Whether or not your teen should contribute to the family’s budget is a personal opinion. Time have changed, however, thinking back to when we were growing up, our family was on a budget and we applied for part-time jobs after school so that we could help out with household expenses.

Having your child contribute to the family’s budget is one way to teach them financial responsibility. Of course, depending upon your family budget it may be a necessity for your teens to contribute. Regardless of your circumstances, every teen should consider contributing something to the family budget.

One of the ways in which a teen can become responsible not only for his own expenses but contribute to the family expenses as well, is to acquire an after-school job. A few hours a day can make all the difference not only in the teen’s self-confidence, but the empowerment gained by becoming a responsible member of society.

How much a teen contributes depends on the needs of the family and other personal circumstances. Even if the family is financial stable, it is certainly worth it for the teen to contribute a modest sum.

One woman related that when she was a teen, she took a part-time job while in high school at the age of fifteen. She gave most of the earnings to her parents, and just kept a small sum for transportation, lunch, and sometimes dinner. Her parents didn’t ask for anything, but she felt compelled to help with the family expenses. It was just the way she was brought up.

For most teens today, there is the temptation to buy all of the latest electronic gadgets with their money. One example is a recent report about a teen that spent over 30,000 hours in one month text messaging her friends. Excessive? Most definitely. Were her parents aware of it? Not until they received the bill.

Should your teen contribute to the household expenses? The decision is personal but your teenager will certainly learn about the value and responsibility of money by contributing at least a small amount to the family budget.

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com

Let’s get right to the point. Leasing a car is almost always a very poor financial decision. I’m going to focus the next few Woody’s Goodies on car buying tips. But the first tip is, DON”T LEASE A CAR! Summarized below are my views on the disadvantages of leasing a car:

1. The selling price is usually MSRP. Many dealers hide this value from you, diverting you to low monthly payments. Many car sales people will simply tell you its cheaper to lease, where you can’t figure out that the price charged was MSRP, and stole your trade in because they are not required to disclose a trade on a lease form;
2. Confusing finance charges. Some dealers try to confuse you and lie about something called the “money factor” and often won’t even tell you the money factor. Well, let me tell you about the money factor. It’s usually a very high interest rate as compared to the interest rate you can obtain if you purchased a car. To convert the money factor into an interest rate, simply multiply it by 24;
3. Long-term cost of leasing is more than the cost of buying no matter what the dealer tells you. Dealers don’t compare apples with apples when telling you that a lease is cheaper than buying. Let me illustrate what happens. Most people lease for 36 months, or borrow (if purchasing) for 60 months. However, dealers like to compare a 36-month lease payment to a 24-month loan payment (even though it’s rare for people to borrow for 24 months). Therefore, they can convince people that buying a car is much higher than leasing a car because of the appearance that the monthly payment on the lease is much less. They don’t tell you that they packed the lease payment with hidden extended warranty, credit life insurance, $500 dealer acquisition fee, $300 disposition fee, etc.;
4. Depreciation in any auto lease is RIDICULOUS. With leasing, every 3 year you pay approximately 50% depreciation in car value, so after 2 leases in 9 years, you have paid 150% depreciation. If instead, you purchased the car, and drove it for the same 9 years, you still have not used up 90% depreciation. Obviously, buying is cheaper, end of story;
5. Possible double tax when leasing a car. Most states tax your monthly payment. But some states like Illinois and Texas tax the full amount of the car even though you are only using up to 50% of the value then returning it. Even worse, if you buy the car at the end of the lease, you again pay sales tax on that residual amount! Don’t even consider leasing if you live in Illinois or Texas.
6. High Insurance Cost. Lessors require you have minimum insurance policies of $300,000;
7. If you lease the car, you may not get a manufacturers rebate. This can increase the cost by $500 to $1500, so make sure you get the rebate! Some dealers try to get out of it, and they may keep it for themselves;
8. Lemon laws don’t cover leases in some states. For example, the Illinois attorney general’s office stated that the three day right to cancel law does not apply to an auto purchase, and Illinois Lemon Law only applies to new cars, not used car sales of leases;
9. Misleading dealer lease ads. Many ads state very low monthly payments, like $275 per month for a BMW. However, there’s usually only a tiny stock number of the only car there at that price. To get low monthly payments, you need huge down payments (which are sunk cost lost forever since you don’t own the car). The fine print also may state that taxes are extra;
10. Calculate your own lease payment. Dealers love to volunteer to do a lease versus purchase analysis for you. Tell them, sure go ahead. Then tell them you want a print out of the analysis so you can take it home and check it. You ten MUST be able to figure out the lease payment on your own, and lookup residual values (available on various web sites (i.e. Edmunds.com)). For your convenience, I have attached a spreadsheet which will help you in calculating you lease payment (LEASE PAYMENT CALCULATOR ATTCHED);
11. Mileage limits. Most leases limit you to 12000 miles/year. Some are 10,000 miles. Many of my friends have paid thousands of dollars at the end of their lease for excess mileage.
12. You are responsible for program maintenance. Better keep damn good records of every oil changes tune up, etc. and do them on schedule too. Don’t give them any chance to claim excess wear and tear; and
13. All 4 tires must match! This is in every lease contract. Leasing companies charge you for mismatched tires, and they charge MSRP, which you can get cheaper in a tire shop;
14. Accidents may trigger early termination. Some leases actually may terminate upon an accident, and you’re still obligated to pay off the lease. Car insurance covers the damages, but not the cost of paying off the lease. You’ll need “gap insurance” for that (another additional cost of leasing). You should definitely buy gap insurance when you lease, but shop it, because if you buy it from the dealer, you’ll b e getting a raw deal;
15. Dealers love to offer you and early out on your lease. Dealers will often volunteer to pay your early lease termination penalties, and buy you out of your current lease. But they do this so they can roll you into another lease (thereby selling another car), and in essence they have just financed all that debt into the new lease. Now you’re paying off 2 leases. Thanks for nothing!
16. Tax law changes have reduced the tax considerations of leasing versus buying, and focused the decision on the real economics as mentioned above. Since 1998, taxpayers have the option of using the standard mileage rate on either leased or purchased autos. Prior to 1998, standard mileage rate was only available if the taxpayer owned the auto. This removed the advantage that purchased autos had over leased autos regarding required record keeping.

