Ways You Save That Embarrass the Family

I thought this would be interesting - and perhaps even give some of us some great money savings ideas.   Did it work, and what did it cost you?  Have you been crossed off the family tree?  Did you actually save something during the episode, and if so how much?  Will the family ever be seen in public with you again?

Saving on the phone bill

How can you bring down the phone bill?  If you don't have a cell phone with a gazillion minutes available and unlimited nights and weekend - (and why would you have all of this if you are trying to save some serious money money?), and if you did have high speed internet -preferably using a cable connnection, and  if you keep you computer (Mac w/Intel processor or PC) most of the time, you might want to look into a device called the MagicJack.  

The MagicJack offers some pretty cool things. These include:

• A new phone number
• Voicemail
• Caller ID
• Free unlimited calls to anywhere in the United States and Canada from the United States and Canada
• The ability to use a real (analog) phone that you already have in your home
• The ability to travel with your MagicJack and use it with your own number wherever you are in the world ,as long as you have a computer with a high speed internet and an analog line.

I ordered mine a months ago and the clarity of the phone has gone (where I live) from sometimes clear/sometimes jumpy  a few months ago to absolutely crystal clear now. I really like this device.

The device, which is about the size of a large pack of gum, has a USB connector on one end which connects to your computer, and a modular RJ11 analog phone jack on the other side.  That is all the unit comes with.  When you plug the jack into either the PC or the Mac, and self installing program which resides within the jack, will install on the computer hard drive.  If this is the first time the MagicJack has been used,  the program will prompt you to enter your area code, and then it will assign a number to you.  As I said above, it is working crystal clear for me and has been for some time.   

Price - You order this device online from MagicJack for $39.95. This includes the device and 1 year of service.   You will get hit with a postage fee (which I believe is $6.95).  You will be prompted a few times for other other offers like more MagicJacks and additional years of service for $19.95 per year, and faster shipping.  I chose to go with standard shipping and just the single unit, and a single year of service.  I didn't need fast shipping and, was amazed that it arrived in my mailbox on Monday and I had ordered it Thursday evening.

Your mileage may vary - My setup is ideal at this time, except for some reason the incoming caller ID doesn't work on my telephone.  I am connected to a Mac and it may be a problem that will be resolved in the next automatic and free firmware upgrade.  If I look at the computer computer screen when the phone rings, there is a popup box showing me the number which is calling me. I can live with this.   Call forwarding is also available on this phone, but it needs to be programmed via the web interface.  Also - at this time, there is no way to specify if you want voicemail to be turned on, and how many rings to pick up after.  I am sure this will be coming in the future.

Now here are some caveats some people have found. While I believe some are legitimate, I also believe they are expecting a lot more than they should, given the low price point the inventor and company are making.  Keep this in mind when you read that the customer service is all web chat style and that it is currently off-shore like so many American companies are now.  I have done a lot of business with companies who have sent their customer service out of the US and know the frustration I feel when it seems they agents are reading directly off a script and don't listen to what I have already done.  At some time, they will learn to think out of  the box - and that will be brought up in one of my next post.  The result of course, is that people want expect a full staff of people who will talk with them via voice.  I work in a call center, and I can assure you that each call costs our company more than half the price of the MagicJack.  That kind of  price can not work with the model.

I have suggested to the inventor/owner (Dan) who really does respond personally to email, that he may want to set up a 2 tier system for customer service,  the new tier would be a pay service that would route to real people in the states.  The original service  - the webchat  would remain free.

A few other problems to mention.  Since the network that the phone system utilizes was built by Dan with his own money it needed to be built from from the larger populated areas to the less populated.  Not all area codes are available yet, but they are coming.  You can get an area code from an area near you which doesn't cost any extra for you, but it could cause a neighbor across the street to call you long distance.  If this causes you a problem,  you might want to hold off on your purchase until your area code is available.  All available area codes are listed www.magicjack.com, so you can check before you buy.

Dan has also advertised 30 day free trial before they charge you.  Some people have found they are charged in advance of he 30 days.  This isn't necessarily true.  It could easily be that they are seeing a charge hold on their debit card accounts.  This is no different than holds put on your accounts when fueling our car.  

