Dedicated to bringing you some of the best information to help you survive tough economic times
March 2011 - Posts
by Merissa Alink
If you read through the Little House books, something you will notice that is a reoccurring theme is that Pa tells the girls stories. Alot of stories. They listen to stories, they play together as a family, and they sing together as a family.
“And then, Pa told stories. When Laura and Mary begged him for a story, he would take them on his knees and tickle their faces with his long whiskers until they laughed out loud.” ~ Little House in the Big Woods p. 39
Laura lists at least 5 stories in the Little House in the Big Woods that Pa tells. It’s obvious that it was a way of life for them. They didn’t sit around the TV at night (not that they had the option). Instead, they told their own stories. Not only did Pa tell stories, but he also played with the girls and played music for them.
“Sometimes, when Pa had walked his traplines quickly because the traps were empty, or when he had got game sooner than usual, he would come home early. Then he would have time to play with Laura and Mary.” ~ Little House in the Big Woods p.34
When we invite people over to our house, or even when it’s just us, we love to play games. We have a whole huge closet full of board and card games. The best advice we got when asking for wedding gifts was to register for board games. They were fun for people to give and we loved getting them! I’ve added to the game collection by purchasing more games at garage sales and thrift stores. If you buy them used, just check inside to see if all of the pieces are there. I’ve never had an issue with buying used games, and I hardly ever pay over $2 for an entire game.
Ok, I’m straying from my main point. Even though Laura didn’t have TV like we have today, they probably wouldn’t have had one in their home anyways (they probably wouldn’t have been able to afford it). Something we may not think about all the time that’s costing us money is having family time. What are we doing when we have family time? Going to the park? Going to a movie? Going out to eat? Each of those things cost money, either for the activity or for gas (unless you live next to the park). Those things might be fun to do once in a while, but set aside a night to have a stay-in family game night. Take turns reading a book outloud. Make cookies together and then play a card game. Having family game night is fun and thrifty!
Merissa Alink blogs about couponing, homemaking, and simple living at her blog Little House on the Prairie Living. Come learn how to make the most with what you have at www.littlehouseliving.com.
by This Old Housewife
On a hot pursuit for bay leaves, I noticed an aisle section of the grocery store that's ripping us off royally. It's the spice section! A quick look at bay leaves in the regular spice aisle had them at $23.00/oz. (yep, no typo there--Hubby can confirm), while over in the international foods aisle (where they keep so-called "gourmet" stuff--actually Mexican, Jewish, and Asian stuff), bay leaves were in little packets priced at $2.76/oz. I bought all they had to refill my old bay leaf bottle at home.
Do I need to tell you that McCormick was the highway robber in this story? Simply by walking two aisles over and getting my bay leaves, I managed to save $20.24 without coupons, store discounts, or any other discount-seeking trickery. Try that, coupon queens!
Now I could grow my own bay leaves, but that would entail a laurel tree, which won't grow here.
Moral of the story: Need spices? Look anywhere but the spice aisle. Check out the ethnic/gourmet/international foods aisle, or even ethnic grocery stores. Don't be a victim of ripoff artist "Mickey C" (McCormick) or Schilling ever again!
If Sam's Club only carried bay leaves...
For those of you keeping track of "hourly rates" through savings, I made $1200 that day. If I were to add up all the savings I create in one year, plus the year-end tax return, then put an hourly rate to them, I'd probably pass out. It would be more than the highest lottery jackpot! Who says housewives are only worth the sum total of the wages of all their jobs performed?
Everyone is smart about something! That's why we have The Dollar Stretcher Guest Blog. If you have a story that could help save time or money, please send it by email to MyStory@Stretcher.com.
by Doug Nordman
This article is written for military servicemembers, veterans, and their families. For everyone else, there are many good reasons to join the military, but they're not discussed here. I'm not suggesting that people should sign up just because of these two particular benefits. Instead, think of them as an extra boost toward financial independence and retiring on your terms. People who are planning to join the military for other reasons, perhaps even for an entire 20-year career, can benefit greatly from these rewards.