Do yourself a favor, don’t lease a vehicle. As a matter of fact, buying a 1 or two-year-old vehicle is by far the best way to go. Today, you can even get those used vehicles with 5 and 10-year warranties still in tact. If for some crazy reason you decide to lease, please use my lease calculator (file attached) and make sure the dealer isn’t ripping you off.

INTRODUCTION

The sub-prime mortgage crisis has had a cataclysmic affect on our economy. As a result, this domino effect caused banks to fail, corporate mergers, unemployment, home foreclosures, and a continuous stream of layoffs that grow in numbers each month.

While the Treasury bailout, more commonly known as TARP, whose purpose it was to infuse banks with capital so they could continue the lending process; this did not occur. Instead, the banks are withholding money due to the fact that they are anticipating more home foreclosures that will drain their resources over time.

As one United States Senator put it, “An unknown fact is that many banks are insolvent, and the money they have received is being held for future debt contingencies.”

What does this mean for the average consumer? Tightened restraints on spending, paying down debt, and ensuring there is enough money available to weather the economic storm that is still raging.

For businesses, the result of this crisis is alarming. They cannot borrow money for additional inventory. One example is the auto industry. Last year alone their sales were down an average of 44%. Many of the well-known electronic chains are closing, one of whom is Circuit City. Microsoft let go of 5,000 of its employees. And the news just keeps getting worse.

The volatile market shows no signs of leveling off, and every time a company reveals its quarterly earnings, the market takes a dive. A recent report stated that London is officially in a recession. The market has affected the global economy and its workforce as well.

Here are some basic statistics. The average family is receiving a reduced income of $2000; there are approximately 9,000 families that are losing their healthcare insurance every day, 11000 workers are losing jobs on a daily basis, and one in ten families are currently in foreclosure.

While the news is grim, the new Stimulus Recovery Package may be our saving grace. It will take time for it to trickle down to the average consumer; nonetheless, all efforts by top economists in the country are aimed at solving this financial crisis.

This report will offer tips and suggestions on how to survive this credit crunch. Much sacrifice will be required; from budgeting to eliminating wasteful spending. It will also address the need to change one’s mindset about utilizing credit cards and becoming more financially responsible.

We will also add a resource page offering websites with tools to help you determine the best way to pay off the amount of debt you currently sustain. In addition, there will be websites including FDIC, FHA, and others that offer information on credit and mortgages. Coupon and discount sites, comparison shopping sites, and others will also be listed to help you trim the fat off your budget.

The Family Budget

Today, more than ever, it is important to have a working family budget. While statistics reveal that most families become bored with the budget after two months, the method you use will determine its effectiveness.

Prepare a budget that you can access on a weekly basis in order to keep track of your spending. Purchase an accordion folder in which you can place your weekly receipts. This will serve you well at tax time.

Try to be as realistic as possible based on the family’s income. If you have a budget, revisit it and eliminate additional wasteful spending.

