Cutting Down on Unnecessary Fees

Whenever you are revisiting your budget (and downsizing your expenditures), there are typically a few stages that you go through. The first stage is typically the easiest. You take out as many discretionary items as possible. For example

But what if you find that you need to cut some more expenses? Here are some areas to look at.

Look to car pooling - With the sports season coming up, many parents are just tied up sending kids to various sports training and events during the week. You can potentially save money on gasoline by planning ahead and car pooling.

Use a low grade gasoline - Many people have this perception that you have to fill up your wheels with “premium” gasoline so that they “protect your car engine”, or “enhance performance”. Most of the time, these claims are false. You can actually use the lowest grade gasoline and your car will run just fine.

Don’t buy anymore new clothes - Clothes are a big expense. You can save a lot of money by skipping this year’s new season items and purchasing off season items on clearance. For example, since it’s spring right now, the new spring and fall lines of clothes are priced at a premium.

Instead of buying those clothes, purchase the winter items up to 70% off. If you do this at the end of each season you will have a nice wardrobe at a fraction of the cost.

It does mean that you will have to wait several seasons to wear your new clothes, but at the end of the year you will have a very nice wardrobe that cost far less.

Use more hand me downs - You can purchase some very nice items at thrift stores. Especially thrift stores in wealthy areas. Find out where the wealthiest areas of your city are, and call those thrift stores. Ask if they have days of the month where all items are half price. Most thrift stores do.

You can also ask your family and friends for clothing if they wear the same size. Most people enjoy clearing out their closets, especially if it’s going to help a friend.

Refinance Your Mortgage - With mortgage rates heading lower, now is the time to refinance. Many will face difficulty because appraised home values are down. However, for those who can refinance, now is a great opportunity to knock off a couple of hundred dollars of your mortgage bills.

Use one provider for cable, phone and internet - Your bills will most definitely be lower if you consolidate your phone or cable provider. In most cases, you are choosing between your cable or phone provider. Either way, you will save a lot by doing so.

Use the same insurer for auto and home insurance - You will almost certainly get a lower rate for both your auto and home insurance if you use the same company. Just make sure that if you switch, you are getting an exactly identical or better policy.

Start cutting coupons - If you are not a coupon fanatic, you’d better start now. Coupons are just like money - as long as you use them for items that you would purchase normally.

The quick way to get started using coupons is to buy some current coupons for a few dollars on EBay, and check out sites like The Grocery Game which will help you maximize sales in your area.

Revise your cell phone plans - Every one is probably paying more than we should on our cellphones. Call your provider and ask how many minutes did you use on average last year and what is the best package based on your usage. Cut down or disable things like texting that waste your time and adds to the phone bills.

Be more energy efficient - Electricity rates are lower at night because it is at a non-peak hour. So do your laundry at night and not in the morning or afternoon. Same goes for the dishwasher. Don’t leave it till the morning. Unplug plugs from the wall for appliances that are not frequently used.

Use a cash back credit card for any expense and make sure you pay your bills in full.- I’m still amazed that very few people use an actual cash rewards credit card at the supermarket. The better cards pay more than 1% rebate for supermarket and gasoline purchases.

Have You Checked Your FICO Score Lately?

The last economic slowdown hit in 2000. The difference is this time the banks are already reeling from mortgage defaults. The “easy money” era has caught up with us and them. The banks irresponsibly gave out multiple credit cards to anyone, regardless of income. The consumers took them up on the offers. The “things will keep getting better attitude” has caught up with us and done many people in.

Why Your FICO Score Might Fall If You Have Credit Card Balances

The credit card companies are trying to protect themselves from defaults, so they are cutting credit limits. Amounts owed makes up 30% of your FICO score, and the amount owed is compared to your limit. Depending on your balance and how far your limit is cut, your credit card could go from a 50% ratio to maxed out.

Even if you have a great credit history of paying your bills and paying them on time, the company can cut your limit. The good news is that the amount due vs. the credit limit is looked at as a total, not by individual card.

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What To Do To Secure Your Financial Future

If you want to secure your financial future, you must take action. If your finances aren’t what you want them to be, and you don’t do anything different, how do you expect them to improve?

Suze Orman says, “There is to be no curling up in a fetal position on the couch in 2009 hoping that when you emerge the crisis will have passed. No assuming that there is a government bailout or Wall Street rally right around the corner that will fix everything for you without any effort on your part. You will have to get off the couch and take control of your financial life in 2009.”

Suze has published a free downloadable book to give you an action plan for 2009. You can download it here. If you prefer a printed copy since this is a 227 page book, go to this link Suze Orman’s 2009 Action Plan.

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Protect the Credit You Have

Be proactive rather than reactive with your credit card accounts when you are facing hardships. Don’t wait until the credit card company jacks up your rates and you can no longer pay your bills. Call them and negotiate before you are late with your bill, or broke. The better your credit is, the more negotiable the credit card companies are. If a health crisis arises or you are laid off, call your creditors, explain the situation to them and work out a plan with them. Ask what your options are.

Here are some things that I have successfully negotiated with credit card companies.

1. Your due date can be changed. They won’t change it for the current bill, but it can be changed for future bills. This is helpful if you change jobs and will be getting paid at a different time during the month, or you have too many bills due at the same time of the month.
2. Request a lower interest rate.
   • If you have an offer to transfer your balance to a new credit card, it would be better to call up your current company and negotiate with them. Tell them about the offer you have and let them make you a counter offer, rather than have new credit cards or balance transfers on your credit report. Besides, there are usually fees if you transfer a balance.
   • If you always pay your bills on time and you are late on one, request that they set your interest rate back to the rate you were at before your payment was late. They may give you the benefit of the doubt at least once. Don’t abuse this because they will make a note of it in your record.
3. If you go over your limit, make a payment that will bring the card back below the limit, then ask the company to remove the over-the-limit fee.