These must be really great benefits if they can accelerate financial independence and retirement, right? First let's look at the obstacles standing in the way of those goals.
All retirees have to accumulate the resources to last for the rest of their lives, but early retirees (before age 65) have two daunting challenges: paying for healthcare and contending with decades of inflation.
Health insurance is largely a workplace benefit, and many civilian workers feel "locked in" to their jobs by it. Health insurance can be hundreds of dollars per month without an employer’s subsidy, and it’s difficult to obtain individual coverage for pre-existing conditions. The American healthcare system is the main reason that traditional retirees stay in the workforce until age 65, when Medicare starts to cover much of their health expenses. Even after age 65, retirees still have to contend with rising insurance premiums, higher prescription medication costs, and long-term care concerns.
Inflation is far more insidious. While a health crisis can wipe out a retiree’s finances, inflation is at least as deadly because it’s hard to notice the corrosive long-term effects. At just four percent a year, a decade of inflation can raise retiree expenses by nearly 50%. Retirees in their 60s may only have to contend with two or three decades of inflation, but retirees in their 40s will have to survive four or five decades of inflation that could easily triple their expenses.
A military retirement beats both of those obstacles. You can be financially independent and make your own retirement decision years or even decades ahead of others.
Unbelievable as it may seem to some in the military, Tricare is among the nation’s premiere affordable healthcare systems. It covers far more for active-duty veterans (and their families) than civilian health insurance while charging far less. Unfortunately, many veterans don’t learn this fact until they leave the service, while others with pre-existing conditions may feel locked into military or civil service in order to be able to afford their healthcare costs. In 2010, an active-duty retiree pays less than $40/month for comprehensive Tricare family coverage that, for civilian retirees, would cost hundreds or even thousands of dollars.
As good a financial deal as Tricare may be, the military pension is even better! Military veterans can earn a defined-benefit pension in an era when employers are moving toward defined-contribution 401(k)s. Despite the risks that servicemembers, families, and veterans bear to qualify for that government pension, it’s paid by one of the world’s best-funded institutions with the power to raise its own money.
Not only is the federal government likely to pay military pensions long after corporate pensions hit the skids, that pension includes a cost of living adjustment (COLA) for inflation. This is extremely rare in the business world. Federal pensions (as well as Social Security) rise each year by the inflation rate measured in the Consumer Price Index (CPI). That index may have its own flaws and detractors, but there is no better measure of the nation’s inflation. You may experience a personal inflation rate that’s smaller (or perhaps bigger) than the CPI, but veteran’s pensions will keep up with inflation far better than any other system.Doug is the author of
The Military Guide to Financial Independence and Retirement, coming from Impact Publications in mid-2011 to military exchanges all over the world. It's written by military for military, and ALL royalties will be donated to military charities. Read more at The-Military-Guide.com. Doug is a retired U.S. Navy submariner living in Hawaii with his spouse (a retired Navy Reservist) and their daughter, who's learning even more about the Navy in her college NROTC unit.
Doug is also one of our newest forum members. In addition to his blog, he'll be moderating a new section of our forum especially for military family finances. He's always looking for new material and questions about military financial independence and retirement, so please share your story with him and the rest of our military readers!
by Bill Hardekopf
Last December, the Federal Reserve proposed to cap debit card swipe fees at 12 cents per transaction, a surprisingly sharp decrease from the current fee that averages between 1% and 2% of a transaction. Merchants fought hard for this limit on interchange fees, but in the end, it could backfire on retailers and consumers. Even the Federal Reserve governors are now questioning the impact this bill will make on consumers.
On 3/9 a subcommittee of the House Committee on Financial Services will explore the impact of the Dodd-Frank legislation, including the decrease in interchange fees. The Federal Reserve Board will issue final rules for the interchange fee standards in April, and the new rules should go into effect in July.
