The Real Reason Why You Don't Take Out Loans For College

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Watching my four children on their college adventure has given me time to pause and reflect how proud I am of them. My wife and I have preached and preached how important a college education and the following job is to a successful life. Thankfully they have listened.

Throughout the college journey it has been hard to avoid loans. We have a prepaid college plan for all of them. There have been Pell Grants and scholarships. There has been out of pocket expenses, but nothing that couldn't be cash flowed. We were lucky. But we were prepared and able to have the income to pay for it and avoid loans, for their sake.

Some families don't have the resources or access to scholarships. They don't know about the FASFA application and sources of college money. What they do is take out college loans. Here's where the problems begin. Here is something I believe most people don't even think of.

There is a new study that says that only 22 percent of students enrolled in bachelor's programs at for profit colleges and universities graduate within 6 years, this according to The Education Trust, a Washington, D. C. based group. That compares with 55 percent for public universities and 65 percent for private nonprofit schools.

It is very possible that you will not finish your college plans. Taking out student loans and not finishing is a mistake that will follow you for many years. In the students life many circumstances can come up that will delay the completion of college. There are financial, health, relational and physical problems that could cause the student to never finish. With those outstanding loans your finances will suffer for years to come.

Taking out loans is considered the only way to go to college to most people. But with escalating tuition costs and a new awareness in the culture to be more frugal; students and their parents are finding new ways to better prepare.

If you don't have enough money to pay for college you have two options. Either reduce costs or increase cash. You will have to decide. It will be hard but paying off student loans is much harder.

Credit Card Use Is On The Decline

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Holiday shoppers say they'll use debit cards and cash this Christmas season. According to Britt Beemer, chairman of America's Research Group, a retail polling company. His polling reveals that a remarkably low number of people will be using credit cards this season. If consumers follow this strategy, your going to see much lower sales at retail stores.

Beemer states that when people use cash their average purchase is $41. With a credit card, they spend an average of $87 per transaction. According to the National Retail Federation 27.6 percent of shoppers said they will use their credit cards as primary payment for their holiday gifts, the lowest percent since 2002. According to Beemer, only 12 to 15 percent say they will be using their credit card.

When they have cash they only have so much money they can spend, when using credit cards, they are not under that control. Also a growing number of people are switching to cash, debit and check cards as their main source of payment.

The main reason to use cash is to avoid accruing more debt and staying within a budget. This change of financial habits is because of the Great Recession we are going through. It seems the new frugality is becoming a long term trend and not a fad.

Some shoppers say they are using credit but for other reasons. With credit cards they feel they are getting certain guarantees. If you have any trouble with the purchase at least you can go to Visa or MasterCard for some help. These shoppers say even though they use their cards, they will be paying the bill of in full.

Some retailers are joining the bandwagon with a resurgence of their layaway services. Also an increase in the use of membership points, coupons, and reward cards to keep the shopper happy.

If seems that this holiday season will be very different from anything we have become used to in the past. Credit card use is going down and cash use is going up. This can only be a good thing for the overall economy and our own personal economies.

How Do You Help Your Grown Kids Financially Without Hurting Yourself?

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When our kids are young they are such darlings that it's hard to say no to them. With to much indulging, we sometimes end up spoiling them. Their impact on our finances are minor. Then comes college and cars, the costs start to rise. Then finally they are gone and the costs go down. Now you put that money toward retirement, savings and paying off the house. Whew. You are done.

But wait, your not off the hook yet. Your grown children are coming to you for money. One wants help with a down payment for a house. Another wants to start a business. Maybe another is going through a divorce and needs money for a lawyer. Ouch.

Remember when I started this post I said how hard it is to say no to your kids?  Your kids need money, some are in trouble and some just need money for their life. How do you help them without hurting your own finances. There are a few things to keep in mind. Is this help they want a need or a want. How will your actions help their life? Maybe by helping them you're really hurting them or enabling them.

Children view their parents in different ways.  Some see Mom and Dad as a bottomless pit of money. They never seem to get it that they should be on their own. Some understand that finances are finite and it's best to leave the parents alone. They know it's time for the parents to not bare the financial responsibility for their grown kids any more. The parents have done more than enough.  

So it's a balancing act to know if you should say yes or no. We can all agree that in an emergency we are not going go let our children down. Keeping in mind that by helping them we are careful to not harm ourselves. It's quite possible we will turn down our children's request in a situation, but may help instead in a non-financial way.

The type of situation is important to the decision of giving help. If my child comes to me for a down payment for a car or or house; I will say it's not an emergency or a necessity. I will tell them as adults they responsible for their own finances  Now if you have the money because you are well off and can afford giving them the money, that's a different situation.

On the other hand if your child is going through a divorce or needs money for an operation, your obliged to help them. But only if you aren't going to harm yourself financially. It goes without saying, staying out of debt is paramount.

These black and white examples show what to do in a non-emotional way. But with your children, it's hard to to keep it that way. Your feelings toward them will weigh on your decision. Bottom line, decide if your help will be a help to them long term or just enable bad behavior.

