What is Flood Insurance and How Do I Know If I Need It?

It's that time of year again when the home insurance policies are due for renew. I got my homeowners policy and in a couple of months the flood insurance policy will follow. My mortgage company requires me to have flood insurance because my home is in a flood zone. It's a good idea because your home owners policy does not cover damage by rising waters. I'll probably never use it but I sleep better knowing it's there.

With hurricane season approaching it's better to be prepared. Some people make the mistake of thinking damage caused by rain and wind from a hurricane are covered by the homeowners policy. Many people in New Orleans made that mistake when hurricane Katrina came through.

So, if your lender doesn’t require flood coverage that obviously doesn’t mean you are safe from flood risk completely. Every home is at some type of risk for flood damage. So, how do you know what type of risk zone your home is in?

Your best bet is to visit the FEMA Flood Insurance website FloodSmart.gov and Safety.com for more information. They have a flood risk profile tool where you can type in your address and assess the flood risk of your home: FEMA Map Service Center. The results page will also show average flood insurance premiums in your area.





Don’t want to take their word for it? FEMA also offers online flood maps which are used to determine flood risk for each property. You can visit the FEMA flood map for your property to see exactly where the flood zone lines are drawn in your neighborhood.

These maps are only estimates of your home’s flood risk and should not be taken too literally. Many homes that are in “low risk” zones may experience a significant flood at some point- so it is always a good idea to purchase some flood coverage if you want to be completely protected.

In the event of a disaster, a home inventory can be your greatest asset. If your home is lost in a covered peril, your first call will be to your home insurance agent and your task of proving what was lost will begin. Will you remember everything you owned after it is gone? Especially in a time of crisis? Having a pre-established home inventory will take the headache out of that task- leaving you to focus on more important things.

Here is a checklist you can download to catalog all your belongings.

Download as Microsoft Word (261KB) 

Download as Microsoft Excel (47KB)

It's also a good idea to get out the video camera and do a room by room video inventory of your belongings. Be sure to open all the closets and record video of all your clothes, shoes, coats, and stored items. Get pictures of all special items like computers, electronics, tools, jewelry, etc. Be sure to note model numbers on expensive items.

If you have an iPhone, there's an App for that. Check out MyHome Scr.APP.book over at iTunes.

Why You Should Have A Will.

Image by julianrod via FlickrI was over at my lawyers office this week to modify my will. I remember going many years without having a will. It was very foolish not having one because if you don't, you have given up any say in your affairs after your death. You take such good care of your life and family during your life, why not provide direction after your gone.

What is a Last Will and Testament? Most of us think we know what a will is, but do we really? If you said that a will is a document where a person declares who gets his or hers assets upon death, you are only partly right. A will does much more than that.

Guardianship of your Children.

Do you ever wonder who your children will live with after your gone. They may go to relatives you don't approve of, if your wishes are not stated in a will. If you have children under the age of 18, a will is the place where you declare whom you want to be the guardian in the event of your death.

The courts will decide who gets custody of your minor children based on what is in your childrens's best interest, but judges will give great weight to the stated wishes of a child's natural parents. Judges can't do this unless you have stated those wishes. And the place to state them is in your will.

Administration of Your Estate.

You don't have to be rich to want to ensure that after your death your property and assets are not squandered or stolen. A will is the place where you appoint someone you trust to administer, manage and distribute your assets. If you don't appoint someone to do this for you, the court will appoint a total stranger to serve in this capacity for a fee.

Guardianship of Your Children's Property.

Minors do not have the capacity to contract and therefore do not have ownership rights to property. An adult must be appointed to manage a minor's property until the minor becomes of age. But even after your children reach the age of 18, you probably won't want them to have full ownership rights to your property because if they are anything like I was at 18 they'll probably blow it all in beer. A will is where you not only decide who gets your property but when and how they will get it.

Separate Writing

Florida law allows you to keep a list of special items you wish to leave to certain benificiarys upon you death. This list may be updated by you at anytime without the need for revision of or amendment to your will.

Some examples:

• An engagement ring to a niece
• A baseball card collection to a nephew
• A library to an grandson
• A photo album to a brother

Living Will

Sounds like a contradiction in terms, right? Well, a Living Will is a document that tells your healthcare provider under what conditions you wish not to be revived. It is an essential part of your estate plan. In it you will name one or more health care surrogates who are empowered by you to make decisions about your health in the event you are incapable of doing so.

Durable Power of Attorney

A durable power of attorney is a document that you execute authorizing someone of your choosing (usually a close relative or trusted friend) to handle your affairs in the event you become incapable of doing so. Like the Living Will, this is an essential part of your estate plan.

For so long I put off having a will made. Don't make the same mistake. For only a few hundred dollars you can have piece of mind. This week make plans to see a lawyer and draw up a will.

If There Is A Goverment Shut Down, What Services Will Be Curtailed?

Image via WikipediaCongress has till Friday to finish it's work on the budget, if it doesn't, the government will shutdown. What does it mean for the government to shut down? How will it hurt the average citizen? Democrats and the President say it will hurt Americans deeply. What does that mean, I am not convinced. Let's look at the facts.

Fact: Only one in four federal employee would likely be furloughed, that's 800,000 workers. These workers would not be connected with any services connected to human life or protection of property. That's according to a 1981 law called the Deficiency Act.

