A Financial Education Event
 

Rent-To-Own: Is It Ever A Good Idea?

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You’ve moved into a new place, started a new job and you’re beginning another phase of your life. The only problem is that you don’t have enough furniture for the new place and you realize you’ll also need a washer/dryer.  Then, miraculously, an ad pops up on social media for a place where you can go get name brand appliances and choose from dozens of options on exactly the kind of furniture you need—all for only $21.99 a month! YEA!!!  You’re saved! After all, you have a good job, the monthly payments aren’t going to break you and you deserve to make your new place comfortable, right?

Wait a minute, not so fast.

Is rent-to-own the best option? The answer is:  it depends.

How Does Rent-to-Own Work?

Usually, you’re renting from a well known store, but, in most cases, you’ll have to sign a third party contract. I remember one time when we bought a refrigerator and my husband thought, “Let’s use someone else’s money at 0% interest.”  The only problem was the third party contract indicated that those 0% payments were only for a fixed introductory period, then there were three options. We could buy the item, continue making payments (at 200% APR interest) or return the item to end our lease. We bought it out early, so that we were in the clear and vowed to never buy into this kind of a contract without understanding the fine print first.

 

Rent-to-own also means that if you fall behind on the payments, the leasing company can repossess your leased item and you don’t get any money back. There may be cheaper ways to pay because even if you have bad credit the options of  layaway, sub-prime credit cards or  bad-credit personal loans, which run 36% APR are better than the 200% APR of many rent-to-own programs.

 

When Is Rent-to-Own A Good Idea?

 

Despite the typical APR rates north of 200% for this kind of contract, there may be some anomalies when this option is not a bad thing for your bottom line. In fact, there are some instances, when using a rent-to-own option make sense:

 

  • If the interest rate stays relatively low (less than 3%) during the entire leasing term, and the term is 24 months or less, then you aren’t losing much. But read the fine print.
  • If you believe you’ll have the money to buy the item outright at the end of the low, fixed rate introductory period, then it could be a good way to keep some money in a rainy day account while you save up for the buy out.
  • If you need to diversify your loans to improve your credit score, and you qualify for low interest, then this kind of financial contract could help your credit score. But since diversification of loans only represents 10% of your credit score, it’s not worth paying higher interest rates to diversify.
  • If you are only in a location for a short amount of time (our sons have military training at bases for anywhere from 3 months to 10 months), and your interest rate is low, you could rent and turn the item back in when you move. But make sure the contract allows you to do so. If you must move yourself and your company doesn’t pay for a move, then renting a truck and moving that furniture cross country could cost more than it’s worth.
  • If you have the good credit score amongst your roommates and you all need to get furniture for the main living areas, then you could work a deal where they use your credit (your contribution) and they pay their part of the monthly payments (their contribution). But make sure the interest rates are low for the entire contract and that you trust your roommates enough to make the payments to you (on time) so that you can make the payment. At the end of the lease, you keep the furniture. This option may be more of a hassle than it’s worth. But if you are cash strapped, it might be just what you need.

 

Before You Sign

Let’s say that you’ve decided that Rent-to-own is the route that will work best for your budget and lifestyle. Here is your checklist before you ink that contract, if any of these are not clear are it’s revealed that they are not to your advantage, then think twice about this option. Here’s the list:

  • What are the monthly payments (including all fees)?
  • When are the payments due?
  • What is the total cost to own this item (all payments, interest and fees)?
  • Who insures damaged or theft?
  • If you miss a payment, will it be automatically repossessed?
  • Is the item new or used?

After You Sign

 

Let’s say you already signed a contract before you read this blog. Or, you’ve followed all the advice shared and decide that the contract will be a good option for you. Take these steps to protect yourself:

 

  • Follow the money. Make sure you are keeping your payment records because some rental companies have had problems with giving their customers credit for payments made.
  • Pay on time. Since 35% of your credit score is your credit history, it’s crucial that you make your payments on time or even before they are due. If possible, set up the payments to transfer from your bank account so that you never miss a payment.
  • There’s a chance your debt might be sold to a debt collector Know your rights in this situation as the Fair Debt Collection Practices Act requires debt collectors from harassing customers, calling them excessively and using abusive or deceptive practices to collect on the debt. 

In the Kay family, we like to live a debt free life and will usually save up to buy furniture or appliances before we would go into debt. This isn’t always possible for American consumers, in which case it’s good to know the nuances of Rent-to-Own for you or those you care about.

What has been YOUR experience with Rent-to-Own?

Smart Money Habits for Millennials (and Their Mamas)

The Kay Family had five babies in seven years. That roughly adds up to 3 kids in diapers at once, 10 years of not sleeping through the night, 4 teenage drivers at the same time, 3 kids in college at once and today, we have 5 millennials in their 20’s simultaneously.