TIPS:

• Cancel magazine and newspaper subscriptions. Also consider whether those gym memberships, that you hardly use, are worth the added expense.
• Instead of dining out every week, limit it to once a month and choose an affordable restaurant.
• Do you really need to go to the car wash every week? Get the kids involved and wash your own car.
• If you go to a salon to have your hair colored once a month, you can easily do it at home. Also, eliminate expensive haircutting salons. Surely, you have one in your neighborhood who could use the business.
• Manicure and Pedicures monthly? Save money by doing it yourself at home.
• We’ve all been in the position where upon purchasing electronics we are relentlessly talked to about warranties. If it is not necessary, forego the exorbitant purchase.
• Do you really need all those premium cable channels? Eliminate those that offer a substantial savings.
• Put away at least six months worth of income in case you are laid off or unemployed.

As mentioned earlier, fine-tune your budget so that it covers only those necessities you need, not what you desire. If you smoke; quit. Take the $10.00 you would spend on a pack and put it into a vacation club or apply it a credit card debt.

In a recent news article, a teenage girl spent over 30,000 hours text-messaging her friends. Check your cell phone bills and limit the amount of text-message usage per child.

Note: A recent study on the affects of text-messaging revealed that students were unable to properly articulate their answers on tests. This was due to the fact that they were unconsciously answering questions using text-message lingo.

While cell phone technology has advanced over the years, it can be a costly item to own.
These devices also pose a danger to drivers who willing choose to put themselves and other drivers in jeopardy by talking while driving.

There is current legislation prohibiting the use of hands-free cell phone use. This is yet another safety measure to ensure drivers of all ages to not fall victim to the carelessness of others.

Become Supermarket Savvy

There was a time when you could buy more groceries for $100.00 than you can today. Now is the time to consider alternative methods when shopping at the supermarket.

This requires a change in habit. Reduce food waste. Billions of dollars are attributed to the disposal of food. According to the USDA, 25.9 million tons of food gets thrown out every year.

In addition, it is a detriment to the environment. The EPA tells us that “when food rots, it releases methane – a greenhouse gas which the EPA says is 20 times more damaging to the environment that carbon dioxide.”

You can easily prepare leftovers so that every scrap of food is utilized and thus the waste is eliminated. Another way you can save money during this credit crunch is to shop wisely. Check our resources page for online coupon sites.

TIPS:

• Before your trip to the supermarket, make a list. Ensure that you are not buying items you already have. Take inventory of your pantry closet and note only those items you need.
• Check the Sunday newspapers and circulars and start clipping coupons. Go online to find grocery coupon sites and print those coupons as well.
• Never shop on an empty stomach.
• Buy store brands and/or generic brands.
• Avoid impulse buying.
• Buy in bulk, if warranted.
• Avoid buying an item that you don’t need simply because it’s on sale.

Prepare meals ahead of time. In today’s world of long work hours and little time in the day to accomplish most essential tasks, dining out instead of cooking at home can be a costly endeavor.

Here’s a suggestion: After your supermarket trip, spend a Saturday preparing meals for the following week or, in some cases, two weeks. Place the meals in separate containers, label them, and put them in the freezer.

This is not only a great time saver, but money saver as well. Besides, the meals can be easily prepared (such as soups and stews), and are very healthy and nutritious as well.

As for buying in bulk, ensure the item you do buy will be used in a timely manner. It makes no sense to buy bulk items that may save you money but are only going to prepared twice a week.

Note: Most generic brand names are actually made by well-known companies. For example, there is only one Cheerios, but its counterpart is made by the same company and is aptly labeled due to the way in which it was processed. That is, it may not have evolved into the highest grade of Cheerios – but it is still Cheerios.

Energy Efficiency

Becoming more energy efficient has become one of the most important topics of our day. In addition, besides its positive affect on the environment, a family household can save substantially by following some these suggestions.

TIPS:

• Winterize your home.
• Purchase energy-efficient light bulbs.
• Ensure all appliances have the Energy Star seal.
• Utilize energy star fans.
• Turn off the lights when leaving a room.
• Shut down the computer when not in use.
• Ensure that the TV is turned off after you shut down the cable.
• Wash a full load of clothes on the cold cycle.
• Take shorter showers.
• Do not let the water run while shaving.
• Check all pipes to ensure there is no leakage.
• Maintain all drains.
• Clean the air conditioner filter regularly.
• Keep the thermostat at a low temp during the day.
• Keep the refrigerator thermostat at its recommended temp, and ensure the compressor is working properly.
• Use the microwave whenever possible.
• Use the dishwasher only when you have a full load.
• If your energy bills are too high, call other companies and compare rates.

As far as gas is concerned, while the prices are at their lowest it doesn’t mean they will not increase.
• Make a list of errands and carry them out in one trip.
• Walk to local stores instead of driving.
• Carpool when you can.
• Park on neighborhood side streets instead of feeding the parking meter.
• Keep your vehicle well-maintained.
• Increase the deductible to save money on insurance.
• If you are going on a weekend trip with the family, check the online gas prices in the areas along the way.
• Always drive the speed limit and use HOV lanes whenever possible.