What would stay open?

Armed Forces. The troops would continue to work and Congress is trying to pass a law to ensure they are still paid. Border security would be operating and our ports and airports would still be open.

Secret Service. The president would still be protected.

Airport Traffic Control. All traffic controllers at airport would still be at their job. Even the good ole' TSA would still be patting us down.

Post Office. The Post Office would still be delivering your mail because it is a self financing service running on it's own funds, not needing taxpayer support.

Federal Reserve. Ben Bernanke would still have to go to work along with his whole crew.

Social Security. Everyone would still get their social security checks. But new applicant would have to wait till new funding arrives.

What will shutdown?

Passport Applications. If your in a hurry to get your new passport or a renewal, you are going to be waiting a while.

The Federal Housing Administration. If your dealing with the FHA you will be experiencing a slowdown in your application.

Internal Revenue Service. You will be waiting a little longer to get your refund. The IRS is not on the priority list of essential services.

Of course who is to blame for all this, you guested it, our friendly representatives in Congress. They have had since September of last year to get this job done. They have constantly voted to extend the passage of the budget till the last minute. The blame is squarely on their shoulders. Both parties

10 Ways to Cut Housing-Related Costs in Retirement

Image via WikipediaNot only is Morningstar.com is a great resource for all your investing needs, it has some great articles about the spending side of the equation. Morningstar's director of personal finance and author Christina Benz has a great article about how to reduce your housing costs in retirement. Housing costs in the accumulation years of your life can make or break the amount of money you save for retirement. It is even more critical when you are in retirement.

I like the way Christina speaks of your retirement as a "work in progress". Just as in your working life you have to adjust and readjust your your savings and spending, so also you must in retirement. It's not a set it and forget it. You are regularly having to adjust your plan for what life throws at you.

One of the largest expenses we all have to deal with in our lives is the housing expense. Even cutting costs in this department can make a big impact on your bottom line. The list contains many palatable to some unpalatable choices. It's not a one size fits all choice. It also depends on how much money we have to spend. According to our income, some may have to compromise our first choices for more affordable second choices. Lets get to the list.

1. Consider a Cheaper Location. Moving is no pleasure and moving to reduce housing costs has many tradeoffs. Leaving friends and family is a big downside to moving. So is moving to a location where there is less to do. The locales with more to do usually have a higher cost associated with it. What about the overhead costs of selling your home, buying another, and all the moving expense; this may be the downside. But when you sell you may be freeing up a large amount of equity that can help in your retirement goals.

2. Downsize in the Same Location. Here we have solved two of the problems of leaving freinds and family, also freeing up needed equity. Your getting an immediate reduction in monthly expenses and still enjoying all the comforts of staying in your city.

3. Consider Combining Households. Living with your grown children or relatives will save you money in housing expenses. It's beneficial for both partys financially. But if you have any relational problems it could turn out to be a nightmare. For the seniors in the home it may be a necessity someday to have family there to look after you should the need arise.

4. Don't Pay For Care Until You Need It. A choice of living in a senior assisted living home may be right for some. As we grow older and have the need for more daily care, if your already living in a retirement community that has assisted living care available if needed may be a comfort for some.

5. Consolidate Two Homes Into One. Some of us are lucky enough to have a home and a vacation home. It may be smart to access which of these homes you can sell. Try to figure out which home is under utilized. Either sell or rent the under utilized home for a financial benefit. If you sell a vacation home you can still rent in the desired location. And you'll have the flexibility of not being locked into one vacation destination.

6. Rent a Second Home at Least Part of the Year. Make your second home become a business by renting it out all year or seasonally to supplement your retirement income. Leaving the home empty only increases the financial drain on your cash flow. Having a plan of renting it a fixed number of years, saving the income for future needs may be what's needed for a faltering nest egg.

7. Refinance. Maybe it's time to refinance. This will lower your payment and also free up cash flow for other necesities. Tking some cash out may be the right thing to do if you have some other debts that need to be cleaned up.

8. Cut Loose Your Home Equity Line of Credit. Many lines of credit have a yearly fee. If so releasing this will free up that amount of money.

9. Apply for Property Tax Exemptions and Freezes. After your mortgage payment the property tax is your largest expense. Signing up for all the exemptions, freezes, and credits you can will only add to your cash flow. Also check if your assessment is correct.

10. Contest Your Home's Assessed Value. Check to see if your tax bill refects accurately your homes actual features like square footage and amenities.


I like these tips for reducing housing costs. They should be applied also to homeowners of all ages. It should be a part of your lifelong financial planning.


For further good information check out other articles by Christina Benz at Morningstar.com

Does Cancelled Debt Have To Be Reported On My Income Tax?

Image via WikipediaIt was worth it, you had to jump through a few hoops but that credit card canceled your debt. It was a great feeling not having to worry about that anymore. But you received in the mail a 1099-C that states you you owe taxes on that forgiven debt. Do you have to report it on your tax, you don't have to but expect a stern letter from the IRS if you don't.

Don't even think about ignoring it because Uncle Sam gets a copy of that 1099-C, too. They are going to be looking for it on your tax return. A Form 1099-C is issued when a debt of $600 or more is forgiven or canceled.