Fun .

But the good news is that they eventually slept, pottied, drove, graduated and even mastered money habits in the journey. Here are the habits we helped teach our millennials to make sure they didn’t have to move home, they could remain financially independent, have a great start for their families, and still buy their mama nice birthday gifts.

Habit #1 – Create and Live By a Spending Plan

Many millennials have heard of the value of creating a budget and even have apps that help. But it’s of little use if they don’t know how to stick to it. Here are my favorite apps to help:

  • Mint Budgeting App – I met the founder of Mint, Aaron Patzer, in a green room, years ago, when we were both going to be on ABC News in NYC. At the time, he was building his success with Mint. I just remember him being (as he says in the video) “full of myself.” Ha! But his budgeting app is probably the best out there because it makes it easy to create a budget. You connect the Mint app to your bank and the app uses your details to help create a personalized budget.
  • PocketGuard Budget App – This app also connects to your bank accounts and shows you what you currently have in your pocket. It tracks your money to show what you are spending and automates where you’re going off budget and where you need to cut back.
  • You Need a Budget – This app’s claim to fame is that it creates a budget you can stick to based on the info provided in your bank accounts and spending habits. It even teaches you what to do if you overspend and how to live on last month’s income. This is the only app that cost money in my list and it’s $50 for the year, but there are hoards of devotees that say this app helped them to finally live on a budget.
  • GoodBudget – Back when dinosaurs roamed the financial space, there was an “envelope system” where you put the money you needed in each envelope labeled with expenses such as gas, food and entertainment. It helped Bob and I get out of 40K in consumer debt in only 2.5 years when we were first married. This app is the digital version of that system, making sure that everyone knows how much is left in the “envelope.”

You might need a money buddy to stay on track, too. Tiffany Aliche, The Budgetnista, talks about her journey on our fun podcast The Money Millhouse and how she went from broke to anything-but-broke through techniques that kept her on track.

Habit #2 – Cook Creatively and Consistently

Money evaporates when you order out for lunch or dinner more than one or two meals a week. Bob took leftover dinners (the

re’s a microwave and fridge at work) for our entire marriage and we calculate that he’s saved $20,000 by doing this! Make Pintrist your pal or watch The Food Network to learn easy ways to create nutritious and tasty meals. Ask for an Instant Pot for your next birthday and make more than you need for dinner so you’ll have leftovers for either lunch or dinner later in the week. Or freeze the leftovers. My daughter lived with roommates for a few years and they would assign different nights for each of them to cook to simplify the work. Cook more and your wallet and your waistline will thank you.

Habit #3 – Care About Your Retirement

When we take our Heroes At Home Financial Event on the road, we teach young service members the miracle of compounding interest with the mantra: start early, start small and stay committed. Be sure to start with funding a Roth IRA and take advantage of your company’s matching portion of your 401(k). Lacey Langford, an Accredited Financial Counselor gave some great tips on a segment called “I Aint Afraid of No Money.”  She discussed retirement planning from her experience in working with the military (but many tips apply to civilians as well.) If you’re military, be sure to go into your Family Readiness Center to discuss the Blended Retirement System and what your options are for your situation. It’s free and a benefit you can use early and often.

Habit #4 – Count the Cost of Debt

The average millennial college grad owes 37K in student loan debt and the average household owes $8500 in credit card debt. Work on minimizing the debt you accrue and pay off the debt you have so that you’ll have the flexibility to move or wait on the right job. One of my sons worked for JC Penney, and they eliminated his entire department. Most employees were freaking out because they had student loan debt, consumer debt and car debt—but not our son. He made a practice of living on less so he wouldn’t accrue debt and he was able to have less worry in the process of finding a new job.

Be sure you also pay attention to your credit score. Rod Griffin, from Experian, came over for a discussion on coffee and credit. He works with us on our tours and he teaches that if you have bad credit, you’ll pay an average of 360K more (over your lifetime) for the use of basic credit, than the person who has a good score. Improve your score by paying on time, paying more than the minimum balance due and make sure you never use more than 30% of your available credit.

Habit #5 – Choose Contentment

This is a tricky habit because it’s a mindset that you choose. There will always be something to spend money on to make you go off budget or get into financial trouble. There’s the new phone, tablet, car, vacay, boyfriend/girlfriend, baby, or a plethora of other reasons to want to spend more and have more. This is where your friends, family and even faith come into play. Coveting what others have or do is a lesson in futility and discontentment. Your friends either contribute to this mindset or they keep you focused on what matters most. If keeping up with their lifestyle is an important platform in your friendship, then you may want to find new friends. Remember that this financial journey is a marathon not a sprint. I’ve always said, “you can have it all—just not at the same time.”

