Someone Is After Your Social Security Number

Image via Wikipedia

 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

Image via Wikipedia
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

Image via Wikipedia
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

Image via Wikipedia
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

Image via Wikipedia

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?

Image by o5com via Flickr
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.