The IRS stated that the number of 1099-C's grew from 1 million forms to 1.9 million forms in 2008. Estimates for 2010 go as high as 3 million 1099-C forms. It's strange because people that couldn't pay their debts are now expected to pay taxes. So they will be forced to put the tax bill on their credit card and here we come full circle.

If you have $50,000 in debt forgiven , expect to pay $15,000 in taxes.

But be careful, all forgiven debt is not taxable. If you had a student loan that was forgiven because you worked in an under served community, it's not taxable. But the forgiveness of the remaining student loan balance after 25 years in an income-based repayment program is taxable. Given the complex rules, you should provide the 1099-C to the tax preparer. This applies only to a principal residence — not a second home. And the exclusion applies only if a foreclosure or short sale takes place from 2007 through 2012. The canceled debt must have been incurred to buy, build or improve your main home.

As with all things of this complexity, seek out a competent tax accountant to do it right.

What Do I Do If I Can't Pay My Taxes?

Image via WikipediaWith tax day only a few weeks away, people are scurrying to get their tax returns done. If your nervous about the whole procedure you're either afraid your not going to make the deadline or you know you owe Uncle Sam money.

If you don't pay by the deadline of April 18th, you could be in store for some tough interest and penalties. The IRS could garnish your wages or your bank account. It also has the power to place a lien on your property, which could ruin your credit rating.

Even if you don't have the money, you should file anyway because failing to file brings with it a penalty of 5% of the unpaid tax for each month the return is late, up to 25% of the amount owed, plus interest. So it's better to file because the IRS will only charge a late fee that is only one-half of 1% a month.

What if I can't file or pay the taxes? Get a short-term extension. If you know you'll have the money in 120 days or less, ask the IRS for a short-term administrative extension. You'll still be liable for the failure-to-pay penalty and interest. You can request a six-month extension by filing IRS Form 4868. Approval is automatic. Filing for an extension doesn't give you more time to pay, so you'll still owe interest and late-payment penalties for every month you're overdue. However, you'll escape the failure-to-file penalty. Include your best estimate of the amount you owe. To request an extension, call 800-829-1040.

I have the tax returns ready, but I don't have the money to pay. Pay with a credit card. The IRS accepts plastic. But unlike most retailers, the IRS won't cover the cost of processing the transaction. You'll have to pay the fee, which ranges from 2.35% to 3.93%, depending on which provider you choose. The fee will be added to your balance.

Is there a way I can make monthly payments to the IRS? The IRS offers a program that allows taxpayers to pay their tax bill in monthly installments. If you owe $10,000 or less and are in good standing with the IRS, approval is automatic. The fee to set up an installment plan is $105, but the IRS will reduce it to $52 if you agree to have payments electronically debited from your bank account. You'll also pay interest, but the rate, which is adjusted quarterly, is considerably lower than the interest on a credit card balance. To request an installment agreement, file IRS Form 9465. In general, the IRS will give you up to five years to pay off your debt. You can choose the amount of your monthly payments. And if you miss a payment, the IRS has the right to demand that you pay the entire balance.

I am so broke, I will never be able to pay my tax bill, What can I do? Under certain circumstances, the IRS will agree to accept less than you owe. The percentage of people that receive this kind of help is very low. You have to convince the government that you don't have the money and that you probably never will. The fee to apply for an offer in compromise is $150, although the IRS will waive it for low-income taxpayers. You'll also be asked to document your assets and liabilities in excruciating detail.

With matters as serious as these, it will not be a bad idea to seek professional tax help. A certified tax accountant will hold your hand through these times and give you the needed guidance.

For a more detailed explanation check out "Losing Sleep Over Owing The IRS?" over at Forbes.com

The Mystery Of Medicare

Image via WikipediaI have gone through most of life not thinking about Medicare. I didn't have to, it wasn't for me, it was for those old timers over there. Now that I have become one of those old-timers, I am getting curious. Even though I am to young for it yet, you have to be 65. It's still over the horizon for me, but with a lot of my baby-boomer brothers and sisters closer to it, I thought a little info searching was in order.

So what does it cover? Do I need it? When should I sign up? Lots of questions. So I headed over to the HQ for all things about retirement, our old friends at AARP.org. They have created Medicare Starter Kit to get you up to speed on all things Medicare.

They start out with the Top Eight Do's and Don'ts:

1. Do give yourself time to learn about Medicare: It's a system with many choices and deadlines. Being informed is the best way to avoid mistakes that cost money.

2. Don't expect to be notified when it's time to sign up: Unless you're already receiving Social Security benefits, you must apply for Medicare. But you won't get any official notice on when or how to enroll.

3. Do enroll when you're supposed to: To avoid permanent late penalties, enroll at age 65 if you're not working, don't have employer insurance or live abroad; or, beyond 65, enroll within eight months of stopping work — even if you continue to receive COBRA or retiree health benefits from an employer.

4. Don't despair if you haven't worked long enough to qualify: You may qualify for Medicare on your current or former spouse's work record. Or you may be able to buy into the program.

5. Don't worry that poor health will affect your coverage: If you qualify for Medicare, you receive full benefits. You can't be denied coverage or charged higher premiums because of current or past health problems.

6. Do remember that Medicare is not free: You pay premiums for coverage and copayments for most services, unless you qualify for a low-income program or have other, extra insurance.

7. Don't assume that Medicare covers everything: It covers a wide range of health services (including expensive ones like organ transplants), prescription drugs and medical equipment. But there are gaps.