Banks aren't accepting this huge cut in revenue without a fight and are trying to delay the deadline. According to ABC News, some big banks, including Bank of America, Citigroup, and JP Morgan Chase, might limit each debit card purchase to $50 or $100 if Congress accepts the new rules for swipe fees. This could be a scare tactic by banks, but banks have proved again and again that regulations which cost them will eventually be passed on to consumers.
Debit card limits might force consumers to use checks, cash, or credit cards for larger purchases. In the very near future, $100 might only cover a tank of gas for some consumers.
Limiting debit card usage would be a big blow for consumers. Turning to credit card usage for large purchases could quickly push cardholders to the credit limit. It could significantly increase the balance they carry from month to month, costing them dearly in interest penalties and possibly even hurting their credit score.
If consumers turn to cash, this could lower sales volume for retailers since consumers spend less when they pay with cash. Even checks, which require writing out the full amount, would provide a small warning about overspending.
The pain is real when you have to hand over hard-earned dollars. When you pay with cash, you are more likely to only buy what you need. Returning to cash would hurt the retailers, but would actually be good for the household budget.
A cap on debit cards could also minimize the growth and usage of smart phones for electronic payments.
The debit limit cap is part of the Dodd-Frank financial reform law. Banks charge as much as 2% for interchange fees. The National Retail Federation estimates that debit card fees total about $20 billion annually. Bank of America, the biggest issuer of debit cards, said last year that the fee limits could cost the bank between $1.8 billion to $2.3 billion each year.
When banks lose revenue in one area, it is consumers who usually pay the price. This can come in the form of new fees or a cut in benefits or rewards. Many banks are already adding new fees to bank accounts in response to other regulations.
There is still time for a surprise ending. According to the Associated Press, the Federal Reserve told Congress that it may reconsider its proposal to limit the fee that banks charge merchants for debit card. Fed Governor Sarah Bloom Raskin told the House Financial Services Committee that the Fed has received thousands of comments on the proposal and expects many more. She also said that the Fed was uncertain about how much of the savings would be passed to consumers and how much banks would boost their fees.
Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.
If you live a "simple" lifestyle in one way or another, we need your help!
The Simplicity Institute is an organization dedicated to research and policy analysis around the topic of simple living, downshifting, and similar lifestyles. This research is profoundly important as it touches the core of global problems, such as climate change, over-consumption, work-life balance and a host of other social and ecological issues.
The Simplicity Institute's current research project is focused on people who have chosen a "simpler" lifestyle, including changes such as reduced or restrained income, reduced consumption or reduced working hours.
If this sounds like you, then you are part of the most promising social movement on the planet. Learning more about people like you is therefore extremely important, so if you can spare 4 minutes to answer some quick questions, then please do! As an added incentive, if you participate, you'll go into the draw to win an exciting book package on the topic of "simple living."
To learn more and help build a better future, visit simplicityinstitute.org/phpQ/fillsurvey.php?sid=2.
by Frank Collins
Avoid the Fees. Settle Debts On Your Own
Anyone with debt has probably given at least a second of thought to debt settlement. The debt settlement industry has a bad reputation because of the proliferation of scam companies, but there are still some good companies out there. And there are more of them thanks to a recently passed debt relief law. But, even reputable debt settlement companies charge fees that can total several thousand dollars. You can save money and settle the debts on your own.
What You Must Do to Settle Your Account
To settle your debts, you’ll have to do two things. First, you’ll have to let your accounts go delinquent for several months. You have to do this because creditors only settle accounts on which they’re at risk of losing money. Your account only enters this risky territory after you fall at least 90 days past due. Plus, you’d have a hard time meeting the second debt settlement requirement if you were making payments on all your debts.
Second, you’ll have to save up enough money to make a one-time, lump-sum settlement around 40% to 70% of your balance. The exact amount varies by creditor. Some may only accept a higher settlement, while others may go for the lower amount. If you’re dealing with a debt collector, you can typically settle on the lower end, sometimes even as low as 5% or 10%.
Instead of sending your regular monthly payment to your creditor, you’ll put it in a separate checking account to accumulate. Then, once you have enough money to settle an account and your account is “risky” enough, you can start negotiating with your creditor.
