Archive for July, 2009

What Do You do If You Need a Payday Loan?

By: Green Panda | Date posted: July 13, 2009 (8:00 am)

I have a relative that has used payday loans to keep them a float sometimes. I was surprised since they had a decent job. After chating a bit with them, I found out that they had a habit of spending more than they earned.  Pretty much many items in the house were on a payment plan, credit card, or rent to own.

If you’re in a similar boat and want to get out of using payday loans, I have some suggestions.

Alternatives to Taking Payday Loans

Find out exactly why you’re short on money. Did an unexpected bill come up or did you forget about your semiannual bills? Was your paycheck shorted? Do you lack a budget or don’t stick to one? Finding the reason can help you avoid being stuck in this situation again.

Re-prioritize your your monthly expenses. Pay your  necessities first. Cut all your luxuries until you can get back on your feet.

  • Housing: You need a roof over your head. If you have a mortgage, please focus on paying this bill to avoid foreclosure.
  • Food: You need food to survive. Cut out all eating out expenses and stick to grocery foods. Eating sandwiches may not be the popular choice, but it’s the smart one.
  • Utilities: Electric, phone, and water are important utilities. Cancel your cable bills and make sure you’re not paying too much for phone service. You can call and see if you can qualify for assistance or a special payment plan.
  • Car **If you are way over your head with car payments, try selling it to break even. **

Contact the all companies that you’re in debt with and set up a payment plan. If you’re unable to pay the minimum for your credit cards, call them to set up an affordable plan. Ask them to waive fees and lower your interest rate. Some credit card companies are willingly to cut you a deal on your debt as this recession continues. They would rather get some money than no money. Some utilties like electric will work with you on catching up with bills.

See if you can get a short term loan with Lending Club.You may be surprised to see how reasonably priced the loan can be.

Rebuild Your Finances: Step by Step

Once you’re out of the whole, focus on improving your finances bit by bit. It is possible to get out of the cycle of debt.

Increase your income.

You can only cut your monthly expenses so much, so increasing your income should be a focus. See if you can increase your profile at work and ask for a raise. It may mean getting a second job temporarily. See if you can turn a hobby into side income.

Have a portion of your paycheck transferred to a high interest savings account.

Start small ($25/week) and automate your money to put into savings. You’ll become use to the slightly small paycheck as you start savings.If you can find the money to pay back the payday loan, then consider allocating that money into a small emergency fund for the next time you need help.

The first thing you need to save for is an emergency fund.

This step can help you build financial cushion, especially in turbulent economic times like these. Find an FDIC bank or NCUA credit union that offer high interest rates for savings and watch it grow faster.

Set up free online bill pay with your bank.

Most banks and credit unions offer money and time saving feature. Spend an hour setting this up with your bills, account numbers, due dates, and amounts, and you’ll only need a few minutes a month to keep it up.

Pay down your credit card debt.

Depending on your circumstance you may want to transfer over to a 0% interest card to speed the process up.

  • Pay your bills on time. A good credit history can help when looking for a home as ahigher credit score leads to lower interest rates. I had a bad habit of losing paperwork, so I automated all my bills. It saves on late fees and stamps. Many banks have online bill pay as a feature.
  • If you can, pay the full amount owed. Credit card companies might call you a “deadbeat“, but at least you’re not tied to them each month. If you can’t, then pay as much as you can. Try a debt snow ball (a technique Dave Ramsey advocates) or evensnowflaking. Find money in your budget to eliminate your debt.
  • NEVER, EVER lend your credit card to anyone! Even if it is a trusted family member or family. This account is tied to YOU and you will be held responsible.

Your Take

Those are some things I’ve done to help me get out of credit card debt. What ideas do you have for those trying to dig themelves out of the hole? Any stories or suggestions?

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Free Coffee at McDonalds on Mondays

By: Green Panda | Date posted: July 13, 2009 (7:54 am)

Good news for coffee drinkers!

In case you haven’t heard, starting today, July 13 2009, McDonalds will be giving an iced McCafé mocha ( hot or iced ) to consumers every Monday from 7 a.m. to 7 p.m. The coffee deal’s last day is Aug. 3, 2009. I’m going to grab some coffee and save a little bit of cash.  My husband is probably going to take advantage of this deal as he LOVES coffee.

Free coffee at McDonalds for the next few Mondays.

Free coffee at McDonalds for the next few Mondays.

How about you? Will you grab some of the free coffee?

