? Do you plan to retire together or not? And if one of you leaves this planet early, are you confidant your spouse can carry on making financial decisions without you?
Or, we can talk about what other issues the pair of you has come across as retirement approaches.
Email me at eileen.ambrose@baltsun.com.
Kids, if those piggy banks feel a little lighter these days, thank Mom and Dad.
Parents are dipping into their children’s savings accounts to pay household expenses, according to a recent survey by ING Direct.
The survey of 2,123 adults found that nearly 20 percent of parents who had set aside money for their children have tapped those accounts to pay bills or other debt. About one in three cut back on their contributions to children’s savings.
So fess up. Have you been using money intended for children to keep the household going in this recession?
And, if the family budget is stretched, is it really so bad to use this money?
(Photo: woordenaar/Flickr)
There's more to picking a target-date fund than knowing when you'd like to retire, advises Eileen Ambrose in her Sunday personal finance column.
Target-date retirement funds are meant to help people too busy to select their own investments. In a nutshell, most guidelines suggest putting your retirement money into more volatile options like stocks early on and then gradually moving into more conservative alternatives such as bonds as you get older.
With target-date funds, the fund managers make that shift automatically, so investors have fewer decisions to make.
However, Eileen points out that you still have to monitor where that money is going. Look at the prospectus to ensure the fund's investment strategy matches your own risk tolerance, whether you're pretty conservative or if you enjoy the thrill of the market's ups and downs.
Also, don't overlook the fees charged by these funds. Remember: there's a price for convenience, which is valuable. By investing in a target-date fund, you're paying for a fund manager's expertise.
Continue reading "Target-date funds & Lake Montebello restrooms: Consumer Sundays" »
Are you invested in a target-date retirement fund in your 401(k)? How has that worked out for you in this bear market?
I’m interested in interviewing workers in these funds for an upcoming article. Send me an email at eileen.ambrose@baltsun.com if you’d like to talk.
Target-date funds are supposed to be a no-brainer way to invest for retirement, although many people — particularly older workers — got burned after their funds plummeted along with the stock market. Some workers hadn’t realized how heavily the funds were invested in stock.
Target date funds are the subject of an upcoming hearing with the U.S. Department of Labor’s Employee Benefits Security Administration and the Securities and Exchange Commission on June 18. You can listen to a Webcast at the EBSA’s Web site.
The Pension Benefit Guaranty Corp. says despite GM’s bankruptcy filing, the automaker’s two pension plans for hourly and salaried workers will remain under GM sponsorship. (That’s good news considering if the PBGC assumed control, workers and retirees might get less than promised by the company.)
The PBGC said the goal of GM and the union iss to keep the two pensions under a new corporate entity that will be created from the sale of some of GM’s assets.
GM workers and retirees should contact GM’s benefit center at 800-489-4646 if they have questions.
Interesting factoid from the people at the Wilshire 5000 index:
Since President Obama's swearing in Jan. 20th, the Wilshire index gained 7.9 percent. That's better than the first 100-day return of all recent presidents except for one: George H.W. Bush.
The scorecard for the first 100 days:
Ronald Reagan first term 4.0%
Reagan's second term 3.8%
George H. W. Bush 9.1%
Bill Clinton first term 1.2%
Clinton's second term 0.5%
George W. Bush -2.3%
Bush's second term -1.2%
Barack Obama through April 28 7.9%
Stuart Ritter teaches college students at Johns Hopkins University about personal finance. (His day job is being a financial planner with T. Rowe Price Associates.)
Most of his students are college seniors. Ritter says he wants seniors to leave the class knowing how to prioritize and think long term.
"Up until now, their lives are broken up in three month chunks. Now they have to make decisions for literally decades in the future," Ritter says.
Their lifestyle decisions, such as the kind of car they drive will or participate in an employer’s retirement plan, will have an impact on how much they can save for a house or even when they eventually will retire, he says.
Ritter sends his students off with a list of tips. It's good advice to anyone trying to get finances in order. We post them here:
Budgeting
1) Be patient. Biggest mistake is trying to replicate in a few years the lifestyle it took your parents decades to achieve.
2) Match your income to the three kinds of expenses: Fixed, Flexible, Unexpected
Fixed are decided when you make one big decision (live alone or with roommates)
Here's a tip from Multimedia Editor Mary, via ABC News: BJ's Wholesale is offering a free 60-day BJ's trial membership, valid through July 6. Normally the membership fee is $45.
Feel free to print it out and take it to customer service, but remember our warnings about warehouse store shopping. Tightwad Tod at Consumer Reports broke down the pros and cons of a BJ's membership for us, because BJ's claims to sell more items in reasonably sized packages. They also accept manufacturer's coupons, as loyal commenter Holly has reminded us.
And ladies, there's a good opportunity Saturday to get some financial advice ...
Continue reading "Heads up: free BJ's trial membership, financial workshop for women" »
Put your haggling skills to work in these three situations and you might get what you need for a lot less.
What's the key to negotiating? Be nice, respectful and realistic, said one business owner in a Marketplace Money story about bargaining in retail stores:
She says start by asking if there's any flexibility on the price. And don't forget to smile and maintain eye contact as you wheel and deal.
But where is it wise to negotiate a price? Americans are accustomed to haggling when it's clear there's a commission involved, such as on a new car or furniture. But what about ...
Continue reading "Negotiate in 3 unexpected places: Cheap Trick Thursday" »
Financial aid departments are inundated with requests for additional assistance from families reeling from problems in the woeful economy, Eileen Ambrose writes.
The tragic stories about lost jobs, foreclosed home and other financial issues just keep coming in, according to staff at the University of Maryland, Towson University and others.
How do you ensure that your questions --- and requests for additional aid --- will be honored?
Continue reading "Financial aid woes: Consumer Sundays" »
You should be receiving extra dollars in your paycheck soon, if you haven't already seen an increase.
What are your plans for it?
I'm writing an article about what you can do with your extra $15 or so per paycheck and am looking to talk to readers about their plans.
One of my colleagues, for example, increased his 401(k) contribution by 1 percentage point. That's not going to stimulate the economy, but will be beneficial to him.
Let me know if you're interested in talking. Post a response here, or write to me at eileen.ambrose@baltsun.com.
If you want to spend less, carry big bills. That’s the latest research from the University of Maryland’s Robert H. Smith School of Business.
Researchers say if you carry a $20 bill, you’re less likely to give into temptation and spend it, than if you had a wad of 20 singles. And people who had to save $100 were more likely to choose a Ben Franklin bill than five 20s.
“In the face of the temptation to spend, you’ll be more reluctant to break that hundred-dollar bill so you’ll end up saving it,” says Joydeep Srivastava, associate professor of marketing and co-author of the research in a prepared statement.
But, of course, it’s not as easy as that. Once you break a big bill, you’re less likely to pay attention to your spending, the researchers found.
“You’re more likely to throw self-restraint to the wind once you’ve released the impulse to buy,” Srivastava says.
Previous research by the Maryland associate professor showed we spend more using credit cards and gift cards than when paying with cash.
Bottom line for wannabe savers: “Leave both your credit cards and small bills at home,” Srivastava says.
Mark March 21 on your calendar. That’s when Marylanders can get lots of free help with their taxes and finances.