Dan also can not be expected to know all the nuances of your computer software or what may interfere with perfect communication.  Sometimes a simple program running in the background will cause havoc on other programs.  Blame poorly written software, or substandard hardware in your system.  Sometimes thing will not work right out of the box.

I find it necessary to reboot my computer occasionally.  Computers need this sometimes.  There is a lot of trash programs leave behind, and sometimes the memory and cache need to be cleared with a restart.

You also may have issues if you are running your computer on a wireless network in your house.  Like anything else, wireless is subject to poor communications at times. Think microwaves, etc.

I really like my MagicJack.  I realize that if my computer is off,  I won't be able to make or take calls - however my voicemail will still work and I can check it when I am back online.  The same goes for power outages or web outages.

I also know that I am saving a ton of money.  And that is important to me.

Joseph

While the site says that they will soon have the ability to move your current analog number to the Magiv

How To Start Digging Your Way Out

I can't imagine anyone who is not in some kind of financial crises doing a Google web search see how to be financially free and responsible ending up at this page.  So I am going to believe that there is a problem in your life with making ends meet.  The reason doesn't matter, but the cause is that the lifestyle you have been living and the expenses you have incurred are out of balance with each other.  Now you are trying to get yourself out of the situation you have have found yourself in  - as quickly as possible. 

I would be full of something you don't want to step in if I told you there was a quick way to clean up this mess.  It took a long time dig yourself into this,  and it is going to take time to make things right.  But - it is going to be OK,  as long as you start the process IMMEDIATELY.  It is not too late, you are going to live through your current crises, and if you stick to the plan you are going to make some necessary life changes to ensure you don't end up in the same situation again.  Are you ready?   

First - know how to deal with collectors for at least 30 days.

• Don't take out a PayDay Loan!  Stay away from these places.  If you think your financial situation is bad now, wait until you find out what you have to come up with in a few short weeks to pay them back.  It doesn't make sense to do this.   You will be deeper in the hole and will come up with another mind numbing excuse to get another Payday loan from that other LoansRus down the street to pay the first loan company back. Stay away from these places.  This includes Tile Loan places as well.  These people who run these places are not your friends and the rates they charge are as close to illegal as they can get.  
• Do not take out more loans to pay off your bills.  This is crazy - you can't afford more payments.
• Do not get a debt consolidation loan.  These will cost you up front, these may lower monthly payments but extend the length of time you owe, and will result in a single interest loan which may very well be higher than the interest you already are paying.
• Do not take a "loan" from your 401(k) unless you will be foreclosed upon and you have no other way to make your mortgage payments.

• If you are getting calls from collection agencies - be aware of the Fair Lending Act. There are a lot of things they can not do or say and you want to be ready for their tactics.  If you are getting calls or think you are going to get call from them arm yourself.
• Do Not Ever give a bank account number to a collector.  Even if they insist, do not allow this.  They can very easily drain your account.  Do not give them electronic access to your money!
• Get a home answering machine that allows you to start recording during a conversation. You can find used machines very reasonably priced at the Goodwill or Salvation Army, or garage sales, etc.  
• If you get called at work, tell them that you can not take these calls at work, and follow up with a certified letter to the physical address of the collection agency stating again that you will not take calls at work.  This is the law, and collectors must abide by it.
• Collectors are not allowed to call your cell phones.  You pay a fee for your cell phone minutes, and if you do not want to waste your minutes speaking with these goons, don't allow them to call you on your cell phone.
• Collectors can not harass you.
• Collectors can not garnish your wages without a court order
• Collectors can not pretend to be someone they are not.
• Collectors can not call you before 8:00 in the morning or after 9:00 in the evening - your time.
• Collectors can not make threats to you.
• Collectors can not tell you what you have to pay them or when you have to pay.
• Collectors can not speak with family, friends, neighbors, acquaintances and let them know anything about a debt.  They call them however, in order to obtain a current phone number or address.
• Collectors will lie to you
• Collectors will try to do anything to find where your breaking point is and will use this same method every time they call.  Be aware of this and do not allow them to intimidate you.
• Do not agree at first to pay them anything.  You have the right to demand written evidence that a debt is owed by you and to receive copies of the signed original agreements with the lenders.  You also have the right to see that the agency is licensed to operate within the state you live in.
• If a collector calls and yells, or swears, or calls you names a sailor would blush about, calmly tell the collector that you will not listen to trash like that and that they can call you back when they can speak more civilly. Then hang up on them.
• Be pleasant but firm when you speak to these collectors.  You need to put yourself in control of the situation and you need to let them know how often they can call you.  If you tell them they can call once every 2 weeks, make note of the date the can call you again.  If  you receive a call before the 2 weeks is up, firmly inform they have not waited the full two weeks and hang up on them.
• Don't pay these guys anything during the next 30 days.  Who cares about how your credit rating is at this time?  You will find out what a sham the whole credit bit is soon enough. 

