I’ve mentioned a couple times that my husband is receiving disability insurance while recovering from surgery. However, I was startled to discover recently that California is one of only five states with a state-run disability program. If you don’t live in one of these states (California, Rhode Island, Hawaii, New York, New Jersey), you should pursue other options for getting this insurance.
How State Disability Programs Work
In states that offer disability programs, your employer deducts your contributions through payroll deductions. Some organizations and government agencies are exempt, but may have a similar internal program. If you’re self-employed, you may be able to buy benefits through the state program.
Once you have a disability, you apply for benefits through the disability program, which is usually operated by the unemployment department. The specifics vary by state, but in general, you’re paid 55% of your previous salary per week, based on your highest-earning quarter out of the last five quarters. There is a cap, however. In California it’s $987. Disability income is not taxable, so even though you receive about half your salary, you’re not losing as much income as it seems. In California, there is a 52-week cap on benefits.
If you’re unemployed when you become disabled, you may also qualify for benefits, which will be higher than your unemployment benefits. Unemployment payments are low to encourage workers to return to work quickly. Disabled workers obviously can’t do that. You can’t receive both benefits at the same time.
How Employer-Provided Disability Programs Work
If you don’t live in a state with a government disability program, your employer may offer it privately as an employment benefit. Many employers provide it as a free benefit, but some ask employees to contribute. If your employer asks you to contribute, do it. It’s much cheaper to buy coverage through a large group plan than through an independent plan.
Unlike state plans, which are the same for everyone in your state, you should check with human resources or your insurance provider for information about eligibility, waiting periods, and filing a claim. Most plans cover up to 60% of your salary. My husband’s employer provides a state supplemental for 60% of his income. If your employer pays for the coverage as a benefit, the income may be taxable. Ask your employer.
How Private Disability Insurance Works
If your state or employer doesn’t offer disability insurance, you can acquire it privately. You’ll most likely be required to undergo medical underwriting as part of the application process. You may also be subject to a longer waiting period before benefits become available.
If you’re a high-earner, you may want to supplement your existing state or employer disability plan with a private plan. Private plans will usually cover 70-80% of your income. It can cost $600-1800 a year, so review your plan carefully to make sure you have adequate coverage and that it includes an “own occupation” rider. Without that, benefits may stop if you can return to any work. You want to be covered until you can return to your current occupation.
How to Apply for Disability Coverage
In order to apply for disability, you and your doctor must complete the form that proves your disability. Contact your state, employer, or insurance company for the proper forms and follow the instructions carefully. Be sure to notify the insurer when you return to work in order to stop the payments. Failure to do so is insurance fraud.
Worker’s Comp vs. Disability Insurance
Disability insurance is for injuries or illnesses that occur outside the workplace. If you’re injured on the job, then you should file a worker’s comp claim. All employers are required to maintain proper worker’s comp coverage. You don’t have to opt-in or pay for the benefit. Benefits and the claims process will vary depending on your state, so contact HR for advice.
State/Employer Disability vs. SSDI
If you’re disabled for more than a year, then you will most likely qualify for a Federal program known was Social Security Disabled Insurance (SSDI). SSDI is part of your FICA contributions. The benefit amount is based on your lifetime average earnings. If you expect to be disabled for more than a year, contact Social Security or speak to your doctor’s office about filing a claim.
Sources of Disability Insurance
If you live in one of the five states that requires disability insurance through the state program, then you probably already have it. If you’re employed and don’t live in one of those states, ask your employer about it.
If you’re self-employed, contact your insurance agent for information about applying. It’s vital that a self-employer person by coverage because you’ll have absolutely no income if you become injured.