There are many avenues you can explore in order to survive the credit crunch. Energy efficiency will not only save you money on a yearly basis, but aid in protecting our precious environment.

Check the resources page where we have provided you with information on Energy Star products, as well as a website listing gas prices by state.

Credit Card Debt and Mortgages

Probably the most stressful part of this recession is the debt most of us have incurred and need to pay down. The credit crunch has not only increased mortgage rates, but credit card interest rates as well.

Here are some suggestions to pay down your current debt so that you can put money aside for any eventuality.

TIPS:

• Begin paying down credit card debt using the “debt snowball.” Make a list of the highest interest card first, then the second, and so on. Pay as much as you can towards the first card. When it is paid off, use the same amount plus a bit more to pay off the second. Follow the process until all the cards are paid off.
• Cut up the credit cards except one. Only use it for emergencies.
• Contact the credit card companies and ask to have the interest rate lowered.
• Pay for all purchases with cash. If you can’t afford it, don’t buy it.
• Utilize debt consolidation, if necessary.
• Transfer high interest rate cards to one that offers 0% APR for at least two years.
• Check your credit report annually. Make revisions to any items that are questionable.
• Find out what your FICO score is. This can determine whether or not you will be approved for a loan, whether it’s a debt consolidation loan, student loan, or second mortgage.
• If you find that you can no longer afford to pay your debt, seek the advice of a certified financial counselor.
• Use automatic deduction from your checking account to pay credit card bills. This will reduce any chance that the bill will not be paid on time which could adversely affect your credit rating.

In line with this credit crunch are worries that mortgage rates will increase the foreclosure rate. As we have seen, this is exactly what is occurring.

• If you are having difficulty paying your monthly mortgage, check to determine if there are cheaper mortgages available. Note, however, that fees will be included.
• Look into interest-only mortgages. This is where you pay the interest for a specified amount of time and then proceed to pay the principle.
• Check our reverse mortgages as well. This may make the difference between keeping your home and foreclosure.
• Increase the deductible on your home insurance to save money.
• Do not fall for the latest predatory lending scams. Seek out information from credible online sources. (We have included many on the resource page.)

IRA, 401K, and Taxes

Undoubtedly, you may have lost a substantial amount of money from your 401K. Keep contributing to it. Eventually the market will correct itself and the last thing you want to do is withdraw the money prematurely.

Keep your money in the bank. The FDIC has increased the insurance to $250,000. If your bank has closed and has been taken over by another bank, contact them to ask questions about your accounts.

As for the IRA, there is new information that can offer additional savings to you and your non-working spouse. The “Spousal IRA” as explained by Smart Money as:

“A nonworking spouse can make a deductible IRA contribution of up to $5,000 for 2009 ($6,000 if age 50 or older as of 12/31/09) as long as the couple files a joint return, and the working spouse has enough earned income to cover the contribution. However, the deductibility of the nonworking spouse’s contribution is phased out for couples with adjusted gross income (AGI) between $166,000 and $176,000, provided that the working spouse is covered by a qualified retirement plan (via a job or self-employment). The working spouse’s ability to make a deductible contribution for 2009 is phased out starting at AGI of $89,000. For example, say a married couple has 2009 AGI of $120,000. All the income is from the wife’s job, and she is covered by a qualified retirement plan at work. The nonworking husband can make a $5,000 deductible contribution (because joint AGI is well under the $166,000 threshold for the phase-out rule). If he will be age 50 or older as of 12/31/09, he can contribute and deduct $6,000. However, the working wife cannot make a deductible contribution (because joint AGI exceeds the $109,000 top end for the phase-out range).”

Another area you should explore is Certificates of Deposit, Money Market Accounts, and savings accounts. For your information we have listed the appropriate websites on the resource page.

Tax preparation is just around the corner. Most working individuals claim zero on their tax return. This enables them to receive money or pay fewer taxes. One way you save money is by claiming dependents and thus you will receive more money in your paycheck. If you take that money and place it in a CD, IRA, 401K or savings account, you will be that much better off at years end. Although you may have to pay taxes, consider that the money saved is earning interest.

Note: If you itemize your tax deductions, we have listed the IRS Tax Deduction Write-offs on the Resource Page. This is important because most of the time items that can be written off are not.

Check out the IRS page to ensure your accountant is not only in compliance with the current regulations, but are utilizing every write-off accordingly and appropriately.

The Lilly Ledbetter Fair Pay Act

While this may not fall under the heading of “credit crunch,” it is nonetheless an important topic to mention since it affects all working individuals, especially women.

The Lilly Ledbetter Fair Pay Act was enacted into law in January of this year. This came about because the plaintiff, Lilly Ledbetter, was discriminated against by her employer.