Black Friday Survival Guide

If your like most people your getting ready to hit the malls today. It must be what running with the bulls is like. You may be getting a late start, but its never to late to go through a checklist of great shopping tips. I am including a broad array of tips from shopping to shipping and warranties to rebates. Here we go.

Avoid Debt

If you spread grocery purchases for holiday meals over several weeks, freezing perishables and storing staples; it can leave a lower impact on your food budget.

Make a budget and stick to it. Get the whole family in on it. You will be saving money and it's a great chance to teach the kids about money management. Most of all pay cash this season for all purchases.

Shop Safely

Shop only at reputable brick and mortar retailers.

If shopping online be sure to read the return policy and make sure the website is has industry seals of safe shopping like Verisign and the Better Business Bureau.

Websites and Shopping Online

Be sure to check out websites like Blackfriday.com, Blackfriday.fm, Tgiblackfriday.com, and Theblackfriday.com. These websites should give you a broad look at all the online and brick and mortar stores. When comparing prices be sure to check out Amazon and Ebay. It's always good to be signed up for email from Target.com, Walmart.com, and your own favorite web stores.

Gift Cards

When you can't find that special gift for that hard to shop for person, why not get them a gift card. They are available for all major retailers in town and online too. If you receive gift cards as a Christmas gift be smart and take precautions. Its always good to photocopy the card so you have all the pertinent information in case you lose it. Also keeping the receipt as proof of purchase whether you are are giving or receiving. But the best advice of all is, if you receive one as a gift, use it as soon as possible. This way it won't get lost or maybe expire.

Rebates

This is the most troublesome aspect of modern shopping. Retailers know we like to get a good price with the rebate incentive. But they know most of the time we won't follow up on the rebate process. We either forget, lose some forms and file it wrong.

If you have to use a rebate follow these steps. Check the expiration date of the rebate and mail it way before then. Don't throw away receipts or product packaging in case you need to resubmit. Make photocopies of all paper work you send in. Consider sending your paper work by certified mail. So you will have proof you made the deadline. Lastly be patient because it does take a few months to process it. Make a note of the web site or phone number where you can check on the progress of the rebate.

Green Shopping

Buy gifts that are made with recycled materials and are energy efficient. Bring reusable shopping bags and avoid plastic bags. When wrapping presents try to use any left over or used packaging from last year. Shopping online is a very efficient way to shop. Lastly when decorating use energy efficient led bulbs in your decorations.

Warranties and Returns

Returns can be a headache if you have no receipt or do not know the rules that your retailer has about returns. Save yourself the hassle and familiarize yourself with these rules before making that purchase. Also keep that receipt in a safe place and for at least a year.

Warranties and expiration dates are different for different products and for different stores. Again familiarize yourself before the purchase to save you headaches after.

Package Shipping

Be sure to ship your gift packages early enough to use standard shopping rates, by Dec 15-17 will be the last days. After that you will have to use the more expensive shipping rates to get it there on time. Other deadlines are Dec. 20 for first-class mail, Dec. 21-22 for priority mail, and Dec 23 for express or over night.

These hints will get you started on this seasons coming events. Remember the holidays are only a few weeks away. Don't put things off to the end. Get a head start tomorrow and it get done.

Happy Thanksgiving To All

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Today we give thanks to God for all our gifts we receive. We take a moment to say a prayer and reflect  on all the things we have. Whether it is our family's, our health or what we have. Today is a day of gratitude. 


The original Thanksgiving was first observed by the pilgrims long ago in 1621. The tradition was eventually permanently established by the highest office by President George Washington in 1789. The following proclamation by President Washington was signed October 3,1789 and entitled "General Thanksgiving"

"WHEREAS it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favour; and Whereas both Houses of Congress have, by their joint committee, requested me "to recommend to the people of the United States a DAY OF PUBLIC THANKSGIVING and PRAYER, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness.

NOW THEREFORE, I do recommend and assign THURSDAY, the TWENTY-SIXTH DAY of NOVEMBER next, to be devoted by the people of these States to the service of that great and glorious Being who is the beneficent author of all the good that was, that is, or that will be; that we may then all unite in rendering unto Him our sincere and humble thanks for His kind care and protection of the people of this country previous to their becoming a nation; for the signal and manifold mercies and the favorable interpositions of His providence in the course and conclusion of the late war; for the great degree of tranquility, union, and plenty which we have since enjoyed;-- for the peaceable and rational manner in which we have been enable to establish Constitutions of government for our safety and happiness, and particularly the national one now lately instituted;-- for the civil and religious liberty with which we are blessed, and the means we have of acquiring and diffusing useful knowledge;-- and, in general, for all the great and various favours which He has been pleased to confer upon us.:"

And also, that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech Him to pardon our national and other transgressions;-- to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually; to render our National Government a blessing to all the people by constantly being a Government of wife, just, and constitutional laws, discreetly and faithfully executed and obeyed; to protect and guide all sovereigns and nations (especially such as have shewn kindness unto us); and to bless them with good governments, peace, and concord; to promote the knowledge and practice of true religion and virtue, and the increase of science among them and us; and, generally to grant unto all mankind such a degree of temporal prosperity as he alone knows to be best.