The Baltimore CASH (Creating Assets, Savings and Hope) Campaign is hosting “Money Power Day” which will feature financial workshops, free tax preparation for those earning less than $42,000 and more than 40 exhibitors offering on-site education and financial services.
You also will be able to get your free credit report and one-on-one credit counseling.
Got sensitive papers you need to throw out but worry about identity theft? You will be able to shred you papers at the Shred-It Truck. Dogwood Cafe will offer demonstrations on healthy cooking on a budget. And there are workshops for teens, as well as a raffle for a laptop computer.
The event will be held from 9 a.m. to 2 p.m. at the Baltimore Polytechnic Institute at 1400 Cold Spring Lane in Baltimore.
Get there by 9:30 a.m. and you will hear “inspiring speeches” by Representatives Elijah Cummings, John Sarbanes and others, the group promises.
Also on Saturday, the IRS is offering free tax preparation at seven Taxpayer Assistance Centers in Maryland for those eligible for the Earned Income Tax Credit or those with incomes under $42,000. On top of that, the IRS promises to resolve tax issues, answer tax law questions, accept payments, establish payment agreements for those who can’t pay their taxes and work with those having a hard time paying. The tax centers will be open from 9 a.m. to 2 p.m. at these locations:
190 Admiral Cochran Drive, Annapolis
31 Hopkins Plaza, Baltimore
1260 Maryland Ave, Hagerstown
8401 Corporate Dr., Landover
14701 National Highway, Suite 4, LaVale
212 W. Main St., Salisbury
11510 Georgia Ave., Wheaton
Can peer pressure be positive?
ING thinks so. The financial institution has launched INGCompareMe. This allows you to plug in some details about yourself and compare how you rate among others on saving, spending, investing, debt and other areas of finance.
“For example, if investors determine they’ve saved less in their workplace retirement plans than their counterparts, it may inspire them to save more,” says ING in a prepared statement. “If they come out ahead of the curve, it may encourage them to continue their good habits.” (Or, it could make them slack off.)
ING collected data on 5,000 adults who contributed to retirement plans at work for the basis of the new tool. The information will be expanded and updated as time goes on.
Check it out, and let us know what you think.
Talk to financial planners, and they will often tell you that people underestimate how long they will live.
That means they likely underestimate how much money they will need to save for retirement.
Northwestern Mutual has come out with a lifespan calculator to help you estimate how long you are likely to live based on your eating, driving, exercise and other health habits.
Calculators such as this one are sort of fun, and it could be an eye-opener for those who have no idea of how long they could live.
Northwestern Mutual calculates your life expectancy in about a dozen questions. (My age: 90)
Check out other sites like such as Dr. Thomas Perls’ Livingto100 calculator and the David Demko’s Death Calculator.
Meet Jim Wang. You've read the Columbia resident's comments here at Consuming Interests, and we've certainly cited Jim's blog bargaineering.com along with his peers in the personal finance blogging world, including J.D. Roth from Get Rich Slowly and Trent from The Simple Dollar.
Read Eileen Ambrose's Sunday column to find out how these personal finance bloggers shared their experiences getting themselves out of the red... and have earned some green in the process.
As for Watchdog ...
Continue reading "Consumer Sundays: Moneybloggers and storm inlet grates" »
Tons of people blog, but some people save you money while doing it.
Eileen Ambrose talked with three personal finance bloggers who have cultivated an audience by sharing great advice about their own experiences digging out of debt. Now, they're helping others change their own financial outlook for the better --- and bringing in bucks while doing it.
Check out Eileen's Sunday column to find out how they corrected some big money mistakes.
As for Watchdog ...
Continue reading "Blogging for fun and profit & open storm drains: Consumer Sundays" »
Excellent Eileen tackles an intriguing topic on Sunday: why some people are savers despite modest incomes, while others can't save a penny even on healthy salaries.
I'm not sure whether nature or nurture has a bigger impact on developing a frugal philosophy. However, you often hear stories about how living through the Great Depression, when people had to quit high school because they couldn't afford the socks (check out episode 3). It made people appreciate what they had and taught them not to waste anything. They fixed broken things and reused everything before recycling was trendy.
Anyone believe the current economic climate will help people form frugal habits they will practice for a lifetime? Check out what Eileen thinks on Sunday.
And as for Watchdog, we see how long it takes for someone trying to be a good neighbor to succeed in his quest to remove a handicapped parking space that his family no longer needs.
This week we're ending on a public service announcement:
Here's an article from Newsday's Patricia Kitchen on changes in FICO scores:
As of Saturday, one of the three major credit reporting bureaus -- Experian -- will no longer allow consumers direct access to their FICO credit scores, this at a time when money is tight and lenders are putting even more stock in those scores.
Experian’s move “is a huge problem” for consumers, said John Ulzheimer, president of consumer education at Credit .com, an education site. “Experian is taking us in the wrong direction. ... We don’t need less access. We need more access.”
The scores are based on data in consumers’ credit reports. Consumers are advised to compare data in their reports from the three bureaus, and if there are no major discrepancies, then it’s likely the variation between credit scores will be minimal, Ulzheimer said.
The FICO score “is by far the most popular available for lenders to evaluate credit histories,” said Gerri Detweiler, credit adviser with Credit.com. The other two major reporting bureaus, TransUnion and Equifax, will still allow consumers to purchase their FICO scores.
While consumers are entitled by law to see credit reports for free at least once a year, that is not the case with credit scores. Experian’s move was based on a disagreement over terms with Minneapolis-based Fair Isaac, which developed the FICO scoring method, said a spokeswoman.
But lenders look at many other scores besides FICO, said Peg Smith, executive vice president for California-based Experian.
The office of New York State Attorney General Andrew Cuomo said it will look into the matter.
FICO scores from the three bureaus often vary by 10 to 20 points, said Steven A. Precht, director of housing counseling at SafeGuard Credit Counseling Services Inc. in Hauppauge. To discover and correct problems, it’s more important than ever for consumers to monitor data in their credit reports, especially Experian’s, said Carolyn McCormack, director of education at SafeGuard. To access credit reports, see annualcreditreport.com.
Have you loaned money to a friend or relative? Was it a good experience or one you are still regretting?
I'm writing a column for Sunday about lending money to those near and dear and would like to talk to those with some experience for the article.
If you're interested, send me an email at eileen.ambrose@baltsun.com.
Got a personal finance question? Like, what do I do now with half my savings wiped out?
You can get an answer from a pro today at an event sponsored by the National Association of Personal Financial Advisers and Kiplinger’s Personal Finance magazine.
Financial advisers around the country will be taking consumers’ calls today from 9 a.m. to 6 p.m. Eastern Time. To ask a question, call toll-free 888-919-2345.
Or, you can go online at Kiplinger’s site to participate in an online discussion with an adviser.
Power of attorney is an important responsibility, so choose wisely, Eileen warned us this week.
According to Eileen's column yesterday,
... the power of attorney gives your "agent," the person acting on your behalf, broad authority over your finances with little or no monitoring.
Few protections exist, unfortunately, to keep the person you've selected from paying their own bills with your savings if you're unable to make those decisions yourself.
AARP is lobbying to have a Uniform Power of Attorney Act to try to keep folks from taking advantage, but until then, consider requiring the agent to share financial records with someone else, to ensure that no hanky-panky happens.