How to Make a Settlement Offer
Call your creditor and say something like this: “Hi. I know I’m behind on my payments and I’ve been hoping I can get caught up, but unfortunately, I’m in a financial crunch right now. I don’t think I can resume making regular monthly payments. If I can come up with enough money to settle this account, would you consider that?” Wait for a response.
Politely refuse any payment arrangement, minimum payment reduction, or hardship arrangement. You’re goal is to settle the account. You’re having trouble making monthly payments which is why you want to settle. If the creditor asks how much you’d be able to settle for, give them the amount that’s around 40% of the debt even if you have more saved up. Give the creditor room to negotiate upward if necessary. Know the maximum you’re willing or able to pay. Politely refuse any offer you can’t afford. End the call and try again later.
But, if you do get a settlement agreement, ask the creditor to fax you a settlement letter on company letterhead. Fax is the best method for receiving this letter because you’ll get it faster than if it’s sent regular mail. Once you have an acceptable settlement letter, you’re ready to make the payment.
Debt settlement isn’t difficult and doesn’t require you to have special relationship with the creditor. Just follow the plan of saving up and making an offer when you have the money and you’ll see results.
Frank Collins is a seasoned writer with strong background in both personal and business finance. You can read more of his articles about debt relief options, credit counseling and related services at the debt settlement blog
contributed by Hannah of Debt Advisory Centre
Budgeting is something many of us would like to be better at, but it's something a lot of us don't get enough time to work on.
Your budget is the foundation of your finances, and budgeting is all about understanding this and controlling your money.
Creating a budget can be a great way to gain further control over your finances and can help you manage your money far more efficiently. To create your own budget, and take a step to gaining a stronger control over your finances, follow the simple steps listed in this guide:
- First of all, write down everything you earn (and receive in benefits, for example) each month. You should list each income source separately so you can see exactly where your money is coming from.
- Secondly, you'll need to write down everything you must spend each month. If you've got enough time, it may be worth taking a month to write your expenditure down (so you have an accurate amount), but if you can't wait this long, you'll have to rely on memory, receipts, bank statements, etc. Although this won't give you as accurate a total, it will save you time and help you get started on making any necessary changes more quickly.
- It's important that you only write down what you spend on your priority debts (mortgage/rent, household bills, etc.) and essential living costs. You will account for your other expenses (unsecured debts, etc.) later on.
- Now you've got both your income and essential expenditure written down, you'll need to total each of them up and subtract your expenditure from your income. This will leave you with your disposable income.
- Your disposable income is the amount of money you've got available to pay towards your unsecured debts (credit cards, unsecured loans, store cards, overdrafts, etc.) each month and, if you've got any left after doing so, to save and to spend on "luxury" purchases.
- Once you know the value of your disposable income, you can move into the final stage of budgeting: working out whether or not your disposable income is enough to cover your unsecured debt repayments. To do this, simply add up the monthly cost of your unsecured debt payments, and subtract it from your disposable income.
- If you're left with a negative number, you should take action immediately. The solution will depend on the severity of your problem. If you're a few pounds into the red each month, you might be able to cut back on some expenses to even things out. However, if you're quite far into the red, you may need to enter a debt solution like a debt management plan, for example. There are various organisations that can offer a debt repayment plan, but as with other debt solutions, there are several things you should bear in mind, including the impact it will have on your credit rating. The bottom line is, though, you're spending beyond your means and this needs to be sorted out as soon as possible before the problem gets worse.
- If you're left with a positive number, though, you could use the extra cash to "overpay" your debts each month (paying more than the required amount, in other words). This could save you a lot of money in interest and means you'll be debt free sooner!
So, there you have the guide to budgeting. You might want to revisit the budgeting process once a month, just to make sure you're always on top of things. It shouldn't take too long to do once you've created your initial budget.
For more advice on budgeting and on other ways you could improve your finances, you could seek professional debt advice.
This budgeting guide was provided by Debt Advisory Centre, a financial services company based in the UK.