8. Don't expect Medicare to cover your dependents: Nobody can get Medicare under age 65, except those who qualify through disability. Medicare has no family coverage.

This is only a small taste of what the Medicare Starter Kit has to offer, get over to AARP.org and find out more.

How Can I Correct Errors Found In My Credit Report?

Image via CrunchBaseIf you find errors in your credit report, you may dispute the information and request that the information be deleted or corrected. To do so, you should contact either the credit bureau that provided the report or the company or person that provided the incorrect information to the credit bureau.

To contact the credit bureau, call the toll-free number on your credit report or visit their website:

• Equifax www.equifax.com/answers/correct-credit-report-errors/en_cp 
• Experian www.experian.com/disputes/ 
• TransUnion www.transunion.com/corporate/personal/creditDisputes.page 

To contact the company or person that provided the incorrect information to the credit bureau, look on your credit report, in an account statement, or on the company's website for contact information for handling such disputes.

When disputing information on your credit report, you should:

• Provide information about yourself, such as your name, address, date of birth, and Social Security number;
• Identify specific details about the information that is being disputed and explain the basis of your dispute;
• Have a copy of your credit report that contains the disputed information available; and
• Provide supporting documentation, such as a copy of the relevant portion of the consumer report, a police report, a fraud or identity theft affidavit, or account statements.

If you submit your dispute through a credit bureau or directly to the company or person that provided the incorrect information to the credit bureau, your dispute must be investigated, usually within thirty days. If you provide additional information during the thirty-day investigation, that investigation period may be extended an additional 15 days in some circumstances. When the investigation is completed, either the credit bureau or the company or person that provided the incorrect information to the credit bureau must give you the written results of its investigation.

If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit bureaus so they can correct the information in your credit report. You can get a free copy of your report if the dispute results in a change. This free report is in addition to your annual free report. If an item is changed or deleted, a credit bureau cannot put the disputed information back in your credit report unless the company or person that provided the incorrect information to the credit bureau verifies that the information is, indeed, accurate and complete.

You can request that the credit bureau send notices of any correction to anyone who received your report in the past six months. A corrected copy of your report can be sent to anyone who received a copy during the past two years for employment purposes.

If an investigation does not resolve your dispute, you can ask that a statement of the dispute be included in your future credit reports. You also can ask the credit bureau to provide your statement to anyone who received a copy of your report in the recent past, but you may have to pay a fee for this service.

How Private Is My Credit Report Data And Who Can See It?

Image via WikipediaCredit bureaus get information from your creditors, such as a bank, credit card issuer, or auto finance company. They also get information about you from public records, such as property or court records. Each credit bureau gets its information from different sources, so the information in one credit bureau's report may not be the same as the information in another credit bureau's report.

Because credit reports contain sensitive personal information, access to them is limited. Credit bureaus can provide credit reports only to

• lenders from whom you are seeking credit;
• lenders that have granted you credit;
• telephone, cell phone, and utility companies that may provide services to you;
• your employer or prospective employer, but only if you agree;
• insurance companies that have issued or may issue an insurance policy for you;
• government agencies reviewing your financial status for government benefits; and
• anyone else with a legitimate business need for the information, such as a potential landlord or a bank at which you are opening a checking account.

Credit bureaus also furnish reports if required by court orders or federal grand jury subpoenas. Upon your written request, they will also issue your report to a third party.

But what if the credit report data has mistakes in it?

If you are denied credit, insurance, or employment--or some other adverse action is taken against you, such as lowering your credit limit on credit card account--because of information in your credit report, the lender, insurance company, or employer must notify you and provide you with the name, address, and phone number of the credit bureau that provided the credit report used to make the decision. You can get a free credit report from this credit bureau if you request it within sixty days after receiving the notice. This free report is in addition to your annual free report.

In addition, lenders may use a credit report to set the terms of credit they offer you. If a lender offers you terms less favorable (for example, a higher rate) than the terms offered to consumers with better credit histories based on the information in your credit report, the lender may give you a notice with information about the credit bureau that provided the credit report used to make the decision. Again, you can get a free credit report (in addition to your annual free report) from this credit bureau if you request it within sixty days after receiving the notice.

If you receive one of these notices, it's a good idea to get your free credit report and review the information in it right away. If you think your credit report contains inaccurate or incomplete information, to try to resolve the issue.

What Is A Credit Report And Why Is It Important?

Image via Wikipedia

Your credit history is important to a lot of people: mortgage lenders, banks, utility companies, prospective employers, and more. So it's especially important that you understand your credit report, credit score, and the companies that compile that information, credit bureaus.

Q: What is a credit report?

A: A credit report is a record of your credit history that includes information about:

• Your identity. Your name, address, full or partial Social Security number, date of birth, and possibly employment information.
• Your existing credit. Information about credit that you have, such as your credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
• Your public record. Information about any court judgments against you, any tax liens against your property, or whether you have filed for bankruptcy.
• Inquiries about you. A list of companies or persons who recently requested a copy of your report.

Q: Why is a credit report important?

