June 2009
You are currently browsing the articles from Immigrant Millionaire written in the month of June 2009.
Kids love Halloween. Some adults do too, but Halloween is one of those holidays that is all about the kids. It’s fun to get free bags full of candy and junk food, and its fun to dress up in a scary costume and roam the neighborhood at night, or just hide behind a tree in the front yard and leap out to scare the smaller kids. Like many holidays, however, it can cause a real drain on your finances if you’re not careful about how you spend for the celebrating.
Ghosts & Goblins on a Budget
The kids may want a store-bought costume for Halloween. They may beg for one. After all, you’re just not cool if you’re not dressed in a “real” Sponge Bob or Darth Vader costume. The costs of these items can be simply insane. You’re far better off making costumes at home. If you’re good at sewing, making a costume can be a fun project and the costume can probably be used several times. If you’re not a seamstress, a home made costume is still a possibility. Old clothes can be smeared with dirt and fake blood to make a gruesome zombie outfit.
Vampire blood can be made with some corn syrup and red food coloring (don’t be fooled, that’s what’s in the tubes of the stuff you buy at the store, and it’s basically what Hollywood make-up effects artists like Tom Savini use in movies like Dawn of the Dead.)
When it comes to candy, this is not something that you can make at home. Homemade treats handed out to trick-or-treaters are always suspicious. There’s no sense in working to make candied apples or cookies just to have them thrown away by concerned parents and not enjoyed by the children. There’s no reason to spend a pile of money on a pile of candy. In the grocery store, next to the bags of Hershey bars and Kit Kats, you’ll find larger bags of treats like Sweet Tarts, Smarties, and bubble gum for much less. If you must buy candy for the trick-or-treaters, buy those. Sadly, fewer kids trick-or-treat each year, because of the dangers in our world. Eventually buying candy for them won’t be necessary at all.
With a little careful spending, you and your family can enjoy the festivities of Halloween without a frightening effect on your bank account.
Written by srini on June 10th, 2009 with no comments.
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Comparison Shopping
Years ago, comparison-shopping was nothing short of a royal pain in the patootie. Comparing prices involved driving from store to store or making repeated phone calls to different retailers in an effort to find the best price. Thankfully, those days are long gone. Thanks to the advent of the Internet, comparison-shopping now involves a few clicks and can be completed in moments. It’s never been easier to shop around for literally anything from auto insurance to zither strings. Isn’t technology wonderful?
Grocery Shopping
There are lots of little tricks that will save you money at the grocery store. Clipping coupons can work, as can choosing store brands or generics over name brand items. Planning your shopping trips ahead of time and sticking to your list can also save money. Stock up on items when they’re on sale and avoid impulse purchases. Put down that copy of People right now. Do you really need to know if it’s splittsville for Nick and Jessica?
Auto Insurance
The car insurance business has changed dramatically in recent years. With every state making insurance a requirement and the Internet making it easy to shop around and get quotes in seconds, there is no reason for anyone to pay more than she should for automobile insurance.
Clothing
Buying clothing can get very expensive. Save money in this department by avoiding designer labels, shopping at discount clothiers, and choosing a few simple items that you can mix and match to create multiple outfits and ensembles.
Shoes may be one item that you don’t want to cut back on. It’s probably better to buy one good pair of $50-$80 shoes than to buy several pairs of $20 shoes over the course of the year because they wear out.
Internet Service
If you’ve not yet jumped on the “broad bandwagon” by choosing a cable, DSL, or satellite Internet service, don’t. Unless you need it for business, there’s no reason to have high-speed access if you’re trying to save money. The difference between broadband and dial-up access is like night and day, but so is the cost. Most broadband providers charge upwards of thirty dollars per month while dial-up access can be had for about ten. You do the math, even if it takes a while to upload the answers.
By assessing your personal situation and the things that you spend money on, you can undoubtedly find additional ways to cut corners, curtail your spending, and save even more money.
Written by srini on June 9th, 2009 with no comments.
