A Financial Education Event
     

When Free Credit Reports Aren’t Free

When A “Free” Credit Report is not Free

Ellie was on ABC News Now this past week talking about this critical topic. Since 2004, consumers have had the right to request a free credit report every 12 months from each of the three credit-reporting agencies. But almost from the beginning there’s been confusion about how to get a free credit report. There are thousands of people who respond to TV ads offering “free” credit reports or they order a credit report online only to later discover that they have signed up for a monthly credit-monitoring service that was definitely not free.
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Q. Let’s start with the obvious question, Ellie, when is a free credit report really free?


Ellie: There’s basically one primary way to get a no-strings-attached free credit report and that is to go to AnnualCreditReport.com or call 1-877-322-8228. You can also write into Annual Credit Report Request Service at PO Box 105281, Atlanta, GA 30348-5281. While there are many look-a-likes sites, there is basically one government site and that is AnnualCreditReport.com .

Q. What is the difference between a credit report and a credit score and are they both free?

Ellie: A credit report is your credit history and that is free as outlined above. However, you are not entitled to a free credit score. The credit score is your FICO (Fair Isaac Credit Score) and it indicates your credit worthiness and will impact a variety of financial areas including what kind of Annual Percentage Rate you will pay for your mortgage loan.

Q. How often can you get a free credit report and from what credit reporting agencies?

Ellie: You are allowed one free report, per year, from each of the three major reporting agencies: TransUnion, Experian and Equifax. You don’t have to get all of them at the same time. In fact, I recommend that you spread out each of the reports every four months. That way you can track, for free, whether there have been any major changes in your credit history on a regular basis.

Q. Should I order a copy of my kids’ credit report to see if someone stole their ID?

Ellie: Child identity theft is on the rise and it is important for you to order a copy of your child’s credit report at least once a year to make sure it has not been compromised. You should also go to Social Security Administration website and order a copy of your child’s social security earnings to make sure someone isn’t using their number in order to obtain work.

Ellie Kay

America’s Family Financial Expert (R)

Prioritize Your Debt – What to do With Unpaid Bills

Recently, on ABC NEWS, I talked about the fact that some parts of the country still have unemployment in the double digits while other employees are facing cutbacks in hours and salaries. More and more people are having a hard time paying their bills in these economically challenging times. If you only have a certain amount of money available and you know you won’t be able to pay all the bills, you need to know that not all bills are created equal. There are certain bills that have greater penalties than others. Today, I want to help you look at how to tackle those unpaid bills as well as grace periods and the variable consequences for not paying bills on time.
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Q. Are people still having a harder time paying their bills? I mean, we hear about new jobs being created and the recession is officially over. Why are some families susceptible to continued financial difficulty?

ELLIE: Obviously, unemployment is a big issue as well as the fact that many workers have had to accept pay cuts or work fewer hours to keep their jobs. With these come a contagion effect in that if you are unemployed or you go part time, there’s additional costs involved such as purchasing health insurance. Even if these workers find new jobs, they still have the residual effect of having less income for many months. In other cases, some may have had homes foreclosed upon and it’s cost them a lot to get established in another place of residence, plus these individuals has tanked their credit ratings—which means that rental property will require a larger down payment. A poor credit score also means these renters have to pay more down to even get basic utilities hooked up to their rental property. All these expenses start to add up and eventually, families are finding that they don’t have enough to pay all the bills.

Q. So if someone is between jobs or had some unexpected expenses such as medical bills, then what bill should they pay first?

ELLIE: When it comes to paying the bills there are always consequences for not paying. However, it’s the severity of the consequences that people need to consider when they are rank ordering which bills they should pay first, second, and so forth. The rule of thumb is to look at how fast your creditors will be likely to move against you. Which brings us to the most important bill and first bill you should always pay—your mortgage. If you fail to pay, the bank can begin foreclosure in as little as three months. Plus, this is the most significant debt you have when it comes to influencing your credit score. And with a poor credit score, the bills will just stack up even more quickly as we know that those who have bad credit have to pay more for deposits, for auto insurance some times and a poor score can even influence whether you get a new job or a job promotion at your existing place of employment. So protect your score and your financial future by paying the mortgage first.