When she rose to the ranks of manager in her company, she was paid a specific salary. What she didn’t know was that a male counterpart, with the same job description, was making significantly more than she.

When she was anonymously informed of this situation 15 years after the fact, she filed a lawsuit. Although she won the suit, it was appealed to the Supreme Court. They, in turn, denied her case since they claimed “she did not file a lawsuit within 180 days” after obtaining knowledge that her salary was not commensurate with the male manager.

In other words, she would have had to file the lawsuit after receiving the first pay check as a manager. This is ludicrous since there was no way for her to know that she was being discriminated against until she was informed years later. Therefore, complying with the law by filing a lawsuit within 180 days of the first check is a moot point.

In essence, the Supreme Court overturned a law that had been in effect for 40 years. The U.S. Senate decided to reinstate the original law and was successful in their endeavor.

The point of relating this information is that women currently earn 77 cents for every dollar a man makes. But any woman who may be affected by wage discrimination may not be aware that such an egregious act is occurring.

Thus, there may be women around the country who are not receiving fair pay for equivalent work.

One of the arguments made during this case was that most corporations do not allow their employees to discuss their pay. This is true. The only exception is the Department of Education and the US Senate. Their pay scales are posted.

At a time when there are more women in the workforce than ever before, it is critical that women ensure their pay scale falls in line with those of their counterparts: Equal pay for equal work.

If you find that you are not receiving your fair share, it is incumbent upon you to talk to your employer. Wage discrimination is against the law.

TIP: Talk to your employer and ask if you can work extra hours to make additional money. Moreover, demonstrate that you are a hard worker and will make yourself available for any project your boss requires. With many corporations laying off workers, they may think twice after witnessing your strong work ethic.

If your current employer cannot afford to offer overtime work, seek out a second part-time job, either at home or close to your home.

Spending Habits

As the nation faces more than a trillion dollar debt, consumers around the world are facing insurmountable debts of their own. At the outset, we began this report with the importance of family budgeting. Enough cannot be said why it is important to create a budget that is sensible and one the entire family can live with and up to. Yet, there is one aspect of spending that causes great angst among consumers – credit card debt.

There is a widening trend among credit card owners that prevents them from accepting their debt from a realistic point of view. They know they owe quite a sum of money, but are hesitant to look at the actual numbers. This type of denial is the catalyst that brings them to the inevitable task of seeking help because they have fallen deeper into debt.

Some would argue that consumers view credit cards as “play money,” and as such, are so emotionally attached to their cash that parting with it can cause additional angst. With most stores offering quicker methods to pay for items, one would have to ask if we are not falling prey to the credit card company’s insatiable desire to increase credit card usage. There is a TV commercial promoting a store that literally has customers singing and dancing as they order food and then swipe their cards to pay in a most orderly fashion. And the one lonely customer who has sense enough to pay with cash is portrayed as the outcast, because he is holding up the line.

This commercial and others like them are subliminally planting messages in our subconscious that it’s not only appropriate to own credit cards, but it saves time and rewards you with points, cash, gift certificates, and other compensation. This is another incentive to bring new customers into the fold.

While not everyone follows the path to credit card usage, not having a card prevents you from establishing credit. Thus, if you wish to buy a car, take out a student loan, or make improvements on your home – without a credit report you probably will not succeed in acquiring the desired loan.

This catch-22 situation has plagued many consumers for years. Yet, the most responsible among us, that is, those who only pay with cash, have become relics in a society that views credit as the only legitimate form of purchasing power.

At a time when this recession may mirror the Great Depression, economists around the world are concerned about how we can turn the economy around. The phrase often used is, “We’ve never faced anything like this before.” This holds little hope for those of us who have been waging our own battles to eliminate credit and become more financially responsible.

What is the answer? Perhaps, it is returning to a time when credit was unheard of and cash was the only method of payment. If one couldn’t afford to buy anything with cash, one had to save until they could. If you are in the same predicament most consumers are today, and have mounting debt that is becoming more unbearable by the day, here are some tips you can utilize to alleviate the stress you are currently facing.