A: Your credit report is important because lenders, insurers, employers, and others may obtain your credit report from credit bureaus to assess how you manage financial responsibilities. For example:

• Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you).
• Insurance companies may use the information to decide whether you can get insurance and to set the rates you will pay.
• Employers may use your credit report, if you give them permission to do so, to decide whether to hire you.
• Telephone and utility companies may use information in your credit report to decide whether to provide services to you.
• Landlords may use the information to determine whether to rent an apartment to you.

Today the credit report is your introduction to to companies that you need to do business with. If it's good you will receive lower insurance rates and lower interest rates on borrowing money. It's up to you to take of it.

Would You Like To Have A Financial Tsunami Happen To Your Life?

Image via WikipediaI have been watching the videos coming back from Japan depicting the devastation. Peoples whole lives completely erased. Seeing pictures of cars and houses going past in the oncoming waters. Then seeing them as they come back and go out to sea. What do they have left? The house is gone so is their cars, clothes, furnishings, and every physical thing they have.

What if this happened to you? Would you want it to happen to you? I believe there are some people who would want this to happen. Not the tsunami, but a financial tsunami. Imagine no more mortgage. No more car payment. No more bills. Your totally free to start over. Your financial tsunami has given you a clean slate, a fresh start. Your getting a do over to get it right this time.

Think about it for a minute. You still have your job, your income. What would you change this time around? Would you buy the big house again? Or get something more affordable so you can save more for retirement. What about the expensive car, would you get another one or a good used car this time. Would you save more in your 401k? How about living within a budget and not going into credit card debt.

Many people are doing the money thing right, but many of us have screwed it up big time. A fresh start sounds pretty good. Getting a fresh start can still be done without a tsunami. It takes a little discipline and a plan.

To make it happen you must be sick and tired of being sick and tired. You must be ready and determined to turn your finances around. Without this complete commitment you will not succeed. Are you fed up enough to make it happen this time?

If you are ready then the first thing you must do is make a spending plan, in other words a budget. At the top of the page you write your income and list down the page, in priority, what you need to pay. You pay each bill with the money and when the money runs out you don't spend anymore. Of course credit cards are cut up and thrown out. No more added debt. This time you will live within your means and no more debt.

For further information on budget creation read this post on making a budget. Here.

This is the first step on a journey that will take you on to be financially successful. You won't need a tsunami to clean your life up. You are capable of doing it your self.

How to File for a Tax Extension

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If you can’t file your federal tax return by the April 18, 2011 deadline, you can file for an extension. It’s important to remember, though, that an extension to file is not an extension to pay any taxes you might owe -- the extension only covers filing of the actual paperwork.



Failure to pay a balance owed to the IRS, regardless of requested extensions, results in penalties for late filing and possibly fees. State tax laws vary, so if you need to learn how to get a state tax extension, you should consult your state's specific tax instructions.

For most taxpayers, to get an extension until Oct. 17, 2011, you’ll need to submit Form 4868 by April 18.

1. Your Social Security number

2. Your spouse's Social Security number, if you’re filing a joint tax return

3. Your complete mailing address

4. Your total tax liability, which can be found on line 60 of Form 1040.

5. Total amount of your tax payments – found on line 71 of Form 1040.

6. Your balance due -- if you don’t owe additional tax, you can enter zero here. Otherwise, you will use the total tax due shown on line 75 of your Form 1040.

If you need help with these numbers, click here for How to File Your Taxes.

If you don’t owe additional taxes, make a copy of the form for your records. If you do have a balance due, you can send a check or money order, (simply include that with your form and be sure to write your social security number on the check), or you can pay electronically via the IRS website.

How to Freeze Your Credit Report

Image via CrunchBase


Before asking the agencies to freeze your credit report, you should know the particular rules, fees, and regulations for each state. Where you live can affect the costs involved and the duration of the freeze itself. Once you know the rules for your state, you should gather the following information:

1. Your name.
2. Your social security number.
3. Your date of birth.
4. Your address.
5. Any addresses over the last two to five years.
6. For Experian and Equifax, proof of current address, such as copy of a utility bill, or bank or insurance statement.
7. For Experian and Transunion, a copy of your driver's license or state-issued identification card.
8. If you have been the victim of identity theft, and are claiming exemption from fees, you must also provide a copy of a police report, investigative report, or report filed with a law enforcement agency.
9. If you are over 65, and your state grants a free exemption for senior citizens, you may also have to provide proof of age.
10. Send all of the required information, along with a clearly worded request for the bureau to freeze your credit report, via certified mail to the addresses below.A few states allow you to send the information by regular mail, and a few even allow you to place a freeze over the phone. In order to help you get started, we have included links to sample freeze request letters provided by the AARPbelow.
11. If you have any questions for a specific credit reporting agency, you can visit their website or try to call them at the numbers below. You should understand that the agencies may try to discourage you from freezing your credit, as this is their business, and it is not in their best interest. However, only you can decide whether freezing your credit is a good idea.

Equifax: 1-888-685-1111
Experian: 1-888-EXPERIAN (1-888-397-3742)
TransUnion: 1-888-909-8872

Facing Baby Boomer Retirement Problems

As the generation of American Baby Boomers head into retirement age, many are astounded by just how much they didn’t save over the years. With the continuous high cost of living increases and the downfall of many stocks, the baby boomer generation is finding it really hard to retire.

Why The Failure?

