Monthly Archives: March 2014

Just Say No.

Just Say NoThe word “No” kinda gets a bad rap. Parents of young children grow weary of saying it. “Just say no” was the 1980s ad campaign for the war on drugs. We feel bad sometimes when we say it; like when you are asked to do something you really don’t want to do, or don’t have the time, yet feel obligated to say yes.

Saying no is no fun.

The word yes is much more positive, like that Home Alone Macaulay Culkin fist pump YES!

But when you are talking about your finances, saying “yes” can be much worse than saying “no.”

Just ask Lisa and Bryan. They want to reduce their debt and save for retirement. They are saying “yes” to things, when they should be saying no. Especially to family and friends.

It’s hard to say no to those close to us, or even our co-workers and neighbors. But if you are trying to stick to a budget, save for retirement or whatever, “just say no.”

No to Sonic runs. No to that new movie that just opened today. No to the soda at the ball game. (By the way, if you said no to just those three things, you’d have an extra $20 to save.)

But how do you come across without sounding like a Debbie Downer or a Party Pooper?

It’s simple. Tell people you are trying to stick to a budget, save money, save for retirement, whatever. People who care about you, won’t put you through the ringer for wanting save for a rainy day.

You’ve got to stand your ground. And don’t you dare feel guilty about saying no. It’s like peer pressure for adults. It’s like keeping up with the Joneses. There will also be someone with the newest gadgets, eating at the fanciest restaurant, taking the coolest vacations. Get over it. Just say no.

Here are three ways to say no:

  1. Keep it simple.
    You don’t need to explain the heck out of why you can’t (or don’t want to) go the latest flick. Just say “another time.” Or “I’m busy that night.” Even a casual “It’s not in the budget this week” should do the trick.
  2. Offer something else.
    “Instead of going out to a movie, let’s rent that one we’ve been wanting to see, and have a movie night at my house.” You are still spending time with them, just in a different way.
  3. Say “I don’t” instead of “I can’t.”
    “I don’t go to movies in the theater,” is different than “I can’t go to movies in the theater.” A change in terminology can be the difference between staying within your budget, and blowing it to bits.

A couple of good hardy “nos” and you’ll be a pro at it. You’ll feel better about your decision, and your budget will be saying YES!

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The Payday Loan Trap

The Payday loan trapDid you know there are more payday loan establishments in the United States than McDonald’s and Burger King fast food restaurants COMBINED? Welcome to America, where we swipe our cards, spend our money and stuff our faces.

12 million Americans take out payday loans each year. That’s a lot, but it’s less than half of the 27 million Americans who eat McDonalds EVERY DAY! That’s a lot of burgers.

Raquel, our young mother, admits she stepped into the payday loan trap.

Payday loans are meant to be a quick fix, but consumers are finding these loans (or cash advances) are causing debt to become the next four-letter word. These loans are typically $500 or less and carry hefty fees. The problem is, most consumers, 80 percent of you, can’t pay off the first loan, so its rolled over or renewed within two weeks, turning that initial $500 into $1,500 before you can even say “super size it!”

Don’t despair. Try these alternatives to get you by in a pinch.

Credit unions.
Credit unions put people before profit, and as not-for-profit financial cooperatives (read: not-for-profit bank) they can offer low or no fees on some of their services. The credit union philosophy is “people helping people” so you can be sure that they won’t pull a fast one on you. Credit unions promote financial literacy too, and many have a financial counselor on staff that can help you re-evaluate your finances and put you on a path to smart money management skills. Many also conduct money management workshops for their members, free of charge.

You have to become a member first, which is easier than understanding what is said through a drive-thru speaker. Find a credit union near you at asmarterchoice.org.

Credit counseling help.
A financial counselor can’t help you if you need cash NOW, (kinda like an apple won’t satisfy that craving for chocolate), but if you are using payday loans, it’s probably a good idea to seek help with your financial situation, and eliminate the need for future payday loans. So join the crowd of roughly two million people who sought the help of a financial counselor last year.

A non-profit agency like Consumer Credit Counseling Service usually offers free money management help such as budget counseling, debt management planning, and mortgage default or rent delinquency counseling. In fact, our Money Possible participants are all meeting with a counselor from the Consumer Credit Counseling Service of Wichita.

Reduce spending in other areas.
If you stop hitting the McDonald’s drive-thru, wait until that epic movie is on pay-per-view and hold off buying that new iPhone, you might be able to take that quick cash place off speed dial. Don’t be fooled…it’s hard work, just like eating a salad instead of a Big Mac. But you’ll soon find that some of your “needs” are actually “wants” and you can go without them.

Negotiating your bills.
Talk to your credit card companies. Beg your utility company. Negotiate a payment plan. Most would rather keep you as a customer than lose you, and are willing to work with you. At least it’s worth a try.

Cash advance from a credit card.
We usually don’t condone using your credit card for cash, but the 25 to 30 percent interest rate you’ll be charged is far less than the fees and 300 percent to 500 percent interest on a payday loan. Yup…pay day loan places charge 300 to 500 percent interest plus fees!

Think on that for a minute. It’s not uncommon for a consumer to be charged $10 or $20 on every $100 borrowed. So, if you borrow $300, and the fee is $20 per $100, you’ll actually owe $360. Then, if you can’t pay that loan in two weeks, you’ll roll it over and pay another $60. So now you’ve paid $120 in fees to borrow $300. That equals 520 percent interest rate!

Don’t Be Such a Waste

Wasteful spendingDon’t be such a waste. Wasteful spender that is. Financial experts estimate Americans spend 10%-15% of their income on unnecessary items. (Read: Things you don’t need!) Or things like fees or services charges that are certainly avoidable.