GIVEN under my hand, at the city of New-York, the third day of October, in the year of our Lord, one thousand seven hundred and eighty-nine."

(signed) G. Washington

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I would like to wish a happy and healthy Thanksgiving to all. I will be spending my thanksgiving at home with my wonderful wife and children. My best to you. God Bless. Happy Thanksgiving.

Essential Money Management Tips for Kids.

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Author Bio : This is a Guest Post by Marc Brown, a Financial Writer, associated with Oak View Law Group. Besides, he also maintains his own personal finance sites & advice people to lead a debt free life.

Debt is crucial concern to many people irrespective of rich and poor, which necessitates them to preserve money and manage their budget. It is even essential to teach your kids about how to plan their budget, save money thereby. As It would help them to properly utilize their financial resources in future. However kids are too innocent to understand the importance of money and budgeting. Therefore, parents should take the responsibility in their own shoulders to make their financial future secure.

Here are some tips which can help you to make your kids acknowledge the value of money:

1.  Budget Planning : Teach your kid to make a weekly or monthly budget. Ask them to allot their money to different areas. They should divide it as X% of the total money goes to the savings account, Y% to something else. Advice them about how much they must allot for each area and arrange them a depository where they can reserve their money.

2.  Playing with your kid : Play games with your kid that includes dealing with money. This will teach them to count money and will compel them to learn how to save it.

3.  Discuss family budget : Involve your kid in the family budget discussion. Give them a knowledge as to where the money goes, how you save, how much you afford to spend.

4.  Shop together : Take your child with you while you go for a shopping. Ask him to assist you by finding sales on items. Involve him while making a list of things to be purchased. Also tell him to keep a instant record of the total expenses.

5.  Live indication : Give your kid a new or a fresh storage box so that they can visualize the increment when they save and the deduction when they spend. This will help them to value savings.

6.  Training kids on real things : Kids remember the visualized things more than what they hear. Practical teachings are more effective where they can apply their own brains. Beside the weekly allowances that you give them, tell them that you would pay them an incentive if they do certain work for you. This way they will learn to value their own earnings.

7.  Teach them to have patience : Once your kid starts understanding more about money, he might hurry in getting what they like. So incorporate in them to have patience. Buy things what he likes but delay the purchase. This will help him having a control on his own desire of buying things.

8.  Teach them to compare price : It is very important that they learn to compare prices before buying something. Tell them that doing this will increase their savings.

Following these simple but important tips you can help your child to make a money management at an early age, which will be definitely prove to be very helpful in his future.

New Frugality Hurting Corporations Bottom Line

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The recession has taken it's toll on American culture by making us think before we spend money. Never before, besides the financial devastation of the Great Depression, has America taken the time to really think about the money they spend. Money market accounts are awash with cash just sitting on the sidelines waiting for a better economy. Our friends and neighbors are thinking twice about spending their cash because they are worried what tomorrow will bring. Many people have sworn off the use of credit cards and are paying down their debt and vowing to never to borrow again. We are seeing a new frugality developing in our country.

Some of this frugality has already been a part of many peoples lives. But today it's on the rise. The money we spend and what we spend it on is affecting many businesses. The economy is reflecting this frugality in the bottom lines of business.

Ketchup maker H.J. Heinz has made some noise about how this new frugality has hurt it's bottom line. They state in a press release that this new found "funk" in spending has shaved a few pennies of their profit for the quarter. Don't feel sorry for them their profit for the last quarter was only $251.4  million dollars. To make it worse the company has complained that coupon use has increased by 5%.

This is the kind of news I love to read about. Proof that we are making good decisions with our money. It makes sense to the public, but executives at Heinz find themselves confused. Even with ketchup we are frugal.

In what other ways does frugality effect the economy? If ketchup frugality makes it to the news what other results are on the horizon. Will the increase in savings and the reduction in debt help or hurt the economy. I believe it will benefit and and help heal the economy. Deficits and limitless debt has proved to be a blessing so far, so let's try something else. What's your take? Will saving and frugality help save the economy?

Someone Is After Your Social Security Number

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 I went over to see the doctor this week for my yearly physical. Everything checked out fine but I had to go to a lab to get some blood work done. It was a different one from the one I usually went to. They gave me the forms to fill out which indicate all my particulars. There was a line on the form for my social security number. As a rule I never put down my number. I never get a problem from the doctors office. But I think how many people just put it down without thinking. For years, I never put it on any application or information records.

According to the Identity Theft Resource Center, Privacy Rights Clearinghouse and the Open Security Foundation 32% of identity theft occurs from the improper safe keeping of records. The theft of social security numbers occurs when the identity thief goes through discarded files in dumpsters, inside an organizations’ file cabinets, in any of the hundreds of databases maintained by government, corporate, and educational institutions, or even in public records, which are freely accessible on the Internet. 