If your employer doesn’t offer insurance, you have a few options. If you’re a member of a union or trade group, contact them to see if they have a group program. My husband bought a small, cheap plan through his professional organization. It has a 3-month waiting period, so we won’t be tapping it for his current injury, but at $80 a year, it’s worth it in case of future emergencies. If you don’t belong to a trade group, contact your insurance agent for information and q
With all the news that credit card companies are closing accounts and cutting credit limits left and right, my first reaction was to get incensed. How dare they reduce my credit? How dare they deny me what I’ve “earned”? Then I realized that my first reaction upon receiving my credit limit increase letters was laughter. There was no way I needed as much credit as they wanted to give me. If they chose to cut my limit or close my card for non-use, it’s not really that much skin off my nose. I already have a mortgage and my credit scores wouldn’t take that big of a hit. So then I started thinking: how many credit cards do I really need?
The Cards In My Wallet
So, let’s start by counting the number of cards in my wallet. I have four traditional credit cards. One of them gets used for nearly all purchases. Two others get used once a month at most. One probably hasn’t been used since I went to Belize in 2008. I also have one store card in my wallet. There used to be eight, but I discovered that they had all been closed for inactivity when I called to change my address last year. The one remaining is the Goodyear card that I love so very much. This one has a low limit, because it’s only for auto repair purchases. The others still have relatively high limits. There’s also a debit card, which I could use as a credit card in a pinch.
How Many Could I Live Without?
If I were going to really cut back, I think I would keep two traditional cards and the Goodyear card. Not only does the Goodyear card allow awesome payment terms, it also gets me discounts on oil changes and a couple other perks.
As I’ve mentioned before, we put nearly everything on our Amex, even recurring charges like the cable and phone bills. This is part of our mileage-accruement strategy and I’ve been very successful at using those miles for the trips we want to take. So, I’d definitely keep that card.
I’d also keep one other card, either a Visa or Mastercard. If your primary card is an Amex or a Discover, then you should have a Visa or a Mastercard as a back-up. Not all merchants accept Amex. It’s also important to take two cards with you when you travel, just in case one of them gets blocked because of unusual transactions in another city.
So, I started with five cards, and have worked myself down to three that I think are “necessary” for the way I choose to conduct my financial life. Overspending is not a problem for me, so I don’t need to cut my credit to save money. I’d only do it to simplify.
How to Choose Which Cards to Keep
If you want to slim down your wallet, how do you decide which cards to keep? Here are a few simple guidelines:
Other Accounts with the Bank: If you have a checking account or mortgage with a financial institution, consider choosing them as either your primary or back-up card. It’s my suspicion, that banks treat customers with additional accounts better than those with no other ties to the institution. If you like the security of overdraft protection, then this is another point in favor of the bank where you have your checking account.
Rewards: If you have a rewards card and have accrued a hefty point or miles balance, make sure you can keep it or cash it out before cancelling the card. If you can’t, then keep the card until you can use up the rewards. Or, the rewards may be the thing that make the card a keeper, especially if you use them well.
Interest Rates and Fees: Neither interest rates or fees are a huge factor for me (except foreign transaction fees). However, if you carry a balance or sometimes forget to make a payment, then scrutinize the rates and fees carefully. These can change quickly, but it’s at least a place to start.
Foreign Transaction Fees: It doesn’t really matter which extra cards I keep, so I would call to ask about each card’s current foreign transaction fees. These fees can and do change, but they don’t usually come down once they’ve gone up, so I’d keep the card with the lowest foreign transaction fee. The card we took to Belize had a 1% fee, vs. 2-3% for the other cards. Don’t worry as much about the fees for Amex or Discover cards because they aren’t accepted in some parts of the world. Visa and Mastercard are.
Oldest Card: I would be hesitant to close my oldest card because it would reduce the average age of my credit history. However, if you acquired your two oldest cards around the same time, it may be safe to cancel one of them.
Ultimately, I don’t need any credit cards, but they make my life simpler and I like to have them. I don’t need as many as I have, though. If you want to slim things down, consider not fighting the bank if they cut your limit or close an inactive account. As long as you’ve still got a low utilization ratio overall and a long credit history, one closure isn’t going to hurt that much. If you do want to keep a card, then keep it active.