We asked our Money Possible participants what they found they waste money on.

Fredica brings up a common one: cell phone. She says her monthly payment could be lower.

Lisa and Bryan admit wasting money on things like a soda at the gas station, or food and drinks at sporting events.

Fredica, Lisa and Bryan are in good company.

Unnecessary bills, fees, or or simply paying for a service you don’t need is at the top of the “money down the drain” list. So are “extras” at entertainment venues, like popcorn at the movies. At $5 a bag, that’s enough to pop your wallet!

Wasteful spending items can include any or all of the following, and can really add up:

  • Memberships you don’t use (gym, Sam’s club)
  • Late fees (pay your bills on time!)
  • ATM service charges (use your financial institution’s ATM. Credit unions have a network of surcharge free ATMS…7,000 of them! Or at least take out a big chunk of money so you don’t have to use the ATM every week)
  • Services you don’t use (check your bills – don’t use call waiting on your landline anymore? Who does? Get rid of it!)
  • Unlimited data on a mobile device (only text your teenage daughter? Use a limited data plan to save money)
  • Junk food (eat before you go!)

Need more money wasters? How about drinks and dessert when eating out? Those alone can tack on an extra $20 on your restaurant bill…and an extra $4 in tip…so really an extra $25! Sheesh!

Here’s another, and it sounds stupid. But you can waste $100 a year on electronics that are plugged in when not in use. Just don’t pull the plug on that annoying clock that you have to set every time the electricity goes out. It’s not worth it.

And by all means, pay those dang bills on time! Get your act together, organize your household expenses and budget and never pay a late fee. It’s just money down the drain.

Need more?
Yahoo Finance: Ways to Waste Your Money

Budgeting: Not as hard as it looks!

Budgeting: Not as hard as it looksWhy is it that the right thing to do is always the hardest? Like not eating that double fudge chocolate brownie warm from the oven. Like breaking up with that person whose laugh drives you insane and you know it just won’t work out with. But when it comes to budgeting, you can’t use the old ‘it’s me, not you’ excuse.

So why don’t we do it? Is it because we don’t like to see the hard reality staring back at us? Or that it takes a little thought and planning? Whatever the reason, we promise you that making and sticking to a budget isn’t as hard as it looks. (Check out the ‘Basic Money Management’ section of our Money Possible Workbook)

Our participants are well on their way to destroying their debt. But guess what? They all started by making a budget. While some were budget newbies, others had tried before.

Lisa and Bryan said, “We did have a budget before. However, it was hard to stick to when unexpected things would show up.” We know, how can you plan for the unexpected? Having a little cushion in your budget will help keep you on track for the long haul.

Fredica and Raquel never had a structured budget.

Fredica, “just mapped out what was owed and the due date.” That’s a good start, but planning for the future requires long term budgeting and goals.

Raquel’s method was, “to pay with what you have and pay the most important things, rent, utilities, medicines, daycare, etc.  I think the hardest part is trying to find and figure out EVERYTHING that you owe, and what to start with first.” Getting everything down on paper (or the computer) makes your budget tangible. From there, you can begin determining what next steps to take to destroy your debt.

So here are three easy steps to get you started:

  1. Identify how you’re spending your money now.
  2. Evaluate your current spending and set long-term financial goals.
  3. Track your spending monthly and adjust if necessary.

Join our participants and follow along – you, too, can be on your way to destroying your debt. As for your relationship woes, just do it already! It really isn’t you, we promise.

View the television segments.

Follow along on twitter: #moneypossible

POLL: What’s Your Financial Goal?

We all have goals. Career goals. Exercise goals. Home improvement goals. Get to bed at a “reasonable hour” goals.

We also have financial goals. Pay off one credit card. Cushion an emergency savings account. Save for something big…like retirement, a house…or an 84″ HD 3D TV complete with four pairs of 3D glasses. (Which costs $39,999 at Best Buy, in case you were wondering).

We want to know. What’s your financial goal this year? And if you say to purchase a $39,999 TV, well, you made need to revisit that goal.

Meet the Participants

“I need to pay down loans.”
“We want to save for retirement.”
” It’s hard to control my spending.”

Sound familiar? These are the challenges facing our three Money Possible families, and the issues affecting millions of Americans who want to take control of their finances.

Each family has agreed to tell their story, and show that getting control of their money isn’t hard, it just takes dedication and a little self-control (of course, self-control is a whole other problem for us Americans…evident by our super-size nation…and we’re not just talking about food!)

Meet the participants
RaquelRaquel
Raquel is married and a mother of two young children.

In her 30s, her goal is to pay down payday loans, and learn to save.

Lisa & BryanLisa and Bryan
In their 40s, Lisa and Bryan want to save for retirement.

They have three older children. They need to learn to say “no” and live within their means.

FredicaFredica
A divorced mother of four in her 50s, Fredica wants to control impulse spending.

She always wants to save enough to buy a house.

Follow these Wichita area credit union members’ stories here, and every Tuesday on KAKE-TV’s (Channel 10, ABC) 4 p.m. newscast. Follow the hashtag #moneypossible.

Let’s face it…with Americans $11 trillion in debt and struggling with saving money, many of you can probably benefit from following them and learning from their successes and their challenges.

Who hasn’t had loans to pay back? Who doesn’t need to save a little (or a lot) more for retirement? And who isn’t plagued by the temptations at the grocery store?  By following Raquel, Fredica and Lisa and Bryan, they will show us that we can do it. We can destroy our debt.

This program highlights the need for consumer financial education, as well as the value of credit unions as strong financial partners. The campaign aims to give consumers tips and explain that there are resources available to those who need extra help.