And over in Watchdog World, we addressed a pretty common reader complaint ...
Continue reading "Consumer Sunday: power of attorney and BGE's tree-trimming schedules" »
So, hypothetically speaking, you work for a business that has recently declared bankruptcy or otherwise goes kaput.
Unfortunately, given the downward trajectory of our markets lately, this is a reality that affects more and more people every day.
Read Eileen's column Sunday to learn the fate of your 401 (k), pension and other accounts that are tied up with the company's messy finances.
And over in Watchdog ...
Have your unemployment benefits run out yet you still haven’t found work?
The Maryland Department of Labor, Licensing and Regulation has some good news. The agency today says it’s sending letters to those eligible for an extra seven weeks of benefits, thanks to some emergency action by Congress.
The typical unemployment benefit runs 26 weeks. Congress extended that last summer by 13 weeks. And more recently, lawmakers tacked on an extra seven weeks in emergency relief legislation.
The first week for these extended benefits is the week ending Nov. 29th. State agency officials ask that you don’t call the claims center before you receive word that you are eligible.
If you quit your job, rather than being laid off, you are not eligible for benefits.
Well kids, here goes my last Consumer Sundays post. I just handed in my paperwork at HR, got my boxes packed and am wrapping things up now on this here blog.
Tune in Sunday to find out why Eileen says, in her personal finance column, it's OK to embrace your inner tightwad in these hard economic times.
Liz's Watchdog column tackles a bus that doesn't stop at an unmarked bus stop in Canton.
And me? Well, just for giggles, I looked up the oldest article written by me that I could find in the Sun's archives. Here it is, a story that ran on 3B of the old Maryland section, when I was an intern in 1991:
Catrice Green, a student at Rosemont Elementary School, thought it was just great being a part of a stripe in the American flag."I feel like I am a star," said Shanee Monroe, a senior at City College and president of the student council who was one of the flag's stars. "To be any part of this celebration for the flag is a lifelong experience."
An estimated 3,400 elementary and high school students agreed yesterday that being a part of a human flag was exciting, fun and quite a privilege.
Continue reading "Consumer Sundays: Thanks and Goodbye" »
The other day, we were talking about Starbuck's abysmal earnings report and how it really might be true that consumers are taking seriously that advice about how cutting one cup of coffee from your daily expenses will help you save lots in the long run.
Reader Don said he's been limiting the number of nights he goes out every week. Vegas Charlie said he and his friends are hanging around at home more. And the wonderful aeb says that packing lunches, bringing coffee from home has done wonders for the budget, although reining in shopping hasn't been quite so easy.
Continue reading "In tough economy, what goes first? Eating out or Pay TV?" »
Happy Monday, everyone. I don't know about you, but I'm sick of candy already. I was visiting my Mom's and they had all of 9 trick or treaters so they were letting the kids grab handfuls from the candy bowl.
(ahem) I might have snuck a couple Junior Mints and M&Ms into my purse.
Anyhow, so did anyone going to the Waverly Farmer's Market notice how long that light is at Barclay Street? Well, thanks to Liz, the Department of Transportation has a fix set for the end of this month that will make those long car lines leaving the market go away faster. I feel like I need to go around the city and write down all the traffic signals that make me crazy because they're either way too long or way too short.
There's one near Hopkins Hospital that is an accident waiting to happen since people run the left turn signal ALL the time.
But I'm going to save my traffic light rant for another time. I don't want to start our Monday ranting... unless you feel like ranting?
Besides, I can't get to uppity since I have a confession to make about Social Security Number requests. I have to tell you that as much as I rail against companies that demand your SSN during a transactiion, I caved recently when I tried to renew my Verizon Wireless contract. The guy at Best Buy said he couldn't sign me up without it and I was pressed for time so instead of standing my ground and saying, "NO," I asked him if I could type it in myself... I hang my head in shame.
Continue reading "Consumer Sundays: Green says go, Social Security Numbers and Open Enrollment" »
Just a taste of what you'll have to look forward to this weekend....
Find out which traffic signal in town was driving people nuts at a local farmer's market in Liz's Watchdog column.
Find out in my Consuming Interests column how American Express drove me nuts when I called them to help with a customer's complaint about a request for his Social Security Number.
Find out what Eileen says you can expect in open enrollment this month so healthcare surprises don't drive you nuts this year.
Tune in Sundays!
How can you avoid turning credit repair into credit despair? Here are a few suggestions from the Federal Trade Commission:
Avoid any company that wants you to pay for credit repair services before they provide any services. It is against the law.
Avoid any credit repair company that will not tell you your legal rights and what you can do, yourself, for free.
Avoid any credit repair company that tells you not to contact a credit reporting company directly.
Avoid any credit repair company that advises you to dispute all of the information in your credit report.
Avoid any company that suggests creating a 'new' credit identity - and then, a new credit report - by applying for an Employer Identification Number to use instead of your Social Security number. That is against the law. If you follow illegal advice and commit fraud, you also may be subject to prosecution.
Be safe out there.
Ever wonder if those TV ads claiming to help you repair your credit are legit?
Here's what the Federal Trade Commission and 24 state agencies said:
"Companies that promise they are able to scrub your credit reports of accurate, negative information for a fee are lying - plain and simple," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. "Under federal law, accurate, negative information can be reported for up to seven years, and some bankruptcies can be reported for up to 10 years."
Earlier this month, the FTC and the state agencies launched "Operation Clean Sweep" to go after 33 operations that deceptively claimed they can remove negative information from consumers' credit reports, even if that information is accurate and timely. The FTC sought to halt the companies' allegedly unlawful business practices, prohibit further violations, and make them pay consumer redress and give up their ill-gotten gains. The FTC said it received thousands of complaints from consumers. Keep reading for the list of companies that they took action against.
Continue reading "FTC Crackdown on 36 Credit "Repair" Companies" »
Welcome back, welcome back! Hope everyone had a good weekend.
So did you catch my column yesterday on U-Haul's gas policy? If you're using an eyeball test on a gas gauge, which in my experience with cars (my dad was a mechanic) become increasingly unreliable with age, how accurate can that be? I wonder who ends up shorted more often? U-Haul or their customers?
The only sure thing I learned from Lauren Klemm's experience is that you should never drop off a rental without someone there to check it in or else you're at risk of finding some surprise charges on your card.
I'd advise bringing a camera with you, too, so you can document the condition of the rental before you pick it up and the condition of the rental afterward... As a precaution, I'd say you should probably start taking a photo of the gas gauge, too, especially if you're renting from U-Haul.
Continue reading "Consumer Sundays: Finance and Kids & You vs. U-Haul" »
I do love Fridays... almost as much as I love the end of Thursdays. Why? Because getting through Thursdays (which is deadline day for the print part of my column) is like defusing a ticking time bomb. I never know if I'm going to finish the job or if I'm going to explode into bits before it gets done.
So the end of the day Thursday is euphoric.
Anyhoo, all the wind-up is just to prepare you for Consumer Sunday! Here's a question I have for you: If the needle on a gas gauge points to the letter "F" and no one is around to see it, does it mean the gas tank is full?
For the answer, tune in to Consuming Interests, the column, on Sunday.