Apparently the American wallet is aching to be taken out for a spin and a slew of people have decided that thrift stores are the best place to do that. I haven’t been to a thrift store in a while, but this weekend I decided to walk down to one while waiting for my oil change. I expected it to be quiet and empty. Boy was I surprised!
The place was packed. The aisles were jammed with stuff. I saw whole families inside. And it wasn’t even a very nice thrift store. It was somewhat messy and cramped. But that didn’t stop these bargain shoppers!
There were several families with small children at the thrift store. The toys were piled on top of the clothing racks, but I saw several kids toting “new” toys. None of the toys were in terrible shape, so I’m guessing it’s a great place to get a recently hot toy that some other child doesn’t want anymore.
There was a decent selection of books, some of them hardcovers in excellent condition being sold for $2-$3. I saw a few kids in this section, too, looking for the Lightning Thief series.
There were several parents in the children’s clothing aisles. If you’re going to buy one thing at a thrift store, this is a good choice. Kids grow out of their clothes so quickly that you can find trendy stuff at bargain prices. Just make sure you check the elbows and knees for wear and examine it for stains. Missing buttons are easily replaced.
Depending on your area, you may also find amazing clothes for adults, including designer clothing and expensive shoes at bargain prices.
They had a variety of dishes in decent condition priced $1 and up. I saw platters, fancy wine glasses, matching plates, and some glass knick-knacks. If you’re hosting a party and want real glassware, a thrift store is a fun place to pick unusual choices on the cheap. Recent grads and college students – this is the place to stock up on everything you need. All your friends will have cast-offs and thrift store finds, too, so you’ll be in good company.
I was surprised to see a decent selection of small TVs. They weren’t flat screens, but they’re good options if you need a TV for a guest room or workshop. Some of them may need a digital converter box, so make sure you can turn it on and get an over-the-air signal if you don’t own a box or have cable.
I know from a quilting friend that thrift stores are very popular among quilters and crafters looking for vintage bed linens or unusual fabrics. I saw tons of comforters, sheets, and tablecloths. I even saw what appeared to be several yards of purple organza – perfect for a little girl’s costume. If you’re a crafter or need some inexpensive fabric for any reason, this is the place to go.
I won’t say these wedding dresses were the most fashionable I’ve ever seen, but most of them were clean and in good condition. If you want to make your own dress, consider hitting up a thrift store first. You can use the beads and lace to rebuild the bodice. You might be able to use the skirt and train without too much modification. You’d pay hundreds of dollars for this fabric at another store, so make the most of a thrift store bargain.
This particular store was too small to have a significant furniture section, but I once found a microwave stand at a thrift store. Well, actually, it was just a small rolling cart, but it was $10, so I bought it for my microwave. It’s now my “bar.” At Thanksgiving, it was my rolling buffet because I didn’t have enough room on the table. Larger thrift stores are great places to find dressers, couches, and other furniture if you’re willing to put a little work into them, or are a college student on a budget.
If you need to shop, but don’t want to spend a lot, check Yelp for reviews of the local thrift stores and then hit up the largest one. You might find an amazing deal on exactly what you need. I don’t remember Saturday morning, though. That’s apparently the time to shop.
In my post about the advantages and disadvantages of moving your money to a small community bank, I didn’t address credit unions, which are also an alternative to the big banks. Credit unions and banks will feel similar to the average customer, but they are actually quite different, so here’s what you need to know.
How Do Credit Unions Work?
A credit union is a non-profit financial institution. Rather than customers, they have members. The credit union is owned by its members, who elect the union’s Board of Directors. These Directors then oversee the bank for the good of the members.
Since credit unions don’t operate for profit, they typically offer very competitive interest rates – often better than you’ll get from a bank. Any proceeds they receive from these loans are used to pay above-average interest on deposits and make additional loans. Credit unions also offer lower, if any, service fees and may pay a dividend to members if there is excess revenue.
Are Credit Unions Insured?