Q. OK, so we understand that the mortgage is the most important bill, what would come second?

ELLIE: The next most important bill to pay is your car loan. Not only because you need a car to go to and from work, but also because as the second most significant loan you have, it will also impact your credit score in a more significant way than a department store charge card or a utility bill will. As for the consequences of not paying, a lender can begin repossess your vehicle if you’re a day late, but in all actuality, most will wait about sixty days. If you are serving in the military in a combat zone, there’s a little more leeway for vehicle repossession, you should contact your base’s financial office if you’re in danger of repossession while on active duty. But for the rest of us, not paying this important bill will cripple your ability to remain gainfully employed as having a vehicle is essential in most cases.
Q. So we’ve paid the mortgage and the car loan, now we pay credit cards, right?
ELLIE: Yes, that’s right. As you know, credit cards payment are very important because if you don’t pay on time, you’ll get hit with late fees. But there are more consequences than just a late fee. You might be faced with a hike in your APR if you’re tardy and then it could spread to other cards as well. You might find your average APR going from 9% on your credit cards to 24% or more in just a month. After about six months of missed payments, credit card companies start to send your account to collections and then you have an entirely new set of headaches to contend with. Concentrate on paying bank cards first such as Visa, Mastercard and American Express. You can even go to www.bankrate.com and look for lower interest rate cards that offer a promotional for transferred balances which can help your overall liability on credit cards. A final option is to go to your local credit union to see about a consolidation loan.
Q. Let’s say you have a little bit of money left, what’s one of the lower priority bills that you can tackle?


ELLIE: The next bill to concentrate on just happened yesterday—taxes. While technically, there is no “grace period” you can ask about an installment plan. The IRS can eventually garnish your wages and seize property or bank accounts. The old saying, “death and taxes are inevitable” exists, it’s because you WILL have to pay that tax bill some day—whether you’re a celebrity dishing on talk shows and making 25 million dollars a picture or whether you dish up ice cream part time at Coldstone making $25 a day!

Q. Thus far, we haven’t mentioned student loan debt, isn’t that an essential bill as well?

ELLIE: Yes, it does seem kind of crazy that student loans haven’t made it into our priority list yet, but I think that it illustrates the fact of how quickly the money goes for more “essential” bills and how there’s often more month left at the end of the paycheck Lenders for student loans will wait about nine months before placing a federal loan in default. As of last July, graduates can opt for a loan program that bases payments on up to 15% of your annual gross income. If you have these kinds of bills, then you can go to www.IBRinfo.org for help in how to pay your student loans more efficiently.

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com

Atonement – How to Keep Your Kids from Making the Same Mistakes You Made

Can you atone for the financial mistakes you made and keep your kids from making the same errors? This week in national media, I’m talking about how to help your kids make right financial choices. Here’s my main talking points.

Statistics indicate that the majority of high school graduates cannot pass a basic financial literacy test and end up accruing $3800 in consumer debt in college. In fact, a 2010 American Express survey of parents with children between the ages 6-16 revealed that:

• 71% of parents say their children understand we are in a recession.
• 91% of parents say they are committed to instilling lessons of financial responsibility upon their children, with 62% giving their children a weekly allowance.
• One in five children (20%) has indicated to a parent that “maybe we shouldn’t buy that due to the recession.”

Q. Ellie, in a day where foreclosures abound and consumer debt is at an all time high, there are many parents who are watching who want to help their kids avoid the mistakes they made. Have you ever made any financial mistakes?

ELLIE: Yes, I’ve “been there/done that” and have the t-shirt to prove it. Our family had 40K in credit card debt when we were first married even though my husband had a good job. There were a couple of weeks when we didn’t have money for groceries, things were so bad. We were able to change our ways and became financially healthy and we don’t want our kids to make the same errors we did.

Q. Why do parents need to take responsibility for teaching our kids good money management, aren’t there new financial literacy programs, such as Jumpstart, that are making a difference?

ELLIE: I’ve spoken at Jumpstart conventions and they are a fantastic organization, but these programs aren’t available in every school and it’s up to parents to take that responsibility. In fact, I think that one of the greatest things we can do for our kids is to teach them about money management, something they don’t learn in the classroom. Since the number one reason cited in divorce is “arguments over money” teaching our kids to be financially literate can even help them in their future relationships.

If they don’t have to worry about debt, they know how to manage a budget and they learn smart ways to save money, then we’ve given them the best gift possible. We all know that kids learn most about how to manage money from their parents. And parents have a huge opportunity to teach kids healthy money management habits at an early age so they don’t make the same mistakes we made.

Q. What are your favorite ways to give your kids financial responsibilities without losing control?

ELLIE: There are several options out there for parents looking to stay in control of family spending while still extending financial empowerment to their teens and young adults. One of the things we’ve done is to teach our kids from a young age that if they “borrow” money from us, they pay it back at their next allowance, thus developing the habit of not carrying a balance from month to month. This concept is most closely identified with the Charge Cards that we have with American Express. In my work with their consumer education area, I decided to add additional cards with custom limits to our own account that is in the children’s name so we can teach them about the smart use of plastic and they can never spend more than the limits we’ve placed on the card. One of the reasons I believe in a charge card is that you have to pay it off at the end of each month. These cards are on the parents’ account, not the teens, but we can go online and see how they spend the money and we can also set limits for each additional card. Once they turn 18, these cards, while still under our account, can be also used to develop our child’s FICO score.

