Filed under: Debt, Insurance, Health

I don’t think this is what Ben Franklin had in mind when he established the American insurance system: 47 million of us in this country are uninsured, and those of us who live in California narrowly escaped criminalization for not being able to afford an HMO, PPO or any other combination of initials that will help pay our medical expenses. Meanwhile, the Democratic presidential hopefuls are arguing over the definition of universal health care. It makes me sick to think about it.

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Filed under: Debt, Shopping

In my last post I told you of my problems. About how I love “things.” I also talked about how I would track my spending for a week and post it here, for ALL to see. I must say I was a little hesitant in the beginning. “Do I really want EVERYONE to be able to see my bad habits,” I told myself. I even delayed this post a few days while I tossed around the idea of doing this. But look no further…here it is…7 days of spending…courtesy of the lax spender.

02/13/2008 breakfast: $7.
02/13/2008 Carlene lunch: $4.
02/14/2008 water bill: $132.
02/14/2008 lunch: $9.42
02/15/2008 lunch: $30.
02/15/2008 New Phone: $300.
02/15/2008 Shaq Jersey: $100.
02/16/2008 new phone: $360.
02/17/2008 dinner: $12.
02/17/2008 lunch : $34.02/17/2008 casino: $25
02/17/2008 hotel: $134.29
02/17/2008 tips: $10
02/17/2008 parking: $20.
02/17/2008 lunch: $17.48
02/17/2008 clothes: $39.
02/17/2008 clothes: $88.68
02/17/2008 gas: $56.55
02/17/2008 home improvement: $255.
02/17/2008 poker: $7.50
02/18/2008 Harley gas: $9.78
02/18/2008 dinner: $14.04
02/18/2008 dinner: $30.
02/19/2008 breakfast: $7.

Total $1,702.74

Now to be fair…it was tax return time for me. Some of those things I wouldn’t ordinarily have spent money on. Did I need them? No…but I still got them. It was also Valentine’s Day. We went to the city and got a nice room, had a nice dinner, did things we don’t normally do. So it turns out this isn’t the most typical of spending logs, but it does show some interesting traits.

What do you all think? There are definitely some other things I could have done with the money. (Emergency fund anyone?)

I am also setting a challenge for myself. For this week, I am going to try and not spend a single penny on snacks, lunch, water or anything the like at work. This means packing lunches…eating breakfast before I go to work. I think I can do it…and I think it will save me some moola.

Everyone reading my posts here has been SO helpful. I look forward to seeing what kind of tips I can get to help me out. See you in a couple days.

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Filed under: Debt, Ripoffs and Scams, Fraud

Luckily today it’s not hard to secure your credit information. As long as you’re not looking to take a loan any time soon, your first step should be to “freeze” your credit report. That way no one can open an account without getting permission from you to look at your credit history.

Once that’s in place, you’ll need to change some habits when handling key financial information. Here’s some simple steps you can take:

• Shred financial documents and paperwork that have any personal information before you throw them out. this includes all statements that have your account number or Social Security number on them. If you commonly write account numbers on checks when you pay bills, be sure to shred those too when you no longer need them.

• Safeguard your Social Security number at all times. Don’t carry your Social Security card regularly in your wallet or print it on your check. If a financial institution or medical insurance company, or anyone else for that matter, wants to use your Social Security number as part of an identification number, insist that they don’t.

• If you get unsolicited emails or emails that appear to be from your bank or a government agency, don’t ever click on the link. If you think it might be legitimate, go to the official website of the financial institution or other company and then order what you want or provide the financial information they’re requesting. People who phish for information commonly use this trick by sending what looks like an official email and linking to a website that collects your information for identity theft purposes.

• When you create passwords on the Internet, don’t use information that a thief could easily find out about you, such as your birth date, your mother’s maiden name, your address, or the last four digits of your Social Security number. Develop a random series of numbers and letters instead.

• Always keep your personal information in a secure place in your home, especially if you’ve roommates or employ others who work in your home.

I can’t guarantee these steps will prevent all identity theft entirely, but they’ll certainly reduce your chances of being a victim.

Lita Epstein has written more than 20 books including the “Complete Idiot’s Guide to Improving Your Credit Score.”

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Filed under: Debt, Ripoffs and Scams, Fraud

You might wonder how you can recognize whether or not you’re a victim of identify theft. Here are some red flags:

• Your credit cards or other bills don’t arrive when you anticipate them. A thief could have changed your address with a financial institution and started using your credit card. He’ll change the address so it will take longer for you to figure out the problem. Most financial institutions grant you to look at your accounts online. Do so regularly to avoid this problem. If you see charges you don’t recognize call your bank’s customer service line immediately

• You start to receive credit cards for accounts you know you didn’t open yourself. Don’t hesitate one second. Call the financial institution that issued the card immediately.