Continue reading "Consumer Sundays: Noxious Gas Policies and Teaching Kids about Finances" »
Did anyone notice that there was a running theme in the Consumer Sunday columns this past weekend? All the issues we covered called for patience and calm heads to get through trying times or problems.
An unreliable street light in Roland Park was finally shining all night long in Liz's Watchdog column after what residents said was a long wait. After more than a year locked in dispute, a homeowner and a paving company decided to put the past in the past and try resolving their issues again without getting the state involved.
Eileen advised parents to stop wringing your hands over your 401K plans for a minute and take a good look at those 529 college savings plans you started for that college bound kid in your house. The stock market is likely putting a hurt on those 529s, too, but as Eileen told you, you can move that money to a different investment plan or you can put new contributions in a more conservative plan going forward. Has anyone already started doing this or are you going to?
Continue reading "Consumer Sundays: Calm heads prevail in hard economic times" »
Happy Friday, people! This week just felt like it was never going to end, huh? We've had lots to do, though, preparing columns and stories for you dear readers this weekend. We've also been busy hammering away here on the blog. Did you check out our redesigned blog with our happy little family of four? Groovy, yes?
First up on Sunday... If you're still feeling a little dizzy and sick to your stomach over the stock market roller coaster ride we've been riding, what better time, then, to hear some sage words of reassurance? Americans living through the Great Depression had Franklin Roosevelt and his Fireside Chats to get them through the Great Depression. Read some of the words that calmed a nation in Money & Life on Sunday.
Eileen doesn't just stop there. She also tells you how the downturn in the stock market has hit college savings plans. Find out what you should do if your balance is down and your child is heaed to school in a year or two.
Continue reading "Consumer Sundays: Free money, the Fed bailout and you, Watchdog updates" »
Happy Monday dear readers.
How many of you out there realized there is a difference between using your credit card and debit card at gas stations, hotels and car rental agencies?
Better yet, do you think I was too tough on the Zulichs? Every parent wants to help their children, though, right? Do you think Elizabeth could have eventually resolved this on her own or do you think it was only resolved because of Dad?
Are you like me? Worried that too many people aren't financially literate?
With today's financial crisis and move toward tightening credit policies, being financially illiterate could really hurt you. As Eileen told you in her Sunday column, the current credit crunch isn't just affecting auto loans and mortgages, it's also affecting credit cards now, too.
Continue reading "Consumer Sundays: credit cards and abandoned cars" »
A report from Gus at the Inner Harbor earlier today:
I spoke with Knight Kiplinger, editor in chief of Kiplinger's personal finance magazine, earlier today in downtown Baltimore. He was in town with the "Your Money Bus" -- a roving coach that's going to be touring 60 cities this year, with volunteer financial advisors giving free advice to people. (Kiplinger's magazine is one of the sponsors.)
He had some interesting observations about the current crisis and how it might affect Baltimore. Watch the video of my interview with him.
If I told you I'm working on a story about young love, debit card rules, a beach getaway, enormous security holds and an angry Papa Bear, would you want to hear more?
If the answer is yes, please check out my Consuming Interests column on Sunday.
La Liz tells you the story behind the abandoned SUV that was found with its front fender wrapped around a tree on a grassy median in Park Circle two months ago. If you were wondering about it, too, check out her Watchdog column on Sunday.
Are you breathing a sigh of relief now that the House has passed the financial rescue plan? We're not out of the woods yet.
Continue reading "Consumer Sundays: beach getaways, credit and abandoned SUVs" »
Are you looking for advice on how to lower your debt and increase your savings?
On Friday, Your Money Bus is coming to Baltimore's Inner Harbor, offering fee-only financial advisors who will be holding free advice events and symposiums where you can learn how to get your financial life in order.
Continue reading "Your Money Bus Tour coming to Baltimore" »
The debt settlement industry is about to get a much-needed spotlight on it.
The Federal Trade Commission later this month is holding a conference on debt settlement to learn more about this fast-growing industry.
Debt settlers advertise heavily online, promising to settle your debt for as little as 50 cents on the dollar. But there’s a lot they don’t tell you, like you can end up worse than before.
A few years ago, there were about 300 companies offering debt settlement; now there are at least 1,000, says Peggy Twohig, with the FTC’s division of financial practices.
Calling them all companies may be generous. Twohig says a “telephone and Internet site is all you need in this industry.”
Twohig was in Baltimore this week to speak at National Foundation for Credit Counseling conference.
Twohig says she’s not suggesting all debt settlers are bad players, but the enforcement actions the FTC has taken against debt settlers reveals some disturbing practices.
For instance, she says, some debt settlers tell consumers to stop repaying debts and ignore their creditors. That doesn’t stop interest and late fees from piling up, nor does it keep creditors at bay. There’s “no mention of fees or the negative consequences of stopping to pay creditors," she says.
Many times consumers get frustrated and drop out of the program, yet they still owe the ballooning debt, Twohig says.
NFCC members are credit counselors who offer debt management programs, where counselors work with creditors and consumers on a repayment plan. Consumers end up repaying their debt, but usually get a break on interest and late fees.
Credit counselors are no fans of debt settlers. One complained to Twohig that debt settlers from across the country call consumers in her state in violation of state law. “There’s no regulation of these groups,” she complained.
Another asked if the FTC would be interested in receiving case studies of consumers’ experiences with debt settlers. "Everyone in this room could just swamp you," he said.
Alas, the trials of the print journalism. In today’s story about AmeriDebt, the last line — and important one — was cut.
The article says consumers burned by the defunct credit counselor’s shady business practices will soon start getting checks sent to them in the mail. It’s part of settlement between AmeriDebt’s founder Andris Pukke and the Federal Trade Commission that sued AmeriDebt and Pukke for deceptive business practices about five years ago.
About 460,000 consumers will receive checks totaling around $20 million. That’s an average of $43, but you might get more or less depending on the amount of fees you paid to AmeriDebt or one of its affiliated credit counseling agencies.
Pukke, who didn't admit wrongdoing, agreed to return up to $35 million for restitution. The FTC decided not to wait for all the money to come in before distributing checks to consumers.
The FTC advises consumers to be on the lookout for the checks in the next week and make sure they cash them.
The deleted last line of the article noted that this is that another restitution check could be in the offing if more money is collected from Pukke. Or, if many consumers don’t cash this check — which happens often when restitution is made — that money will go back into the pot and be redistributed to consumers.
Eric Friedman, director of Montgomery County’s Office of Consumer Protection, was an early critic of AmeriDebt. He says the fact that consumers are getting any money back is better news than usual in such cases.
“A lot of times, consumer protection agencies file a big lawsuit for a lot of money and you rarely see payback,” he says. Often the offending company either goes out of business and has no cash to make restitution or the case is settled for little money and consumers get little in return, he says.
If you get one of these AmeriDebt checks, let us know how much and what you think.
Ethan Ewing, president of free online consumer portal Bills.com, shares with us the top ten "mistakes others are making" for people who are concerned with their financial futures :
1. Casually using a credit card: People who pay for their food with a credit card spend 30 percent more on average than people who pay with cash, according to a Visa study of 100,000 restaurant transactions. Those who want to avoid overspending should pay with cash when shopping or dining. (oh geez. I rarely ever carry cash with me.)
