Archive for October, 2009

Even Your Kids Aren’t Safe From IDENTITY THEFT!
October 22, 2009

This week is National Protect Your Identity Week. Many think that identity theft could never happen to them. However, so many people have been victims, it’s not something you should ignore. The wildest story on identity theft, is the 9-year-old whose identity was stolen to create an $18,000 line of credit. Take note, not even your kids are safe from it.

What’s the threat, you might wonder. When your identity (social security, name, driver’s license, etc.) is used to secure credit and to make purchases, it is very difficult to prove that you were not involved. Lenders and creditors like to believe that they screen carefully when awarding credit, and that their practices are fool proof. What this means to you is that they think you are lying. You then have to prove that you do not have the property or items purchased or that you could not have been the one to make the purchase. It’s tricky.

Over 9 million people a year are victims, at an average cost of $4,849 to each individual. That number doesn’t include the many hours and extra dollars involved. Some consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing or cars because of negative information on their credit reports. In rare cases, they may even be arrested for crimes they did not commit.

Luckily, there are some easy ways to safeguard yourself from falling victim to identity theft. Once you know how your information can be stolen, you can protect it. According to the FTC, the number one way that thieves get information is by “dumpster diving”. They retrieve discarded documents that you throw away. Think about the way you go through your mail. Do you just put credit card offers, bank statements, tax returns and other data in the trash?

Shredding your documents is the safest way to prevent them from falling into the wrong hands. Personal shred machines are available at most office supply stores and are a good investment for your home. This Friday, however, you can bring up to three boxes of your personal documents for free shredding in celebration of National Protect Your Identity Week.

Kansas City Saves, a part of America Saves, involves over 50 local businesses that provide financial education resources to the community. Shred Time, Bank of the West, Essential Knowledge and many others have partnered to create this FREE event. Here is the information to attend:

Friday, October 23rd.

Time: 5:00 – 9:00 AM

Place: Bank of the West, 6263 Nall Avenue Mission, KS 66202, located on Shawnee Mission Parkway.

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Thou Shalt Save!
October 13, 2009

Jon Hanson is a new guest blogger for It’s Your Money.

Uncle Sam wants you! To have an IRA! Proposed in President Obama’s 2010 budget is a provision for automatic enrollment of employees in IRA’s for employers that do not offer traditional 401K plans.

The good:

  • It encourages savings, and even though you can opt out,few will. Jennifer Monnin of Nationwide Insurance, at an October 2008 National Savings Forum I attended in D. C. for America Saves, says 95 percent of Nationwide employees do not opt out of their auto 401K.
  • Cutting edge employers could add educational opportunities to the program and increase employee loyalty and stability. Employees with a financial plan and goals are less stressed and more productive.
  • Employers with less than 10 employees would be exempt and employees that earn under $5,000 a year would not be counted, according to Stephen Miller of SHRM.

The bad:

  • The matching contribution by the government is simply forced redistribution of taxpayers’ money. I would like to see the match be voluntary and by the employer.
  • If you do not initiate the savings, will you learn anything?
  • It could be a burden on employers: more burden, less jobs.

The New York Times offered this explanation of the government matching funds, “For households that earn under $65,000, the federal government will match savings up to $1,000 a year with a 50 percent tax credit. So if you saved $500, you would get $250 dropped directly into your I.R.A. This tax credit is refundable, which means you would get it regardless of how much you pay in federal taxes each year. The credit would phase out between $65,000 and $85,000 of household income or half of that if you are single.”

It takes legislation to bring it to reality: Read more: Automatic IRA Act of 2007 not final versions (S. �1141 �& H.R �2167). Other: CFED, Brookings, Heritage

Jon Hanson is the author Good Debt, Bad Debt and Gooddebt.com

A Best Bet Self-Improvement Book “… bracing, snappily written.”
– People Magazine

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6 Ways to Save for the Holidays
October 12, 2009

During the holidays, it is so easy to get caught up in the spirit of the season and to overspend. So, here are my top 6 tips for planning ahead to stretch your dollar this season.

  1. Start Saving Now. How many paydays do you have until the week before Christmas? How much will you be able to save out of each one? Add that up to determine your cash budget. If you already have planned ahead with a Christmas account, good for you! Add that to your cash budget. This total represents what you can afford to spend without going into debt.

Resolve Not To Use Credit. How many times have you started a new year with debt from the holidays? Now is the time to steel yourself against impulse purchases, guilt gifts, and gifts for yourself. Make 2010 the year you don’t carry debt forward.

Make a gift plan (budget). How much will you allocate to each family member or friend? Divide up your funds so that you know exactly how much you can afford for each person. You may really want to buy your brother that new Blu Ray player, but can you afford it? Or should you be looking for something less expensive? Thinking through these purchases will really force you to stick to your budget.

Shop Smart. The key is to either shop early or shop last minute to get the best deals. If you can start early, you have the luxury of time, and can shop online. Google for coupons, and look for free shipping. Make sure to cross items off of your list as you find them.

Make Personal Gifts.  Typically less pricey than buying something, but it is appreciated just as much.

Make A New Gift Giving Tradition. This might be the year that you propose the adults in your family draw one name to buy for. Don’t be shy to suggest new ways to celebrate the holidays with your family. Now is the time to make these plans, though, before everyone else starts their shopping.

I promise that if you act now, you will spend less money and lose less sleep over the holidays.

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What Will Happen When Frugal Isn’t Cool Anymore?
October 6, 2009

Lately, it seems that everywhere I turn, financial institutions and other organizations are boasting about the increase in the national savings rate. Personal spending is down sharply from 2007, while the national savings rate, which dipped below zero a few years ago, went above six per cent earlier this year, finds James Surowiecki of The New Yorker.

Up until October 2008, the U.S. was at a negative savings rate, which basically meant that, as a country, we spent more than we saved. With the availability of credit, and a strong economy, it was easy to adopt a “buy now, pay later” way of thinking. “There’s so much marketing pressure to spend and buy and have instant gratification. And if you can’t buy it now, put it on your credit card,” says Nancy Register, of the Consumer Federation of America.

In a recent blog post, Thomas J.Fox discussed the “Demise of Affluenza”. He cited a recent Consumer Reports survey that dubbed the new savings behavior intelligent thrift. With the unemployment rate rising, people have had to base their spending on needs rather than wants. Frugal is cool, only because there isn’t another choice. So, is the new savings rate truly indicative of changed behavior? Or, is this a fear mentality?

Once the economy improves, will this thrifty behavior continue? Or will many people simply return to their old ways of spending? History tells us that after 9/11 and the Great Depression, Americans went on a spending spree. Will this be the case for us? Or will the hard earned lessons of the past year pave the way for continued thriftiness?

For the sake of you, me, all Americans (and our nation) … I hope this time financial sensibility sticks around for good.

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