What is one habit you are good at? What is one habit you want to improve upon? Share it with us, a friend or even a money buddy, so that you can be fiscally healthy in 2018 and for a lifetime.

 

Before You Say “I Do” – Premarital Financial Counseling

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“Bye, bye!”  I smiled and waved from the front porch, Bob by my side, “Nice to meet you!”

Speaking like a ventriloquist, I continued to wave at my son and his girlfriend,

“I give It less than one week” I told my husband, “two weeks tops.”

Bob smiled, giving his very poor ventriloquist rendition, “I don’t know, she was, ah, very conversational.”

“Yeah,” we turned to walk back in, “and her favorite topic was herself!”

We had just entertained one of our sons and a girl he brought home to meet us. In our family, we are predisposed to like the significant others that our children bring home because our kids have very good judgement. Contrary to popular belief, we aren’t sitting on “no” when it comes to these friendships that could blossom into something more.

One week later, we got a call from our son letting us know that he and the girl were not going to work out.

“Yeah,” our son reported, “I realized that the only thing we had in common was that we both thought she was pretty.”

The Kay whammy had struck again.

“What is the Kay whammy?” you ask.  It’s pretty simple, when our kids bring a special person home to meet our family, they either stay together for life and get married. Or, they break up within two weeks.

We are an intense family and we tend to drive away the faint of heart. But we are also a loving, loud and loquacious family and that attracts the brave hearts.

When it comes to a spouse, our kids look for certain qualities and when they get serious, we ask for a credit report.

I’m kidding.

Not really.

Knowing your future mate’s money habits is a significant part of deciding if they are a “forever” friend or not. Since “money matters” is cited as the #1 reason for divorce in America, it’s important to be on the same page regarding this topic. So far, all of our kids have opted for premarital counseling before the big day and this counseling should include the topic of money management.

Here’s a quick list of the financial topics that should be covered before you say I do.

8 Topics to Cover in Financial Premarital Counseling

Your Family of Origin’s Financial Situation

How did your parents manage money? What did they teach you about money? Chances are good you may manage your finances the way that your family did and this may be different from your significant other’s point of view. Did your parents save, believe in tithing, pay cash for everything or did they live paycheck to paycheck? Hashing out the differences, finding the similarities and developing a new plan for you and your spouse will be topics you cover under this heading.

Your Spend Plan

Do you currently have a budget? Go over both of your current budgets. If you don’t have one, then that is also a discussion point. Decide on what a new budget will look like for you as a couple when you are married. There’s a great app I use called Mint that can be accessed and updated by both parties at any time. This is especially good for military families who are apart but want to keep track of mutual spending.

 Holidays, Birthdays and Vacations

How do you spend money on vacations and holidays? Some families spend so much on Christmas, that it takes until the following May to pay off that debt. Others never take a family vacation. Our family had a low-key Christmas where each child got three modest gifts so the emphasis could stay on the Christ child. Then we went all out on their birthdays where the child was so celebrated that it became a highlight of the year for them. All these different approaches will impact your budget and your relationship.

 Born Spender or Saver?

What is your money personality? You could take the Money Harmony Quiz to see whether you are a born hoarder, spender, money monk, avoider or amasser.  Bob was a born spender, I was a born saver and we made it work nonetheless. But it took a lot of discussion and an action plan to learn to live in harmony with an opposite type of money personality.

 One Checkbook or Two?

Are you each going to keep your own checking account or are you going to combine them? Who will pay for which bill? What about savings accounts and credit cards? Will those be combined or remain separate? Now is a good time to download my free Sixty Minute Money Workout to help you learn how to discuss this topic and others within a time frame that minimizes conflict and maximizes the work you are doing in this area.

 Your Credit History or Debt

You and your significant other need to bring your credit reports to a premarital financial counseling session. Depending on what is there, it may be a wee bit uncomfortable. I married into 40K of consumer debt I didn’t know about and it had a huge impact on our lives together. Your mate may not count student loan debt as debt and you may find out there is an 80K loan that will impact your marriage. You can get a copy of your credit report, once a year, for free at Annual Credit Report and get one for each of the three reporting bureaus at this site. You can also get a copy of your credit score (different from a report) at Credit.com where they will also tell you ways to improve your score. Be prepared to enter your social security number to get this information. Talk about these debts and discuss a repayment plan.

Long Term Financial Priorities

My adult daughter says that life is about investing in experiences, not things. Her priority is travel over a newer car or designer clothes. Her husband’s priorities are slightly different because he’s a born saver. They learned how to discuss these diverse perspectives by doing a Sixty Minute Money Workout so they can get on the same page.  Your mate may want to buy a house as soon as possible and would forgo vacations to make that happen. You may not care that much about home ownership but really want to go home for the holidays. It’s important to discuss topics like housing, retirement, vacation and other long term goals before you get married. I like to say that you can have it all, but not at the same time. Bob and I chose to put our kids in private schools rather than drive new cars. Today, our kids are done with school and we drive the newer cars. We just have to choose the timing on our purchases.