Q. What are some of your favorite money management tactics?

ELLIE: One of my favorite money management tactics is to teach kids the art of managing an allowance. By getting an allowance, kids learn to manage their own money while they are still in our house and have the freedom to fail under our safety net. We teach them to give, save and spend smart. We’ve also used the tactic of a “Fun Kid Budget” where we set aside a certain amount for trips to the movies, zoo or an amusement park. They manage the money we’ve given them for the fun outing and the key is: they get to keep what they don’t spend. As they get older and become teens, their budgets expand to include a school supply budget, clothing allowance and a gasoline budget. A great option is to put their designated amount on a American Express PASS , which is a prepaid, reloadable card that once again, we control. That way, we don’t have to worry about them taking cash to the mall or using our debit card and the funds can be replaced if the card is lost or stolen. It’s like driver’s ed for the teen’s wallet but parents are in the driver’s seat.

Q. You have a “Family 401(k)” how does that work and what age do you start this kind of savings program with your children?

ELLIE: A “Family 401(k)” is a program where our kids have to earn half of the money for a large ticket item that they want such as a bike, videogame, roller blades, skateboards, etc. It may take months for them to earn their half, but once they’ve earned it and purchased the item, they take far better care of it than if we just bought it for them outright. They worked hard to earn their half so they’re going to make sure that videogame doesn’t get scratched and that they don’t leave their bike out in the rain. They can start this program as young as 6 or 7, depending upon the maturity of the child and their math skills. I remember our daughter, Bethany, saving for 8 months to get an American Girl doll, she was only seven years old but she was so proud of it and took such good care of it that it’s still in good shape and she’s now 20 years old!

Q. How can activities like back to school shopping help parents teach kids about money management?

ELLIE: A recent survey that examines consumer back to school spending intentions, notes that 39 percent of Americans plan to spend more on back to school shopping this year than in 2009, yet the majority (63%) say they will have a set budget and virtually all parents (94%) say they will look for ways to be resourceful and stretch their dollars.

I come alongside my kids and teach them how to compare prices, recognize quality and shop the sales, even using a coupon on some of these items. For our teens, we let them use our smartphone while in the mall to local coupons and the best deals that are accessed on the phone and used at the register. For example, retailmenot.com will list coupon codes and special deals. The fact that we’re using their “language” which is technology drives the financial lesson home in an upbeat and lasting way.

One of the other things we do is to teach them that “we pay for the item but you pay for the brand.” So if my son wants the latest Air Jordans, then we tell him we’ll pay $50 for the tennis shoes and he pays the additional $70 (for a total of $120) for the brand. It makes them realize what’s a need and what’s a splurge, then they can decide if it’s worth it to spend their own hard earned money on a brand.

If we can help our kids do better, then you can, too!

Ellie Kay
America’s Family Financial Expert (R)

What Should You Teach Your Three Year Old About Money?

Here we have the world’s cutest four year old, three year old and 7 month old! But what should they be learning about money right now?

So how do you raise a kid that owns his car, debt free, owes no credit card debt and has a 760 FICO score upon graduating from college (no student loan debt) at the tender age of 22? We’ve been able to raise a kid (or two or five) that are financially fit. We still have some at home that we’re working on! But you can raise financially literate kids, too!

It starts with a “Fiscal Report Card” and checking off what they need to know at various ages. Here’s a partial report card you can review and if you want the full version (for free) just email assistant@elliekay.com and put “Fiscal Report Card” in the subject line.

Youngsters

Age 2 to 4
• Picks up toys cheerfully
• Is on a schedule for sleep, play, and work (or school)

Age 4 to 6
• Makes bed in a basic way (not necessarily neat)
• Picks up room regularly
• Brings clothes to hamper
• Knows how to set and clear the table
• Knows how to take out the trash

Middlers

Ages 7 to 10
• Knows how to sort laundry into whites, coloreds and darks
• Can fold laundry and put it in everyone’s room
• Is given an allowance
• Has a savings account at home and at a bank
• Manages a fun kid budget (restaurant, zoo, amusement park, etc)

Ages 11 to 12
• Begins to do additional “jobs” for hire within the home and occasionally for friends or family.
• Has a savings account with at least $200 to $250 in it.
• Is learning the meaning of delayed gratification
• Can save up for half of a larger ticket item they want (bike, skates, video game, etc)
• Is regularly contributing to a community organization either through volunteer hours or donating goods (clothing, toys, money)

Teens

Ages 13 to 15
• Can manage and balance their own checkbook with supervision
• Has enough in savings to take out $200 to $300 to start a mutual fund
• Is able to do outside jobs for hire among approved “employers” in the neighborhood
• Regularly pays for outings (movies, theme parks, etc)
• Is saving for a vehicle
• Is aware of the fact their grades in high school will impact their ability to get into college and earn scholarships for college

Age 16 to 20• Can balance a checkbook without supervision
• Has an additional credit card (on parents account) and can use it responsibly
• Can manage and balance a clothing budget and personal financial budget
• Regularly works inside and outside of the home during breaks from school
• Has paid for 1/3 to 1/2 of the cost of their car
• Maintains a good GPA (or what they are capable of)
• Has a regular volunteer position (hospital, coaching, church involvement, etc)
• Can use social media to learn ways to save money

What are you doing with your kids that is working? Let me hear from you!