For many baby boomers, the reasoning behind the failure to adequately save for retirement is the same. Most baby boomers started too late – well into their thirties in some cases – instead of capitalizing on the funds earned in their late teens/early 20’s. As a result, many people over the age of 60 have saved barely a quarter of what they really need to retire on.

Today’s personal finance experts are urging the working youth to start contemplating their retirement savings plans as soon as they start earning an income. Many youth still struggle to grasp the concept of the importance of savings but many are getting on board with starting their employee-sponsored 401k and other retirement savings vehicles. For baby boomers, 401k accounts did not start appearing until the early 1980’s which means they had less time to save than young workers today. Back then, the 401k account was meant to be a supplemental account for retirement whereas today they are a full vehicle for retirement savings funds.

Another possible reason for the lag in savings funds is the fact that many American families find it hard to save. Their income is often already extended just to live month to month, from one paycheck to the next. They have been neglecting their retirement accounts in lieu of keeping the lights on and food on the table. With the additional loss of retirement funds due to the recession and the high rate of unemployment, workers of every age have been hit hard. Those so close to retirement are really feeling it the most.

What Can You Do to Recover?

As the saying goes, it’s never too late to start saving. The main resource most people have for making it to retirement is to keep working as long as you can, even if it is only part time work. If you have managed to keep your job long-term, it will certainly benefit you to stick with it while you put serious focus on your savings plan for the very near future. You will also get to contribute to your 401k for a longer period of time and likely have the ‘extra’ income necessary to continue making deposits to your IRA or other savings accounts designated for retirement. There are provisions within the government that allow people over 50 years of age to contribute additional funds into their retirement funds as a method of catching up on savings. If you are not able to contribute the maximum amount of funds to your 401k account, make sure you are at least depositing enough to get the company match. At this point in your life, it would be detrimental to refuse free money in retirement.

The next thing you can do to help finance retirement is to delay taking your Social Security payments until you have reached 70 years of age. Even though an individual can claim full benefits at the age of 66, taking benefits too early also means you lose some of the benefits. At 70-plus years, you would be entitled to full Social Security benefits.

Committing to Your Plan

You likely were not caught completely off-guard by the fact you are lacking retirement funds but the realization can still be difficult to live with. The primary concern you should have right now, as you head toward retirement age, is to not give up all together. You need to instead be aggressive about your savings plan for retirement and educate yourself on all available options.

If the task and thought of prepping for retirement overwhelms you completely, you might be well-served to consult with a financial planning effort that can help you put your retirement goals and needs at the forefront of your financial life. Even if you only use the advice and resources initially, it can be a great way to motivate yourself into taking action on your own and help you see the light at the end of the tunnel.

Ed O’Brien is a seasoned writer on issues concerning repairing credit having a strong background in business and personal finance. His blog, Credit Repair, offers free advice to those seeking ways to improve their credit scores.

5 Low Tech Ways To Pay Off Debt

Image via WikipediaYou go through your life noticing everything around you except what is going on in your finances. Unless your a royal nerd you are  sloppy with your money. But the day comes when you wake up because you have just opened that credit card bill and see a five figure balance. You think what did I get myself into. It's time to get things in order and pay it off.

If you realize something has to be done, you have just done step one of the plan. Realizing something is wrong and deciding to fix it is the first step on the journey out of debt and responsible living.

Go through your check register and credit card statements and see where your money is going. Write down everything you spend for one month, you'll be shocked how you waste money. Total up all your debts so you can see the monster your going to attack and destroy.

Forget the computers and spreadsheets get a piece of paper and a pencil and write down your paycheck at the top of the page. Now write down every bill that must be paid from it. Then set aside a portion for food, gas and a small pocket money allowance. What ever is left, use to pay down debt. Some pay periods you may only have $50 to pay down debt, while others you may have $500. Do this the day you are paid so you will know there is no more money to spend.

Put all you credit card debts on low interest balance transfer cards. This will lessen the time for repaying and save money to.

All this is not going to work if you keep going back to using your credit card. The credit cards have to die. Cut them up and say good bye, you won't miss them after a while. Remember they are the ones that got you into this mess. Well, really you got yourself into this mess but they helped.

Paying with cash gives you immediate feedback of the consequences of your spending. Credit cards come with an anesthetic so you don't feel the pain of your spending. I guarantee you will spend less over time with cash. Your spending IQ will go up when you find cheaper places to eat and shop.

Being open and honest with your better half will make the process go much better. The times will come when you feel constrained with the spending plan. It will cause some friction at first. But a healthy budget committee meeting will tackle that problem. Charting your budget and your debt paying, will build confidence in your plan. Seeing that debt go down will inspire everyone to keep going.

You will find motivation for your plan along the way because goals will be attained and new goals will be worked toward causing you to feel good about what you are doing. If you sell something or receive an unforeseen income all the better to get you where you want to be.

To Do List:

• Admit you have a problem with debt and form a plan to conquer it.
• Set up a budget with Income and expenses listed.
• Cut up the credit cards and switch to cash.
• Communicate often and honestly.
• Find motivation to carry on and finish.

Tools needed to eliminate debt:

1. Paper and pencil
2. A plan
3. Honesty
4. Motivation.
5. Scissors to cut up credit cards

With these tools and your plan, you will be able to take your debt and eliminate it. I guarantee it.


Reader: Do you have any tips on how to tackle the debt reduction process?

