Here’s a great budgeting tip …
If you’ve been through a tough financial time, I’m sure you’ve renewed your commitments to creating budgets. You probably take a second look at price tags. You ask yourself things like:
Is an espresso really worth $4?
Wouldn’t it be smarter to rent a movie than spend $25 at the theater?
Should I buy a new pair of running shoes for $90, or can I make do with my old pair?
These are good questions to ask, but instead of looking solely at price tags, let’s also start considering this question:
How much is my time worth and how many hours will I have to work to pay for an item?
I call this association between how much your time is worth and how many hours or days you will need to pay for the item the “Hour Factor.” Figuring out your “Hour Factor” by asking a series of questions is critical in helping a person get a budget under control.
I created the Hour Factor after I wrote 7 Steps to a 720 Credit Score because I began to realize that creating a budget wasn’t enough for people who struggled to stop spending money. Instead, they have to develop an entirely new mindset that guides them when making a buying decision.
For instance, imagine that you are considering buying a $250 gadget. To determine the item’s Hour Factor, start by asking: How much is my time worth?
An attorney might make $250 after taxes. A minimum-wage worker who does not pay taxes might make $7.25.
Next ask: How many hours will this item cost me?
The gadget will cost the attorney one hour; the minimum-wage worker will pay thirty-eight hours for the same gadget.
Is the latest gadget worth thirty-eight hours? If you cannot afford your insurance premium, is it worth even one hour?
Only you can answer this question. They trick is twofold: First, begin associating purchases with the amount of time you must work to secure them. Next, consider the opportunity cost associated with each purchase.
The Hour Factor process works like this:
* Answer the question: How much is my time worth? Determine this as an after-tax figure. If you are paid hourly, this calculation is simple: divide your take-home pay check by the number of hours you worked in that pay period. If you are paid a salary, divided your annual after-tax income by 2080 (the number of hours a full-time employee works in one year, assuming a two-week vacation).
* Relate all spending to your hourly wage. For instance, let’s assume your hourly wage is about $16.50. If you are going to buy the latest $200 cell phone, divide its cost by your hourly wage to determine the Hour Factor. Ask yourself these questions: How much is my time worth? Is this cell phone worth twelve hours of my time? “
* You must also know your weekly “disposable” hours. Let`s say, for instance, that your weekly expenses cost you twenty hours, meaning you have an additional twenty hours to “dispose” of. When we put this in terms of time, you can begin to see that you are “disposing” of one about hour of your life when you treat your friends to $15 of coffee drinks. You are disposing of five hours of your life when you splurge on a lavish meal complete with appetizers, dessert, and drinks.
* Finally, consider the opportunity cost for each of your purchases by asking these questions:
1. What else could I buy with ___ hours of my time? Twelve hours could be directed toward health insurance, a car payment, a retirement account, or your child’s college tuition. When asking, “What is my time worth?,” you begin to see that twelve hours of your time might be worth a car payment, but it certainly isn’t worth a new pair of shiny shoes if you cannot afford your car payment otherwise.
2. What investment and savings opportunities am I losing by disposing of these hours? Consider, for instance, that your goal is to purchase a home. You know that you must save $60,000 for the down payment on a $300,000 home. Assuming you make $16.50 hourly and you have twenty “disposable” hours each week (that is, once you have paid for all necessities, you have twenty hours left over for savings, impulse shopping, entertainment, or whatever else you choose to buy), you must save about 3,640 hours to afford the down payment. If you saved each of your disposable hours, you could afford the down payment in about three and one-half years.
Or, you can buy that cell phone, take a lavish vacation, and splurge on expensive dinners. Only you can decide what your time is worth.
Author: br_admin
Black Friday's Retail Store Credit Card Scam
With Black Friday just five days away, I’d like to take this opportunity to remind you to steer clear of retail store credit cards.
Of course, more than a few of the stores you visit on Friday will try to lure you in with big promises …
“You’ll save 10 percent on today’s purchase by applying for a retail store credit card,” they will tell you.
Just about every major clothing and electronics store has promotion aimed at getting people to sign up for a store-specific credit card.