 

Who Does the Math?

Someone is going to need to balance the checkbook, pay the bills and set up the budget. Yes, you should set up your spend plan together, you can even pay the bills together, but that’s usually the exception rather than the norm. One of you may be predisposed to balancing the books better than the other. One of you may actually enjoy paying the bills. In our family, I’m the financial expert and my husband flies jets, so you would think I balance the checkbook. But I also know that my husband needs to be aware of the bottom line because he’s the born spender, so he keeps the books and I review the statements. There needs to be a check and balance. One person should not have absolute control over the couple’s money. Sometimes, he who controls the money controls the house. So it’s important that both partners have access so that there’s no abuse of power.

Which of these topics have you already discussed with your significant other? Which topics still need to be explored? Set a day, time and topic to talk about money with your mate and don’t forget to get the free Sixty Minute Money Workout download.

 

Polite Bargaining – 8 Ways to Negotiate on Everything

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My longtime friend, Edith and I found heaven on earth this past weekend and we were determined to milk it for all it was worth. Milk chocolate that is! We took a day trip to Chocolate World in Hershey, PA from her new house in Mechanicsburg and we racked up the discounts all day. There was a Groupon for four special events: a chocolate tasting, the 4D chocolate experience, a trolley ride and build your own candy bar. We saved 30% on those bundled tickets.

Chocoholics forever 

When we had lunch and bought tons of candy to take to our chocoholic friends and family, we got a military discount. When we left, we were astonished to realize that our 3 hours of free parking had grown to $45 for the 6 hours we were there! When we went to pay, Edith (who has 20+ years of military service) asked for a veteran’s discount and we breezed through the exit with a 100% parking discount. We were on a sugar high and a savings high as well! 

My grandma Laudeman used to quote a Bible verse that has stuck with me throughout my whole life: “you have not because you ask not.”

Even though I was a shy person growing up, I was never shy about parting with less of my hard-earned money if there was a chance I could save some bucks.

So, how do you bargain in every day matters without embarrassing yourself or your family? Consumer Reports says that 89% of those who regularly ask for discounts get a “yes” on that discount at least once. Those are good odds.

Here are 8 tried and true ways that can help you become a polite negotiator.  

Everything Is Fair Game – Almost everything in retail goes on sale at some point, so why not try to create your own sale? A retailer may not want to give the sale to everyone, but they may give you a discount if they are still making a profit. Ask the manager if the item has recently been on sale, if it is going on sale soon or if they can sell it at a discount. One college student in Chicago routinely asks for the “good guy discount” because he’s a good guy and they’ll be a good guy if they give him a discount. If you’re military, use the Scout app to find those discounts. Don’t forget the classic money saver, RetailMeNot for additional savings.

Find Something Wrong – A makeup smudge, a missing button or a slight hole along a seam that is easily repaired are all good reasons for a big discount. Show the sales clerk or manager the damaged area and ask for a 30% discount, you can settle for less, but ask for more since it can’t be sold as brand new.

Do Your Research – Comparison shop online using apps like Amazon which has a barcode scanner that you can use when you’re in a store to immediately find the item on Amazon and check its price. Just choose the camera icon next to the search bar and hold it over a barcode. You can do the same thing with Walmart Savings Catcher, which is a part of their regular app. Show the manager the comparison price and ask if they will match it. Check out Yelp to also get check in discounts and review the vendor.

Use Your Expertise – If you are a geek at an electronics store or at a gaming outlet, talk with the sales person and capitalize on your mutual passion for the products. But don’t be a bore and inundate them with a one-way monologue. Instead, build a rapport with the sales person by asking them questions and letting them be the expert they are. You’ll come across as a qualified buyer who is worthy of a discounted price.

Don’t Be Intimidated by Professionals with Titles – Just because someone is an MD, CPA, or a lawyer doesn’t mean you can’t get a discount. One lady was told her eye surgery was going to be 10K and she didn’t have insurance coverage for the procedure. She told the doctor that it was too much and “could he work with her to get it for less?” He told her that besides the big city practice he had (where she saw him) he also had a smaller office in a neighboring smaller city. If she went to that smaller office, he would reduced his fee to $1000, use the smaller clinic that charged a lot less than the hospital surgery room and they got a discounted rate on the anesthesiologist as well. The new price on the surgery? $2800

Buy Everything in Bulk—Even Services! It’s hard for most vendors to turn down cold, hard, cash. I have learned to negotiate paying for services in advance to save even more. These would be known vendors you work with frequently and trust. At my mail and more store where I have a PO Box, I paid for a year and asked for a deal I saw elsewhere where they offered 2 months for free by paying the full year—he gave it to me in seconds. For haircuts, spa treatments, and massage treatments, I’ll prepay anywhere from 5 to 10 services at a 30% discount. Then we keep up with services as we go along, counting down to the next bulk payment. This works especially well for services you know you will get regularly.