TIPS:
• Think twice about the item you are about to purchase. Do you really need it?
• Either bundle your TV, phone, and internet service or eliminate the home phone in lieu of the cell phone. Also, you can use SKYPE to make long distance calls from your computer for free.
• Comparison shop as often as you can. While it make a little more time to find the best bargain, isn’t it worth it to save money?
• Shop online if you must. Utilize the discount sites offered on the Resource page and look for well-known safe sites that offer free shipping.
• When planning your next vacation, look for special deals through your travel agent or online. Currently, the airlines are offering terrific prices. Check to ensure kids are free when booking hotel accommodations.
• If you are in the market to buy a new home, it may be worth it to wait until the economy becomes more balanced. Even though homes are decreasing in value, it may be prudent to put off buying a home until you have more than 25% available to place as a down payment. This will allow you to obtain lower interest rates as well.
• Take inventory of items in your home. Those items that are new or used and have cluttered up your attic, basement, or garage can be sold on eBay. Any profit is still a profit.
• Have a family discussion about the household budget. Determine where additional cuts can be made. If you have teens, determine if this is a good time for them to acquire a part-time job after school so they can contribute to the household expenses.
• If you have been let go or laid off, seek out some form of health insurance for you and your family. (Check out the website on our Resource Page)
• Stay healthy. Exercise and a proper diet are essential during these difficult times. With healthcare costs rising, preventative care will not only get you through this recession but will leave you feeling stronger and healthier.

Finally, and this cannot be stressed enough, don’t panic! Panic creates stress, and when you are stressed you can no longer think rationally about the problems you face. Just do the best you can under the circumstances. Keep hope alive and create a home environment that is healthy and calm. The children will notice any change in your behavior, so have a family gathering and discuss the economic crisis in terms they can understand.

Note: There are several supermarkets that are offering to fill antibiotic prescriptions for free. Check Stop & Shop, Wegmans, and Safeway to determine how long this offer will last.

Resources

Budget Plan Worksheets: http://www.bankrate.com/brm/news/Financial_Literacy/Jan07_budgeting_worksheet_a1.asp?caret=6

Comparison Shopping Sites:
http://www.pricegrabber.com
http://www.bizrate.com
http://www.nextag.com
http://www.dealtime.com
http://www.mysimon.com

Online Grocery Coupons:
http://www.wow-coupons.com/grocery.php
http://www.couponcabin.com/grocery-coupons.htm

Discount Coupon Sites:
http://www.couponwinner.com/
http://www.anycoupons.com/
http://www.couponalbum.com/category/food.htm
http://www.couponfetch.com/
http://www.ebates.com/index.htm;jsessionid=abc0nCW5q3msfcIKYBIxr
http://www.dealhunting.com/
http://www.currentcodes.com/

Energy Star Light Bulbs: http://www.energystar.gov/index.cfm?c=cfls.pr_cfls

Energy Star Ceiling Fans: http://www.energystar.gov/index.cfm?c=ceiling_fans.pr_ceiling_fans

Gas Prices by State: http://gasbuddy.com/GB_StateList.aspx

FDIC and Credit Cards: http://www.fdic.gov/consumers/consumer/alerts/facta.html

FDIC and Mortgages: http://www.fdic.gov/consumers/looking/index.html

FHA: http://www.fha.com/

FHA Mortgage Guide: http://www.fhaloanpros.com/

Certificates of Deposit: http://www.bankrate.com/brm/calc/cdc/CertDeposit.asp

Money Market Accounts: http://www.bankrate.com/brm/rate/mmmf_home.asp

IRS Tax Write-Offs: http://www.irs.gov/taxtopics/tc500.html

The Lilly Ledbetter Fair Pay Act: http://www.nwlc.org/fairpay/

Health Insurance Information: http://www.ehealthinsurance.com/ -

CategoriesBasic Rules on Buying Real Estate Are Good (8) Free Is Good (8) General (16) Sticking to the Basics Is Good (5) Tax Tips (8) ArchivesMarch 2009 February 2009 January 2009 BlogrollCapital Investment Advisors MetaSite Admin Log out Entries (RSS) Comments (RSS) Should My Teenager Have A Credit Card?posted by: woody | » Edit «• Sunday, March 15th, 2009
According to an article in the Wall Street Journal, “plastic has become a fact of life in the U.S., even for teenagers, who made $169 billion of consumer purchases in 2005. 18% of youths ages 12 to 19 had debit cards, while 8% had credit cards.”

There is something inherently wrong with these statistics. Giving a 12-year old a debit or credit card is sending a message that could be interpreted in the exact opposite way in which it was intended.

While most financial planners and bank officials feel that is it perfectly okay to give teens credit cards, it seems that opponents of this argument should also have their day in court as well. In their defense, here are some thoughts.

Children learn from their parents. If parents have conversations with their children and involve them in household budgets and the like, it seems clear that as they grow up they are more likely to become financially responsible. Does this mean they should be given credit cards? Probably not at such a young age, but in the likelihood they are, they will be better equipped to handle the responsibility of owning one.

Some parents, on the other hand, feel justified in allowing their teens to own credit cards as long as boundaries are met and responsibility is shown by the holders of these cards.

One financial planner recommends that children should be taught at an early age about the basic principles of saving, budgeting, and being able to distinguish between things they need and things they want.

If parents believe their children are able to cope with responsibility of owning a credit card, they can choose either a debit card or a prepaid debit card.