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Going through a divorce is trying, both emotionally and financially. It is a difficult time and the emotions involved often manifest themselves in a desire to hurt the other party. Since civility and criminal law prevent us (if we are thinking clearly) from attempting to do so physically, we often attempt to do so financially and emotionally. It is from these feelings that horror stories of husbands hiding their income and accounts from their wives and wives refusing to let their husband see the couple’s children evolve. While many laws to prevent these activities exist today, these things still happen from time to time and either scenario can be perpetrated by either party. It is very important that you take steps to protect yourself.
Hire an Attorney
Many states have adopted community property laws that essentially divide all of the couples assets and liabilities down the middle in the event of a divorce. In cases where there are few assets and no children the couple may be able to handle the divorce amicably and reach an agreement suitable to each other and the court without the involvement of an attorney. If you own a house, have children, or have considerable assets and investments (or considerable debts), an attorney who specializes in divorce law is essential.
Understand Debt and the Divorce Decree
In a community property state (currently Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), debts will be divided down the middle just like your assets. Each spouse will be equally liable under the terms of the divorce settlement. The divorce decree is binding to you and your ex-spouse only, however, and your creditors will not care if one or the other is held responsible for payments to their account. If the debt goes unpaid, they will proceed with collection activity against the person named on the account and have every legal right to do so. Explaining the divorce decree and sending them copies of it will have no bearing on the situation. Even if the divorce settlement specifies the account be paid by your ex, it can affect your credit rating if it’s in your name and goes unpaid.
Divorce is about a number of things and money is among them. When a person is emotionally distraught over the dissolution of his or her marriage it can be difficult to think about finances, but it is, unfortunately, necessary.
Written by srini on June 8th, 2009 with no comments.
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Written by srini on June 7th, 2009 with no comments.
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One downside to investing is the possibility of dealing with a dishonest brokerage firm. While the Securities and Exchange Commission (SEC) does a good job of monitoring and regulating brokerages, there are some dishonest people in this profession. Consumers shouldn’t let that fact discourage them from investing; there are dishonest people in most professions. The fact that there are dishonest car salesmen doesn’t stop you from buying a car; you just do everything you can to be sure you’re not getting taken for a ride. There are dishonest plumbers in the world, but you still call one when you’re facing a broken toilet. You just do everything you can to make sure you’re not getting flushed down the tubes. Knowing what to watch out for is the key to not getting ripped off by any dishonest professional, so following are some practices that a dishonest investment broker may engage in.
“Churning”
Churning is the practice of trading a client’s account excessively and unnecessarily. It is done to increase a broker’s commissions and results in little or no real gain for the client. A telltale sign that your account may be being churned is a marked increase in the number of transactions without any increase in the value of the portfolio.
“Dividend Selling”
Brokers are engaging in dividend selling if they encourage clients to buy a specific stock or mutual fund based on dividends due to be paid. While this sounds like good advice to the uninitiated (“buy Coca Cola right away, they’re paying a $2.00 per share dividend two months from now”), such advice that leads to a trade does nothing for the client while creating a commission for the broker. The client will find that the stock price is reduced by the amount of the dividend when it is traded ex dividend (meaning that the dividend in question belongs to the seller rather than the buyer) and the dividend is actually now a tax liability for the investor.
The best ways to avoid these brokerage tactics is to deal with a brokerage firm that is known as respected, and to investigate any brokerage firm before agreeing to use them. You can also consider opening a wrap account with your broker. In a wrap account situation, the broker services and manages your portfolio for a flat fee, rather than a commission. This makes both of these practices unprofitable for the broker since there is no commission involved.
Written by srini on June 6th, 2009 with no comments.
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Even the most frugal individuals need to get out and have a good time now and then. Even when you’re adhering to a budget you should get out of the house and enjoy a nice, but reasonable, dining experience. In order to enjoy dining out on a budget, there are some ground rules that you should agree to before ever setting foot in the restaurant.
Be Realistic
There are restaurants designed to suit every conceivable price range. Just because you’re on a budget doesn’t mean that you’re limited to the dollar value menu at the corner Burger Shack, but you shouldn’t be driving to the most expensive place in town either. Find a reasonably priced eatery that you know you will enjoy. The definition of reasonably priced is up to you, but if the cost for the entire meal is more than a day’s pay, you’re out of the realm of reasonable.