Get Discounts on Existing Service by Mentioning the C Word – Take those sale circulars you get in the mail, are hanging on your door, or you find in the paper and call your existing provider to renegotiate your current service. Whether you are getting cable service, cell phone service, entomology or house cleaning services. Call your current provider, tell them you want to “cancel” or talk to the cancellations department. You’ll likely be transferred to a department that has more authority to offer you freebies to keep your business. If you mention the introductory pricing from one of their competitors, you might not get that exact price, but you could use it as leverage to get deeper discounts on your current service.

Be Willing to Walk Away- Whether you are in a department store or a Turkish bazaar, decide ahead of time what your “comfortable” price is for the goods or service you are negotiating. Decide this ahead of time so you won’t get caught up in the moment. My favorite words, when discussing prices, are: “I don’t feel good about that price.” Then the seller usually tries to find out what price I would feel good about. I’ve often been stopped while walking away with a lower price that will seal the deal. And if I’m not followed out with the promise of a bargain? That’s OK, too, I can feel good about walking away if I don’t get the price that floats my boat!   

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I have a friend who is a newly single mom and her part time job is making phone calls to get discounts on existing payments she must make. We figured she is earning about $50/ per hour for her time investment. She has talked to utility providers, mortgage bankers, insurance companies and the city to get free items such as light bulbs, a/c filters, a refrigerator, a swamp cooler (also installed free), low moisture landscaping and much more. She’s a firm believer in “you have not because you ask not.”

What’s your bargaining story? Let me hear from you!

Quick and Easy Steps to Healthy Finances in the New Year

With the hustle and bustle of the holidays at a close, I remember what it was like to play with the new toys from Christmas long after ringing in the New Year. It was the time of marbles, pick up sticks, and hot wheels racers sets. My favorite toy was a set of Klackers. These came on the market in the late 60s and lasted into the early 70s. They looked like glass, but were actually acrylic balls attached to a string with a ring or small handle attaching the two strings. The object was to get the two balls going up and down and have them “klick” and “klack” against each other. You would build up momentum until they were hitting on the top and bottom in an arc. It was very hard to do at first and when they hit your fingers instead of each other, it was incredibly painful, too. Without fail, every time I played with my Klackers I ended up with bruised and banged fingers. But I kept playing, day after day.
I’m reminded of my Klackers when I look at today’s economy. Consumers have been playing with debt for years and it’s been hurting them—but they just kept playing. In fact, between 1989 and 2001 credit debt nearly tripled from $238 billion to $692 billion and last year it was up to $937 billion. The average debt-laden American especially feels the pinch when the economy is lagging, gas prices are rising, home values are imploding and inflation is rising. But there is hope and a way to not only survive a possible recession—but thrive in the midst of it.

Here are seven basic tips to help you beware and prepare in the new year:

1. Credit Credibility ––The first step, no matter what your financial picture is to improve your FICO (Fair Isaac Credit Scores) as these scores can determine a variety of financial issues including auto insurance premiums, whether you’ll get the promotion or the job (many employers check FICOS), and whether you pay a security deposit for utilities. You can get a free copy of your credit report at credit.com . If you downsize a home or a vehicle, you’ll also need to have an excellent FICO to get the best APR rates. You can improve your FICO in three easy steps:

  • Pay your bills a day early (rather than a day late) by setting up payments online
  • Pay $5 to $10 more than the minimum balance which indicates paying down debt
  • Proportionality: make sure that you don’t have more than 50% of the available credit charged on any one card.

2. Savings Savvy– I get loads of emails every week from people who are cutting hundreds from their household budget by following simple savings tips. From insurance to groceries, there are savvy ways to save at your fingertips. I have a lot of these savings tips on my blog. Start to implement these tips and it will create good discipline that will prepare you for a recession. Use the money saved from these tips to pay down debt and build short term savings.

3. Debt Deal Dilemma: With a slowing economy comes an influx of those who want to “help” prepare you for the worse by consolidating your debt. However, most “for profit” debt counseling companies charge a hefty fee for their services which is usually tacked onto your debt load. Instead, go to the National Consumer Credit Counseling Service and use their free services.

