Retailers and the tax rebate
April 30, 2008
Everyone wants a piece of your economic stimulus check.
If you read Monday’s post, you already know what Advantage would advise you do with your checks. As it turns out, many retailers have another idea of how you should spend your rebate money.
It’s a no-brainer that stores are going to try to make the most of this little windfall of money many of us will find in our bank accounts and mailboxes over the upcoming weeks.
Some retailers are offering to turn your rebate check into a gift card for their store.
It sounds handy right? It sounds especially appealing in the case of grocery stores. After all, we have to buy food, and spending our rebate money on groceries sounds practical, almost downright responsible.
And for some people maybe it is practical, but you should consider some things before you jump on these offers.
First of all, do you want to spend all of your rebate money at just one store? Second, would it be more practical and responsible to divide that money up between several areas such as debt reduction, savings and groceries or clothing? Third, are there any caveats attached to the gift cards? Make sure to get all the details before choosing this option.
For more reading on the subject, Liz Pulliam Weston this week made a case against the tax rebate gift cards. You can read her take on the topic here and make the decision that is best for you and your family.
By the way, are you still confused over when you should get your check or how much you will get? You’re not alone. These checks have caused a lot of confusion. The Pittsburgh Post-Gazette ran a story today that answers some common rebate check questions. They also gave a rebate hotline number that you can call with questions. That number is (866) 234-2942.
Do you have an opinion about rebate tax gift cards? Please share it.
The Economic Stimulus Check: Spend it or save it?
April 28, 2008
The economic stimulus checks are about to arrive in mailboxes and bank accounts across the country.
What is the best thing to do with your check?
First, take a good look at your financial situation. If you have debt, determine what debt has the highest interest rate. For example, if you have a credit card with a high interest rate, consider using your rebate check to make a dent in the principle balance of that card, especially if you’ve only been making minimum payments that are barely covering the interest you are accruing.
The second thing to consider is using your rebate check to start a savings account if you do not already have one.
It is important to have a financial cushion to fall back on should you find yourself faced with an unexpected expense, reduced income or some kind of an emergency.
It is often recommended an individual have at least three to six months of their take-home pay in savings. Another recommended saving amount is to set aside 5 to 10 percent of your take-home pay.
If those amounts seem too high, don’t get discouraged. Start by putting aside whatever you can, even if it’s only $10 a week. However, the rebate check would be a great way to start a savings account that you can then continue to build on.
What if you know you should save money or pay off bills, but you also have the urge to splurge?
In that case, consider setting aside some of your rebate money for fun and some for reducing your debt or starting a savings account.
To estimate how much money you will be receiving, check out the IRS’s Economic Stimulus Payment Calculator.
Once you have an idea of how much money you may be receiving, you can formulate a spending/savings plan that makes the most sense for you.
A CNN/Opinion Research Corp. poll shows that 41 percent of those surveyed plan to use their rebates to pay off bills, and 32 percent said they would put their money into savings. Only 21 percent of the respondents said they planned to spend the money, and 3 percent said they are going to donate their money.
What do you plan to do with your economic stimulus check? Please feel free to share your thoughts or tips.
Foreclosure and debt can affect everyone
April 25, 2008
I often say, “Debt doesn’t discriminate.”
People find themselves facing financial difficulties for a variety of reasons. Often poor money management is the reason people are struggling with money, but sometimes it’s job loss, reduced income, or medical debt that created difficulties. Other times divorce or the death of a partner can create financial turmoil.
There are plenty of people who have what might be considered “good” jobs with “good” pay who find themselves in need of a financial overhaul.
Take for instance this story from the New York Times. The story focuses on homes in jeopardy of going into foreclosure in
But, no matter where you are on the income spectrum, foreclosures affect everyone — even those people who are paying their mortgages.
Homes in foreclosure can drive down the value of neighboring homes. In some neighborhoods, empty homes have become havens for the homeless or people just looking for a place to hang out. Some homes have become targets for vandals, while others have been raided by thieves and stripped of copper wiring, plumbing and appliances that can be sold for cash.
MSN columnist Liz Pulliam Weston detailed this problem in a recent article. You can read the article in its entirety here. But, one thing really stood out to me. Weston cites a new report by the Pew Charitable Trusts that estimates “40 million homeowners may see their property values and their municipalities’ tax bases drop by as much as $356 billion in the next two years” because of foreclosures in their community. Weston calculates that as a per-household loss of wealth of $8,771.