MSN Money includes some more details with their story on the coffee campaign:

No purchase is necessary to get a 7-ounce iced mocha or an 8-ounce hot drink — both smaller than the 12-ounce “small” size on the menu. That’s because it’s all about the coffee at McDonald’s right now.

Photo Credit: deryckh

Weekly Round Up: Cat Show

By: Green Panda | Date posted: July 12, 2009 (2:09 pm)
My sister's cat when she first adopted him.

My sister's cat when she first adopted him.

My sister is in town again for a cat show. Her cat has gotten 6 ribbons so far. I’m happy for her, but I’m no really into cat shows. Come to think of it, my sister might think that my personal finance blogging is boring. When I tell her about my site, she just politely nods :)

Anyways, we went out to Bahama Breeze for dinr and I enjoyed chatting and catching up with her.

The cat is adorable. She rescued the kitten when my uncle found a box of kittens abandoned behind a pet store. They found homes for them and my sister kept this little guy.

Contest Alert!

Do you want a chance to win an iPod Shuffle? All you have to do is  participate in Moolanomy Answers!

top cat and fish

A more recent picture of the kitten

Here are some great posts from this week. I hope you enjoy reading them as I much as I did.

Personal Finance Carnivals

** JLP has a fantastic resource on The 2009 Personal Finance “How to” Roundup- He has organized a ton of information in one spot. You should be able to see some of your personal finance questions answered. **

Top Personal Finance Posts This Week

Have a great weekend!

What Factors Matter For Your FICO Score?

By: Green Panda | Date posted: July 09, 2009 (2:44 pm)

Many lenders today depend on credit scores for so many big loans, such as a mortgage,car  or student loan. Your credit score helps determine if you can get a loan and how much interest you’ll end up paying.

If you’re wondering what makes up your credit score, this post is going to review the five factors that you have to manage. While we don’t know the exact method of how Fair Issac calculates your score, we do know what they consider.

If you’re willing to work on these points, you can build your score up.

Five Factors That Decide Your Credit Score

As you can see on the pie chart, some factors are more important than others. If you can’t do all of them, try to start of with the first two points, and build from there.

Components of the FICO® score

  • Payment history – 35%
  • Amounts owed – 30%
  • Length of credit history – 15%
  • New credit – 10%
  • Types of credit used – 10%

Source: MyFico

35% – Paying your bills on time: If you’re late with your payments, not only can you get a late fee charged to you, but after 30 days, it ges reported to the credit bureaus.

How to fix it: Make sure you get current on all your bills and start paying them on time. Make sure you don’t have any accounts in collections. As you pay on time month after month, year after you, your FICO will go up.

30% – Debt you owe and the amount of available credit: It’s not just how much debt you’re carrying, it’s how much of your available debt you’re taking advantage of. Another reason why it may not be a good idea to cancel unused credit cards.

How to fix it: If you don’t want to take a big hit on your credit score, don’t cancel too many credit cards at the same time, as it can have an adverse effect. You can also pay down your credit card debt and improve the debt/available credit ratio.

Don’t open an account JUST to increase your credit limit. Instead focus on paying down the debt.

15% – Your credit history length: This is basically keeping track of how long you’ve had your accounts.

How to fix it: This is easy to do, but it takes time. You just have to keep being responsible

10% – New credit applications: This considers how many accounts have been opened up recently.

How to fix it: Another simple one to improve, just don’t open too many accounts at once. Also remember that some banks pull your credit report so keep that in mind.

10% -Different Types of Credit: Having a mix of installment loans like a mortgage

How to fix it: This shouldn’t be a huge problem, so be aware of the accounts you have. DO NOT get a car loan so you can have an installement. Getting into debt to build a record is not a smart move.

If you’re looking for more information on specifi credit report situation, JD and Jim had a wonderful interview with Liz Pulliam Weston on how credit score works and how to improve them.

Financial Guru Review: Ben Stein

By: Green Panda | Date posted: July 08, 2009 (8:00 am)

It took awhile to get this Financial Guru Review done, as I wasn’t too familiar with Ben Stein’s thoughts on personal finance. It was a lot of fun to read some of his columns and interviews.

Ben Stein on Getting Out of Debt and Credit Cards

Mr. Stein does use credit cards out of convenience and pays off the balance each month. Here’s a transcript from Frontline’s special on credit cards:

NARRATOR: Stein says he charges thousands of dollars a month in business expenses on his credit cards.