The Identity Theft Resource Center has listed the top riskiest places for identity theft, through mishandled social security numbers.

The top 10 most dangerous places to give out your Social Security number are:

• Universities/Colleges
• Banking/Financial Institutions
• Hospitals
• State Governments
• Local Governments
• Federal Governments
• Medical Businesses (Please note: These are businesses that concentrate on services and products for the medical field such as distributors of diabetes or dialysis supplies, medical billing services, pharmaceutical companies, etc.)
• Non-Profit Organizations
• Technology Companies
• Medical Insurance and Medical Offices/Clinics

This list indicates almost everywhere people do any kind of transactions. Meaning your vulnerable anywhere.

Over the last 70 years the social security has become our national I.D. It was initially intended to be a way for the social security administration to keep track of income for future retirement payments. But over the years it has become used for so much more. Now it's required for all forms of credit. Are credit score and history is indexed by it. 

According to the Social Security Administration the only use of the number they care about is in the official statute:

A federal law, 42 USC Chapter 7, Subchapter IV, Part D, Sec. 666(a)(13), enacted in 1996, determines when the numbers should be used. The law requires Social Security numbers to be recorded for “any applicant for a professional license, driver’s license, occupational license, recreational license or marriage license.” It can be used and recorded by creditors, the Department of Motor Vehicles, whenever a cash transaction exceeds $10,000, and in military matters.

It's up to you to protect your social security number and identity details.

Here are a few ways to do that:

1. Check your credit report. At least once per year run your credit report for errors and if any found, dispute them as soon as possible.

2. Refuse to provide your Social Security number. Do not give your number unless absolutely necessary and then still argue the need for it.

3. Invest in an identity protection service. Get a good I.D. protection service to keep an eye out for trouble. Or just freeze your credit bureau at all three services.

4. Securely dispose of mail. Invest in a paper shredder and put all mail through it.

5. Opt out of junk mail and preapproved credit card offers.

6. Lock down your PC. Get a good security software to protect your computer.

Pre-Thanksgiving Weekly Round-Up

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Welcome to my Pre-Thanksgiving Round-up. It has been a busy week with work and getting the house ready for next weeks eating extravaganza. From around the web some of the best articles.

Over at Personal Finance By The Book an interesting post on extended warranties. Why I Said “Yes” … and then “No” to My Cell Phone Protection Plan

Jim Wang at Bargineering had a great post on the governments budgeting problems called You Fix The Budget . It has a link to the New York Times site where in a game you actually fix the budget.

Mint.com has fun post called Five Fun Financial Holiday Gifts for All Ages. It's a gift giving guide for you holiday shopping pleasure.

Squirrelers.com has an interesting post on being more productive, 10 Tips to Improve Productivity. I always find something in a list like this to help me be more organized.

Canadian Finance Blog has some great tips to stop the holes in our budgets, 5 Non-Essential Expenses that are Bleeding your Budget. It's some great information on fine tuning your budget. 

Get Rich Slowly gets advice from billionaire Mark Cuban. He's asked "What to do with a windfall?" his answer was very interesting, check out Advice from a Billionaire: What to do With a Windfall.

Dinks Finance has an interesting post on family dynamics and money, When Do We Have Enough Money? With parents, children and combined families the fun never stops.

Financially Poor has some steps to take to get your significant other on board financially, How To Get Your Partner On Board With Finances - 3 Ways.

I hope these links keep you busy over the weekend. Don't forget that turkey at the store. And I don't mean your spouse.

How To Have A Debt Free Christmas

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For so many years I never planned or saved for Christmas. I either didn't buy very much or went heavily into credit card debt. Even after learning from my parents about saving for Christmas. They had something called the "Christmas Club" account over at their bank. They would save a little every week and by Christmas they would have the money needed to buy gifts.

I reached a point where I was sick of paying my Christmas credit card debt till August. You have to reach a point where your sick and tired of being sick and tired. That's when things will change.  I reached my point and reversed the behavior that got me into this mess. I began slowly to save a little out of each paycheck. They were small amounts of $10 a week.  Soon I didn't miss the $10 and kicked it up to $15 a week and then $20. Over the course of the year my account filled up and Christmas was a success.

I have been doing these things for 15 years now. Preparing for something in the future today so you don't have a crisis in the future. The money is there waiting for me. I do the same with my property tax and home insurance. Every week  an amount is saved for these future bills.

Saving for Christmas is only half the battle. Now it's time to plan your gift giving with a budget. Make a list of the friends and family you need to purchase a present for. After each name indicate the amount you want to spend. Add up the total amount you need. If your on below the amount Christmas savings account then your fine. If you are over either increase savings or eliminate the amount needed per person or shorten the list.