Ellie Kay
America’s Family Financial Expert (R)

ABC NEWS – Q&A From Military Members & Families

Here’s a “Hero Shot” of hubby Bob and his F-4 Phantom, that he flew up until last year when a jet incident caused him to break his back. Thankfully, he is fully functional, but his injuries will not allow him to fly an ejection seat aircraft. The good news: he’s gainfully employed flying “regular” airplanes and also the Global Hawk UAV (think the high tech airplane on Transformers).

We had a lot of questions when he had that accident and I speak with a lot of military members and their families who have questions about their lives and finances as well. Some of these fine people were on ABC News with me recently for a Q&A. Here’s the recap for you to share with others you know who are in our armed forces. The questions that made it on ABC NEWS won a free copy of their choice of my books! But here are the answers to many more questions.

Q. Is SGLI enough insurance for families or do you need an additional supplemental insurance? From Melody O’Sullivan

ELLIE: SGLI is relatively cheap, term group life insurance that is offered to members of the military on active duty, in the ready reservists, members of the National Guard, members of the Commissioned Corps of the National Oceanic and Atmospheric Administration and the Public Health Service, cadets and midshipmen of the four service academies, and members of the Reserve Officer Training Corps. The insurance is also offered to spouses as well.
Servicemembers’ Group Life Insurance coverage is available in $50,000 increments up to the maximum of $400,000 for members of the military. The price for this insurance is very cheap, so it’s certainly a good value. But is it enough? If you are a young family with only one or two children, then it could be enough. But if you are a more senior servicemember with a lot of family members depending on you, then you might want to buy some term supplemental insurance. Remember that once you leave the military, SGLI is no longer available to you. So if you know you are going to separate in the next couple of years, then it would be a good idea to get a modest supplemental life insurance policy in place.

Q. As a “Key Spouse” how do we encourage other spouses to take advantage of all the benefits the military has to offer? From Starr Vuchetich

ELLIE: Thank you, Starr, for your volunteer work with other spouses, you are to be commended as should ALL our Key Spouses! There’s an old saying that “you can lead a horse to water, but you can’t make it drink.” Your job, as a key spouse, is a difficult one. You know the benefit of taking advantage of the services and perks available to military families, but others have to decide for themselves. The best thing you can do is to lead those spouses by example and express the benefits you are personally receiving from taking advantage of, such as free childcare for volunteering, free financial counseling, free oil changes (or whatever program your base offers), as well as the many benefits listed at sites such as www.militaryonesource.com or www.ourmilitary.mil

Q. How did you arrange childcare during deployments with very little money and how did you maintain sanity with so many small children on a tight budget?
From Jana Baez

ELLIE: I do remember what an incredible challenge it was when all my kids were so young and my husband was gone for weeks (or months) on end. But the first thing I did was plug into all the “free babysitting” I could get. Go to the Family Support Center and see if they offer free childcare for those who volunteer. I also got on site childcare provided when I attended Army Family Team Building classes, so sometimes you can get a break and learn something, too. Don’t forget the community outside of the base gates, either. There are a number of churches, community centers and MOPS (Mothers of Preschoolers) groups that try to support military families during deployments by offering free “Mother’s Day Out” programs or onsite classes where childcare is provided. Last, but not least, form a babysitting co-op, where you get tickets for every child you babysit for every hour. You can “redeem” your tickets with other co-op members and it serves as a way to escape for a while as well as a playgroup when you are watching other children.

Q. How does one begin a business without acquiring debt?
From Chana Montgomery

ELLIE: In the case of a military family, you need to start a business that is completely portable and can move with you. It’s important to select a homebased business that requires little initial investment and will still yield an income to keep you in the black. Do your research and talk to a mentor at SCORE.org where you can get free business counseling in your desired field. If you follow your passion, you’ll be far more likely to succeed. Just email assistant@elliekay.com and ask for the “Homemade Business” file, we’ll send it to you for free as it contains all the information you need to be successful in your endeavor.

Q. When you have extra income flowing in, is it better to work on paying off debts or continue paying normal payments and stash the money into savings?
From Emily Haffner

ELLIE: The answer is “both” if you pay even $5 to $10 more on your credit card minimums, you’ll improve your FICO score and begin to pay down that debt. But you also need a safety net in savings just in case your car breaks down and your husband is downrange and not home to fix it. The optimum savings goal is to have 12 months worth of living expenses. But even if you just save up to 3 months (and keep adding to it little by little) you’ll be better prepared for rainy days.