Accounts held in credit unions are not FDIC-insured. Instead, they’re insured by the National Credit Union Share Insurance Fund, which is backed the by the US government. The unions are chartered and regulated by the National Credit Union Administration.
What Services Are Offered by Credit Unions?
Different credit unions offer different types of services, but most provide at least savings and checking accounts. Many also offer auto loans and mortgages. Some offer money market savings accounts, certificate of deposit accounts, and credit cards. Larger credit unions may also provide investment services and insurance. Many offer discounts on local attractions, Entertainment Books, and other items.
Do Credit Unions Have ATMs?
Your specific credit union most likely has ATMs outside its branches that you can use free-of-charge. Many credit unions are also members of the CO-OP Network, which gives you free access to 28,000 ATMs around the country. Make sure you ask if a prospective credit union is a member of the network before you join.
Do Credit Unions Offer Online Banking?
Again, it depends on the credit union. Smaller credit unions may not have the infrastructure necessary for online bill-paying, but will allow you to check balances online. If online banking is important to you, make sure a prospective credit union has it before joining.
Who Is Eligible to Join Credit Unions?
Credit union eligibility depends on the specific credit union. Some are limited to a specific trade group or organization. For example, the Aerospace Credit Union is limited to employees of the Aerospace Corporation, US Government employees who work at the LA Air Force Base, and employees of contractors who work at the base.
Other credit unions are open to anyone who lives in a certain area. For example, the WesCom credit union is open to anyone who lives, works, worships or attends school in one of five Southern California counties.
No matter where you live, you should be able to find a credit union that you’re eligible to join. Visit the National Credit Union Association website to find one.
Personally, I used a credit union for a car loan twelve years ago. I joined a trade credit union with a $50 deposit into a savings account. I then contacted a loan rep who helped me apply for a car loan. The rate was reasonable, and certainly better than anything I would have qualified for at a bank or dealership. The whole process required two trips to the credit union – one to open the account and one to sign the loan papers. These days I’d probably be able to do it all online and by fax, just like a regular bank.
I’m a longtime user of TaxAct online tax software for one reason: it’s cheap. After completing my return in the H&R Block At Home software, I took this year’s version of TaxAct for a spin. Call my crazy, but I’ve actually started to like doing my returns twice. Yes, it takes me an extra hour, but it’s a good way to make sure I didn’t forget to include anything and double-check the results. Since it’s free until you file, it doesn’t cost me anything to double-check with a competitor. This year, I found H&R Block’s software much easier to use, which surprised me, but this was also the first year I itemized.
The TaxAct interface is more stripped down than H&R Block, but it’s still easy to navigate. I can easily move between topics and go back to review sections I’ve already completed. If I want to change an answer, it gives me the option to re-answer the questions completely, but displays the old answers for faster click-through. Like H&R Block, it has a status bar in the upper right that offers immediate updates on the amount you owe or are getting back as you answer the questions.
Once again, I had trouble with the lay-out of the questions on my new computer. I opted to key-in the W-2 data quickly rather than using the interview questions, but one section fell below the fold and I completely missed it. I only discovered it because the total deductions from H&R Block and TaxAct didn’t match. So, once again, if you’re going to use the speedy option, make sure you scroll ALL the way down!
TaxAct also offers the option to download your W-2s, but I wasn’t able to. Their system requires some sort of PIN. My employer didn’t provide me with this number, so I had to manually enter the W-2 information. However, since I used the software last year, it transferred over our employer ID information and I only had to change the wage information.
New Homebuyer Credit and Mortgage Deductions
The software offered detailed instructions on qualifying and applying for the new homebuyer credit. It also walked me through the mortgage deductions.
It was much easier to miss deductions in TaxAct. In order to find the reminder to include last year’s state tax payment, I had to click a “learn more” box. If I didn’t know to look for it, I might not have checked that box.