Now that you have your plan it's time to layout your shopping strategy. You must set a specific time to shop. Making. A schedule will get you organized and psyched out to accomplish the task. List what stores you will go to and the amount of time you will spend there. If distracted by a sale, quickly access the benefits and then get back on track. This isn't a window shopping experience; be careful not to buy anything for yourself. As you complete each purchase write down what you buy, for who and how much you spend. Be sure to shop early and only use the cash you have saved. Using credit cards is off limits. You will distracted many times while in the store, it's their jobs to get you to make unplanned purchases. Finish your list and get out of there.

When your finally finished you can be proud of yourself because this may be the first year in your life you stuck to a budget and enjoyed a debt free new year.

Save Money: Appeal Your Property Tax Bill

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I just recently received my property tax bill in the mail. I was hoping it had gone down, no luck it went up. Examining the statement revealed my assessed value had gone down. Why did it go up then? The answer was the millage had increased. With property values dropping, so does tax revenue. To compensate they raise the tax rate, keeping the flow of revenue the same.

What do you do if you disagree with the tax assessors opinion on your homes accessed value? You believe your home has a value lower than the accessed value. Most people think they are just stuck with the assessment. But you are not, you have recourse in appealing the assessment.

There are companies that will do the work to fight for your reassessment.  They charge a fee of 10% of the amount they save for you. But it is possible to do this yourself. I have done it both ways and it is possible to do it your self and succeed. 

But before you proceed get the pertinent facts.

1.Check to see if the description of your property on your bill is correct. The legal description must be accurate or you could be paying someone else's bill. The square footage, incorrect number of bedrooms or bathrooms.
2. Find out what compatible homes in your area have sold for recently. This will determine a market value for your home. You should get at least 3, more would be better. Remember you are trying to backup your opinion with facts. The tax assessor will only act favorably if you have proof.
3. Check the assessments of your neighbors homes and see if their property values are more accurate than yours. This will give you more evidence to prove your that your assessment is wrong.
4. If your home has any problems like easement, zoning, heavy traffic, nearby highways, railroads or industry it does impact on the value of your home; the homes age, condition and defects do impact on the value.
5. Remember the price you paid for your home is not necessarily the assessed value. You could of purchased the home at the top of the market artificially inflating the price.
6. Also check to see if your county has a yearly cap on the percentage that the tax can go up within one year.

After getting all the necessary information proceed to your tax assessors office and fill out the necessary documents and present the necessary backup documents. The assessors office will process your claim. You may get turned down the first time but you can appeal. If you think your assessment is wrong keep at it.  

Remember to keep in mind that your goal to reduce your taxes could backfire, resulting in your taxes going up. The taxing authority may determine that your bill is to low and adjust it up. Personal experience has proved this correct.

The Deficit Commission Comes In DOA

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The Deficit Commission Set up by President Obama to study ways to reduce the federal deficit has delivered a draft of their proposal. I believe the commission wants to send it up the flagpole and see who salutes. I don't think anyone is going to salute it because it just blew away in the wind. It comes up light. Its as if they have been doing nothing and just threw something together last night. Here is a list of the highlights.

• Phase in federal spending cuts
• Cut farm subsidies by $3.0 billion
• Freeze federal salaries for three years
• Cut foreign aid by $4.6 billion
• Eliminate all Congressional earmarks
• Freeze pay for civilians in the defense department
• Cut federal workforce by 10%
• Eliminate 250,000 non-defense service/staff contractors
• Repeal Alternative Minimum Tax

I see a lot of words like cut, freeze, eliminate, and repeal. I like the idea of eliminating 250,000 workers. Cutting the federal employees by 10% is a good start. Cutting cash payments like farm subsidies and foreign aid would save money immediately.  

What I don't like is, it's not enough. We are on the precipice and these folks are giving us a cup of coffee. We need systemic changes, it's not  business as usual anymore. We need whole departments cut. Budgets need to be cut. Salary's need to be cut. We need painful reductions in government.

Here's the harder stuff:

• Raise social security retirement age to 68 
• Cut $100.0 billion in defensive spending
• Raise gas tax by $0.15
• Eliminate mortgage deduction for mortgages $500,000 and more

For the repeal of the mortgage interest deduction, new tax brackets will be instituted. 

Lowering tax rates is a no cost stimulus plan. People will spend that money and more jobs will come from it. Raising the social security age to 70 years old would make more sense. It would help social security by making people pay in longer and receiving less benefits. Cutting  defense spending is a hard to do but would reap the the biggest rewards. I am sending the Deficit Commission back to the drawing board. Give them a sharper knife and tell them to cut deeper. If these guys were cutting my turkey I would not have enough meat for a sandwich.

I like how almost everyday in the news cycle there are stories about the financial mess we are in. When something is in the public eye as much this is, it begins to sink into the culture. Wherever the politicians turn these days, the deficit is the main subject. It's not going to be swept under the rug anymore.

Is Frugality For You?

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If you've been finding ways to indulge on $10 instead of $20, borrow instead of buy, or use cash instead of credit, you're not alone. The "Great Recession" has many Americans shifting from conspicuous consumption to conscientious frugality.