But retail store credit cards will hurt your wallet and your credit score. Avoid them at all cost!
Here’s just one downside to consider: Many stores promote their store-specific credit cards by offering a 10 or 15 percent discount on same-day purchases if you open an account.
Let’s do the math and see how this adds up …
Imagine that you are buying a pair of $60 jeans from the Gap when the cashier tells you that you will get 10 percent off your entire purchase—$6—if you open a Gap credit card.
You figure it is a wise move, so you sign up on the spot. After all, you’ll save $6, or so you think.
But consider all the different ways you might end up spending MORE money:
– If you do not pay this and subsequent bills immediately, you will have to pay interest
– Especially during the holidays, you will be more likely to make purchases you cannot afford.
I should take advantage of this offer, you might think, piling a few more items in your shopping cart and justifying the excess purchases because you are buying gifts.
But you are probably not staying within your budget, so that $6 you “saved” will cause you to make a rash decision to blow your holiday shopping budget.
– You have added a credit inquiry to your credit report. Credit inquiries count for 10 percent of your credit score, so your score drops a few points.
This might not be a big deal, unless you plan to open another credit card, apply for a home loan, or get a car loan in the next few months.
If you do, you might pay higher interest rates, which means that $6 “savings” just cost you a bundle.
– Ever heard of retail therapy? Having credit cards in your wallet strengthens your ability to make emotional buying decisions by creating opportunities for you to charge things you do not need.
My point is that you most certainly do not save a single dollar by opening retail store credit cards.
Still not convinced? Think of it this way: Why would retail stores promote these cards with discounts unless they know they can eventually make money off the retail store credit cards?
There are other reasons retail store credit cards are a bad idea. Click here to read about the impact retail store credit cards have on your credit score.
If You Use a Yahoo or AOL Email Address. Your Credit Score Probably Sucks
An interesting credit score data mining observation has emerged from our friends over at Credit Karma.
Apparently they took a look at the average credit scores of 20,000 people and placed those scores into bins based on the email address people use. They then calculated the average credit score.
Now your email domain is not an indication of credit worthiness and switching to a different email provider does not impact your score at all. It’s just an interesting observation of the credit scores of people that typically use a particular email provider.
If you use BellSouth as your email provider, your score is the highest in the survey results. Congratulations.
If you are using an email address from Yahoo or AOL, the average credit score of your fellow email users is, well, in the toilet.
Seems among the mainstream free email providers, Gmail users are the king of the credit score hill, followed by MSN, Hotmail, and Yahoo at the bottom. It looks like the average credit score of GMail users is 682 while Yahoo users are down at 640. That’s quite a difference.
Author: This article was contributed by GetOutOfDebt.org, a site that provides free help for people looking for debt consolidation advice.
Source: If You Use a Yahoo or AOL Email Address. Your Credit Score Probably Sucks
Source: Defendants Lose The Weight Of Their Assets In “Hoodia” Weight Loss Case
Defendants Lose The Weight Of Their Assets In "Hoodia" Weight Loss Case
In April of 2009 the Federal Trade Commission (FTC) charged makers of a “Hoodia” weight loss supplement with deceptive advertising. The companies, Nutraceuticals International, Stella Labs and key company players and controllers David Romeo, Deborah Vickery, Craig Payton, and Zoltan Klivinyi claimed that using their product would lead to weight loss and appetite suppression.
In its complaint, the FTC alleges that the defendants not only made false and deceptive claims about what hoodia could do, but also, on one or more occasions, claimed that their product was Hoodia gordonii, a plant native to southern Africa, when it was not. They claimed their product was scientifically proven to suppress appetite, resulting in weight loss; and was clinically proven to reduce caloric intake by 1,000 to 2,000 calories per day.
Last week the charges were settled against the aforementioned (sans Klivinyi who is no longer residing in the United States). Under the settlements:
David Romeo, controller of Nutraceuticals International and Stella Labs, are banned from making any weight-loss claims while marketing foods, drugs, and dietary supplements. The settlement imposes a $22.5 million judgment against Romeo and the two companies, which will be suspended when Romeo forfeits his vacation home in Vermont, and assigns to the FTC the right to collect on $635,000 in business loans owed to him. If it is later determined that the financial information Romeo gave the FTC was false, the full amount of the judgment will become due.