However, there are disadvantages in allowing teenagers to have a credit card. Children and/or teens are not always aware of the consequences of using credit. They may overuse the card and expect it to have a balance no matter what they buy.

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Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com

According to an article in the Wall Street Journal, “plastic has become a fact of life in the U.S., even for teenagers, who made $169 billion of consumer purchases in 2005. 18% of youths ages 12 to 19 had debit cards, while 8% had credit cards.”

There is something inherently wrong with these statistics. Giving a 12-year old a debit or credit card is sending a message that could be interpreted in the exact opposite way in which it was intended.

While most financial planners and bank officials feel that is it perfectly okay to give teens credit cards, it seems that opponents of this argument should also have their day in court as well. In their defense, here are some thoughts.

Children learn from their parents. If parents have conversations with their children and involve them in household budgets and the like, it seems clear that as they grow up they are more likely to become financially responsible. Does this mean they should be given credit cards? Probably not at such a young age, but in the likelihood they are, they will be better equipped to handle the responsibility of owning one.

Some parents, on the other hand, feel justified in allowing their teens to own credit cards as long as boundaries are met and responsibility is shown by the holders of these cards.

One financial planner recommends that children should be taught at an early age about the basic principles of saving, budgeting, and being able to distinguish between things they need and things they want.

If parents believe their children are able to cope with responsibility of owning a credit card, they can choose either a debit card or a prepaid debit card.

However, there are disadvantages in allowing teenagers to have a credit card. Children and/or teens are not always aware of the consequences of using credit. They may overuse the card and expect it to have a balance no matter what they buy.

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com

Saving for a family vacation during the year is possible, through some simple measures.

Most banks have a vacation and/or holiday club where you deposit a specific amount each week depending upon how much you wish to save. For example, a Christmas club for $5.00 would yield $250.00, whereas a Holiday Club for $25.00 a week would amount to $1250.00 for the 50-week period.

In addition, you can automatically withdraw an amount from your paycheck and have it deposited to a savings account.

If you have a family budget, you may already be setting aside money for the family vacation. But there are other ways you can save throughout the year.

Here are some ideas:

• Cancel magazine and newspaper subscriptions.
• Bundle your cable, internet, and phone service.
• Call credit card companies and reduce the interest rate.
• Become more energy efficient.
• Bring lunch to work as well as a thermos of coffee.
• Instead of eating out once a week, try once a month.
• Walk to your local stores instead of driving.
• Park on side streets where there are no meters.
• Ask everyone in the family to put the change they have accumulated at the end of the day into the family jug.

If you consider how much you can save by engaging in any one of these money-saving tips, imagine how much you could save if you followed all these tips.

If you are a smoker, quit. $10.00 a pack per day or $100.00 a carton per week can pay for a fabulous vacation for the entire family.

Utilize grocery coupons whenever possible. There are a myriad of online websites devoted to discounts, printable coupons, and other savings. Comparison shop; check out consignment stores for clothes; utilize the library to take out books, DVDs, and magazines.

Money is very tight these days, and this recession is not going to get better any time soon. If you want to spend even a few days away with the family, try these ideas to begin limiting expenses and finding alternative ways to save money.

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com

A sub-prime mortgage is that which is given to homeowners who have less than a stellar credit rating.

For example, someone with a FICO score of 600 or lower may be eligible for a mortgage, but the interest rates would be much higher than for someone with a FICO score of 700 or above.

The sub-prime mortgage crisis was a result of homeowners who dealt with unscrupulous lenders. These lenders offered mortgages, in some instances, with no money down. They then resold the mortgages to others and the interest rate dramatically rose, and the homeowners were unable to meet the monthly payments.

As a result, most banks are holding what is called “toxic mortgages,” and while the Treasury Department gave them bailout money so they could begin lending again, instead they are holding on to the money in expectation that there will be additional foreclosures.

Lenders who offer sub-prime mortgages often charge exorbitant interest rates based on the risk factor. We know that many banks became insolvent as a direct result of these toxic mortgages.

This sub-prime mortgage crisis had a direct affect on the stock market and, as they say, the rest is history. The banks stopped lending, businesses could not restock their inventory, and many companies are going out of business or merging with larger companies.

Currently, the Federal government is debating whether or not to buy these toxic mortgages from banks (which was originally the case with the first bailout money), but since the value of homes is in decline, a determination of how much to offer for these unpaid mortgages is a major consideration.

Recently, there were news reports that predatory lending has begun again. This can only cause undue hardship for homeowners in particular, and for the global economy in general.

The best course of action for anyone considering buying a home is to wait until their credit standing has improved and their FICO scores are in the low to mid 700s. In addition, it is also recommended that a down payment of at least 25% or more would be required for banks to even consider a mortgage.