Q. I have three children and I wanted to know if I should apply the new 9-11 GI Bill to the first child (not knowing how long it will be around) or should I split it up among the children.
Stephanie Berg

ELLIE: Because the Post 911 GI bill is relatively new, and because we don’t know how Congress will vote to continue this practice, it may be best to take the money while you can. It’s still important to have your child go to the most affordable school possible, get scholarships and other means of payment. But go ahead and use as much of that GI Bill money as you can to pay what you can on your oldest child’s college. In the meantime, the money you would have put toward his/her college (from your own 529 plan or other savings vehicle) put into another college fund for your other two children.

By funding more on the other two children’s accounts, your money will continue to grow as the market continues to rebound. But in the meantime, you will also be able to take advantage of the current bill. Do not give your first child his/her saved “college money.” Instead, put whatever you have saved toward the other two. You can tell your oldest that his/her college money is coming in the form of the POST 9ll GI bill. Because you don’t want the youngest two to be stuck with student loan debt that the oldest child did not have to accrue.

Q. With limited funds, what should be the priorities for the best use of financial planning? Should I invest in the TSP (Thrift Savings Plan), IRA, life insurance or mutual funds? Major Anthony Smith

ELLIE: Once you’ve paid off your credit cards and funded a 12 month savings account, then you are ready to take your investments to the next level. It will depend on your family size, retirement needs and current income. I do not recommend life insurance as a good investment tool, even though agents may point you toward that route since the commissions are significant. Better to max out your TSP benefit since those funds will still be available to you if you do not make the military your career for a twenty year retirement requirement. It’s also a good idea to get a ROTH IRA or regular IRA. Go to your Airman and Family Readiness center and ask for an appointment with a financial counselor. It’s free advice and the expert there can look at your entire financial picture to help you come up with the best method of investing. Or try the military friendly company, USAA, they help to fund a lot of military events and can offer good advice on mutual funds.

Q. Being that you moved many times during your military career and have many children, how did you present it to the children when you had to PCS (Permanent Change of Station)? From Kristie Fromer

ELLIE: This is the hard part of military life, Kristie, and thank you for your willingness to go through this. One of the advantages of having so many kids is that they were sure to have built in playmates wherever they went! When we told our kids they would have to leave their friends, we allowed them the freedom to grieve and be sad over leaving. But we were also positive about where we were going. We printed out materials about the new base and all the places we could visit and where we would go camping along the way. By focusing on the positive, while allowing them the freedom to express their feelings, we had healthy, adjusted kids and a well bonded family.

Q. If your auto is less than two years old, is it a good time to refinance? We retire in 2011 and will be buying a house wherever my husband starts his second career. Is this wise to do before buying a house? From Lisa McClain

ELLIE: Refinancing a car will cause a hit to your FICO score, but it can be a good idea in order to get you a lower interest rate. I offer two words of caution: 1) refi at least six months before you get a home loan in order to give your credit time to recover and 2) refi with payments that will end at the same time your original loan would have ended (otherwise, you’re just paying interest over a longer period of time.) For example, if you have 3 years left on your car loan. Then refi the loan for 3 years (instead of 4 or 5).

Thank you for your service, military members and your families. Remember three things:

  • America loves you
  • We support you
  • And together we’ll be all right!

Ellie Kay
America’s Military Family Expert (TM)

One Tip To Save Thousands Each Year!

When I was a little girl I was a big fan of Peter Pan (the Lost boy not the peanut butter) and I believed in fairies. I remember making fairy wings with my seven-year-old girlfriend, they were beautiful. We would walk up a few steps in her house’s open circular stairway leading to the second floor. Then we’d jump and “fly” with our wings. Our goal was to jump from the second floor. We kept flying off “one more step” until we were halfway up and got caught by her mom. Drats! Our airborne hopes were “grounded” and we went back to playing Chinese Jump Ropes instead.

If there is one tip you can use that is almost like sprinkling fairy dust over your finances, it would be to improve your FICO (or Fair Issac Credit Score). Currently, a good FICO can make the difference between paying $900 a month in mortgage payments or $1400. It can mean a $395 car payment or a $600 payment. It can mean you pay more in car insurance with a low FICO or you lose the job or the promotion because your employer checked the scores. This list could go on and on, but a better FICO can literally save you thousands of dollars each year—and its so easy to improve your score in three simple steps:

  • Step One: Pay A Day Early Rather Than A Day Late – Late payments can cost you as much as $45 dollars in penalty fees and they are a hit on your FICO as well. Set up an automatic payment online at your credit card provider’s website and you’ll never be late again.
  • Step Two: Pay A Bit More Than The Minimum – By paying as little as $10 more than the minimum balance on your credit card bill, you will improve your score. This shows up on the record as “paying down” your debt and it helps a lot!
  • Step Three: Proportionality Plus – Keep the proportion on your various cards at 50% or below to improve your overall credit picture. This means that if you have a $5000 limit on a particular card, you don’t want to charge more than $2500 on this card. Redistribute the debt on your existing cards to remain at 50% or less and you will truly help your FICO score.