Nutraceuticals International principal Craig Payton is banned from marketing any foods, drugs, or dietary supplements. The order against Payton does not require him to forfeit any assets, as they were already seized in an unrelated federal drug case.
Nutraceuticals International marketing executive Deborah Vickery is required to pay a $4 million judgment, which has been suspended due to her inability to pay. If it is later determined that the financial information she gave the FTC was false, the full amount of the judgment will become due.
All five defendants (the three mentioned and the two companies) are prohibited from making any false or unsupported claims about foods, drugs, or dietary supplements, and from helping others to make these claims. They also are barred from misrepresenting the results of any scientific study – Source.
Consumers should be wary of any dietary supplement and/or weight loss diet ad. As with anything else in life, if it seems too good to be true, it usually is. Take caution folks. Talk to your doctor about any weight related questions or concerns.
Author: This article was contributed by GetOutOfDebt.org, a site that helps free help for people getting out of debt.
Source: Defendants Lose The Weight Of Their Assets In “Hoodia” Weight Loss Case
Chimney Sweep Scams Sweeping The Country
This year like many others I’ve found an early winter and cold autumn nights. In an attempt to boycott the cold weather I refused to turn the heat on in my house until absolutely necessary. I was determined to make it through the month of October without doing so, yet, on the 30th it became so cold here in North Carolina that I cracked.
One alternative I wished that I had at my frost bitten fingertips was a fireplace. A real fireplace (not the fake, smelly, gas powered crap I have).
It’s that time of year when those lucky enough to posses such amazing fireplaces are getting them ready for the cold winter nights. Unpacking fleece blankets, chopping or buying fire wood, cleaning chimneys: the usual winter preparations.
However, this winter the Better Business Bureau (BBB) is warning consumers to be extra careful when choosing a chimney cleaner as they have received more than 380 complaints this year alone already compared to the 342 complaints received in all of 2010.
The BBB states in a recent press release about this matter:
In some cases, consumers have reported calls stating the town fire department recommends the resident’s chimney be cleaned. The calls go on to recommend a particular chimney sweep and endorse their services on behalf of the fire department. Though town fire departments do recommend having chimneys cleaned on an annual basis, they do not endorse any particular company or inspect chimneys. Many scam artists are targeting the elderly, making vague, unclear phone calls claiming they have done business in the past and it is time for their annual sweep.
Scam artists are also advertising at a much lower price than legitimate businesses. Typically, a professional chimney sweep will charge between $150 and $200 for the cleaning of one chimney shaft, whereas scam artists are charging as little as $50. BBB advises that if a price sounds too good to be true, it usually is.
Many scam artists use a low price tactic to get in your door, at which point they recommend additional work be done immediately, bullying the consumer into a much more expensive bill. If the price you are quoted is significantly lower than that of other businesses, it should be viewed as a red flag.
BBB suggests consumers do their homework before hiring a chimney sweep and inviting them into the home. Additionally, check with your local fire department and with the Chimney Safety Institute of America (csia.org).
BBB recommends using these helpful tips when hiring a chimney sweep:
Check out a chimney sweeping business at bbb.org. Always check with BBB for a trusted chimney sweeping business in your area. Are they an Accredited Business? Do they have any outstanding complaints?
Find out how long they have been in business. How long have they operated in your area? Find out if they offer current references, or if you know anyone who has used their services in the past.
Ask if they have a valid business liability insurance policy. In the event of an accident, this policy keeps your home and belongings safe.
Find out if any employees are certified through CSIA. Though this is not law, it is recommended by the fire department, and speaks to the qualifications of the individual or business you hire. CSIA is a national nonprofit agency with a certification program for chimney sweeps and certification is required of members of the National Chimney Sweeping Guild
Author: This article was contributed by GetOutOfDebt.org, a site that helps people find good credit card relief solutions to deal with tough money troubles.