2. Buying too much house: "The bigger the house, the bigger the headaches," Ewing said. A mini-mansion comes with mansion-sized tax payments, insurance, maintenance, upkeep, repairs and yard work, and owners of more luxurious homes are more likely to feel pressure to upgrade everything from appliances to furnishings to the cars that go in the garage. Realtors sometimes encourage buyers to purchase as much house as they can "stretch" to, but Ewing said, "Take a realistic look at your needs and your budget to choose the house that is the right size for both. Ideally, all home costs -- including insurance, taxes and maintenance – should amount to less than 35 percent of your budget." (whew. I have a tiny house, one that I could afford even if my day job as your consumer columnist took a sudden nose dive.)
Continue reading "10 Ways to Avoid Worst Financial Mistakes" »
Hola, my cheeky little monkeys.
So what did you think of our Consumer Sunday triple play?
For those who missed it, Lovely Liz alerted the city to the missing guardrails on a Fort Avenue bridge leading to Fort McHenry. The city is warning pedestrians and joggers to be careful along that Locust Point area until they can fix it this week. Please do since no one wants anyone to accidentally fall over 40 feet on to the train tracks below.
You should, if you haven't already, find out how much Excellent Eileen says Michael Phelps can spend each year without stressing his budget. (I'll give you a hint: it's way more than what your three consumer bloggers here make in a year.) Do you think you could invest Michael Phelp's money better than the experts she talked to?
As for my column on protecting your personal and financial accounts after a breakup, do you side with Chantel, the Ex or Sprint in this case? Are you prepared to deal with a messy breakup or would you be stuck in the same boat?
Love it, Hate it? Tell us what you think. Got a problem? Share it here. Think we're wrong, wrong wrong? Rant about it here. Just so you know, in our redesign, we will likely republish some blog comments in the paper so we really do want to hear from you. That means that while we encourage all thought and opinions, we are asking everyone to to try your best to be civil, courteous and free of foul language.
Oh yes, the Powers That Be (PTB from now on) are also adding this commenting policy to all the blogs: "All comments must be approved by the blog author. Please do not resubmit comments if they do not immediately appear. You are not required to use your full name when posting, but you should use a real e-mail address. Comments may be republished in print, but we will not publish your e-mail address."
We also won't share your address with anyone else unless we receive authorization from you to do so (some of you who complained about Comcast are familiar with this. But for those who don't know, Comcast and other companies read the blog, asks to get in touch with an unhappy customers, I reach out to unhappy customers to see if you want to hear from Comcast, you say yes, I pass it on. If you say no, I tell Comcast no can do. It's that easy.)
So there you have it. Our first Consumer Sunday in the redesign launch. Questions, Comments, Applause (or er... the opposite of applause if need be... what is that boos?)
Do you have any methods you use to help you sock away money for big-ticket items or just a rainy day?
Multimedia editor Mary pointed me to this Lifehacker post about tricking yourself into saving money. it goes beyond the usual "pay yourself first" tips, which recommend things like automatically transferring money from each pay check so you don't even notice it's missing. If you get a raise, you could also bank that money or direct it automatically toward your outstanding debts, continuing to live at your original income level.
Some of the Lifehacker tips use psychological means to discourage you from spending, such as making a picture of what's motivating you to save (your kid, your dog, your dream car or vacation destination) into a credit card sleeve so you have a visual disincentive every time you are tempted to buy buy buy.
Others are more practical ...
One of the worst financial ideas out there is the 401(k) debit card, which basically allows you tap your 401(k) like it was an ATM machine.
I wrote about this disturbing product in March. The story is posted below.
The good news is that the card isn’t widespead – yet. But regulators are worried.
The Financial Industry Regulatory Authority – the industry group representing brokerages – issued an alert on the cards.
"Regardless of how easy it might be to do, borrowing against your retirement savings should be a last resort - and done only in emergency situations," says John Gannon, the group’s senior vice president for investor education, in a news release. "If a debit card is one of the options in your 401(k) plan, be mindful of the hazards that can come with using the card - from a smaller nest egg when you retire to a possible loan default that can deal a serious financial blow. Remember that with every swipe comes the real potential to wipe out a portion of your hard-earned retirement savings."
Money in a 401(k) is best left alone and allowed to grow. Even taking out a loan from a 401(k), which most plans allow, will leave you with a smaller nest egg than if you didn’t borrow at all. Sure, you pay that money back with interest. But you may go for years without that money invested and growing. Also, money goes into a 401(k) before taxes have been paid on it. You pay income tax on those dollars when you withdraw them iin retirement.
FINRA warns of a variety of reasons why debit card loans are bad. Fees are one of them. The other is double-taxation. Money goes into a 401(k) before taxes have been paid on it. You'll pay income tax on those dollars when you withdraw them in retirement. But when you borrow from a 401(k) using a debit card, you repay the short-term loan with money you've already been taxed on. Later, when you pull the money out in retirement, you'll pay taxes again on those dollars.
“This is double taxation that would not take place if you took out a conventional loan,” the group says.
So, if your employer offers a 401(k) debit card feature, just say, “No, thanks.”
As Dan Thanh pointed out earlier, banks don't have too many fans these days.
Take a look at the Internets Celebrities' amusing video about why people in poor neighborhoods use check-cashing services. (Thanks to Maryann over at Baltamour for the heads up on this one.)
There are so few banks in poor neighborhoods that it makes sense to use one of the check-cashing centers conveniently located in their communities. And banks are not open when you're available, after business hours.
Then again, banks earn a lot of money charging their customers for penalties and services as well, especially if you don't carry a large balance. Consumerist.com tallied a local check casher's fees and found them to be 1 to 4 percent per transaction.
Lately, there have been a number of online tools to help with budgeting. You give your account and credit card numbers and these sites inform you when bills are due and show you where you’re spending your money.
One of the latest is Quizzle from online mortgage lender Quicken Loans.
But Quizzle is more in-depth than some of the other sites. It will look at your credit report.
The site doesn’t ask for your Social Security number, but it does ask lots of personal information to get access to your Experian credit report. Quicken says the inquiry into your credit report doesn’t affect your credit score, as it does when a potential creditor takes a peek.
Giving out so much personal information made me Queasy when I tried Quizzle. But Quicken’s Mike Dunklee swears the site is secure and the company is not going to start pitching you products. (The site’s disclosure information does say it may contact you to take part in a survey, and if you agree, will then ask for contact information.)
Quizzle is fun. You immediately get your Experian credit score and can look at the accounts open in your name, the balances, whether you have been late and who has looked at your report of late. It makes estimates on your home’s value and taxes. It’s interactive, so you can update your Quizzle account when your finances change.
The site also creates a Quizzle Score, which is a combination of your credit score, home value, savings and the amount of debt you have in relation to your income. According to Quicken, the debt-to-income ratio weighs far more heavily in mortgage lending decisions than the credit score.
The site is free. Dunklee says Quicken hopes that if users ever are in the market for a mortgage, that they will think of Quicken. So far, more than 12,000 accounts have been opened.
Let us know what you think if you try Quizzle.
After developing one of the nation’s toughest consumer laws on credit counseling, Maryland is ready to weaken it.
The General Assembly passed legislation that would open the doors to for-profit credit counseling. Right now, a counseling agency must be a non-profit to serve Marylanders.