4. Don’t Do Dumb Debt– As things begin to get tight, you might be tempted to get a HELOC (Home Equity Line of Credit) or refinance your home in order to pay consumer debt. Bad idea. This will only deteriorate the equity in your home and chances are really good you’ll be right back in that HUGE boat load of debt by this time next year. The better option is to cut costs, budget, and go to the NFCC.

5. Budget Baby and Learn – If you don’t have a budget, as part of your lifestyle, then yesterday was the day to start. Set one up with online budgeting tools, found at www.elliekay.com. It’s also important to learn how to budget, a great new program that helps military families with their money matters is supported by the Military Family Advisory Network called MilCents and it begins a new (free) course in February.

6. Repurpose Funds: My daughter loves to take antiques and even junk and repurpose it to give it more life (and save money in the process). As you save money in one area, it’s important to redirect it to another area through proactive actions such as writing a check to pay debt or to fund your savings account.

7. Plan With A Purpose – Whenever a “theory” is tested, it must stand up to a “proof” in order to be established as true. You can have all this good stuff on paper, but if you slap down the credit card to pay for a “40% off” killer Marc Jacobs suit, or use debt to fund a vacation–then your plan is only a theory. For it to become REAL, you need to make it part of your daily life. This means you start living with your plan and don’t incur more debt.

Happy Savings and Happy New Year!

Ellie Kay

 

Junk Mail Junkies

Mother’s Day is on Sunday, and I LOVE getting mail from my kids around this time. Even when there isn’t a gift in the mailbox, I just love hearing from my kids! Because, let’s face it, who doesn’t love to get mail? When Joshua was seven years old, he loved to check the mail for me, it was his “job.” He would scour the letters, as most kids do, looking for mail for himself. I would ask my girlfriends to send him a letter, just so he could receive mail! One day, he was bringing in an arm full of junk mail and paused to sort through it, looking for that golden letter. All of the sudden, I heard a huge shout as he ran into the kitchen where I was working.
“Mama!” he was more excited than just getting a letter in his name, “Mama! We won! We won the publisher’s clearinghouse! We won ten MILLION dollars!”

I looked at the junk mail in his hand, saw that it was the usual clever packaging, designed to fool adults with the IQ of a seven-year-old. It was just a chance to be entered into the contest if we bought magazines.

How many of us waste valuable time, energy, and effort going through all the junk in our e-boxes and mailboxes? Not to mention the phone calls that come in the middle of watching the fabulous HBO series on John Adams! If you’re wasting effort in this area, it’s time to stop the madness. Here are a few tips on how to keep the junk mail junkies from poisoning your life:

  • Listless – Get off mailing list by going to the Mail Preference Service registry of the Direct Marketing Association at http://www.dmachoice.org/ and select “Remove my name.” This service is free and takes care of 80% of your problem with junk that arrives in the mail. It’s good for three years at your current address, when you move, change it again.
  • Numberless– To stop telemarketing solicitors, go to the National Do Not Call registry at 1-888-382-1222 or go to http://www.donotcall.gov/ and register all your phone numbers. Don’t forget to register cel phone numbers as well because these numbers are now released to telemarketers and the consumer pays for the call. Telemarketers should not call your number once it has been on the registry for 30 days. If they do, you can file a complaint at this Website.
  • Formless – When you register a product, you are opening yourself up to a whole new realm of junk. Most of these forms are for recalls, so just don’t fill them out, the same goes for contests and sweepstakes–those are like standing on the middle of a wildlife reserve with a piece of meat in your hand and a bunch of hungry lions under the nearby trees–you’re just saying “come and get me!”
  • Creditless – Some of the most dangerous email are the preapproved credit forms you receive–these should be SHREDDED to avoid Identity Theft. If you call 888-567-8688 and give your social security number, you’ll stop the mail and reduce your chance if ID theft.
  • Anonymous-When you sign up for your grocery store card or other frequent buyer programs, you can do so anonymously, without giving vital information. Use a different name, with no address, to protect your privacy.
  • Catalog-less-To opt out of catalogs (a frequent occurrance if you shop online), go to http://www.catalogchoice.org/ and stop the temptation from arriving in your mail.

A word of caution: the only instance in which you will give your social security info in order to opt out of junk is the credit card form. Do not ever release your SS # for any kind of other opt out.

Now, with all that extra time you have, go out and have a cup of coffee with a friend, take the time to enjoy those who enjoy your company because life is too short for high maintenance relationships or junk mail junkies!

Ellie Kay

http://www.elliekay.com/

America’s Family Financial Expert (R)

FInancial Pre-Deployment Checklist (part 3)

Do you have your money matters in order for your next deployment?  It’s important to make sure that all aspects of your finances are lined up to be able to give your family and yourself peace of mind while you are deployed. This is the final part of a continuing series. The items on the checklists from last week and from this week will make all the difference in minimizing stress not only for yourself, but for your loved ones as well.