Source: Chimney Sweep Scams Sweeping The Country
This guy is stuck …
Here is his problem..
- He has over $41,000 in credit card debt.
- He has other unsecured loans totaling $12,000.
- Although he hasn’t been late on his bills yet, he can’t seem to get caught up and doesn’t think he will ever dig himself out of this debt.
- When he puts his debt into a debt reduction calculator, it says that it will take him 21.6 years to pay everything off at his current pace.
(Can you say …. STUCK?)
He emailed me and asked for my advice… I explained to him his three options:
Option #1 – Continue to pay the bills for 21.6 years.
Option #2 – File for Bankruptcy
Option #3 – Negotiate his debt with his creditors.
Let’s review…:
Option #1 – Continue to pay, which needs no explanation. This client did call the credit card company and got his interest rates lowered, however, by following their payment plan; he will be paying for 21.6 years.
That is like being held hostage by your credit card company for 21.6 years. I say “held hostage” because I believe that.
Yes, he took out the debt, but to pay on $41,000 in credit card debt for 21.6 years… is a crazy thought and in my opinion, other options need to be looked at.
Option #2 –Bankruptcy. If he qualifies for a Chapter 7 bankruptcy, he will have no more debt, however, the bankruptcy will be on his credit report for 10 years.
He can easily repair his credit (to 720+) after the bankruptcy, which can be done in 1 ½ to 2 years.
There are two downsides to this option;
- The bankruptcy on his credit report. That will impact his ability to borrow for the next 2-3 years.
- Does he qualify for a Chapter 7 Bankruptcy? Believe it or not, many people cannot qualify for a bankruptcy because their income is too high.
If this is the case, he will have to file a Chapter 13 Bankruptcy. That means he will have to repay all his debt plus have a bankruptcy on his credit report.
Let’s move on to Option #3.
Option #3 – Renegotiate his credit card debt with the credit card company.
Here is what I know for sure:
- Your credit card company will not negotiate with you unless you stop paying your bills. They may tell you differently, but this is what I know to be true.
- Your credit card company will lie to you so you continue to pay. I’m sure this is not their “policy,” but when you combine eager employees looking to get their bonus with vulnerable debtor – this happens.
- Once delinquent, they will put your phone number into an auto dialing systems. This means you will get up to 8 calls per day trying to collect payment. … Ouch!
- If you understand how to negotiate with your credit card company (and I don’t), I hear from numerous clients that they will offer you a settlement somewhere between 15-40%. Meaning, if this gentleman did it right, he would pay off his credit card debt for between $7,950 – $21,200. You read that correctly, he would pay off $53,000 in debt for between $7,950 and $21,200.
- After you pay off your debt, our clients are getting back to a 720+ credit score in approximately 18-24 months.
The biggest problem with Option #3, is having the stomach to handle the negotiations… because it is very stressful and daunting. And, if you don’t know the proper way to negotiate, you will pay more than you should.
If this sounds like your situation, listen up.
I’m going to put together free information designed for those that have more than $20,000 in debt and would like to know and understand all their options.
If you want to be informed about this information, give me your name and email below!
Once I do the interviews or webinars, I’ll email them to you.
I know this is a long email… thanks for reading!
If you have debt over $20,000 and this post seems to be written for you, submit your name and email below. I’ll provide you additional free information that I hope will help you choose the right option for yourself.
Free Government Grants, Diet Pills and Credit, Oh My!
Looking for free government grants endorsed by President Obama and Vice President Biden? Dietary supplements supported by scientific research and endorsed by Oprah? How about exclusive credit offers? Keep looking.
The Federal Trade Commission (FTC) has halted an operation called, the “Grant Connect” program, that allegedly deceived and mislead consumers about bogus products and services with unsubstantiated claims.
The complaint lists Juliette Kimoto and Johnnie Smith, amongst others, behind the “Grant Connect” program. As part of an agreement with the FTC several defendants have agreed not to market products and serviced similar to those they sold and pitched to consumers previously. Settlements also impose an almost $30 million judgments against them.