BEN STEIN: I use all their good services, and they don’t make any money from me. I mean, none to speak of.

NARRATOR: The credit card companies do make a percentage on each transaction, but Stein is not their ideal customer because, like 55 million Americans, he pays his bills off every month and doesn’t pay any interest.

BEN STEIN: The credit card companies hate people like me, who pay off our bills every month. And I know that because I ran into a fellow I went to high school with on the street, and he told me he worked for a credit card company. And I told him about how much I use credit cards and how I pay them off every month, and he said, “Oh, we hate you. We hate you guys. We call you deadbeats.”

 

Ben Stein and Building Wealth

In an interview with Nickel, Ben Stein commented he saves around 20% of his income for retirement. He also talks about how having specific financial goals can help you avoid ‘indulgences’.

I agree that sometimes you have to make big sacrifices to reap the benefits later. We tend to justify our luxuries. While it’s a common phrase, spending less than you earn is the foundation of fixing your finances. Either cut your expenses or find a way to earn more money. 

Ben Stein on Paying Off Mortgage or Investing

A question some people have is whether to pay off their mortgage faster or invest that money. 

While making no hard and fast rules, Ben Stein offered the following advice:

 Generally speaking, if you have a very low mortgage rate, it is better to invest the money than to pay off your mortgage. It’s an interesting fact – the rate of return on your mortgage is the interest you’re paying on it.

If you have a 6 percent mortgage and you’re paying it off, you’re earning 6 percent. If you can earn more than 6 percent in the stock market, you should probably put it in the stock market.

But, on the other hand, pay it off in an expeditious way. It’s good to have it paid off, or at least mostly paid off, by retirement time.

My Thoughts On Ben Stein

I wasn’t as familiar with his books as I was with the other financial gurus, so I had to dig a round a bit. If you’d like to learn more, here a link to his NY Times columns.

I agree with how he uses credit cards without going into debt. I found some bloggers have wrote some good posts about him. 

 

What are Your Thoughts?

With everything, find out if this advice is useful for you. No one is going to care about your finances like you do. Following the guidelines of a financial guru doesn’t get you off the hook for personal responsibility.

Do you listen to financial gurus’ money advice? If so, which one? Is there a financial guru you’d like me to review?

Deciding If We’re Going to Move

By: Green Panda | Date posted: July 07, 2009 (8:00 am)

We just got a notice from our leasing office that the renewal for our lease is coming up in September. They want us to let them know by the end of this month if we’re renewing for another year, staying on a month to month basis, or if we are planning on moving.

Our Three Options For Our Rental Lease

I’m pretty sure we will not be renewing our lease for another year, but never say never. Our rent would stay at its current price. To break the lease, we’d have to pay two months worth of rent.

I’m not crazy about that because if we do find something we want to move into, we’ll have a low emergency fund after making the down payment. Paying two months rent would deplete it further.

If we decide to do month to month, it’ll be $150/month more for rent. We would still have to give 60 day notice.

If we could find a place and move into it before the end of September, that would be ideal. If we could find something suitable and within our budget, and close by August, that would allow us to move more leisurely than our last move from Virginia.

Where We Are With Home Buying Process

We’re deciding to rent or buy. We ran the numbers to see if we could afford buying a home.  Our goal is to keep our housing costs (mortgage, taxes, and insurance) no higher than 25% of our monthly income.

We went through the pre-approval process, giving them our financial information,and have gotten an amount from the mortgage broker. We have decide we are going to look for a townhouse or small house lower than the amount we’re approved for to keep our housing cost goals.

We drove around Friday night to some potential neighborhoods to get a feel for how busy it was. We’re whittling the list down to about 5 places, all townhouses and making appointments this week. I’ll update later on what happens.

What We’ll Do

We’ll give our answer right before the due date, so we have time to see how our situation turns out.

Has Our Costco Membership Been Worth it?

By: Green Panda | Date posted: July 06, 2009 (8:00 am)

I’ve heard from so many people growing up that having a warehouse club membership automatically meant you save money. My mom has been a Sam’s Club member for years and she’s saved money, especially when we were growing up in a family of four.

We currently have a Costco membership. We planned ahead before we paid for the membership, but I thought it would be useful to see if we really did save money with our Costco membership.

How is our Costco membership doing? Find out!

How is our Costco membership doing? Find out!

Costco Membership Costs

As you’re well aware, there are are fees to become a Costco member. They offer different memberships, each with their own fees and benefits.