• You are denied credit although you know you have a good credit history. Whenever you’re denied credit for whatever reason you’re entitled to free copies of your credit reports from each of the three top credit reporting agencies — Equifax, Experian and TransUnion. As part of that denial, you should get a letter that tells you how to get those free credit reports. Take advantage of this law and review your credit report to see what the problem is. If you find fraudulent accounts on your report, follow the instructions on the report that explain how to deal with fraudulent accounts.

• You get a call from a store about a buy you know you didn’t make. If you do get this type of call, don’t give out any information because the call could be a phishing attempt. But do find out as many details about the purchase as you can, as well as the caller’s name and contact information. Be sure you get the name of the company and then look up a contact number yourself. Call the company after you’ve checked it out. Only after you know the company is legitimate should you give out any personal information. Also, call your credit card company and let them know that your card was used fraudulently.

Any time you suspect fraud you should place a fraud alert at all three credit reporting agencies. They’ll place a 90-day fraud alert on your account, which can be extended. They’ll also send you a copy of your report to be sure there aren’t other problems. Here are the contact numbers to report fraud:

• Equifax - 1-800-525-6285

• Experian - 1-888-397-3742

• TransUnion - 1-800-680-7289

You can never err by being too cautious. It’s superior to report a possible fraud attempt and be wrong, than not to report one and allow a problem to continue to grow and fester.

Lita Epstein has written more than 20 books including the “Complete Idiot’s Guide to Improving Your Credit Score.”

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Filed under: Debt, Home

It used to be that when people talked about short sales, they were talking about a technique that investors in the stock market use to bet on declines.

The meaning that’s currently getting the most attention — selling a home for less than you owe on it — was nearly incomprehensible to most people during the heady days of the real estate bubble. Homes going down in value? Hah! Home prices only go up, silly! This is America!

In a depressing sign of the times, tonight’s Suze Orman Show is devoted to troubled home owners looking for a way out. So far (I’m writing this halfway through the broadcast), it’s quite interesting an informative, and should be viewed by all home owners in a rough spot, as well as anyone looking to understand what has happened to the real estate market.

Here’s the broadcast schedule for it:

Sunday
12:00 AM, 4:00 AM, 5:00 AM (ET)

Be sure to watch for it.

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Filed under: Debt, Ripoffs and Scams

During my blogging “career”, I’ve found myself defending the payday lending industry on more than one occasion. I don’t do it because I think payday lenders are good for consumers but rather because there’s a widely-held assumption that the industry is earning massive profits at the expense of consumers, which isn’t the case. Looking at the financials of these companies, you can swiftly see that they’re really not that profitable. They make small loans and have substantial overhead. Without insanely high rates on the loans, they wouldn’t be able to turn a profit. So the industry is basically a bad deal for consumers and a below-average deal for the lenders.

According to the Community Financial Services Association of America, an industry trade group, “A study by the FDIC Center for Financial Research found that “operating costs lie in the range of advance fees” [collected] and that, after subtracting fixed operating costs and “unusually high rate of default losses,” payday loans “may not necessarily yield astonishing profits. “So I’m willing to defend the industry when it’s appropriate. But I’ve seen some “public service announcements” for the industry on TV lately (CNBC of all places — How many CNBC viewers use payday loans? Only the ones who actually follow the stock tips of the pundits, I bet ….). I can’t find the latest one online but here’s an old one you can watch on YouTube. At the end of the video, which features smiling well-spoken voices explaining how payday loans have helped them, a voice cautions consumers to “always use payday loans responsibly.”

Here’s my question: If the payday lending industry only made loans to people who are using them responsibly, would they be able to turn a profit? I somehow doubt it.

I appreciate the message behind the commercial but it seems a bit like a tobacco company saying (They’re not granted to say this by the way) “Please smoke responsibly.” True, smoking once a year would be perfectly responsible … But how many people do that or use payday loans responsibly.

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Filed under: Banks, Borrowing, Debt, Home, Real Estate

If you’re facing foreclosure in California, New York, Kansas Massachusetts, or Ohio and your lender can’t find your original loan closing paperwork, there’s a good chance the judge will dismiss the case.

Lenders who want to foreclose regularly file what’s called a “lost-note affidavit” when they can’t find the original documents you signed at closing. That’s happening a lot lately because many times a loan is sold over and over again after the original loan closing. In a rush to package and sell mortgages, shortcuts were taken, and sometimes the lender who currently collects your payments does not actually hold the original note.

In fact, according to a report at Bloomberg this day, 19% of outstanding mortgages have been bundled into private securities for a total of $2.1 trillion in loans. Alan White, an assistant professor at Valparaiso University School of Law in Indiana told Bloomberg that in a rush to package these loans from 2003 to 2006 assignment of ownership was not always properly completed. If you hold one of these loans it is possible that the paperwork is lost forever because many of the originating loan companies have since gone bankrupt or were gobbled up by a bigger lender.

Judges in at least five says — named above — have decided not to allow a foreclosure without the original note signed at the time the loan was shut. They believe that without that original paperwork the lenders can’t prove they actually hold the note. One of the first judges to take this strong stance was Judge Christopher Boyko in Ohio.