Consumers are putting needs above wants, sticking to budgets, deferring purchases and spending less — and they aren't shy about letting others know about it. In fact, those who have embraced the new frugal mindset are proud of their accomplishments, and they should be.

Here are just a few reasons why:

People with a frugal mindset view money as a tool, not a status symbol.They don't see money as the end result but rather as a means to help achieve a more balanced, comfortable life. So they tend to transfer their spending from things that are less important, such as brand-name products and luxury items, to things that are more meaningful, such as freedom from debt, a home or an emergency fund.

 Those who practice frugality more effectively distinguish wants from needs. They don't interpret essential needs — food, water, clothing, shelter and transportation — as their more upscale counterparts — eating out, Perrier, designer clothing, luxury homes and new cars each year. Instead, they look for value when purchasing necessities. They also recognize extras, like cable TV and magazine subscriptions, as desires — not must haves.

Frugal people track their bills and manage their cash flow. Disciplined spending and budget tracking are at the core of the frugal mindset. Every dollar and expense is accounted for. Saving before spending is the norm. And credit is a last resort.

People who are frugal focus on their long-term goals instead of short-term indulgences. They rarely spend money on immaterial purchases that give them immediate satisfaction. Instead, they are committed to saving for future financial goals, such as college for their children or retirement.

For consumers who embrace it, frugality has an upside. It's a shift to a new value system and provides relief from the burden of "keeping up with the Joneses." It's even helping to bring some households closer, with more opportunities to spend time together at home playing board games, participating in outdoor activities, preparing meals and watching TV as a family. And here’s one ancillary benefit to this lifestyle: Parents are leading by example, teaching their children how to save and spend more responsibly.

So is the era of conspicuous consumption gone forever? Evidence suggests that, as with the Great Depression, this change in consumer behavior toward frugality will last even after the economy gets back on its feet, largely because consumers have less confidence in the economy and are less willing to run up debt. But only time will tell if the new frugal mindset is permanent. One thing is for certain: Living within our means could be a very good thing.

How Does Bankruptcy Work?

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Bankruptcy was created to protect the financial health of the jobless and the infirm by eliminating high levels of debt. There are two ways to file for bankruptcy, each with its own rules. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Reform Act), made many changes in bankruptcy law.

Under a Chapter 7 bankruptcy filing, many debts are eliminated, but the filer must liquidate personal assets to pay down some of the debt. Personal property is sold by a bankruptcy trustee, who then uses the proceeds to pay creditors. Some assets are exempt if they are considered necessary to support the filer and any dependents, but state and federal laws vary widely. In general, a percentage of home equity and disability benefits are exempt, and Chapter 7 filers may be allowed to keep any money or property they obtain after filing. Chapter 7 bankruptcy can be filed once every eight years.

A Chapter 13 filing does not erase debt. Rather, it requires the filer to set up a repayment plan, typically over a three- to five-year period, in exchange for keeping personal assets. The Bankruptcy Reform Act of 2005 states that anyone with income above the state median will have to file for Chapter 13 and pay back at least a portion of their debts. In general, homes will only be protected if owned for at least 40 months. Chapter 13 bankruptcy can only be filed once every two years.

Certain debts cannot be erased under any bankruptcy filing, including alimony, child support, property settlements, criminal judgements and fines, student loans, and most taxes. In addition, a bankruptcy filing will not allow you to keep property that secures a loan, such as an automobile or home, unless you repay the loan.


Who Should File?

In general, filing for bankruptcy should be avoided. Filing, however, may help to begin a financial recovery if:
You cannot meet debt obligations on current income.
Attempts to negotiate payments with creditors have failed.
Your ratio of debt to annual income is 40% or more.
Previous attempts to reduce debt have failed, particularly with the help of a credit counselor or debt reduction plan.
You have charge-offs on your credit history. Charge-offs appear when you have debts that are more than 250 days past due that are written off by your creditors for accounting purposes. A series of charge-offs and bankruptcy are both black marks on your credit report, but a bankruptcy filing demonstrates that you have at least dealt with the debt.

Source: National Institute for Consumer Education


Alternatives to Bankruptcy

Bankruptcy, and the resulting credit difficulties, is not the only way to manage excessive debt. You can try to negotiate a payment plan with a creditor and perhaps reduce your debt. Credit card companies faced with the rising number of bankruptcy filings may prefer to get some of what's owed them rather than have the entire debt erased.

You can conduct these negotiations on your own, with the help of an attorney, or through a professional credit counselor, who specializes in credit negotiations and will charge less than an attorney for the service. Payments for the negotiated debts can be deducted directly from your paycheck by the counseling service, which then distributes the money to creditors. Credit counselors will also work with you to rebuild your credit and improve your long-term financial situation.

Though the stigma surrounding bankruptcy has lifted, it should still be seen as a last resort after all other methods of settling debt have been exhausted. The thought of your debt being erased may be attractive, but the financial hardships bankruptcy can create far outweigh any benefits.

7 Things We Can't Live Without

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This recession that's turned our lives upside down has changed the way we think about life's necessities. What we thought were necessary things in out lives are now considered luxury's. We have made conscious decisions to cut back lifestyle for for a more frugal life.