The charitable deductions interface was in some ways more complicated, and in some ways simpler. In H&R Block, I had to enter each charity on a separate line, but I was able to lump them all together in TaxAct. Then, for charitable goods, I had to lump them all together and determine my own value in H&R Block, whereas TaxAct offered a calculation based on the specific item I donated.
Correcting errors is simple in TaxAct. Simply go to the summary and select the section you want to review. Choose the option to review all of your answers and fix your mistakes as you go. It’s fast and simple.
Overall, I thought TaxAct was more difficult to use for itemized returns. There were some items where I had to use a calculator to total information before entering it. I also had to enter complete addresses for the financial institutions that sent 1098 forms, although this information doesn’t appear anywhere on the tax return. On the other hand, some things were easier to enter and being able to easily correct errors is important to me. The software is a much more stripped-down offering, but it also has a stripped down price.
The online prices are:
Free for Basic (Federal e-File only, state $14.95)
$9.95 for Deluxe (Federal only, state $8
$17.95 for Ultimate (Federal and State)
I still think TaxAct is great for people who are comfortable completing tax returns and either take the standard deduction or are old hands at filing itemized returns. If this is your first year itemizing, or you’ve had a major life change that substantially affects your taxes, consider springing for the H&R Block software this year. The extra hand-holding could save you money. And don’t forget to enter my H&R Block software giveaway!
This weekend was full of accomplishments, and one of them was getting my taxes done. I’ve been using online tax software for nearly a decade, so I’d become pretty handy at it. Still, this was the first time I had to itemize my taxes and had a major life change to deal with, so I was a bit nervous about finding all the deductions. That’s why I was so happy when H&R Block sent me a free copy of their 2009 H&R Block At Home software to review. (All opinions expressed are my own.) I’ll also have one copy to give away at the end of this post.
The H&R Block at Home Interface
This is the first time I used physical software rather than online software. It installed quickly and easily, and then it was as simple and straightforward as using the online version, except I didn’t have to create a username and password and I didn’t have to log on or off. I could save the return or exit as I went through.
The navigation is seamless. I was able to quickly review a previous section through the summaries if I needed to. Like other programs, it has a refund or tax due status bar in the upper right that updates automatically as you work through the return. Don’t panic if it shows that you owe a high amount after the income portion – you haven’t gotten to the deductions yet!
I did run into a problem with scrolling down the page, but this has more to do with our laptop than with the software. We have a laptop with the new HD-aspect ratio. It’s great for watching movies, but not so great for using websites and programs built on the original 4×3 aspect ratio. If you have a new laptop, make sure you scroll ALL the way down and read ALL the questions before moving to the next section.
I didn’t have data saved in TaxCut or TurboTax, so I didn’t use this feature, but it is an option. I was able to import my W-2, which was pretty nifty. I had to provide a couple of pieces of data so it could find me, then it did the rest. Interestingly, I couldn’t import my husband’s W-2, even though we have the same payroll processing company, so it must be something your employer has to choose.
New Homebuyer Credit Instructions and Mortgage Assistant
I really appreciated the new homebuyer credit informational screen and the mortgage assistant section that helped me find all of the potential deductions and credits. My 1099s were correct, but the software prompted me to double-check my escrow statement and amortization table to be sure.
They also provided clear instructions about the required documents for the homebuyer tax credit and submitting my return on paper.
Frequently Missed Deductions
The software also flagged a frequently missed deduction that I certainly would have missed. If you paid state taxes when you submitted your state return last year, that payment is deductible this year. For example, if you owed an extra $500 on your 2008 California return, but mailed the payment in 2009, deduct it on your 2009 return. We owed a hefty sum last year, so I was thrilled to be alerted to this.
Roth IRA Alert
This is a special year for Roth IRAs, or people who want to convert to them. The software offered an explanation and a reminder of how you can take advantage of the new tax rules for 2010.
New Car Deduction
I didn’t have a new car to deduct, but the software includes detailed instructions for anyone who does.