The question is: Will the governor sign the legislation?
You might recall that the credit counseling scandal a few years ago basically involved non-profits acting like for-profits. Thousands of consumers ended up paying high fees to groups, like AmeriDebt, and got into worse debt.
At a time when more consumers will need the services of credit counselors, do we really want profit-driven companies to provide counseling? (Read my article below about the issue.)
The Maryland Consumer Rights Coalition, which is opposed to for-profit counseling, is now asking for you help to make its case to the governor. In an e-mail today, executive director Stephen Hannan writes:
“In our letter to the Governor, we voiced our concerns that the bill will harm Marylanders who face serious credit problems now and will exacerbate the credit problems of those who may face economic hardships in the future. To make your voice heard against the licensing of for-profit debt management companies, contact the Governor.
The bill's number is SB646. The governor's next bill-signing ceremony is next week.
Continue reading "Tell MOM: VETO For-Profit Credit Counseling bill NOW" »
Don't forget to pick up Forever stamps today and tomorrow!
As we reminded you before, the price of first-class stamps goes up to 42 cents on Monday --- but Forever stamps are good forever, no matter how much you paid for them originally.
It might not seem like a lot, but as wise people say, pennies make up dollars.
So, stock up!
Tax day is over. Now can you throw away all those scraps of paper, right?
Maybe. Here’s the low-down on paperwork from the Privacy-Rights Clearinghouse:
— Throw away old pay stubs once you checked the information against your W-2.
— Keep any documentation related to an entry on your tax return this year, or some future tax year. If you bought stock, keep the paperwork so you can figure your cost basis whenever you sell the shares.
— Retain documents as long as the IRS is likely to audit a return. For most, that’s three years. But if you underreport your income by more than 25 percent, an IRS auditor can come knocking as much as six years later. Blatantly lie and file a fraudulent return and the IRS auditor has no time limit.
— Each state has its own audit deadlines. So, check with your home state.
One of the handier tips: If you lost your birth certificate, you can find out where to replace them at a government Web site.
Also, if you are throwing away papers, make sure you shred with a cross-cut or confetti shredder, the privacy group says.
(Photo courtesy of stockxchng.com)
Are you putting off a major life decision because you’re cash-strapped or worried about the weak economy?
Four out of 10 adults say they are doing just that, according to a poll released today by the American Institute of Certified Public Accountants.
These adults say they have put off retirement, marriage, medical procedures, college education, buying a home or having a child because of their financial situation or the economy’s.
This is more pessimistic than last year, when three out of 10 were postponing life decisions. Among those putting life on hold this year, 28 percent said it was due to a lack of savings. Eighteen percent blamed the economy.
“It’s alarming that so many people are choosing not to get married, buy a home or further their education because they don’t have the money,” said Carl George, head of AICPA’s National CPA Financial Literacy Commission in a prepared statement.
The survey polled 1,026 adults.
So, are you putting off major expenses?
Do you clip and collect coupons?
You can print out coupons at home, but that requires a printer --- not to mention an Internet connection. Some people swear by online sites such as The Grocery Game or couponmom.com to help stretch their food dollars by matching coupons with store sales to maximize savings.
Others pooh-pooh such discounts, say that they usually apply toward processed items sold on the inside aisles rather than whole foods that are better for you to eat --- think Hamburger Helper rather than produce.
Personally, I find myself using coupons for household products like detergent or soap --- or at least cutting them out. My problem is the follow through: making sure I have the coupons with me when I end up at the store, before the coupons themselves expire.
Well, one company has come up with a system to combat that problem, which I hope hits our shores soon.
Continue reading "Coupons without the clipping" »
Stories today and earlier this week about a security breach at The Dental Network, a CareFirst BlueCross BlueShield dental HMO, caused concern for some readers who are current or former plan members who worried their information might have been compromised.
The business accidentally posted names, addresses, dates of birth and Social Security numbers of 75,000 members on its Web site for two weeks last month. Under state law that went into effect in January, companies are required to notify consumers if their data has been disclosed.
Some people who did NOT receive letters from The Dental Network have contacted me as well as the Identity Theft Program of the state attorney general's office asking if they, too, were affected.
We've been talking a lot about managing our money and the slowing economy. For anyone who thinks you may need some help getting your finances back in order, here's good advice on how to find a credit counselor from writer Gregory Karp at our sister paper, The Morning Call, in Allentown, Pa.:
Determine whether you're a good candidate. Sometimes a credit-counseling agency doesn't do anything you couldn't do for yourself.
Evaluate all of your options before entering credit counseling, including developing a better spending and savings plan and negotiating with creditors yourself.
Enlisting a credit counselor will be noted on your credit report. It can do significant damage to your ability to borrow money at good interest rates, because creditors will see that notation.
But credit counseling doesn't directly affect your three-digit credit score. Many distressed people seeking counseling have badly dinged up their creditworthiness, so an additional bad mark is perhaps only incremental.
Continue reading "How to find a credit counselor" »
Anyone out there wondering how we got into this mess? By mess, I mean the slowing economy, which might or might not be in recession. Officially, we're not in a recession, as the msnbc story says. But, and this is a big BUT, things are definitely not rosy.
I read a great story in the WPost yesterday about why we've got this mortgage mess on our hands. We're leverage addicts. Writer Michael S. Rosenwald sums it up quite well:
The simple answer, according to personal finance experts, is that we want more -- more money, more house, more car, just more, more, more. We often think we deserve more. Leverage gets us more. With historically low interest rates, leverage is the easiest and quickest tool to get more stuff.
The problem is that too much leverage has a downside that is easy to overlook. When everyone else is using leverage so successfully to get more, do we wonder what will happen if interest rates go up? Not so much.
Continue reading "Borrowing 'til it hurts" »
Yesterday, I was at the grocery store picking up some food for a salad. Usually, I toss all manner of things into my cart like seltzer water (which I occasionally indulge in, instead of drinking soda), a bag of pretzels and some frozen food (for those late days when I don't have time to make a salad or cook something up because I'm writing all day).
This time, though, I found myself talking myself out of purchases. Don't buy that cheese, it's a buck more. Do you really need a loaf of bread that will go stale before you get a chance to eat it? Sure, you love blueberries, but at $4.99 for a small plastic container I can do without.
Don't get me wrong. It's not as if I'm depriving myself. But I am not as foot-loose and fancy free about buying groceries as I used to be... not when my electric bill, gas tank costs, and taxes have crept up higher and higher. I've never been one to eat out a lot, but I do find myself ordering Chinese food, pizza and the local take-out Mexican food place even less often now, too (although, my waistline does thank me for it).
I was just absent-mindedly thinking I could cut my pay-for-TV provider, too, since I don't find myself watching much of anything outside of the four or five basic channels I can get for free. Funny how your needs adjust to the economy without you even realizing it, huh? My colleagues Hanah and Jamie wrote a very interesting piece yesterday on how consumers are cutting back on spending these days, and how that's affecting small businesses.
Continue reading "Consumers cutting back" »
Seriously, stuff is cheap these days.
If you don't believe me, check out Peter Y. Hong's article in the LA Times, where he points out that lower production costs have kept the price of consumer goods so low that they have not changed since the 1970s.
But while prices have remained the same or decreased, so have our wages, when adjusted for inflation, he says.