Sales of cars, homes and appliances have plunged. We are finding out that we can live on a lot less and still function. It's not a choice we freely make but one forced on us. The question is what things in your life have you found that you can't live without. If you asked 100 people that question you would get a wide range of answers according to their list of creature comforts that they have become used to over the years. These things that make life a little more easy or bearable. 

1. Portable computers.

Whether it's cheap net books, iPads or laptops these bits of technology have become ingrained in our lives. We run our lives out of them. We shop on them, pay our bills, socialize, get our news and communicate on them. They make life easy and convenient. I can't live without my computer.

2. High-Speed Internet Access

If you have been using Internet access for any number of years you have used dial-up and know how painfully slow that was. But the day you started to use cable or DSL service you were not ever going back. Now the Internet was very usable. You could hook up a router and everyone in the house could be online. It was like night and day and the convenience was like"Wow". Could you live with out it. Probably not. I would cut back on everything else before removing my DSL. I would give up the dryer, dishwasher, cable TV, telephone, and the dog rather than lose my Internet. I can't live without my Internet.  

3. Smart Phones

When smart phones first came out they were priced well above the price of regular cell phones. I said I would never buy one of those expensive thing. But as time rolled on the IPhone came out and I was sold. Now I do everything on my phone. From banking to blogging. It's my GPS and my mailbox. My entertainment and my knowledge finder. It so covienent, it does everything for me quickly and efficiently. Sorry can't live without it.

4. Coffee

Here is a special subject close to my heart. Coffee. I have started everyday of my adult life with a nice hot cup of coffee. It's ingrained in our culture. To not start the day with coffee is like not to breathe. It's a pleasant habit and a rewarding experience. It holds a special place in our lives. Sorry can't live without it.

5. Pets.

Our pets are as important to us as members of our own family are. They keep us company and give us love. We send them for grooming and buy them clothes. They are like little hairy children to us. To give them up would be unthinkable. We would give up so many things to not lose them. Sorry, can't live without our pets.

6. TV and Movies.

We have cut back so far already. We are saving money everyplace else, please don't take the TV and Movies. Of course this includes the cable, too. We quit going to the mall and sporting events, shows and vacations. The TV is our only source of entertainment. So I can justify my 42" plasma screen with HD. We don't do anything else so can we keep it? Sorry, can't live without TV.

7. Drinking.

Yes, I mean booze. Also beer and wine.  Obviously people have cut back going out. During hard times you know people drink a lot more to self medicate. To give this item up is going to very hard. Maybe because of addiction problems. But also because we love the stuff. More people are drinking at home to save money. So, sorry can't live without drinking.

Even faced with hard financial decisions, loss of jobs and money there are somethings we can't live without. We will give up other things to have some creature comforts. The meaning of the words want and needs have become blurred. What were once luxuries are now necessities. What things can you not live without?    

Veterans Day - Thank You Soldiers

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God Bless the men and Women that have kept us free. Also Happy 235th Anniversary to the Marines.

15 Top Owners Of Government Debt

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As the US government spends an unprecedented amount of money to fix the nation's economy, there is an equally great need to raise the cash to pay for it. This is accomplished through borrowing, whereby Uncle Sam sells Treasury securities of varying maturity.
For investors, the government bills, notes and bonds are considered a safe financial product because they have a guaranteed rate of return, based on faith in future US tax revenues. The government has been partially funding operations via Treasury securities for decades.
This borrowing adds to the national debt, which has climbed to a staggering $13.72 trillion and is rising every day. Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most.

15. Taiwan

US debt holdings: $130.2 billion
Taiwan's holdings of US debt have fluctuated between $120.5 billion and $152.4 billion over the past year.
To date, Taiwan holds $130.2 billion in Treasury securities, which is only $1.2 billion more than the next highest national debt purchaser, Russia, whose holdings stand at $129 billion.

14. Hong Kong

US debt holdings: $137.8 billion 
Hong Kong is one of the world's largest holders of US debt, although in 2010 the region has cut its holdings by approximately $10 billion from January levels.

13. Caribbean Banking Centers

US debt holdings: $159.1 billion 
The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings are currently listed at $159.1 billion, up about $30 billion from a year earlier, but still off the group's high of $213.6 billion in March 2009.

12. Brazil

US debt holdings: $165 billion 
The South American economic giant has $165 billion in holdings, according to the Treasury. Brazil’s investment into US debt has been fluctuating slightly over the past two years, with current holdings testing the high of $170.8 billion hit in Feb 2010.

11. Oil Exporters

US debt holdings: $226.6 billion 
Big oil means big money... and big investment into US debt.
Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $226.6 billion, which is a slight increase from the $190 billion to $220 billion range they have maintained in recent history.

10. Insurance Companies

US debt holdings: $260.6 billion 
According to the Federal Reserve Board of Governors, insurance companies hold $260.6 billion in Treasury securities. This group includes property-casualty and life insurance firms.