Skip the Appetizers, Alcohol, and Desserts
When dining out on a budget, before dinner appetizers and alcoholic beverages should be avoided. The two combined can easily double the cost of the meal and even an appetizer itself can come close to the price of an entrée. Bypass both of these temptations as well as dessert and you’ll save quite a bit on the cost of dining out.
Set a Price Limit and Stick to it
Set a limit for the price you’re willing to pay for your entrée. By making a dollar amount limit before hand you’ll avoid uncomfortable deliberations at the table and the temptation to splurge will be reduced. You should have a general idea what the meal is going to cost before ever going to the restaurant and you definitely don’t want to go too far over it. If you find yourself thinking “I’ll have the prime rib” and the prime rib is over your limit, imagine yourself on a game show. “I’ll have the prime rib.” BZZZZT! “Sorry, diner, that’s the wrong answer. But to thank you for playing our game we’d like to offer you the parting gift of a lovely Combo Plate.”
“Umm… How Much is This?”
Make sure that you choose a restaurant that has the prices on the menus. When they don’t print a price they’re saying, “If you have to ask, you can’t afford it.” Also, don’t order anything that doesn’t have a price listed. “Market Price” translates in the restaurant to English dictionary as “too expensive.”
Written by srini on June 5th, 2009 with no comments.
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You are probably aware that congress passed the so-called “Bankruptcy Bill,” a bill that makes a number of changes to the federal bankruptcy code. While you may know that the bill essentially makes it more difficult for a consumer to file for bankruptcy, you may be unaware of the specifics. Here’s what the Bankruptcy Bill, which goes into effect in October, 2005, basically means.
Under current bankruptcy law the trustee or judge makes a determination as to whether the debtor is abusing the bankruptcy system. Under the new law, a “means test” will be used and anyone who has an income that is at or over a set median amount will automatically be found to be abusing the system. These people must then disprove that claim.
Currently anyone who wishes to file bankruptcy may do so and has no problem finding legal counsel (bankruptcy lawyers compete for business almost as aggressively as personal injury lawyers.) With the new law a debtor must attempt an approved credit counseling or debt management program prior to filing bankruptcy. Lawyers representing the debtors may face personal liability if their clients are found to be ineligible for Chapter 7 filing. This is expected to result in fewer attorneys accepting bankruptcy cases and increased fees for the ones that do. The bankruptcy filing fees will also increase.
Bankruptcy law currently includes an “automatic stay” or cessation of collection activity against the debtor once bankruptcy has been filed. When the new law is in effect the automatic stay becomes conditional in many cases and creditors have more leeway in continuing collection activity during the bankruptcy proceedings.
Several types of debt are not dischargeable under the current laws. These include state and federal taxes, government guaranteed student loans, and family support payments. Under the new regulations more types of debt fall into the non-dischargeable category and the “presumption of fraud” category is broadened to include “luxury items” worth $500 or more that were purchased within 90 days of filing and cash advances of at least $750 made within 70 days of filing.
The new law makes other provisions as well but, generally speaking, the Bankruptcy Bill serves to increase the rights of creditors while reducing the rights and increasing the responsibilities of debtors. If bankruptcy is something you’ve been considering (and it should always be a last resort), it may be best to do so before the law goes into effect. After October 17, 2005, it will be much more difficult to do so.
Written by srini on June 5th, 2009 with no comments.
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Being in debt is certainly no fun. The feeling of dread every time the phone rings, the sense of impending doom because you know that you can’t possibly dig yourself out of the hole that you’re in, and the self loathing that comes from essentially feeling worthless can cause undue stress and mental anguish at a time in your life when you’re probably already pretty stressed out.
The best way to deal with debt collection agencies is to avoid ever having to do so. By making sound financial decisions and saving money for unforeseen hardships you can stay out of the hot water of past due bills and collection accounts. Unfortunately, sometimes things just happen and eventually the bill collectors start calling. Here are some things to keep in mind if you’re dealing with debt collectors.
The Law is on Your Side
Collection agencies are governed by a law called the Fair Debt Collection Practices Act or FDCPA. Enforced by the Federal Trade Commission, this law spells out specific guidelines concerning what a collection agency can and can not do.
• Collectors may not contact you more than once per day regarding a debt.