  • Servicemembers Civil Relief Act

In addition to legal protections, the Servicemembers Civil Relief Act (SCRA) provides certain financial protections for active duty members of the regular forces,

A servicemember’s protections under the SCRA are not automatic and require that the servicemember requests the protections such as limitation on interest rates, and payment schedules. You will likely have to prove you’re your military service may make an impact on your ability to pay.

All interest rates can be reduced to 6 percent for accounts established before active duty and can include mortgages, car loans, credit cards and even some student loans. This only applies to loans before you became an active duty servicemember, it does not include loans you received after becoming a servicemember.

The SCRA also protects from foreclosures and repossessions and helps with termination of residential leases and auto leases. These are before military service or if you receive PCS orders from CONUS to OCONUS or a deployment for a minimum of 90 days.   

  • Savings Accounts

It’s important to build a personal savings account of  6 to 12 months worth of income

Calculate how much you’ll need by this formula (BAH + ME) x 6 = Goal Savings

Never use PAYDAY LOANS to supplement your savings because in these you pay 200% to 500%. Instead, go to PentagonFoundation.org for a $500 loan with a $3 service charge and no interest for one month. It’s called the ARK (Asset Recovery Kit) program.

The Savings Deposit Program – SDP – While deployed and after 30 days in a combat zone, service members may be eligible to participate in the Savings Deposit Program (SDP).  The program is available to service members during assignments and deployments to specified locations. The SDP pays back a guaranteed 10 percent annual return on investment (2.5.percent.quarterly) on up to $10,000 contributed from un-allotted current pay and allowances. Upon withdrawal, a service member’s contributions to SDP will not be taxed, but the interest earned will be.  Interest continues 3 months after the servicemember is out of the zone.

  • SBP – Survivors Benefit Plan – This program provides monthly payments to the servicemembers elgible beneficiaries in the event they

Cost – no cost while you are activeduty. But during retirement there’s a monthly deduction which can be no more than 6.5 percent of your gross retired pay.

Beneficiaries – spouse, legal child, former spouse (if court ordered), the child must be under 18, if over 18, then in college (up to 22).

  • SGLI Servicemembers’ Group Life Insurance

SGLI is a low-cost term life insurance protection policy offered through the Department of Veterans Affairs 
(VA) for servicemembers on active duty. Even though SGLI coverage is automatic, before servicemembers deploy, they should confirm that their beneficiary(ies) designation is up to date.

Servicemembers are automatically covered for the maximum amount of $400,000 unless coverage is declined or elected at a lower amount and this costs $26/month plus $1/month for traumatic for a total of $27.

Family Servicemembers’ Group Life Insurance (FSGLI) automatically provides life insurance coverage to spouses and dependent children when the service member is covered by SGLI up to $100,000 for the spouse and $10,000 per child unless the servicemember declined the coverage in writing. Coverage amounts for FSGLI cannot exceed the coverage amount selected for the servicemember under SGLI. The cost is very affordable for the spouse such as $5/month for a female 35 or under and it is free for children under 18.

Whether you are single or married, it’s important to check off the above items to make sure you and your family are financially ready for deployment. Thank you for your service please know that America appreciates both you and your family.

Ellie Kay

FInancial Pre-Deployment Checklist (part 2)

 

Are your finances ready for your next deployment?  If you have all your business affairs in order, then you will have less stress on your next deployment because you won’t be worried about the things you didn’t get done. The items on the checklists from our last blog and from this week will make all the difference in minimizing stress not only for yourself, but for your loved ones as well.

  • Budget – If you are married, then set up a budget with your spouse that can be used throughout your deployment. Make sure they know when bills are due and how much is owed for regular payments. If you email me at assistant@elliekay.com and request the “Sixty Minute Money Workout” we will send you a free guide that can help you set up your budget with your spouse or a “money buddy” so that you can establish a budget and discuss financial matters with your mate without arguing. Mint.com has an excellent budgeting app and there’s an interactive, free budgeting tool at elliekay.com as well.

 

  • Will including a Living Will or advanced medical directive. Don’t get so busy that you rely on the laws of the state for which you have residence to administer your estate. Instead, make sure you have a will that not only includes who will have control over your financial assets, but also include where you would like to be buried and if you want cremation or not. We once lost a pilot in a routine training accident in our squadron. His wife was left with a six week old baby girl and she had to face his parents who insisted he be buried in their hometown while she had other ideas of what he wanted. The more specific you are, then less headache your family will have when they are already dealing with tremendous loss.