  • Gold Star Member ship ($50/year): This membership allows you to purchase products for personal use at any Costco in the world. You also get an additional card for one member in your household included.
  • Business Membership ($50/year): In addition to the Gold Star membership benefits, you also purchase business products for use or resale and you can get to add 6 additional cardholders.
  • Executive Gold Star Membership ($100/year): Executive Members enjoy an annual 2% Reward on most Costco purchases, as well as additional values on member services, such as lower prices on check printing, payroll services and identity protection; an account bonus for money market and online investing accounts; free roadside assistance for vehicles covered through the auto insurance program; and extra travel benefits.

We decided to get the Executive Membership for our family. I’ll review the discounts and savings we have. I’ll also keep a running total of the membership’s value after each section where I have some numbers.

Costco Savings: -$100

Car Insurance Savings with Costco

We found a great discount with our Costco membership on our car insurance. Our previous policy with Progressive was $118/month. I shopped around for car insurance rates, trying to see if we could get something better.

Amerprise through Costco offered auto insurance coverage for $58/month. That saves us $60/month for an annual savings of $720.

I’ve also used their roadside assistance and didn’t have to pay anything, since that was included in our Executive membership.

Costco Savings: $620

Gasoline Discounts at Costco’s Gas Stations

I have noticed that Costco’s gasoline has been 12-15 cents cheaper a gallon then other gas stations around my area, which is a bit more expensive then the city’s  average. If I lived in a different part of town, the savings would drop to around 5-7 cents a gallon.

Since I live relatively near Costco, getting my gasoline there is a c0nvienent way to save money. I fill up about every 10-14 days, and my husband fills up just as frequently.  We have about 12 gallons for our cars’ gas tanks.

To keep it simple, I’ll calculate we fill up every two weeks and we get to Costco about 75% of the time for a total of 39 fill-ups between the two of us each year. I’ll say we save 13 cents a gallon. The annual savings comes out to $60.84.

Costco Savings: $680.84

Big Purchases and Warranty Savings

My husband purchased a 40″ LCD HDTV from Costco. It was $499 and with shipping, the total was $560. Best Buy has the model listed for $579.99, with a delivery cost of $70, for a total of $649.99.

It has a 2 year warranty with Costco. Best Buy has a 4 year warranty available for $100. To keep it fair, I’m using the deliver price to calculate savings of $89.99 .

Costco Savings: $770.83

Food and Bulk Item Savings

You may be surprised, but we haven’t saved a huge amount as we have in the other categories. We’re a family of two, so some bulk items aren’t good buys for us based on the amount we eat and our limited freezer space. We do buy our cold cuts of  roast beef and ham for lunch sandwiches.

We have saved money on paper goods like toilet paper and paper towels. We plan most of our purchases, so we don’t inadvertently spend too much, a complaint many families had with warehouse club shopping. i also want to point out some of Costco’s heat up and ready dinners are great for dinners where you invite a few friends over. their past and shrimp was phenomenal.

Rebate Check

Update: September 27, 2009 We just received our 2% Reward rebate check from Costco. It’s not huge, $34.87 , but getting cash back is always welcomed.

Costco Savings: $805.70

Run The Numbers Yourself on Warehouse Club Memberships

Even though the Costco Executive membership has saved us almost $800 in a year, you have to figure out for yourself and your family if warehouse membership will pay off. A candian blogger also took the time to see what Costco membeship benefits worked for them.

Your Take: How Do You Save Money with Your Warehouse Club?

If you’re a warehouse club member (Costco, Sam’s, BJ’s, or something else), what do you get and why? Has the membership paid off?

Photo Credit: reenwenvy08

June 2009 Blog Review

By: Green Panda | Date posted: July 05, 2009 (2:07 pm)

Thank You Readers!

I want to thank all the wonderful readers on this site.  If you want  get in contact with me send me an email or message me on Twitter. Send me any questions you may have or suggestions. 

Reminder To Subscribe:

By subscribing to Green Panda Treehouse you’ll always receive new content. You can also subscribe to the site through your email.  I won’t sell your email address or send you any junk. I’m really happy about having new members on the site. 

Top 5 Referring Personal Finance Blogs

I want to thank all the bloggers who have helped me with this site, whether it was a guest post, a comment, or challenging me by writing insightful posts.

I’m grateful for the  following five blogs for their links and support. If you haven’t already, please check out their blogs!

Most Popular Posts on Green Panda Treehouse in June

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