9. Depository Institutions

US debt holdings: $273.7 billion 
As of March 2010 (the most recent numbers currently available), the Federal Reserve Board of Governors lists depository institutions as holding approximately $273.7 billion in US debt. This group includes commercial banks, savings banks and credit unions and has nearly tripled from Q4 2008, when holdings stood at $105 billion.

8. United Kingdom

US debt holdings: $448.4 billion
Britain currently holds $448.4 billion in US debt. The country has been ramping up its debt in 2010, rising from $218.8 billion in January to $448.4 billion in the most recent numbers, which have them doubling in an 8 month span.

7. State and Local Governments

US debt holdings: $534.7 billion 
US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range of $534.7 billion and $550.3 billion from 2006 to 2009, and although the amount has been increasing, the total value of holdings are off the highs. However, this number does not include an additional $181.6 billion of holdings of treasury notes in state and local government pension funds.

6. Pension Funds

US debt holdings: $643.8 billion
Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $643.8 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."

5. Mutual Funds

US debt holdings: $648.6 billion 
According to the Federal Reserve, mutual funds hold the fifth largest amount of US debt compared to any other group, although mutual fund holdings have diminished by nearly $120 billion since December 2008.
Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $648.6 billion of US Treasury securities as of March 2010, which are the most recent numbers available.

4. Japan

US debt holdings: $836.6 billion
A major US trade partner, Japan holds a huge amount of American debt, and has traditionally been one of the US's largest debt holders, currently owning $836.6 billion of treasury securities.

3. China

US debt holdings: $868.4 billion
The largest foreign holder of US Treasury securities, China currently holds $868.4 billion in American debt, although it is off the all time highs of $900.2 billion in April 2010.

2. Other Investors/Savings Bonds

US debt holdings $1.266 trillion
With the most recent numbers from June 2010, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and non-corporate businesses for a total of $1.266 trillion. Although the level of debt held in U.S. savings bonds has remained relatively constant since 2000, the broad category of "Other" investors has nearly quadrupled since reaching a four-year low in September 2007.

1. Federal Reserve and Intragovernmental Holdings

US debt holdings: $5.345 trillion
That’s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.345 trillion in US Treasury debt. This is the most recent number available (June 2010), and marks an all-time high.
About a decade ago, the total government holdings were "only" $2.5 trillion.

Car Insurance Discounts Are Waiting For You

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Insurance is a particularly expensive part of our lives. We have life, car, boat, disability and home insurance to pay; the costs add up quick. Insurance companies have to compete with each other so there is good competition between them. One of the ways they do this is discounts.

Car insurance has it's share good discounts. But if your not aware of them you'll miss out on saving money.

Here are a few of the discounts available to you:

Vehicle Equipment

Air Bag

You could save up to 25% for driver side air bags and 40% for full front seat air bags. These discounts apply to the medical payments or pip portion of your car insurance premium.

Anti-lock Brake System

Does your car have a factory installed anti-lock brake system? You could receive a 5% discount on the collision portion of the premium.

Anti-theft System

Cars with a built in anti-theft system could earn a discount of up to 25% on the comprehensive portion of your premium.

Daytime Running Lights

Vehicles equipped with daylight running lights as standard equipment could earn you a 3% discount on certain car insurance coverage.

Driving History & Habits

Five Year Accident Free Good Driver

If your driving record is clear for five years you may save up to 26% on coverage.

Plus if your insurance company carries accident forgiveness, your rates won't go up.

Seat Belt Use

If you and your passengers always wear seat belts you could receive up to 15% off the medical or personal injury protection portion of your premium

Drivers Education

Defensive Driving Discounts

If you have completed a defensive driver education course you may be eligible for some discounts depending on the state where you live.

Driver's Education

If your a young driver and you have completed a drivers education course you may earn a discount on most coverage.

Good Student

Full time students with good grades can receive up to a 15% discount on their coverage.

Drivers Affiliation

Emergency Deployment

As a member of the armed forces fighting in wars overseas you are eligible for discounts of up to 25%.

Military

If your in the military on active duty, retired from the military, or a member of the National Guard or Reserves, you may be eligible of up to 15% of your premium.

Partnering Organizations

Some insurance companies have partnered up with various clubs and organizations to give discounts on your auto insurance premium.

Senior Level Federal Employees

If you have a senior-level job in the government, some companies give up to 8% discounts on your premium.

Customer Loyalty

Multi-Car

There is a discount if you insure more than one car on your policy and it may be up to a 25% discount.

Multi Policy/ Multi Line Discount

When you insure your car and also have your homeowners, renters, condo or mobile home policy with your car insurer you could get a discount.

Renewal Discount

For having multi year renewal with your insurer you can receive a loyalty discount.

With increasing demands on our incomes we must find ways to save some money. Make sure you have all the discounts coming to you that you qualify for. Today it's so easy to buy car insurance, there is an auto insurance store on every corner. With all the competition and discounts, the consumer wins. Why can't health insurance be bought so easily?