Peter Pan had a score to settle–and you do, too! But you don’t need fairy dust, you’ve got a good FICO to keep your finances flying high!

Ellie Kay
“America’s Family Financial Expert” (R)
www.elliekay.com

Black Friday: Fact or Fiction?

The Kay Family, Christmas on the Move, 1995

The Kay family has been waking at the crack of dawn the Friday after Thanksgiving for almost two decades in order to save as much as 50% on our Christmas purchases. But does all that hot chocolate and bleary-eyed effort really pay off? There is a lot of misinformation about this retailers’ dream day, so I’d like to set the record straight on what is fact and what is fiction regarding this special day.

  • Black Friday sales begin on Black Friday.

FICTION:  It seems that the holiday sales begin earlier and earlier each year. We are used to almost bypassing Thanksgiving as a holiday and decorations go out in stores even before Halloween is over. While some stores like, JC Penneys have issued press releases that they will “honor Thanksgiving as a family day” and not open until 6:00 AM on Friday, other stores aren’t sharing the sentiment. For example, some big sales will start on Thanksgiving day, including stores like Sears, Wal-Mart and K-Mart; you’ll find them at Bradsdeals or BlackFriday So if you need an excuse to get away from your annoying sister-in-law and walk off some of that turkey, you may want to do some shopping on Thanksgiving.

  • Getting a store credit card to get a discount will hurt your FICO score & you should never use any credit  card for purchases.

FACT: Every time you open a line of credit, or there’s an inquiry about your credit you run the risk of getting a hit on your Fair Isaac Credit Score, or FICO. So trying to receive that extra 20% off all your purchases and then closing down the account in a couple of months is usually a very bad idea. It’s especially bad if you’re going to buy a new car or a home in the next several months. Plus, if you are someone who is prone to run up your credit cards and not pay off the balance each month, then you’re in for a double whammy. Your best friend may tell you she does this all the time to get the discounts, and all she’s telling you is that she also gets hit on credit score. Give her the facts, and help a sister out!

When it comes to using a credit card, you are are often better off using credit if you know you can pay the balance at the next billing cycle. It will help you in a dispute with an online vendor and can help you earn rewards points to buy other gifts. Check out LowCards for the rewards and cash back conus you might get. Some credit cards have their own extended warranties if you buy that item (think electronics) with the card. They’ll take a one year warranty and double it. Go to Credit.com to find out the details on what your card is offering.

  • Price Matching Doesn’t Apply on Black Friday

FICTION:  Wal-Mart has offered to match competitor’s ads for years, and this year is no exception. Last year, Best Buy, Amazon, and Home Depot got in on the price comping, and this year you can expect even more including
Target.  So bring in the ads to these various stores to get the good deals (some stores will even match online offers), and save those receipts as well. Because if you have an elite credit card, including  or some offered by Citi and Visa, they will offer a price-protection feature where they will refund you the difference if you find a lower price for the item you’ve bought. For example,the  Chase Freedom card refunds up to $500 per eligible purchase and up to $3500 per calendar year and is valid 90 days after purchase.

Black Friday is not the busiest shopping day of the year.

FACT:   According to the International Council of Shopping Centers the busiest shopping day of the year is actually the Saturday before Dec. 25. In fact, only 35% of respondents plan on shopping on BF—which is more good news for you. It won’t be as crowded as you thought!

  • They give away products for free on Black Friday

FICTION: Yeah, right. You may have been dipping into the cider a bit early if you really believe there are free door busters on Black Friday. The most you will get is some cheesy little ornament worth $2.99 given to the first 100 customers. This also means that sleeping outside the store to get something you think is free.

  • The Best prices of the year are found on Black Friday

FACT: Sorta. There is no doubt that some items will never be cheaper than on Black Friday, but other items may be part of a large retailer’s push to get those Saturday-before-Christmas shoppers and may cut their Black Friday prices. You can use a cool tool at Decide.com to help you figure out whether you should buy that item now or later. It uses data to help you decide the best time to buy a certain product.

  • Black Friday deals are worth sleeping on the curb to get

FICTION:  If you really love the great outdoors and want to sleep under the starts to get one of the 3 HDTV deals that Best Buy is offering in your city, then knock yourself out. But really, this year there are more BF deals available online and in the store as well. For example, this year Kohl’s is offering its online shoppers all early bird deals on Nov 21 and all day on Thanksgiving!  So unless you just have a whole lot of free time on your hands, I’d pass on the sleepover.

  • Be careful before you buy because you may not be able to get a full refund on some of your Black Friday purchases

FACT: Retailers sometimes tighten their return policies during the holidays.  I remember one year I got 35% less than what I paid for a camera because of restocking fees that Best Buy charged me. Not fun. Other stores may only give you an in-store refund, so you are locked into spending your refund at that store. So be sure you know the store’s refund policy before you slap down the dough.

  • There are special, “secret” deals online that are not in the circulars.

FACT:   In recent years, on Thanksgiving Day, retailers like Best Buy, Target, and Wal-Mart have advertised extra Black Friday deals that were not listed in their circulars. These “secret” deals are only found online or with the store’s app, so the trick is to find them early so you’ll know about them when you arrive at the store on Friday. Get the Dealnews app to find new listings.

Myth: Cyber Monday offers the same caliber deals online as Black Friday in-store sales. For those of you who’d rather fully digest your Thanksgiving meal and not stand in line starting at 3 a.m. on Black Friday, we understand. Shopping for the best deals can be exhausting, but if you wait until Cyber Monday you may be missing out on some of the highest markdowns of the holiday season.

Happy Savings!

Ellie Kay

 

Military Heroes, Money and Me

If time and money were no issue, what could you see yourself doing for the rest of your life? That’s the question we ask in order to discover our passions.

Think about this for a minute and remember this would be something you have to do FOR THE REST OF YOUR LIFE! What would you do and why? Could you really travel for the rest of your life?  Could you eat chocolate for the duration? Could you go to spas forever? Most of the “splurges” we would indulge in if time and money were no object are not sustainable for the REST OF OUR LIVES.

Here’s my answer:

I’d speak to our military members and their families. I’d give two kinds of presentations:

1) Heroes at Home — The top characteristics of military families that help them not only survive the lifestyle, but thrive in the midst of it. These families would experience humor, hope and healing and walk away feeling that what they do as Heroes at Home has a life and death impact on our world. They would feel they are leaving a meaningful legacy.

2) Money Matters — The number one problem in marriages is money. I would show families how to get out of debt, improve FICOS, teach their kids financial literacy and pay cash for cars. I would give them real world examples from our very real family of kids that graduate from college debt free with 700+ FICOS. This is the message I’d give to families if time and money were no object.

Wait a minute!  This is exactly what I’m doing because my “profession” is finances in which I’m a media veteran, financial expert and spokesperson. But my “passion” is helping military families and it’s what I have the privilege of doing in between my corporate work, speaking and media appearances. In fact, the two often marry such as the recent appearance I had on Fox and Friends talking about sequestration and the loss of tuition assistance for military members. Click through to see the segment. 

Thanks to sponsors like USAA I can give away hundreds of free books to these military audiences so that they can walk away with some tangible military and financial help at their fingertips. I waived my usual honorariums at these events. With additional generous donors like ProFlowers, I’m able to travel to military bases and give away lots of free stuff to our Heroes at Home like several $200 gift certificates for San Diego’s own Shari’s Berries, Red Envelope, Personal Creations and ProFlowers . What do these corporate sponsors get out of the deal? They get the satisfaction of knowing they are making a difference in the lives of people like Shari.

I did a Heroes at Home presentation last month at the Marine Corps Recruit Depot (MCRD)and there was a woman named Shari* (*name changed) who came up to me after the event. She confessed that she was at the end of her sanity because she was stuck at home with two toddlers while her husband was facing his 3rd deployment in 5 years. She was all of 23 years old.

Shari smiled weakly, “I came out tonight because of the free childcare and to get a break from the kids.”

She wiped away her tears, “I didn’t expect to laugh so much. Isn’t that silly, I don’t know why I’m crying now…But to hear that others feel the same way I do and I have people here who can be a support has changed my outlook. I can’t believe you did it with all those kids of yours.”

“I feel that I know why I’m a military spouse and that it really is worth it after all.” She smiled bravely, “I know what I need to do and you helped me see that.”

“Besides,” she wiped her nose “I won the gift basket door prize.” She laughed and blew her nose into a kleenex.

I got an email from Shari a few weeks later and she’s plugged into a family support group program at MCRD to get the support she needs. She said that night we met was a turning point for her because it gave her hope.

Hope. That’s a powerful word.

I guess you can see why military families are my passion.

Ellie Kay

America’s Family Financial Expert (R) 

If you live in the San Diego area, then save the date:

Camp Pendleton – April 19th — Del Mar Beach Resort – 6:00 — Call 760-725-9052 to make reservations for free childcare

We will be giving away free books, and $200 gift certificates from San Diego’s own, Shari’s Berries, plus $200 gift certificates for Red Envelope and Personal Creations plus a $350 gift certificate to ProFlowers.

Pass along this info to your military friends in the area, there are limited spots available for childcare, so they should act now

Seven Steps to Thrive and Survive Financially

Today, many families are facing the same issues that Bob and I faced when we were first married—paying bills, stretching paychecks, and still trying to maintain a reasonable quality of life. We read in the news that homes are being foreclosed upon in unprecedented numbers across the country. Consumer confidence isn’t very high these days, sub prime rates are fluctuating and wages are remaining relatively constant—which usually means more inflation. Let’s face it, the headlines aren’t all that cheerful in the midst of a recession. If most families aren’t concerned about losing their homes in uncertain times, they’re certainly concerned about rising food and fuel costs, keeping their kids in clothes, or the freedom to go on vacation. But there are answers for those who are willing to do something about it. Here are seven basic tips to help you beware and prepare:

Financial Readiness and FICO Scores

On our “Heroes at Home Financial Event Tour” in FY15, one of our most loved segments was given by Gerri Detweiller, who wrote the original book on personal Credit. The Department of Defense realizes that financial readiness impacts military readiness. In fact, credit scores (or Fair Isaac Credit Score) follow you from assignment to assignment and don’t just determine if you qualify for an auto or mortgage loan. Your credit score also can also be an indicator of whether you are allowed to stay in the military or whether you are kindly asked to leave. It’s not so much the score itself, but what the score represents—your credit worthiness. If you have too much debt, then you cannot get the security clearances necessary to do your job and this can follow you into the civilian world as well. Even utility companies check these and decide whether you have to pay a deposit based on the score.

According to recent figures provided by FICO, 25.5% of consumers (nearly 43.4 million) now have a credit score of 599 or less, marking them as bad risks for lenders (see the chart). It makes it is unlikely that this group of people will get credit cards, auto loans or mortgages under the tighter lending standards that banks now use.

These credit ratings can also make the difference between whether you are accepted or rejected for a new insurance policy or as a renter and much more. That’s why it’s important to know your number. Furthermore, some employers check these scores, which could be the determining factor in whether you get that new job at the next assignment.

Summary: Why do I need a good FICO score?

A good credit score is invaluable to everyone. Here are the benefits of a good score in a nutshell:

  • Security Clearances — If you are having financial problems, as indicated by a FICO score, then you are a security risk and cannot be allowed to work in certain areas requiring a security clearance.
  • LoansA good credit score helps you qualify for loans and get faster loan approval.
  • Interest Rates Your FICO score oftentimes is the determining factor when it comes time to be assigned an interest rate. A better rating can help you get a better mortgage rate and could even make the difference between becoming a homeowner versus a continued renter.
  • 0% APR Have you ever been tempted by the advertisement on a new car, furniture or a new credit card that offers a special “0% APR”? No wonder so many people get in line for these special deals. Few people realize that these kinds of special offers only go to those who have the top levels in the national distribution of FICO scores. If a good credit score holder acquires too many of these kinds of loans, they’ll deteriorate their score. So reserve these for long term loans such as a new automobile.
  • So Close and Yet so Far Sometimes the difference between qualifying for a great deal and not qualifying for it can be as close as twenty points on your FICO score. You may say: “So what? I don’t qualify for it, I can still qualify for a fairly low interest rate.” But it adds up and matters a great deal. The difference on a $20K car loan at a 0% APR versus a 7% to 8% APR is around $1800 over the course of the loan.
  • Job Applications – There are jobs that require high security clearances and government positions that can be impacted by your score as well as employment in the financial sector.
  • Renting – Some people cannot rent a home or an apartment without a good credit score.
  • Utilities – You can often have your security deposit waived if you have a good FICO.
  • Insurance Rates It could also affect what kind of an insurance premium you will pay. Some auto insurers are using credit data to help determine insurance rates. In fact, ninety-two of the 100 largest personal auto insurance companies in the country use credit data in underwriting new business, according to a study by Conning & Co.

Improve FICO Scores in Three Easy Steps:

  • Pay credit bills a day early rather than a day late – Set this up online using automatic pay so that you’ll never be late again.
  • Pay attention to proportionality — Keep your charges at 50% or less of the available credit, even if you pay off the card at the end of each month. This means that if you have a $5,000 credit limit, you should never charge more than $2500.
  • Pay at least $5 more than the minimum each month – It will show up on your report as paying down your debt which will make your credit score go up!

 For a copy of your FICO score, go to Credit.com and for a free copy of your credit report go to Annual Credit Report and for more help go to your local Airman and Family Readiness Center (or the equivalent in your branch of the service). You can improve your FICO, pay down debt and get fiscally healthy so that you can find the financial freedom that is worth fighting for!

 

 

 

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