Money Saving Deals For April, May and June

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The new quarter is fast approaching. Taxes are due soon and the refund checks are in the mail. If you want to save some money, I have listed the best buys for the next three months. The list is courtesy of LifeHacker.com. Happy Shopping.

April

• Cruises: Cruise lines are moving ships around this month. You can even book and travel on short notice.
• Car accessories & parts
• Laptops
• Fabric: Craft stores are shifting from winter fabrics to lighter spring fabric.
• Cookware
• Vacuum cleaners: The new models arrive in June.
• Sneakers: Sneaker makers are targeting less serious runners.

May

• Patio furniture: New stuff hits the floor, old stuff needs to go. Also, check out garage sales for last year’s stuff.
• Party supplies
• Cookware
• Vacuum cleaners: Just like last month, clearing out old models.

June

• Gym memberships
• Tools (June 1-20)
• Suits (June 1-20)
• Dishware: Like May, June is a wedding month, so dishes are cheaper.
• Off-season sports gear

For their complete list go to: http://lifehacker.com/#!5736625/the-best-times-to-buy-anything-in-2011

Do Your Kids Need A Cell Phone?

Image by yisris via FlickrIn most cases, whether or not to get your child a cell phone, especially if they are a teenager, is going to be like any other parenting decision. Things to consider include:

• Does your child really ‘need’ a cell phone?
• Can you afford a cell phone?
• Is your child responsible enough to take care of a cell phone?

My daughter came home from school one day and said, “I need a cell phone.” She’s 10. What I heard was, “Everybody has a cell phone. Can I get one too?”

My wife and I aren’t the type of parents to run out and buy something just because someone else has one. I know this gets frustrating for the kids, who see all the toys and gadgets their friends have, and would like to have more.

We never had the cell phone issue growing up. We just had to make sure we had enough change in our pocket for the pay phone, or call from the school office if there was a problem.

When we sat down and asked her why he thought he “needed” a cell phone, she gave the usual answers:
In case there’s an emergency at school
In case I need you to pick me up from school early

Both of these I shot down with, “then you can go to the school office and call us from there.”

There are different reasons why some kids should have phones and others don’t really need them. These reasons have nothing to do with age, but with their activities. If they are left alone often, then I can see having a cell phone, or if they will be late from a school activity or other event.

Safety is probably the main reason I would consider a cell phone for children.

If you’re considering getting a phone for your child, here is a link to some phones for kids with different levels of parental control: http://cellphonesforkidsguide.com/2010/05/08/best-cell-phones-for-kids-2010/

Reader: What's your experience with kids and cell phones?

Are You Suffering From Daily Deal Fatigue?

Image by paulamarttila via FlickrIf your Internet experience is one notch above e-mail then you certainly are the victim of the daily deal syndrome. When surfing the Internet you have signed up to some of your favorites sites and get their interesting daily or weekly emails. If your a smart shopper you have searched the Internet to find the best deal for your purchases. Not wanting to miss out on those good deals you have signed up to the deal websites so you don't miss that next great deal.

You see the ads saying "We have saved 50 to 80 percent at restaurants, tickets to movies and hotels stays." You can get deals to almost anything, even skydiving. With nearly 500 daily deal sites it's easy to get lost in the emails.

But some bargain hunters are feeling bombarded by e-mails coming from the sites. I have had to unsubscribe from many deal sites, I just don't have the time. Now I just use a deal aggregator. They collect the deals from multiple sites and send them all in one e-mail. Yipit.com, for example, compiles deals from nine sites. It's a lot simpler.

Being overrun with e-mails isn't the only problem. Some buyers say that they find so many deals that are too good to pass up that they overbuy or let the vouchers expire. Unlike traditional coupons, which are free, vouchers let you purchase at a discount, but they cost money. Letting a voucher go can cost a buyer $5, $20, or even $100, depending on the purchase.

But what many voucher buyers might not know -- and what the daily deal sites don't advertise -- is that customers can use a daily deal voucher for the price paid, even after expiration. For example, a customer who paid $40 for a massage worth $80 can still get $40 credit toward a service after the voucher expires.

Groupon-style deals are becoming too much of a good thing for businesses, as well. Some local business owners say they're growing tired of sales calls from daily deal reps.

Daily deal sites typically charge businesses 40 or 50 percent of the cost of the voucher. Businesses keep the rest. But some deal sites are so desperate for deals that they are settling for 30 or 35 percent commission. As more startups join the fray, some run deals at no cost to the business just to build an audience.

Sometimes it feels better to take a break and unplug from the daily deals. It gets to a point where you hope the Internet is down so you just don't have to see another deal.


Reader: How about you, do you suffer from daily deal fatigue?

Tax Relief From The Chinese Drywall Problems

Image via WikipediaBeing in the building business in South Florida I see a lot of the issues concerning home sales. There is a glut of homes on the market plus plenty of home foreclosures. It's hard to sell a house now a days. Construction of new homes hasn't stopped which only adds to the problem. Mortgages can't be obtained because appraisals come in so much lower than the asking price.

Builders and home owners are also suffering from having homes that have Chinese drywall. Chinese drywall is drywall shipped from China that has containment's that give off toxic, high levels of sulfur gas. The gases cause copper components to corrode and fail. The air conditioners, wiring, and copper plumbing corrode and fail. It also causes the occupants of the homes to become ill.