It doesn't help that our tastes have changed. Americans like their houses bigger these days, and so they cost more to build, furnish and heat. We spend more on gasoline because we drive more powerful cars, he says in a follow-up interview on Marketplace.
Sure, technology has improved --- and labor costs diminished, since more things are manufactured outside the United States --- so items like VCRs and washing machines cost less to produce. But the things we care about cost more.
I often sit here daydreaming about winning the lottery. I wonder if I'd quit my job? I wonder if I'd buy a fancy new car or a villa in Europe somewhere? When I'm not in la-la land, I actually temper my dreams with reality and figure I'd just invest my winnings wisely so my family and i could retire in comfort.
These days, it's hard not to think about reality. What with the mortgage crisis, soaring energy prices and increasingly expensive food prices, we keep talking about saving for the future and being financially literate enough so that you manage your money wisely.
In that discussion about saving, Reader Don and I discovered that we are both worriers. We worry about whether we're saving enough for retirement. We worry about whether there will be any Social Security benefits left for us when we retire. We worry about whether we'll ever be able to retire. Don's banking on winning the lottery to lift him out of his worries. Me? I don't even play so i know I'll never win. That means I better have a plan B.
When I asked Don if he's got a plan B, he said: I haven't, and that's the scary part, my 401K has $655 in it, and that'll last me a week of retirement. We are truly the spend now, worry later generation and i am a prime example. I'm starting to think lottery tickets so any advice would be much welcomed!
Continue reading "How to start saving for the future" »
Did everyone catch Excellent Eileen's column yesterday on financial literacy? If you didn't, as they say in Monopoly, do not pass go. Do not collect $200 because you wouldn't know what to do with it anyway.
Now, some who know me well, will say I'm talking out of the side of my mouth because I'm just about as bad at math as you can get. My sisters tease me all the time because it takes me a minute or five to compute how much to tip the waiter from the bill.
Waddaya expect here? I'm a writer, not a mathematician!
But look, that's no longer a valid excuse. Eileen says that people stumped by even basic financial concepts face serious consequences because the decisions you make at this stage can determine whether you can retire comfortably or run out of money late in life.
To prepare for National Financial Literacy Month in April, take this test that ran in Eileen's column:
1. If the chance of getting a disease is 10 percent, how many people out of 1,000 would be expected to get the disease?
2. If five people all have the winning number in the lottery and the prize is $2 million, how much will each get?
3. You have $200 in a savings account that earns 10 percent in interest each year. How much would you have in the account after two years?
Continue reading "Are you smarter than a 5th grader?" »
By now, you've probably read or heard about the fact that we Americans in 2005 and 2006 have been spending more than we earn. For the first time since the Great Depression, Americans saved at a rate of negative 1 percent in 2006.
In those high-flying days of the housing boom, we were living way beyond our means. Whether we were buying houses we couldn't afford or stuffing those houses with home theater systems and pricey SUVs, some of us spent like the money was never going to run out.
Now with energy prices rising higher and higher, food prices growing, the mortgage crisis going strong and lenders tightening up the ability to borrow money, I can't help but wonder if that abysmal rate of savings is still true. I scoured the Web last night in vain for more current stats, but didn't find any. Quality points go to anyone who can find more current savings figures for me.
I did find this interesting story in the NYT about how unlike consumers, companies have been socking away
Continue reading "Are you saving for trouble ahead?" »
Like the classic question "paper or plastic?," "credit or debit?" has entered our cultural lexicon, occupying a space at the end of every transaction that is powered by a card. But the folks at Consumer Reports suggest you think hard before you answer.
According to this research, more people prefer debit when shopping at the grocery store --- especially when entering a PIN, as opposed to signing a receipt.
That's good, even though banks want you to choose debit, specifically the signature option. CR says some banks charge their customers for paying with a debit card and entering a PIN. Others offer incentives for signatures, such as frequent flyer miles and other benefits similar to credit cards.
That's because banks bill retailers more for the transaction when you sign rather than punch in the number, in exchange for the electronic magic that goes on behind the scenes.
Debit helps banks make money in other ways as well.
Real estate wonk Jamie Smith Hopkins took the lead on today's examination of how rising prices for just about everything, including food, fuel and other utilities are affecting consumers.
When things like milk hit $4 people start cutting back on essentials and trying to find other ways to supplement their income.
Thomas Brown, pictured above, is 84 and looking for a job to help ends meet.
Others are finding ways to pare their food budgets --- by eating free meat, like venison from a hunter --- and eliminating trips to see friends, because gas is so expensive.
Where have you noticed the biggest jumps in cost: the supermarket checkout, the gas pump, when sitting down to pay bills? What are you doing to stay in the black, and where do you draw the line about being cheap or frugal?
Even before I started this line of work, I was aware of several online coupon-management systems that promised to save their members oodles of money. But I was never sure I bought enough branded items /prepared foods to ensure that I drew much of a return on the investment of time.
What fees or fines do you hate to pay?
I was all set to wax poetic about Maryland's wonderful library system, when I got a notice in the mail about 8 overdue books.
I didn't know that you could only renew once, so now I'm spending about as much money as I would have, had I actually purchased some of the books in question.
This is the way I felt a few weeks ago, when I got a parking ticket --- really kicking myself for not dumping another dollar in the meter, just in case. $1 is a lot less to pay to park than $28 ... and that's money that's just thrown away.
Then again, you could take a chance, never feed a meter, and just average the cost of paying your ticket over the number of times you get away with it.
A good friend hates ATM fees --- the fees your bank charges you for using a different bank's ATM. Really, he says, you're paying them for not having ATMs in a location that's convenient for you.
So what fees really burn you up, when you have to pay them? And just to clarify ---
How are we doing on savings?
Here’s what 1,000 or so of us told pollsters in a survey this month by America Saves and the American Savings Education Council:
73 percent spend less than they earn, and save the rest.
71 percent have emergency savings to cover car repairs or other unexpected bills.
57 percent said they were saving enough for retirement; in other words, 43 percent aren’t.
41 percent say they save some of their cash windfalls, like a tax refund.
About one in five says consumer debt is either growing or staying the same.
Sure, the findings show there’s room for improvement. But our savings don’t appear to be in dire shape, right?
Not so, the groups say. The results are worse than they sound. That’s because we tend to portray our finances in the most positive light possible.
“Hard data about savings behavior suggest that responses to several questions were buoyed by the personal optimism of respondents,” said Stephen Brobeck, executive director of the Consumer Federation of America and part of America Saves.
Looking at other research, the study's authors say there is a wide disparity in savings between high-income households — those with income of $75,000 and up — and those with low-incomes of under $35,000. No surprise there.
But the research does show the vulnerability of lower-income households now and in the future. Only 28 percent of low-income workers say they are adequately saving for retirement. And less than a quarter participate in retirement plan at work.
The study was released today, the first day of America Saves Week. The goal is to persuade organizations to encourage millions of Americans to review and improve their level of savings.
Have you ever wanted to hire a financial advisor to give you tips on saving and investing money? How much would you pay someone for valuable tips on buying and keeping a home? Would you pay money to listen to someone give you advice on how to start your own business?