This was one area where I found the software lacking. I couldn’t find a way to go back and re-answer questions once I left that portion. For example, I misunderstood the questions for the Making Work Pay credit. I realized that once I got to the form review section and read the question on the actual IRS form. I went back into the software, but I couldn’t change my answers in the main interview section. Instead, I had to click the button for “whole form” and change the answers on the form, which then updated the software. It took me a while to figure that out, so I would have preferred an option to re-answer those questions.
For those of you who speed-read, like me, the software asks if you received any Economic Recovery Payments. If thought they meant the portion of the credit that was returned to us in our paychecks, so I checked yes. They were actually referring to the $250 one-time payments sent to Social Security and SSI recipients. If you didn’t receive a Economic Recovery check or deposit, then the answer is no.
Overall, this software was very easy to use. It took me about an hour to complete the return, but some of that was spent double-checking documents and collecting escrow documents I wasn’t expecting to use. I’m used to zipping through the software, but I’ve never itemized before, so I appreciated the extra hand-holding the software offered. I’m still irritated that I have to file on paper, but that’s not H&R Block’s fault!
If this is your first year itemizing or you’ve had another major life change (adoption, birth of a child, divorce), it’s probably worthwhile to spring for more detailed software. As you’ll see in tomorrow’s review, it’s easy to miss things you’ve never deducted before.
The download prices are:
$19.95 for Basic (Federal only)
$44.95 for Deluxe (Federal + 1 State)
$59.95 for Premium (Federal + 1 State for self-employed/rental property owners)
The boxed versions at Amazon are:
$14.99 for Basic
$34.99 for Deluxe
$43.49 for Premium
I have one copy of H&R Block At Home software to give away ($150) value. Entering is simple – just post in the comments. Make sure you use an email address you check regularly. Don’t worry – I won’t use it for anything except telling you that you’ve won. Since it’s early in the season, I’ll run this giveaway for two weeks. All entries must be in by March 3 at 6PM, PST.
From time to time, I’m offered an opportunity to do a bit of moonlighting. In my case, it’s freelance writing. Sometimes I accept the offer, and sometimes I don’t. Before accepting any offer, I carefully consider a few factors and discuss with my spouse. If you’re looking for side work, or being offered side work, here are some questions to ask.
Am I Qualified to Do the Job?
A potential client may not be completely familiar with your skills. Before accepting a side job or freelance project, get more details about what they expect from you, when they need it, and what the job requires. It might be something that you can do in a weekend, but it could also be something that requires you to learn new skills. If you don’t have the time to learn them, or don’t want to learn them, pass on the job.
Is the Money Worth My Time?
Ask up front how much the client is expecting to pay and how the pay will be structured. Once you know how long you have to complete the job and what sort of pay you’re looking at, figure out how long it will take you to do it. Are there any events or jobs that will require your time in the interim? How much actual time do you have available to do the job? If you don’t have enough time in your day already, then don’t do the job. If you’re stressed about fitting the extra work into your life, you and the job will suffer.
Even if you have enough time, is the money worth it? If you’ll earn just a few bucks an hour, the additional stress and exhaustion may not be worth it. That’s especially true if you work a full-time job, and would have to do the side job on top of that. On the other hand, sometimes the money is just too good to pass up. If it’s a big job that you’re fully qualified for, and have time for, then it’s probably worth giving up an hour each night and a few hours on the weekends.
Can You Afford the Taxes or Related Expenses?
Remember, any self-employment income over $400 is taxable. Is the job still worth it after you pay 5.3% of it in self-employment taxes, plus income tax on the additional income, and cover the costs for any necessary supplies? If the supplies are expensive, ask the client to pay for those separately. Don’t let them eat into your profit. If you can afford the taxes, make sure you pay estimated taxes in the quarter you earn them, or adjust your withholding to cover it. Failing to pay those state and federal can result in a penalty if you wait until tax day to pay them.
Do I Want to Do the Job?