Allegedly “Grant Connect” programs used pictures of political figures and celebrities to make it appear that they endorsed their products they were selling. They used pictures of President Obama, Vice President Biden, and the American flag to bolster claims that their bogus government grants service was affiliated with the U.S. government. They promoted their dietary supplement by falsely claiming that it was endorsed by Oprah Winfrey and supported by scientific research, and failed to adequately disclose that their credit offers were merely memberships to a costly shopping club.
The FTC claims that the defendants failed to disclose to consumers that purchased their products that they would be enrolled in continuity plans and charged high monthly fees for mostly unrelated products along with using fake testimonials to promote products.
The first settlement order announced October 17, bans defendant Johnnie Smith from marketing or selling grant-related products or services, credit-related products, work-at-home business opportunities, weight-loss related dietary supplements, and other products or services using a negative-option or continuity program in which consumers are billed automatically until they decide to cancel.
Smith also is banned from assisting anyone else selling these programs or products and from taking customer payments using pre-approved electronic fund transfers. Finally, Smith is banned from using testimonials to sell products or services, and is subject to the monetary judgment, under which he will pay $45,000.
The second settlement order bans Juliette Kimoto and four companies she owned from: selling grant-related products or services, credit-related products, or work-at-home business opportunities; selling products or services with a continuity or negative-option program; taking consumer payments by pre-authorized electronic funds transfer; assisting others engaged in these activities; and using testimonials.
The second settlement order also bans the four companies from marketing dietary supplements claimed to assist in weight loss or other specified outcomes, and prohibits Juliette Kimoto from making misleading health claims related to dietary supplements. The order also requires Juliette Kimoto to pay more than $90,000 and to turn over various personal assets, including jewelry, a piano, and a 1967 Chevy Camaro, along with all the cash and other assets held by the entities she owned. The total value of the cash and assets turned over by Juliette Kimoto and the companies she owned exceeds $220,000
Author: This article was contributed by GetOutOfDebt.org, a site that helps people find good debt relief solutions to deal with tough money troubles.
Source: Free Government Grants, Diet Pills and Credit, Oh My!
Divorce and Credit … Read this NOW!
The other week, I got an email that made me cringe.
The email was from a man had just been through a divorce. He explained that he lost 94 percent of everything when he and his wife divorced.
“She got the properties, and I got the mortgages.”
Per the terms of their divorce decree, his monthly spousal support check was to include the cost of the mortgages.
When I read that, I just knew what he was going to say next, and that’s when I cringed…
His ex-wife was cashing the checks, but she wasn’t paying the mortgages on time… the very same mortgages in his name.
This Happens All the Time
This situation is common, so if you ever go through a divorce, make sure you protect your credit.
In short, here’s my advice:
1. Refinance the mortgage in your ex’s name only. In the case of the man who emailed me, he should keep paying spousal support. If his ex fails to pay the mortgage, she will be the only one who suffers. He cannot do anything about the past, but in the future, refinancing in her name will protect his credit.
2. If she cannot qualify for a refinance, he should renegotiate the terms of his spousal support so that he pays the mortgage directly, sending his ex a spousal support check for the remainder.
Click here to read a longer article about divorce and credit.
Credit Score = Your Financial Reputation, How Much Are You Losing?
Whenever I was in basic training, each recruit, each private was assigned their own roster number. That roster number was our identifier. We had to put it on all our gear. I had to have it strapped across a tape on my Kevlar, which is our helmet. It dictated as far as when we would eat chow and what order we would fall in. It also would designate when we would draw our weapon from the arms room when we had to go to the different ranges. Our roster number was our second name. First name was Private, and the second name was our roster number. Every time you heard your roster number yelled by a drill sergeant or a captain, you always knew either you were called to do something, or you got caught doing something you shouldn’t have been doing.
Your Identity Theft Stories….
Please post them here… so we can all learn from each other!
Include as much information as possible:
1) What happened?
2) How did you find out you were a victim?
3) What did you do?
4) How did it all work out?
5) Was your credit impacted?
Thank you.
– Philip Tirone
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