Saturday's your lucky day, my friends. The Baltimore CASH Campaign -- which is working with Congressman Elijah Cummings and other community and financial institution partners -- is holding its 3rd Annual Money Power Day on Feb. 16 at the Baltimore Polytechnic Institute, 1400 W. Coldspring Lane, Baltimore, MD. from 10 a.m. to 3 p.m.
This year's theme is "Road Map to Financial Success." The event will feature an exhibit area with over 40 organizations providing information to working families who need help obtaining and understanding a credit report, legal advice on taxes and information about grants to help people purchase homes in the city. There will also be workshops and services on a range of financial topics from credit counseling to tax preparation assistance.
Continue reading "Get Money Smart" »
People who earn little money often pay more for financial services because they lack access to low-interest, short-term sources of credit and to banks themselves, according to a report by the Maryland Consumer Rights Coalition. They're also not informed of the high fees they often pay to consolidate debt and for tax refund anticipation loans or payday loans.
The Maryland Consumer Rights Coalition is urging elected officials and government regulators to take more steps to protect the rights of poor consumers and to enforce the laws already on the books.
Interesting to note --- part of the remedy in the 2003 Maryland Debt Management Services Act involves making sure that the print is not-so-fine:
"The consumer must enter into a debt management services agreementThe coalition's recommendations include:
and must receive a copy of the agreement that is in at least 12
point type and sets out the schedule of payments, maintenance
fees and a list of which creditors will receive payments, and a
notice of the right to rescind the agreement by giving written
notice."
Continue reading "Poor? Pay more." »
Here's the answer in Biz Writer Extraordinaire Tricia Bishop's really good story today.
As Tricia says, a wave of consumers wondering that very question rang up mortgage companies everywhere because: "Rates for 30-year fixed mortgages hovered around 5.5 percent Wednesday, with some dipping into the 5.25 percent range early in the day, according to area brokers. That's just a hair above the record lows recorded in June 2003, when the housing market was flourishing."
But before you rush to refinance, be warned that the rules are pretty different now. Let's just say that you better make sure your credit is pretty good. So if you owe more than your house is worth, have little to no equity in your home or can't prove how much you earn every year, this refi-rush will likely pass you by.
If you haven't already read Eileen's very helpful story on how the Fed's three-quarters of a percentage point cut affects you, check it out here.
If you're too lazy to read it, I'll sum up for you.
Credit Cards: Don't count on seeing a lower interest rate.
Home Equity Lines: Expect to see a decrease as early as next month.
Mortgages: No change for fixed-rate mortgages, but maybe for adjustable rate mortgages.
Continue reading "How the Fed interest rate cut affects you" »
Here's another piece of news I meant to put out earlier. A cluster of consumer advocacy groups in the state are warning Marylanders that even as thousands of homeowners are suffering through the loss of their home through foreclosure, that could just be the beginning your financial troubles.
Here's why: If you, the homeowner, has part of your debt forgiven during the foreclosure process, you're required to include the forgiven amount as income on your tax return. This amount is called a "windfall" and often taxes will be owed on that amount, according to the Maryland Consumer Rights Coalition, Maryland CASH Campaign and Baltimore CASH Campaign.
Forgiven debt in a foreclosure can range from a few thousand dollars to hundreds of thousands, which means the taxes owed can be significant. The groups warned that federal and state tax debt usually cannot be discharged through bankruptcy so consumers should contact their tax preparer immediately if you have canceled debt, known as the "1099 shortfall."
Continue reading "Tax bills on forgiven debt in your future?" »
I meant to remind everyone of this last week, but I figure better late than never... Marylanders now have a new tool to stop identity theft. Thanks to a new state law that went into effect on New Year's Day, consumers here now have the ability to put a security freeze on your credit reports to stop thieves from opening fraudulent new accounts in your name.
By placing a freeze on your reports, it prevents a credit reporting bureau from releasing information about your credit history. If a creditor can't check your credit history, it's unlikely they'd extend new credit to you or anyone else trying to open accounts in your name. The freeze lessens your chances of becoming a victim.
As my colleague Eileen wrote on Dec. 9, "Marylanders can't be charged more than $5 to freeze a report or to have a freeze lifted. That is half the amount that credit bureaus are charging residents in most other states."
And victims of identity theft don't have to pay any fee, no matter where they live.
Do keep in mind that putting a freeze in place will make it harder for you to get instant credit. So if you're shopping for a car or like signing up for new credit cards (a bad habit!) often, you might want to hold off on putting a freeze on your reports. You can lift the freeze, of course, but you'll have to pay each time you ask to lift it.
To request a freeze:
Continue reading "Security freeze is now available" »
'Tis the time to give, but if you're giving to charities, remember to hang onto those receipts if you want to deduct the gift on your taxes next year.
My esteemed colleague and new consumer reporter Liz Kay wanted me to remind everyone that the IRS did change its rules a year ago about charitable gifts so you must have a detailed reciept, canceled check or credit card statement to prove your generosity if you're going to write it off.
Check out the story Liz wrote last year on the subject after the jump! At the end of the story, there are also some good tips on how to document your gift-giving properly.
Continue reading "The IRS says, prove you're charitable..." »
Scrooge McDuck tops this year’s list of Forbes Fictional 15 — the richest characters in fiction. All told, the Fab 15 have a net worth of $137 billion.
McDuck, 80, moved into the top spot following the death of last year’s richest character— Oliver “Daddy” Warbucks. The father of adopted daughter Lil’Orphan Annie was killed by an improvised explosive devise during a visit this year to Iraq, according to Forbes. Who knew? Why doesn't the MSM report this?
Only two women — Mom and Princess Peach — made the list.
Good news for singles. Ten of the richest 15 are single, including Bruce Wayne and C. Montgomery Burns. Ten-year-old Richie Rich, of course, is too young to marry.
At a net worth of $28.8 billion, the single McDuck is the biggest catch — that is, of course, if you can get past the fact that he doesn’t wear pants.
Personal finance magazine Kiplinger’s has come out with its “Best of Everything 2007” edition. And if you’re shopping for the best place to roll over your 401(k) or the best 529 plan for the kids, you don’t have to look far.
Local money manager T. Rowe Price Associates came up top dog in those and other categories.
“It’s not surprising,” says Jeff Tjornehoj, Lipper’s senior research analyst. “They just have a commitment to a shareholder’s experience, not only in terms of fund performance but on the service side as well.”
Price takes top billing in four areas:
Best place to roll over your IRA or 401(k). You get investment advice and annual reviews for a one-time fee of $250, Kiplinger's says. No fee if you roll over $100,000 or more.
Best target-date retirement funds.
As promised, here's that link to find out if you're owed a tax refund from the state of Maryland.
It's real easy, thanks to our tech whizzes. Just punch in your name, city/community and zip code. Oh yea and let us know if you get lucky!
Excellent Eileen has some excellent and timely news for some fortunate Marylanders:
Are you one of the lucky ones?
The IRS is looking for 1,701 Marylanders who are due more than $1.3 million in refunds. That works out to about $812 each. Can the timing be any better with the holidays just around the corner?!
Think of the number of stocking stuffers you can buy!
It seems these taxpayers moved after filing their tax returns earlier this year so their refunds bounced back as undeliverable.
Not to keep you in suspense, but due to some technical glitches, please check back here tomorrow to see if your name is on the list of Marylanders due a windfall.
If you can’t wait,