It sounds simple, but for me this is the trickiest question of all. The allure of extra money is very tempting, but sometimes I’m just not interested in the topic. Other times I don’t want to deal with the client. Still other times I don’t want to give up my already short time. All of those are valid reasons to say no, even if the money is good. If you don’t want to do the job, you’ll just make yourself miserable in the long run.
Freelance work can be a great financial windfall, but only if you can handle the extra work. If you’re overwhelmed, just saying now is okay, too.
Bargain hunting is a real fun. You won’t be able to save a fortune by collecting and using coupons but you will save a precious penny and what’s more important you’ll make a smarter shopper: by learning how to find and organize coupons you’ll broaden your outlook:
- You get to know more places where you can buy anything you need;
- You become aware of broader product range and less popular manufactures;
- You learn to compare prices and estimate what the offer is really worth;
- You make contacts with people who shop online and know a lot; etc.
There are plenty more benefits, however there are a few issues as well. The worst thing that may happen to you when hunting for freebies and bargains is getting scammed. The two things that may happen after that are:
- Your private information can be stolen (and used to send you spam for example);
- Your money may be stolen (which is actually worse).
This post looks at 3 effective ways to research any product or deal reviews to keep your privacy and money safe:
Twitter is a widely popular site where people come to share opinions on anything, including shopping. Using Twitter search you can find conversations about any product or special offer you want to research. One trick that always comes in handy is using sentiment search to find negative reviews or bad experience shared:
! Use a smiling icon in your search that reflects negative emotion
Example: [:( amazon]
The best advice I have ever got regarding online shopping was that I only need to use trusted sources of deals and freebies to keep myself safe from scam. I know there are quite a few but here’s what I am personally using (and tested by experience):
Buxr.com is an online community where shoppers meet to exchange deals and freebies they came across and had some luck with. The resource have three huge advantages:
- Deals are submitted by real shoppers who also review each others’ submissions;
- Submissions are pre-moderated (administrators check deals before publishing them);
- Members rate deals, so you can easily identify most useful and trusted ones:
ListFreeSamples: you won’t find actually reviews at this site but I had to mention this one for one reason that it only uses official sources of freebies and deals; so if you are serious about your privacy, this resource should be in your list:
There are a few useful specialized forums which will help you check if the merchant you are considering has ever been involved into scam.
Scam.com is one of those places (and actually one of the best of them). It is very active and has a huge database of scammers in a number of categories (MLM / Pyramid scams, Internet scams, etc). The forum has a robust search feature for you to quickly look through the mentions of the offer or seller’s name:
And how do you try to keep your privacy safe when shopping online? Please share your thoughts!
The guest post was provided by Ann Smarty, a search blogger and online shopper. If you are looking for guest posts, create your profile at Ann’s forum called My Blog Guest – the place where bloggers and guest posters can meet to exchange posts and help each other.
Last week I read a post in Wise Bread that left me confused. The author argued that you don’t need to make a budget, you just need to “leave a little slack,” by which he meant underspend. His argument was that you can’t be prepared for life’s little emergencies if you budget every penny, because you don’t have flexibility. I think this argument is a willful misunderstanding of how budgets work by someone who just doesn’t like budgets.
When Is Not Having a Plan Actually a Plan?
As the author describes it, he does actually have a plan. His plan is to spend less than he earns. In order to do this, he has to have some idea of how much he earns, and have a mental tally of what he spends every month. He may not think of it as a formal budget, but it’s a budget nonetheless. If he spent willy nilly, he wouldn’t be able to intentionally spend less than he earned, because he’d have no idea when he reached that point.
Budgets Don’t Contain Hard Numbers
This is where I think people get scared – they worry that if they make a budget, then they’ll only have $61 dollars to spend on food and $13 to spend on personal care, etc. This is not how budgets works. Budgets work in round numbers. We don’t budget $423 a month for food. We budget $450. We usually come in less, but if we come in over, it doesn’t bust our budget. We still have flexibility in there because other categories will probably come in low.