I certainly don’t have an answer to this problem, but I think it is very important for people to be aware of what is going on in their communities and be proactive about trying to stave off foreclosure.
I can’t stress enough how important it is for someone who is struggling with their mortgage to look for assistance at the first sign of a problem. Too often homeowners wait until the foreclosure notice is in their hand before they try to get help. Only 40 percent of borrowers actually contact their mortgage lenders before they receive a foreclosure notice.
If you are worried that you may have trouble paying your mortgage, contact your lender immediately. If you are not comfortable contacting your lender or would like help exploring the options that may be available to help you, contact a non-profit credit counseling agency, like Advantage CCS, that offers housing counseling.
Please don’t wait too long to get help. Likewise, if you know someone who may be struggling, encourage them to get assistance as soon as possible.
Go “green” and save some green
April 24, 2008
I don’t know many people who wouldn’t reduce their cost of living if they could. And many people would be happy to know that you can reduce costs at home and do something good for the environment.
Everyone is talking about “going green” these days. There are some easy ways to be Earth-friendly and pocketbook-friendly at the same time.
This article on MSN has some great suggestions of ways to go green including line drying clothes, using dish towels (especially vintage towels) in place of paper towels and napkins, and catching storm water from your gutters to water gardens and plants.
Here are some more ways to go green at home and save some green in the process:
· Invest in a water filter at home instead of buying bottled water.
· If you don’t have a place to recycle plastic shopping bags, keep them. They are useful for many things including as trash bags or cleaning up after pets.
· If you have a spray bottle of window cleaner, when it’s empty, fill it with vinegar and use that to clean your windows.
· When cleaning, use rags instead of paper towels, and look for mops with removable, washable heads. You won’t have to keep buying new sponges and mops.
· Check out the power of baking soda. It can be used as a substitute for many things including store bought cleaning products and deodorizers.
· Don’t leave the water running while you brush your teeth. A typical faucet releases about three gallons of water a minute. Look at the math on this one: If you have a household of four people, and each person saves two gallons of water when they brush their teeth, and each person brushes their teeth twice a day, your household could save up to 112 gallons of water a week or 5,824 gallons a year!
· Buy compact florescent light bulbs. They use less electricity and last much longer than incandescent bulbs.
· Did you print something on the computer only to realize there’s a mistake or you don’t really need the printout? Don’t throw the paper away. Simply flip it over and keep it handy for scrap paper before tossing it.
· If you have items around your home that you no longer use, sell them instead of sending them to the landfill. Garage sales and online auction sites are a great way to get rid of unwanted household items and toys and put a little extra cash in your pocket.
Those are just a few tips on living greener and cheaper. Do you have any suggestions of simple ways to be environmentally friendly and save money?
What happens during a credit counseling session?
April 21, 2008
You’ve decided you need help to pay down your debt and get your finances back on track. You may have even decided on a credit counseling agency to help you do just that.
But, now you’re wondering just what will happen during your credit counseling session. Maybe you’re nervous about how the counselor will treat you. Maybe you’re embarrassed by how much debt you’ve accumulated.
Even though discussing your financial situation with a stranger may seem difficult, rest assured, it won’t be as difficult as you think.
The first thing to know is that the counselors are not there to judge you. They are there to determine where you are financially and to help you find the best solution to get back in control of your finances. You should not be scolded for your past financial decisions.
A typical credit counseling session should last about one hour. During that time, the counselor will work with you to determine your monthly household income and your monthly expenses. The counselor will ask for as detailed of a budget as you can give them. It is important to know where all of your money is spent in order to get the most accurate assessment of your situation.
It’s a good idea to accumulate all of your bills for the past month prior to your credit counseling session. Make sure to have a best estimate of what you spend on everything from groceries, to your pets, to gifts for family and friends.
It is also important to be honest with your counselor. Don’t “fudge” numbers because you think something will look bad. The counselor can only give you the best help and advice if he or she has the most accurate information possible.
At the end of the session, the counselor will make practical suggestions and offer an action plan that will best fit your situation. They may refer you to other community agencies for assistance, if you so choose. You will be mailed a complete packet of information including your personalized budget and action plan.
The certified counselors at Advantage Credit Counseling Service understand that every client has a unique situation and background. They will work with you to help you determine the best way to pay down your debt, establish a reasonable monthly budget and get you back in control of your finances.
- SEARCH:
