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A National 501(c)(3) Non-Profit Organization
call: 1.800.763.1874 |
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CACC Moneywise Monthly
Budgeting & Savings News You Can Bank On
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September 2012
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We all Make Money Mistakes
NEW REPORT: MIDDLE CLASS AMERICANS ACKNOWLEDGE PAST FINANCIAL MISTAKES
Two out of Three Adult Americans say they have made at least one really bad decision. Yet, large majorities of those surveyed believed their ability to make sound financial decisions is good or excellent.
In an analysis of two new sources of information about family finances, the Consumer Federation of America and Primerica found that two-thirds of middle class Americans acknowledge having made financial mistakes, often costly ones.
Key findings from an analysis of the survey data are:
* Two-thirds of middle class Americans (67%) said that, in the past, they had made at least one really bad financial decision, and nearly half of those questioned acknowledged that they had made more than one bad decision. The typical average cost of these bad decisions was was $23,000.
* Few of these Americans said their main source of information or advice about specific financial decisions would be from the Internet, books, magazines, or TV. And a number said they would not seek information or advice in making these decisions. For example, for saving and investing, only 15 percent said they would rely on the Internet, publications, or TV for the information, yet another 17 percent said they wouldn't seek any information or advice, and just make a decision. However, for this kind of decision, 45 percent said they would use information and advice from a financial professional.
* These middle class Americans are much more risk-averse than those with higher incomes. If given $1,000,000 to invest for retirement, only 21 percent of middle class Americans, compared to 48 percent of higher-income persons (incomes $100,000 and over), would invest mainly in stocks, bonds, and/or mutual funds. And 19 percent of the middle class group would invest most of their funds in a savings account while 25 percent would invest mainly in real estate.
* Yet, large majorities of these Americans believe their ability to make financial decisions is good or excellent.
Considering their past mistakes and the complexity of the financial services marketplace, we were surprised at how highly most middle class Americans rate their ability to make a variety of financial decisions and how infrequently they rely on information from the Internet and publications, said CFA Executive Director Stephen Brobeck.
The second source of information was the Federal Reserve Board's 2010 Survey of Consumer Finances, which was released several months ago. Analysis of these data revealed that:
* This typical middle class family had financial assets of $27,300, including $3,900 in checking and/or savings accounts. These financial assets were 28 percent less than the $37,800 held in 2007.
* Most of these financial assets represented money in contributory retirement accounts, but only about three-fifths of all families (61%) had such an account (though a number of middle class families did have pensions).
* For middle class families, the typical debt payments-to-income ratio was 20 percent with only 9 percent having debt payments that were overdue by 60 days or more. But nearly half (49%) still carried credit card debt from month to month, and the typical (median) debt for these families was $2,700.
* The decline in housing prices was the main reason that the net assets of the typical middle income family declined 35 percent, from $145,600 to $94,700.
Families without a lot of resources are balancing difficult and expensive priorities such as saving enough for college and retirement or paying off a mortgage and consumer debt.
Other findings from the analysis of the data include:
* Only 21 percent of the middle class families had a cash value life insurance policy, 15 percent stocks outside a retirement account, 14 percent certificates of deposit, and 13 percent U.S. Savings Bonds.
* Over half of these families (53%) had installment debt whose typical amount was $13,500. Almost all of this debt represented auto loans and student loans.
* The least well-educated middle class persons were the least likely to seek information or advice. For example, 23 percent of those with a high school degree or less, but only 10 percent of those with a college degree, would not seek information about saving and investing.
It is clear that educating yourself about personal finance at every opportunity is extremely helpful and important to improving financial performance. Clearly, limiting financial mistakes is important but, even more important is how you rebound if and when mistakes are made.
Take Action!
Seek out financial information and advice, especially from trusted and licensed financial professionals when possible in order to limit making money mistakes. If you make a mistake, recognize it and move on.
A great way to change your money management style is with the free Money Smart program developed by the FDIC? It's the smart way to improve your fiscal fitness!
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Motivate Kids by Teaching Them "Life is a Business"
Tips for Raising Kids to Succeed by Virgil Brannon
Welfare may seem like a charitable measure for struggling families. But it's a self-perpetuating trap when it becomes the only way of life parents know how to teach their children, who then know nothing else to teach their own children, says Virgil Brannon, founder of the non-profit, I Am Vision Inc.
"Living on entitlements becomes a way of life for recipients when it's handed down from one generation to the next because the family loses any tools it might have once had to forge a life based on self-discipline, achievement and challenging," says Brannon.
"It's no different from the child who grow up being given material thing he wants, along with excessive praise that's not deserved. One child may be from a poor family and the other from an affluent family, but both are at risk for growing up without the skills necessary for success."
Brannon's non-profit organization mentors disadvantaged children, helping them develop the values, understanding and knowledge they need to be motivated and equipped to succeed. He has found that coaching children to manage their lives as they would a business helps them not only develop good habits and skills, it also teaches them some essential business lessons:
Your life is your business: Our business is how we act, speak, the way we dress, how we treat ourselves and how we treat others. Like any other business, it is expected to grow and prosper and to do that, we must invest in it. Part of that is feeding the mind with the information needed to make good choices.
The people you meet and the friends you make are your clientele:
Treat all people with the respect you would any customer or potential customer. Our relationships can elevate us if people feel their treated fairly, honestly and with respect.
The more you provide or produce, the more you advance: Business involves providing a service or product. Business people do not care about excuses; they care about what you have to offer them. It doesn't matter where you come from or what color you are, if you have something they need - and a reputation for integrity -- they will come to you for it.
Your appearance means everything: You must look the part to get the part. The secret is to look as though you already have it to obtain what you want. Parents should teach their children to be business-like and to think like a professional, Brannon says.
"That includes giving them the best education possible, including learning at home about history, civic duty and different cultures," Brannon says. "In business, people are expected to display good manners and to communicate with others, from a firm handshake to looking others in the eye and speaking clearly and correctly. "That is the most important investment we can make."
Virgil Brannon is the founder of I Am Vision Inc., a non-profit program that embraces and empowers youth with academic and leadership challenges.
** Do you need help creating your family budget? Talk to a CACC Credit Counselor toll-free 1-800-763-1874 or visit www.caccdebt.org.
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Smart Consumer Tips
Save money on your next auto
This is the time of year when auto dealers clear out this year's models to make room for the new ones. There are many enticing ads out there drawing would-be buyers onto the car lot.
The Federal Trade Commission offers these ideas: To save as much as several thousand dollars in finance charges, pay for the car in cash or make a large down payment. Always get the shortest term loan possible as this will lower your interest rate.
Make certain to get a rate quote (or preapproved loan) from your bank or credit union before seeking dealer financing. You can save as much as $1000 in finance charges by shopping for the cheapest loan.
Make certain to consider the dollar difference between low-rate financing and a lower sale price. Remember that getting zero or low-rate financing from a dealer may prevent you from getting the rebate.
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If you have the desire and the ability to make extra payments towards your DMP, contact CACC Customer Service to coordinate making the extra payment. Since your DMP is set up to pay a certain amount each month changes must be handled properly to make sure you do not get removed from the Creditors DMP.
CACC Customer Service: 1-800-763-1874 Do you know someone who would benefit from money management strategies and information? Please forward this email to your friends and family! |
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Protect your personal information
The personal information of Americans is under constant attack by Identity thieves. Here are some key ways to protect your personal information and your personal finances:
Read your credit reports! You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies. Order all three reports at once, or order one report every four months. To order, go to annualcreditreport.com or call 1-877-322-8228.
Read your bank, credit card, and account statements, and the explanation of medical benefits from your health plan. If a statement has mistakes or doesn't come on time, contact the business.
Shred all documents that show personal, financial, and medical information before you throw them away.
Don't respond to email, text, and phone messages that ask for personal information. Legitimate companies don't ask for information this way. Delete the messages.
Create passwords that mix letters, numbers, and special characters. Don't use the same password for more than one account.
If you shop or bank online, use websites that protect your financial information with encryption. An encrypted site has "https" at the beginning of the web address; "s" is for secure.
If you use a public wireless network, don't send information to any website that isn't fully encrypted.
Use anti-virus and anti-spyware software, and a firewall on your computer.
Set your computer's operating system, web browser, and security system to update automatically.
WHAT YOU SHOULD KNOW ABOUT THE NATIONAL DO NOT CALL REGISTRY
The National Do Not Call Registry gives you a choice about whether to receive telemarketing calls at home. Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at this Website. You can register your home or mobile phone for free.
Why would I register my phone number with the National Do Not Call Registry? The National Do Not Call Registry gives you an opportunity to limit the telemarketing calls you receive. Once you register your phone number, telemarketers covered by the National Do Not Call Registry have up to 31 days from the date you register to stop calling you.
Who manages the National Do Not Call Registry? The National Do Not Call Registry is managed by the Federal Trade Commission (FTC), the nation's consumer protection agency. It is enforced by the FTC, the Federal Communications Commission (FCC), and state law enforcement officials.
Register for the Do Not Call Registry Here
Have more questions about how the Do No Call registry works? Find answers here
Thank you for choosing Consumer Advocates Credit Counselors. We welcome your comments and suggestions for future issues. Please email education@caccdebt.org with your ideas.
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Give yourself Credit
How to improve your Credit Report Under the Fair Credit Reporting Act (FCRA), both the credit reporting company and the information provider (the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the credit reporting company and the information provider if you see inaccurate or incomplete information. 1. Tell the credit reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report that you dispute, state the facts and explain why you dispute the information, and request that the information be deleted or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one below. Send your letter by certified mail, return receipt requested, so you can document what the credit reporting company received. Keep copies of your dispute letter and enclosures. Credit reporting companies must investigate the items in question - usually within 30 days - unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the credit reporting company, it must investigate, review the relevant information, and report the results back to the credit reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file. When the investigation is complete, the credit reporting company must give you the written results and a free copy of your report if the dispute results in a change. (This free report does not count as your annual free report under the FACT Act.) If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that the information is, indeed, accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider. If you request, the credit reporting company must send notices of any correction to anyone who received your report in the past six months. A corrected copy of your report can be sent to anyone who received a copy during the past two years for employment purposes. If an investigation doesn't resolve your dispute with the credit reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the credit reporting company to provide your statement to anyone who received a copy of your report in the recent past. Expect to pay a fee for this service. 2. Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a credit reporting company, it must include a notice of your dispute. And if you are correct - that is, if the information is found to be inaccurate - the information provider may not report it again. Sample Dispute Letter __________________________________________________________ Date Your Name
Your Address
Your City, State, Zip Code Complaint Department
Name of Company
Address
City, State, Zip Code Dear Sir or Madam:
I am writing to dispute the following information in my file. The items I dispute also are circled on the attached copy of the report I received. This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information. Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible. Sincerely, Your name Enclosures: (List what you are enclosing) ________________________________________________________ Accurate Negative Information When negative information in your report is accurate, only the passage of time can assure its removal. A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.
Have a money saving idea that you'd like to share?
Send it to us for possible publication in this newsletter!
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Is Freelance work for you?
International Freelancers' Day took place in September and there is plenty for many freelancers to celebrate. According to a report issued by the International Freelancers' Academy, 90% of freelancers are happier than they were before they went freelance. Nearly half (46%) say they have more time, and more than three-fourths - 77% - say that they are optimistic about their business prospects for the next 12 months.
Of course there are challenges. The IFA's report shows that finding clients is rated as the biggest challenge faced by freelancers, with 21% saying it was their primary concern. But with a strong gameplan, new freelancers can give themselves a great chance of success while reaping the benefits of being their own boss - more free time to spend with their family, for instance, and having more control over their income.
According to Liran Kotzer, CEO of DoNanza, a company that provides services for Freelancers, there are a number of things that freelancers can do to increase their chances of getting the best out of their new working arrangements. By following a five-point plan, outlined below, freelancers can set themselves up to succeed.
Attitude - Adopting the right attitude is key to succeeding as a freelancer. Motivation and self-discipline are key to making the freelance life work, so develop a five-year plan. Create specific, measurable goals which can be ticked off as they are achieved.
Creating a sense of accomplishment helps to maintain motivation.
Back office setup - New freelancers need to think very carefully about the tools they will need to work on projects effectively. They'll need a backup system , while tools such as Google Docs and Dropbox are ideal for sharing documents and working on collaborative projects. The billing aspect of the business shouldn't be overlooked, either - smartphone apps can be used to log receipts for expenses claims, while accounting software is a must for keeping on top of invoices.
Be realistic and flexible - There have been some significant shifts in the kinds of jobs on offer for freelancers as well as the relative rewards for these jobs. For example, demand for translators has increased since 2011, but the average reward offered for translation jobs declined over the same period. Freelancers should think about which skills they can offer as a freelancer and shouldn't be afraid to work on developing new skills to take advantage of shifts in the marketplace.
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Skill
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% increase in demand since 2011
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Hypertext Processing (PHP)
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23.42%
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Translation
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116.43%
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Graphic design
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80.48%
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Data entry
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28.46%
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Content writing
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50.16%
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Client relationships - Freelancers need to work on the relationships they have with their clients. Making sure they behave in a professional manner at all times could make the difference between winning more projects and being cast aside. Responding to emails promptly, following through on requests for information and being willing to ask pointed questions when more details are needed in order to complete a job are key considerations.
Advertising - DoNanza's data shows that on average, every project advertised on a public job listings board will receive 30 applications. As any time spent on pitches that don't succeed is wasted and doesn't earn a freelancer any money, freelancers who want to get ahead of the competition should consider advertising their services online.
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Millions of people are
still suffering with Debt related problems!
They need your Help! CACC is a non-profit, IRS approved 501(c)3 educational and counseling organization. Our expenses and operations are supported through generous contributions from corporations and individuals like you. Will you please consider providing some financial support so that we can continue our mission? The donation you make today will help fund debt relief programs, education and client services while providing help and hope to thousands. Won't you help us give the gift of Debt Relief?
YES, I'd like to help fund CACC's Debt Relief and Education efforts with a contribution of:
( ) $25 ( ) $50 ( ) Other $___________.
Please Mail your Donation to:
CACC Education Development
23123 U.S. 441, Suite 107
Boca Raton, FL 33428
Thank you for your generosity! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Support CACC while you save up to 85% on your favorite Magazines! Now that's a Win-Win!
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Free Workshops and Seminars 
As a non-profit Credit Counseling and Financial Education organization, CACC is dedicated to reaching out to the community. CACC provides financial education seminars and workshops at community centers, local organizations, and companies.
Popular Topics Include:
- Managing Money in Tough Times
- Creating and Using a Spending Plan
- Managing Debt
- Fighting Identity Theft and Financial Fraud
- Understanding Your Credit Report and Boosting Your Credit Score
- Creative Ways to Teach Kids About Money
- How to Get Out of Debt
Ask about customized seminars for your group, staff, congregation, organization, or club!
Call 1-800-763-1874 or e-Mail: education@caccdebt.org
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Consumer Advocates Credit Counselors, Inc. is a 501 (c)3 non-profit credit counseling organization providing credit counseling, financial education, and debt management services. Please visit our website at: www.caccdebt.org
Additional consumer resources:
Free Birthday Gifts
Stay Safe On-Line
US General Services Administration Federal Citizen Information Center
National Drug Abuse Hotline 1-800-622-HELP
National Domestic Violence Hotline 1-800-799-SAFE
Suicide & Depression Hotline 1-800-999-9999
National Council on Problem Gambling 1-800-522-4700
Fair Debt Collection Practices Act
Homeowners Hope Hotline for Mortgage Counseling and Assistance 1-888-995-4673
Benefits.gov
Learn about a variety of Government Benefits, how to qualify and how to apply.
Supplemental Nutrition Assistance Program (SNAP)
SNAP is the new name for the federal Food Stamp Program.
Temporary Assistance for Needy Families (TANF)
TANF is designed to help needy families achieve self-sufficiency. States receive a block grant to design and operate their programs to accomplish the purposes of TANF. These are:
-assist needy families so that children can be cared for in their own homes
-reduce dependency of needy parents by promoting job preparation, work and marriage
-preventing out-of-wedlock pregnancies
-encouraging the formation and maintenance of two-parent families.
Medicaid
Medicaid is health insurance that helps many people who can't afford medical care pay for some or all of their medical bills.
Good health is important to everyone. If you can't afford to pay for medical care right now, Medicaid can make it possible for you to get the care that you need so that you can get healthy and stay healthy.
Supplemental Security Income (SSI)
is a Federal income supplement program designed to help aged, blind, and disabled people, who have little or no income.
It provides cash to meet basic needs for food, clothing, and shelter.
Low Income Home Energy Assistance Program (LIHEAP)
If you can't afford to pay your home energy bill, your home may not be safe, and you may be at risk of serious illness or injury. The LIHEAP may be able to help keep you and your family safe and healthy.
National School Lunch Free Lunch Program (NSLP)
Established in 1946, The National School Lunch Program (NSLP) is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day.
Federal Housing Assistance/Section 8 (FPHA)
Public housing assistance was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from scattered single family houses to high rise apartments for elderly families.
Home Affordable Modification Program (HAMP)
888-995-HOPE
If you are struggling with your monthly mortgage payments or have already missed a payment, now is the time to take action.
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Contact Us:
phone: 1.800.763.1874
CACC Money Wise Monthly Editor in Chief:
Mike Schiano, "The DebtBuster"
'Til Next Month, Consumer Advocates Credit Counselors, Inc.
This newsletter is designed to provide accurate and authoritative information with regard to the subject matter covered. This information is given with the understanding that neither CACC nor the Editor and Writers are engaged in rendering legal, accounting, or other professional advice. Since the details of your situation are fact dependent you should always seek the services of a competent professional before making any financial decisions.
Copyright©Consumer Advocates Credit Counselors, Inc. 2012. All Rights Reserved.
Use of all or part of this newsletter is allowed with proper attribution and link: Source: Consumer Advocates Credit Counselors, Inc. www.caccdebt.org
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