Brought To You By
Woody Alpern
CPA/PFS
http://www.yourwealth.com/
Woody@yourwealth.com

In order to determine the advantages and disadvantages of internet banking, one must ask an important question from the get-go. Is online banking safe?

If you visit the FDIC website, there are several pieces of information to be aware of before deciding to bank online.

• “Read key information about the bank posted on its website.
• Protect yourself from fraudulent websites.
• Verify the bank’s insurance status.
• Check the FDIC’s online database of FDIC-insured institutions.
• Be aware that a bank may use a different name for its online and traditional services.”

Having said that, the advantages of internet banking include the following:

• Unlike traditional banks, internet banks are open 24/7.
• You can access your bank from any country.
• Transactions and confirmations are much quicker than traditional banking processes.
• You can utilize a multitude of bank accounts from one banking website.
• Most online banks offer the latest tools and software to make your online banking easier to use.

What are the disadvantages of internet banking?

• If you have been a victim of identity theft, you may think long and hard about giving out personal information online.
• Some banking websites may be difficult to utilize. It may take some time before you understand the ins and outs of internet banking.
• There are instances in which banks change their website structure or add new features which may take time to understand. You may also have to give them your account information all over again when this happens.
• At a time when identity theft is at an all-time high, and banks are closing or merging, it may be wise to visit the bank in question (if they have a physical office) and determine if their online banking services are right for you.
• It may be difficult to get used to an online bank. After all, you are giving them vital information that could be accessed by unscrupulous individuals.

While there are many individuals who swear by online banking, there are others who would rather deal with their banks on a personalized basis. Regardless of whether or not you decide to use the internet, it’s a good idea to read the FDIC website information, talk to the personnel at the bank (if applicable), and then make a decision based upon everything you have learned.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

There is an old saying that states: Never shop on an empty stomach. Think back to the last trip you made to the supermarket. Did you have breakfast or lunch before you left home? If not, how much more did you spend on items that were not on your list?

We all do it; we make a list for the supermarket and once there we peruse each aisle looking for the items on our list but inevitably something not on the list winds up in the shopping cart.

Sometimes we buy items because they are on sale. We make an evaluation that we are saving money by doing so. Other times, we find an item we may have seen on TV and want to try it. Or sometimes the urge is so great that we have to buy that particular item.

Being supermarket savvy requires three things: First, we buy only those items on the list, second, we buy generic or store brands instead of the name brand items, and third, just because we saved money on one item doesn’t give us the go-ahead to buy a more expensive item.

It’s a mind game we play with ourselves. We use coupons and save money, but then we spend it elsewhere.

This is also true for buying items in bulk. Here’s a great example. One woman loves to buy the rice pilaf at her supermarket. Unfortunately, it is so popular they run out of stock quite frequently. She checks online to see if it is available and finds it on Amazon.com. She buys a case.

Is this a rational way of shopping? Some may say she is wasting money on a product that is a brand name and could easily buy another type of rice and make her own pilaf. Others would argue that this is something the family loves to eat, so why not buy the case. Who’s right? Perhaps both are.

On the other hand, if an individual bought a case of canned tomatoes simply because they were very cheap but only prepared pasta dishes infrequently, could you also make the argument that this is a waste of money? Some would say yes, especially if you are on a budget.

So the moral to this story is just buy what you need, use coupons, buy store brands, and only buy in bulk if you are going to use the product continuously.

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com

Recently, there was a TV program about people who are having problems paying there debts. One woman was chosen to receive advice from a financial counselor. The result of this encounter was enlightening.

The financial counselor went over the woman’s credit report, income, and debts. After a while, she looked at the woman and told her she was in debt for $108,000. There was instant shock on the woman’s face. She hadn’t realized that she owed that much money.

The financial counselor asked the woman to call several credit card companies, beginning with the company which had the highest interest rate. After several calls and definitive tones, the woman was able to lower most of her credit card interest rates. This example is just one of many scenarios that most people are facing during this recession.

Most would suggest she should have known how much money she owed. While the general consensus would agree, the truth is the woman was fearful of what she might find. Instead, she paid the minimum balance on her cards and it wasn’t until she found herself in a position where she might lose her home that she finally faced reality.

This story is analogous to someone with a weight problem, for example. Perhaps the doctor has been telling the patient for years that he needs to lose weight or he will face serious consequences.

The patient listens to what the doctor is saying, but the subconscious mind is not accepting the reality. Instead, the patient is justifying his actions by giving the doctor excuses.

In both examples, fear is the catalyst that prevents each of these people to face the truth. Denial also plays a role in their inability to accept the reality that they are on a precipice and, unless and until they change their mindset, they are doomed to repeat the same mistakes over and over.

We all have our own financial realities to face; the question is: Are we strong enough to meet the challenges and make the changes needed to find the path to financial freedom?

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
Woody@yourwealth.com