• Collectors may not give information about your debtor status to any third party
• Collectors may not threaten any legal action which they do not actually intend to take
• Collectors may not call you before 8am or after 9pm in your local time zone
• If you inform a collector that you are represented by an attorney, the collector must deal with your attorney and not with you directly
• Collectors must inform you that their communication with you is an attempt to collect a debt and that any information they obtain from you will be used for that purpose
• If you advise a collection agency, in writing, that you wish them to cease and desist all contact with you, they must do so
It is important to keep in mind that these laws apply to third party collection agencies only, and not to the original creditors you owe. Being represented by an attorney or sending a cease and desist letter to a collection agency will not stop them from suing you. The law applies to consumer debt only. Certain civil debts (such as past due child support payments and federal or state taxes) are not covered by the FDCPA.
Written by srini on June 4th, 2009 with no comments.
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Past credit problems and mistakes can come back to haunt us when we’re in a position to seek credit later in life. Sometimes the mistakes of our youth can cause problems in our later years and must be dealt with when we want to finance a new car, buy a home, or obtain a credit card. There is a right way and a wrong way to attempt to clean up your credit.
No Quick Fix
The most important thing to understand is that there is no quick and easy way to correct your credit. Any company that is advertising a way to clean up your credit with the wave of some magic wand is peddling magic beans. Remember that giant beanstalks leading to castles in the sky only grow in fairy tales. Don’t fall for the claims made by these con artists.
If you really want to address your credit concerns, you’ll need to obtain copies of your credit report from all three of the major reporting agencies. These are Trans Union, Equifax, and Experian. Fortunately in the internet age, obtaining these copies is as easy as going to the companies’ websites. Take a look at what is and isn’t on the reports and prepare to deal with anything negative.
You should have a pretty good idea of what negatives are on your report. You know what bills you paid and what you didn’t. Keep in mind that the Fair Credit Reporting Act dictates that most negatives can remain on your credit report for a maximum of seven years from the time you last acknowledged the account. If you have a bill from six years ago that you can’t fathom how you will ever repay, it may be best to let it go and wait it out. Simply making a good faith payment to an old account can keep it on your report for another seven years.
The only way to address more recent items is to pay them. An account that has defaulted or been charged off will still be negative if it’s paid off late, but a satisfied account looks better than an ignored one.
If there are items on your report that you believe are incorrect, they can be disputed with the reporting company and the reporting agency. The process for doing so will be available on the reporting agency’s website.
Once you take the steps to clean your credit, you need to do everything you can to keep it that way.
Written by srini on June 3rd, 2009 with no comments.
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People love their cars, there’s no doubt about it. We love them so much that we often spend too much for them for all of the wrong reasons. People tend to buy cars that are flashy, that are popular, or that have the most exciting TV commercials, rather than basing their decision on more practical criteria. Choosing a vehicle based on your actual needs rather than on some ‘unreasonable reasoning’ can save you money not just on the car itself, but on a number of vehicle related costs.
Take the SUV explosion of the late 90s and the 2000s as an example. SUVs are everywhere despite the fact that they’re more expensive, burn more fuel, and are often more dangerous than a regular car. People are drawn to the cargo capacity of the SUV, are lulled into a false sense of security based on its size, and like the fact that it can be taken off-road if necessary.
That’s all well and good, but if you own an SUV, how often do you transport large items in it? How often do you take it out for a romp through the desert or other off-road area? If you’re answers to these questions are “never” or “rarely,” then you probably never needed to buy an SUV. You’re paying more for gas than you need to, and probably more for auto insurance.
If you’re considering buying an SUV, stop and ask yourself those questions. If you don’t need to transport large items regularly, are not likely to go “four wheeling,” and don’t have a large family, you may do better with a smaller car.
Your vehicle is the one major purchase you’re likely to make in life that actually depreciates in value over time. When you’re spending thousands on something that is going to be worth less the moment you drive it off the lot, you need to make sure that you’re getting as much as you can for as little as you can get away with.
On the other end of the spectrum is the flashy sports car. People buy these to show off, plain and simple. It’s that love affair with cars that makes people want to buy a car that looks cool and fast. There is no practical purpose to own a Chevy Corvette or Dodge Viper. You’re better off saving your money and impressing the ladies with your bank balance rather than your wheels.
Written by srini on June 2nd, 2009 with no comments.
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