Above all else, remember that attitude counts for a lot. If you want people to work with you, you must be willing to work with them.

New Credit Card Billing Rules

The bill for the new credit card rules has been approved, but the rules do not take effect until July 1, 2010. The rules sound good to me, but there are some who say it will make matters worse. They say the banks will try to make the money they will lose in other ways. But it makes more sense to me that by that time the banks would extend less credit to those who would be a high risk. See what you think by reading the following.

The new rules include five key protections for consumers who use credit cards.

1. Banks would be prohibited from increasing the rate on a pre-existing credit card balance, and must allow the consumer to pay off that balance over a reasonable period of time. The consumer would be given 45 days notice before a rate increase. The increase will typically apply to future purchases rather than current balances. However, the rate can be increased if
   • it is a variable rate and the rate index changes
   • a promotional rate expires
   • the minimum payment is not received within 30 days of the due date

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Online Credit Card Fraud Prevention Mechanisms

Are you afraid to use your credit card online? Most credit card companies limit your liability for unauthorized or fraudulent charges to $50. You do not have this security with a debit card. Keep reading to discover a way to limit your liability for online credit card use to $0!

Databases that store your credit card number are frequently hacked. Just because you do not use your credit card to make online purchases, does not mean that your credit card number is not stored in a database that can be hacked.

I had an online purchase show up on my credit card once. However, in that case I think that the purchaser had incorrectly entered the credit card number, and just happened to have the same expiration date. So that is one reason that the three digit CW2/CID number on the back of the card helps identify the correct number was entered. To fix the problem, I just called the credit card company and explained that I had never shopped online with that retailer, and they reversed the charge.

I found another great way to protect yourself with online purchases that limits your liability to $0!

Discover Card has set up a zero dollar liability program. The way it works is they generate secure account numbers. Instead of using your real credit card number, Discover Card assigns you a secure number that is linked to your account through a secure database. When you shop online, you enter your assigned secure number.

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Never Live on Just Cash

Many of us blame credit cards for getting us into debt, which leads us to believe that credit cards are evil and should be eliminated from our lives. While the idea of not spending more money than you have is on point, the notion of eliminating credit cards is just silly. Consider the following points before deciding to live solely on cash.

VS.

Spending cash can’t make you cash like credit cards can.
You don’t get rewards or discounts for paying in cash. But you do get rewards such as cash back when you use credit cards. With rewards credit cards, you can even earn points for gifts, travel, gas etc. If there is something you are going to buy, then you might as well buy it with a rewards credit card and get rewards for making the purchase. Buying in cash doesn’t give rewards, but credit cards do.

Cash is unsecure.
If your cash is stolen, then it is gone forever. But if your credit card is stolen, then your money can still be secure by simply reporting your card stolen. Carrying around tons of money just isn’t a good idea.

Cash isn’t accepted everywhere.
More and more places these days aren’t accepting cash, such as car rental agencies. It’s always good to have a credit card handy just in case.

Cash doesn’t leave a paper trail.
By leaving a paper trail it’s easier to see where all of your money is going. Unless you’re great at writing all your expenses down, your credit card bill can be used as a simple way to document your expenses. Knowing where all of your money is going can help you budget your money for the future.

Living just on cash isn’t the solution to anyone’s money problems. Credit cards are great for helping you save money by giving you cash back or rewards when you use them. Just remember to not spend more money then you have.

Do you have an opinion about cash vs. credit cards? Share it with us by leaving a comment!

7 Ways for College Students to Save Money

1. Apply for financial aid, grants and scholarships (free money). Grants and scholarships are officially free money for college students. The most work you would have to do is write essays, collect recommendations or fill out applications. Just compare it to the real world, the work you do for scholarship money is less than the work you would do at a job for the equivalent amount of money. Scholarships and grants are easy, free money.

2. Get a job that will pay for your tuition.
Indeed there are jobs that pay more than just a salary. Certain employers will actually pay for your education. Look for companies that have positions related to your major.

3. Buy and sell books online.
The bookstore is always overpriced. You might as well purchase your books online since thousands of students are trying to get rid of their books at low prices. To get extra cash, you can sell the books you don’t need any more online to other students in need of them. Of course, one place to find and sell college books is on eBay.

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9 Tips to Raise Your FICO Credit Score

The fastest way to raise your credit score is to never let it fall. However, circumstances such as losing your job or medical emergencies can do you in. The fastest ways that you find to raise your credit score could backfire. The best advice is to improve your credit responsibly over time. So here are some pointers for raising your credit score:

1. Always pay your bill on time.
2. Always pay your bill on time. Sorry, but I can’t emphasize this enough. Even if you owe $5, pay it on time.
3. Lower your debt to credit limit ratio.
4. Close credit cards that are store specific. You should never have more than one of these, because they reduce your credit score. Each one you apply for can reduce your credit score by 20 points.

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What To Do If Your Identity Is Stolen

If your identity is stolen you need to act fast. Follow the steps below to stop identity thieves in their tracks.

Step 1: Call Your Bank

You are not liable for much (if anything) that is charged on your credit cards in the event of identity theft. Your bank account is a different story though. You can be held liable for any charges that were made before you notified the bank that your accounts had been compromised. So call your bank first, before you do anything else!

Tell them to cancel your debit cards and your checks. If necessary, have them completely close the account and open up a new one. You should also dispute any charges that were made before you called your bank. There is a good chance that you can get the charges credited back to your account. Your individual bank will walk you through this process. I had to do this myself when my identity was stolen, and it was simple, and quick. As long as you take this step first, you will be protected from the worst of the financial damage that an identity thief can inflict.

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