If you are facing foreclosure in a say not mentioned here and your lender is using a “lost-note affidavit,” contact an attorney for help. You might be able to save your home.

Lita Epstein has written more than 20 books including “The 250 Questions You Should Ask to Avoid Foreclosure.”

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Filed under: Borrowing, Debt, Reduce, Reuse, Recycle, Transportation

When I was 16 I drove my parents’ used ‘85 Subaru station wagon (a.k.a. The Silver Bullet). I was just thrilled to be behind the wheel of something with four moving tires. I could pack at least five friends in it legally and a few more if we avoided driving by the Dairy Queen in our small Texas Town. That was where you cops drank coffee.

The Bullet was great on gas mileage and 100% paid off. In fact my parents never took a loan out on a automobile. They purchased used cars in good condition with whatever they had in their bank account. Now, we didn’t live under a rock, our family had two credit cards, but they either always had low or no balances on them. This lack of debt wasn’t because they’d a lot of money to pay off cards off each month; it was because they never spent a lot on things that they “wanted.” They only made purchases they needed.

I wish I had paid more attention to the way they handled money. For me it was about getting out of that small town as fast as I could and trying to live a lifestyle I had always wanted to live; a lifestyle un-deprived. When you come from nothing, the first major purchase in your twenties is that brand new automobile that you can barely afford. For me it was a convertible sport scar. I loved that vehicle but it nearly broke me at payments of $425 per month. Broke or not, I felt like quite the hot pocket in that vehicle. I thought what I drove really made a difference in other people’s eyes.

After a year of sporting around, I moved to a city where it snows twice a year and decided what I really needed was a brand new SUV. So I traded in my sports car along with my $1,000 tax refund as a down payment. After all was stated and done, I left the parking lot with a zero interest loan on a brand new Durango with heated leather seats. I convinced myself that the payment of $550 for 5 years was more than worth it. That day my banking account had maybe $200 in it and my savings account had $50. Once again I was more concerned with what other people thought than what was actually the ideal financial decision for me.

Here is a hard lesson that took me almost 10 years to learn, and I hope some other fool in his or her twenties reads this. No one gives a damn about what kind of car you drive, and if they do they probably don’t give a damn about you. Buying a brand new automobile is never something you “need” to do. It’s something you want to do and the vehicle dealers have no problem financing more than you can realistically afford.

I have had the Durango (my Hoopty) paid off for two years now. Does it get good gas mileage? No. Is it too huge for what I need in my life right now? Yes. Is it the coolest new ride in town? Most definitely not. But you know what’s cool? Having an extra $550 to add to my savings account each month.

So the next time you get that new automobile itch, wash your old vehicle. It helps, trust me. If your Hoopty is falling apart, think about buying a used vehicle. If you can, use the money you have in the bank to finance all or most of the buy price. Also don’t forget to do some research, vehicles are lasting a lot longer than they used to.

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Filed under: Budgets, Cards, Debt, Saving, The Dolans

Ken and Daria Dolan, America’s First Family of Personal Finance, answer your money questions each Friday.

Ken and Daria,

My credit score is 657. My wife and I want to refinance our mortgage, but we need a higher score to get a good interest rate. What can we do to boost our credit score before we speak to our lender?

Joe

Ken and Daria Dolan offer more advice on living credit smart in their new special report,”8 Secrets Your Credit Card Company Doesn’t Want You to Know.” Download it now.

Click here to ask Ken and Daria your question.

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Filed under: Debt, Extracurriculars, Tax

Actor Nicholas Cage is the latest celebrity to run afoul of the IRS.

According to Forbes magazine, Uncle Sam is accusing Cage of using a company he owns to wrongly write off $3.3 million in personal expenses including limos, meals, gifts, travel and his Gulfstream jet.

“In just-filed U.S. Tax Court lawsuits, the 44-year-old actor–using his legal name of Nicolas Coppola — is disputing a personal IRS bill for $814,000 in taxes and penalties from 2002 to 2004, while his Saturn Productions of Los Angeles is fighting a demand for $988,000,” the magazine said. “The feds hit Cage both ways, denying Saturn a deduction for the disputed expenses while taxing Cage individually on the perks as salary and `constructive dividends.’”

Cage’s business manager, Samuel J. Levin, told Forbes the expenses were proper. The Tax Court might feel differently about the matter.

Maybe Cage should employ the legal team that got Wesley Snipes recently cleared of serious tax evasion charges. Snipes managed to convince a jury that he believed he wasn’t required to pay income taxes because he didn’t think he’d to pay taxes. Nonetheless, Snipes owes the government $17 million in back taxes plus interest and penalties.

Cage is going to face a hefty legal bill, so he might want to unload some of his many properties such as a castle in U.K. and a multi-million dollar mansion in Rhode Island. I also have a suspicion that a “Face/Off 2″ may be in the works.

–Freelance writer Jonathan Berr edits the blog Ketchup and Eggs.

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