We will get more into how to handle these goons in a future article.  I just want you to know how to deal with them until you can understand where you stand in your current financial situation.  And this is going to take you a month to get it together. 

Here are the steps for the next 30 days.

• Confide in someone that you are over your head in debt.  You are going to find that the majority of Americans are over their heads.  Don't be too embarrassed to admit this. You will feel a rush of calmness after doing this and that calmness with stay with you.  There!  isn't that better?
• If your significant other is not aware of the debt, come clean.  It is hard to do, but once done it is so much better.  You are supposed to be a team, and you will need each other more now than ever.  It will also bring about a closer and non-strained relation ship that you may have never experienced. 
• Be on time with the following 
• House or Rent Payment
  
• Groceries
  
• Utilities 
  
• Transportation.  
  
• These are the four things to keep you afloat.  You most always pay these.  You can get away with being behind on unsecured loan payments at this time and don't let anyone tell you that you need to pay off  the cards before any of the above. 
• Order a copy of your credit reports from all 3 major companies. You can get one free copy per year from each company.  Don't worry how bad they may look.  You need them to know where you stand.  

1. Experian: 
   1-800-397-3742 
   www.experian.com
2. Equifax: 
   1-800-685-1111 
   www.equifax.com
   
3. TransUnion: 
   1-800-888-4213 
   www.transunion.com
   

• Get a small spiral notebook you can keep in your pocket.  Get one for your significant other as well.  Record every cent you spend for 30 days, and what it was for.  Also keep track of all incoming money.  At the end of the 30 days, we are going to find out how much money comes in and how much goes out.   Only after knowing the detail of your monthly money will you be able to know how to better handle it. 

Anyway that is a good start.  There is so much more that hasn't been brought up yet, but start today, and lets get back together in 30 days when you are ready to start the budget and are prepared to move forward with a new plan, and a new way of life.

Joseph.

The Stinking Ecomomy - Who is to Blame?

While the economy in the US is having challenges and we hear rumors that the sky is falling,  it is important to understand what is causing these reports.  I believe the doom and gloom is a direct result of  our refusal to place the blame upon ourselves.  To place the blame on anyone other than ourselves would be irresponsible and would do nothing to enable us to learn a lesson. 

Let's look at the reasons I believe we are in this mess and how each of these worked together to create the perfect storm.

What we have control over.

• We tend to be selfish with our money and don't give the first 10% (a tithe) back to a church or community need.  I don't know anyone who gives consistently complain about not having enough.  Do you?
• We are overspending and purchase what we want without saving up for them or putting them in a budget.
  
• We don't create a budget, and therefore have no idea what has happened to our money.
• We don't share our possessions.  Everyone in the neighborhood has garages filled with the same items which are rarely used. We have to own it all, even though we only need it an hour or less a week. 
• We always pay retail (Manufacturer Suggested Retail Price) instead of bargaining.  Yes - you can bargain and win. 
• We tend to always want "New In The Box"
  