 

  •  Accounts and Auto Pay Bills – List all accounts (credit card, car, utilities) and any passwords or acct numbers for the person taking care of your bills. If possible, set up these accounts to pay automatically so that you are not late on them and won’t get a hit on your FICO (credit score).
  • Legal Documents – Gather all legal documents such as birth and marriage certificates, deeds, mortgages and automobile titles and put them in one central location so that they are easily accessed by your spouse.
  • Meet with Personal Financial Manager (PFM) from the installation family centers or through MFLC (Military Family Life Counselors) or Military OneSource.com to go over any other financial issues that need to be settled before you deploy.
  • Emergency Financial Assistance   In the event the family may need assistance while the servicemember is deployed, it saves time and headache to take care of this ahead of time. You can pre-Authorize assistance by going to:  http://www.nmcrs.org  (Navy-Marine Corps Relief Society).

Whether you are single or married, it’s important to check off the above items to make sure you are financially ready for deployment. Thank you for your service and a special thanks to those family members who support you as well!

 Ellie Kay

 

 

Financial Pre-Deployment Check List – Part 1

What are the most important financial details to take care of before a deployment?

As a long time wife of a fighter pilot, we lived through a lot of separations and I’m glad we had our financial house in order before he left. Today, we have a Marine who recently deployed and since he is single, there were aspects of this checklist that involve us as well. Whether you are married or single, it’s important to take care of business before you leave the states. This is part one of a three part series and it can make all the difference for family members back at home.

Here’s a checklist to help you get through.

  • Defense Enrollment Eligibility Reporting System (DEERS) Make sure that this info is up-to-date for all family members since this impacts everything from being able to get Tri-Care to keeping a current military ID.  If you do not live in the same household with all your dependants, be sure that you have all the current information (i.e. children who do not live with you or children in college).
  • Military IDs – Make sure they are up-to-date and won’t expire during deployment. This is, once again, true for all your dependants and sometimes the expiration dates are different on the cards than they are on your own military ID, so double check this so that your dependants can have access to everything from the commissary to discounted Disneyland tickets through MWR.
  • Passports –Make sure family members have current valid passports.  If a military member is severely wounded, then parents or spouses would need current passports to come and see them. If you are single, and your parents would be the ones to come see you, then contact them and make sure they have current passports.
  • Record of Emergency Data – If your family needs to be notified of a severe illness or injury, they will be contacted based on the information you have in your emergency data. Are you newly married and your name has changed? What about other changes to your information? We recently decided to go from having a house phone line to only having cell phones. The house phone line was the one in the emergency data information for our single,  Marine son, so we had to make sure that he updated that very important info. Check with your parents and children who are dependants but do not live with you and make sure you make note of any info that has changed.
  • Family Care Plan  – If you are dual military spouse, a single parent or have another family member dependent on you for care, you need to update your family care plan. Your family services center can help you walk through the updates necessary to make sure all your family members are taken care of if you are the sole source of their provision.
  •  Power of Attorney- The person designated in the power of attorney document should be the service member’s spouse, a parent or trusted friend, since it give that person the expressed written permission to act on the service member’s behalf. There are three different kinds of POAs.

A General power of attorney allows for the person to buy, sell, trade or sign for almost any legal act on their behalf. If you and your spouse are having marital issues that may lead to a separation, then it might be better to have the spouse on a specific/limited POA rather than a general POA.

A Specific/limited allows only specific powers for a specific period of time. For example, they can sign your tax documents to file taxes or sell a specific car. This kind of POA is good when you are single and having a parent or trusted friend handle your business affairs.

A Durable POA is the most comprehensive of the three kinds of powers of attorney.  It remains valid even if the servicemember is incapacitated. If you don’t specifically select this while drafting a general POA, then it will automatically end if they are incapacitated. Therefore, if you want a family member to have the POA even if you are incapacitated, this has to be indicated by securing a durable POA before deployment.

Set aside an hour a week before your deployment to start chipping away at this list and be sure to check back next time for part two of this series.

What is your favorite pre-deployment tip? 

Ellie Kay

Keeping to the “B” Word

Families usually have favorite restaurants, movies, and even special songs that reflect the character and tastes of the family. Your budget will be just as unique as your family. It will be based on variable factors, such as your family’s size, geographical location, debt load, and income.

When Bob and I first set up a budget, we realized that both of us wanted to have healthy finances, even though we approached money differently. As you go through the sometimes-painful process of establishing and sticking to a family budget, it is important to make a real commitment to these important issues. We also realized that we didn’t need to go overboard by pinching our pennies so tightly that it strained our relationship and took all the enjoyment out of life. So we allowed for an occasional indulgence, implemented budget-cutting techniques slowly, and modified our plan as needed. As time went on, we fine-tuned some aspects of our budget and then did an annual check-up to make adjustments that allowed the budget to become a part of our lifestyle.

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