He also argues that budgets are pointless because prices change. If you budget $41 for fuel and the price goes up, you’re screwed. That’s just poppycock. Again, budgets adjust. For things that can vary wildly like fuel or energy costs, you pad the typical amount to cover possible overages. Then if you have extra, off it goes to savings for the time when you have to exceed the pad.
Budgets Aren’t Adjusted Every Time an Expense Changes
This is the other misunderstanding. The author believes that you have to change your budget every time one factor of the budget changes. This just isn’t true. A budget is an overall plan to make sure you have enough to cover everything and some leftover. Yes, if gas prices rise over time, you’ll need to adjust the budget upward. But you don’t have to adjust the budget because you spent $30 extra on groceries on month. You don’t have to make a whole new plan every time one item changes for one month.
My concern with this “leave a little slack” plan is that it’s hard for people just learning to manage their finances to just “leave a little slack.” Certainly, you can do that once you’ve gotten out of debt and comfortably understand how your spending correlates to your income. But if overspending got you into debt in the first place, then a budget is the only way to retrain yourself.
It’s like going on a diet. You’ll lose weight if you cut calories for a few weeks, but it will come back when you start eating normally again. However, if you learn to change the way you eat by adjusting portion sizes and truly understanding the impact of the foods you eat, you don’t need to track it forever. Money is the same way – eventually you can get there, but don’t start there.
Yesterday, I started this discussion about the dichotomy between credit lovers and credit card haters. Some people believe credit cards are evil, while others consider them simply to be tools. Yesterday I covered the evil side of things, today the tools side of things.
The “Credit Cards Are Tools” Camp
I fall firmly into this camp. Before anyone attacks me, I have had credit card debt, twice. I entered into it knowingly because I wanted to buy groceries and put gas in my car. I did not spend lavishly or eat out frequently. My debt was the result of unemployment and underemployment the first time, and grad school the second time. I paid it off, and I didn’t blame the credit card companies for charging me interest. In fact, both times I took advantage of 0% balance transfers to manage my debt and pay it off faster.
So, the “Credit Cards Are Tools” camp argues that credit cards are financial vehicles that make life easier. They allow us to earn rewards, reduce the number of bills we have to pay, and carry less cash. The people in this camp are able to pay the balance in full every month, on time, without struggle. Let’s look at these arguments:
Credit cards make life easier. Yes, that’s true in most cases. It’s easier to rent a car or hotel room or buy an expensive item with a credit card. Certainly you can’t shop online with cash – although you can with a debit card. However, cash is easier to spend at other places and it’s preferable for small purchases. And if you find the cards to be too much of a temptation to spend, then they make life very difficult. They also make life difficult if your wallet is lost or stolen and you have to call all the issuers to notify them.
Credit cards allow us to earn rewards. This is true, they do. However, some rewards cards carry annual fees. They also charge higher interest if you fail to make a full payment, which pretty much cancels out whatever rewards you receive. Before you choose a rewards card, make absolutely sure you can pay it off.
We can carry less cash. There have been numerous occasions where I’ve managed to go a week with about a dollar in my wallet. But I don’t recommend it. I try to always have at least $20 in my wallet, because you never know when the power will go out. Businesses always take cash. (Actually, this isn’t true. I tried to pay cash for my co-pay at the doctor, but they didn’t have change, so I had to charge it.)
Credit cards help us manage our bills. My husband are definitely in this group. We put all of our recurring bills (except loans) onto one credit card, which greatly reduces the number of bills we have to track every month. This was especially handy for me in the early days of online banking when my cable and phone companies couldn’t seem to process online payments without sending me a late bill. However, it’s a bad plan for people who carry revolving debt, because now you’re paying interest on your phone bill!
What I found most interesting was how entrenched these two camps were. There seems to be no changing anyone’s mind. It’s very similar to listening to Congress debate actually. So where do you fall? Are credit cards evil or are they tools? Do you fear credit or do you love it?