The only remedy to the problem is to gut the house. Remove all drywall, copper pipes, all wiring, and any metal studs. It must be done down to the block outer walls. This remedy is very expensive to say the least. Costs to do exceed $100,000.

In our state the insurance companies won't touch the claims. Saying it's not part of their coverage. Even insurer of last resort, Citizens Insurance, the state run insurance agency won't have anything to do with the claims. So everyone sits waiting for the lawsuits and the goodwill of the manufacturer to step up.

The IRS has stepped up and allowed a deduction of 75% of expenses for the repairs. If at a later time the home owner is compensated from a insurer or lawsuit, the tax relief must be paid back. Also Broward County has stepped up and will not charge a property tax on the home if it is not livable. Check your own county if similar relief is available.

This has been a terrible blow to many homeowners. But some relief is available. If you know of any other kinds of relief, drop me a line.

If A Property Is In Foreclosure Do You Still Have To Pay The Rent?

Image by hownowdesign via FlickrThe common opinion when a rental property is in foreclosure is that you don't have to pay your rent. You may claim that the owner is going to lose the property so whats the harm in not paying. You have been receiving mail from the mortgage holder about the looming foreclosure and your afraid of what will happen. Do not worry you will have 30 days to move if it comes to that.

Not knowing what to do do in a situation is normal. Getting the facts will allow you to make the right decision. When you have a rental agreement you are promising to pay rent according to the details of the lease. A lease is a legal document that states how each party will perform. Just deciding to stop paying rent is in violation of the lease and you are legally liable to pay. You can be sued for the back rent and may even have to pay the landlords legal fees in pursuing the matter.

Paying your rent is the right and moral thing to do. Not paying, is taking advantage of the situation. The landlord in foreclosure has their hands full and may not pursue you for the rent, but it still is wrong not to pay.

If the property does go into foreclosure and later is settled by the owner. You have to catch up on the rent to stay in the rental. If the poperty is foreclosed and later sold to a new owner; the new owner has all contractual rights and responsibilities that were contained in the lease or, if the lease had run out, in the month-to-month rental agreement (with the same lease terms) that legally kicks in when tenants stay on with permission after the end of a lease.

So, for example, as the old owner had the right to receive rent on the first of the month, you, too, can expect the same. The former owner also had the right to demand back rent, by delivering a "pay or quit" notice. Most owners send these notices after one or, at most two, missed rent payments. With bank-owned properties these days, there's no telling how much (or more likely, how little) attention is being paid to the property. But even though a demand for 18 months of unpaid rent is unusual, it's still a right that you obtained when you took over as the owner.

You'll need to check your state law to see how much rent you can demand in a "pay or quit" notice. If you are limited and want to collect the balance, you'll need to go to small-claims court.

If in this situation, work out something with your landlord. If you don't trust your landlord why not pay in the rears. Pay at the end of the current month. You will feel your not getting taken and the landlord still gets their money. It may not be to the letter of the lease, but at least you are paying.

Reader: Have you had some experiences with living in a rental thats been in foreclosure?

When Is It Best To Ignore Money Advice?

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Retirement, IRA's, emergency fund, saving, debt so many things to keep track of. It can get a little overwhelming. Managing your finances can be confusing. Do you save for a house first or do you pay off debt? Both options are good if done in the right order. 

We all receive good financial advice, but is it appropriate to the current situation. Buy a house, don't rent is the one bit of advice you here the most. It's only good advice if your financial prepared, it could be disastrous advice if your not prepared. Good intentioned advice acted on at the wrong time will torpedo your financial goals.

Everyone has unique situations, it's the knowing when to do the right thing that will give you the results you want.

Buy a house, don't waste your money on rent.
It's the first thing you hear after some life changing event like a new job, marriage, or baby on the way. The advice is that your making the landlord rich while you could buy a house and be paying yourself instead. But being ready financially is the first step to buying a house. Do you have an emergency fund in place. Will the payment be affordable? Don't forget you don't just have the mortgage payment to worry about. Add to that insurance, property taxes, insurance, furnishings, utility bills, maintenance and repairs. Maybe renting sounds like a better idea now.

Are you saving enough for retirement? Are you getting the match on you 401k? Don't miss that match!
Again the wisdom of saving for retirement in a tax deferred account makes sense. Getting the match makes more sense. It's good advice. But is it good for you at this moment in your financial life. You have to weigh this good advice against do you have an emergency fund of 3 to 6 months savings. Do you have credit card debt still to pay off? It's not smart to ignore these more important things. What if you were sick or got laid off? How would your 401k help then? I would rather have a hefty emergency fund. These are things you need to consider.

Get life insurance so your family will be protected when your gone.
On the surface getting life insurance sounds good. How could leaving someone a large amount of money when you die not be seen as a loving and caring thing. You must decide if life insurance is even necessary. The purpose of it is to meet a financial need the deceased can no longer provide. Money to replace an income in the raising of a child or providing funds for a college education would seem appropriate goals. If it's not used to replace the deceased financial responsibilities , then it's not needed. If the deceased is leaving a spouse with no children, mortgage or other financial need; Insurance is not necessary.

These are only three examples of how good financial advice can be misapplied or applied at the wrong time for the wrong reasons. But there are many more.

Reader: Do have any examples of misapplied financial advice?