• We allow ourselves to purchase and finance extended warranties which ARE NOT good deals. (If you must have an extended warranty, make sure you pay cash so you don't pay 2 or 3 times the cost of the service)
• We allow ourselves to believe that credit is a good thing, and a tool that we all need to utilize. The net result of this is that we are no longer a saving nation.  Instead we are spending 120% of our paycheck year after year.  While we should be saving at least 15% of our paychecks for our futures, the average savings in the  US is now 1/2 of 1 percent.  Twenty years ago we were saving on the average of 8 percent.  
• Most people who do save in the bank are doing so at a measly 1% - 3%.  This kind of "saving" is not wise, as the inflation and taxes you will pay will average about 6% annually, so you will lose money  yearly with savings or investing in CD's.
• We don't educate ourselves about how money works. Most of us don't want to discuss money because we either have been told it is rude to discuss finances with our peers, or because we are afraid to admit we are ignorant of the subject.
• We tend to panic at the market vulnerability over the short term instead of looking at the long term.
• We believe that being able to "afford" means we can make the minimum payments on items.  We don't consider if we can continue to "afford" something with payments if we were to lose a job, take a cut in pay,  if gasoline goes up, or if we were to get sick.
• Accepting a mortgage payment which requires more than 25% of your take-home pay.
• We have no emergency money saved and emergencies require we spend money we don't have.
• We take loans on our 401(k) retirement funds without realize the implications of it. (Did you know that if you lose your job you are required to pay it all back within 30 days - as if you could afford it at that time?)
• We use Payday loans, or car title loans for "emergencies",  then pay the Payday loans with another Payday loan.
• We believing the slime sucking collection agencies who will tell you almost anything to get you to pay their accounts first.  You have a responsibility to know read and know the rules of the Fair Credit Act so that when you find you are over-extended you know the truth and can pay the house or rent, the groceries, the transportation, and utilities before you pay the credit cards. 

What we don't have control over.

• Higher minimum payments on revolving charges. 
• Higher interest rates on loans.
• Outstanding credit card debt which is given higher interest rate even after the items have been purchased at the lower interest rate.
• Greater penalties on late charges.
• Fudging by creditors who do not apply payments as they are received resulting in late charges.
• Understanding all the fine print on credit card agreements
• The price of oil.
• Catastrophic events which lead to market down sliding.
• Outsourcing jobs to offshore countries. 
• The government who instead of regulating loans, is often paid to look the other way by lobbyists.  I have seen videos showing our representatives supporting the banking institutions rather than people who have been hurt by them.  
• Our schools who need to be teaching responsible money management skills but instead are teaching other subjects like World History.  I don't want to offend anyone, but World History did not prepare me for life.   Our colleges are also allowing banks to market their credit cards to students who do not have the resources to pay the bills. Many applicants are able to obtain credit cards without even a job.  The schools receive financial compensation from the banks and often it is the bank who pays the school the most - and not the bank which offers the best deal to the student. (See yesterday's posting for the Business Week article I mentioned).  There have been more students leaving school for bankruptcy problems than graduating the last few years. 

You will see me write quite often about the financial planning as taught by Dave Ramsey.  Dave offers a class called Financial Peace University which is a 13 week course offered all over the country.  If your purchase his kit you and the family you live with can attend the class free and as many times as you would like for life.  I can not begin to tell you how much I have gained from attending this and how there truly is a sense of Financial Peace.  You may agree or disagree with his teaching.  Dave also teaches his Baby Step methodology and how to get to the point where you will become financially free.  He doesn't offer a guarantee his class, but does state that if you will follow his plan it will work.   His technique is not a get-rich quick plan, but it is a simple plan which we should have all been taught many years ago.  

Dave does make some people "crazy" because:

• He teaches that it is important to pay the lowest debts before the higher debts.  While this will result in paying more in the long run, the importance of the satisfaction of paying off debts quickly outweighs the knowledge that you paid less paying the higher interest rates first.
  
• He suggests that people invest in Mutual Funds with a 10 to 15  year history of consistent 12% or higher return.  Many people unwisely state that this is impossible now, but a good look at Morningstar will show that there a still many of these funds available.  Anyone who will disagree with this has not researched this.
• Dave uses the 12% annual return rate on all his examples.  Again the naysayers will say this is impossible but as in the point above it is very possible.

My suggestion is to start leaning from the economy today and what we have done to create the panic in our lives, and what to do to ensure we won't be adding to the claims that the sky is falling in the future.  Personal responsibility is key to our future and weather we are able to make it through recessions and depressions.  

Enough said today.

Joseph

Buisnessweek Economy