The Money Girl on Money Matters

What do Halloween and Political campaigns have in common?

Both are scary times of year!

Unfortunately, Halloween lasts only 1 day every year while the effects of a political campaign can be felt for years, and sometimes decades.

Who are you voting for?  Why?

Are you looking at the issues?  Or are you voting party lines just like you always have?

Have you considered the effects the 2 major parties have had on our economy?

Did you know that in the current administration only 4% of the high ranking officials have any business experience?  Do you think that maybe it’s time to bring in some business people to help the current administration understand how the real world works?

Or do you like living in a country where everyday has become Halloween?  Where you never know what scary idea the college professors might try because they have no business people to explain to them how those theories that are in the textbooks don’t work.

Or at least how the theories really work, which is rarely how the textbook says they will work.  Do you like the fact that the country is over $1 trillion in debt?  That your grandkids and even great grandchildren may never see a balanced budget in their lifetimes?

Isn’t now the time to stop the insanity?

Review the issues before you vote.  And please make your voice heard by voting this election.  Everyone’s opinion counts!

Late Sunday evening Congress passed Health Care Reform bill.  President Obama signed it into law claiming it was a great step forward.  For those who have waded through the over 2200 pages the answer to reform is to destroy the health care system and to make sure anyone not in a union has to pay.

And the payment is not just for health insurance.  The payment is in the form of additional tax burdens as well.  Have an HSA (health savings account) or FSA (flexible spending account)?  Use the money from one of those tax deferred accounts to pay for out of pocket medical expenses not covered by insurance?

Hope you didn’t use the money to buy over the counter medical equipment or products, such as aspirin, cough syrup, bandages.  These items are no longer covered and if you use the money for those items you will pay a hefty 20% penalty on the money you withdrew from the HSA or FSA account.

Obama is so convinced that anyone making $200,000 is rich that they have added additional taxes to really soak the rich, such as 3.8% tax increase on investment income for anyone in this tax bracket.  Where does Obama think new job growth is going to come from?

The more difficult they make it for the small business person the less likely the small business will hire new workers thus continuing the downward spiral of the economy.

Oh, and for those of you who haven’t read all 2200+ pages of the health care reform bill, it states that 30 hours is considered full time for purposes of calculating the number of employees the employer is required to cover.  This says to me that employers who limit employees to 32-38 hours per week to avoid paying benefits today will further reduce the part time employee hours.  For those barely making ends meet now, better find a 2nd or even 3rd job because if this bill is not repealed your hours will be cut so your employer can continue to stay in business.

And in all those pages there is not a single mention of lawsuit reform.  This would go a long way toward making health care more affordable.  Doctors must require multiple tests  regardless of a patient’s history, before treating someone to ensure the doctor has documentation in case of a lawsuit.  Many doctors will not treat certain patients due to fear of repercussions should something go wrong.

This new bill virtually guarantees rationing of health care as more and more physicians decide to leave medicine and do something more profitable, less stressful and more rewarding.

Is this the United States you want to live in?

If your answer is no, write your Congressmen and Senators and tell them to repeal this ill conceived bill before they bankrupt the country and completely destroy the free enterprise system.

Credit Card Changes effective in 2010.  Did those changes help you?  Did your interest rates change positively or did you get hurt by the new rules?

Not sure what changed?

Here’s a synopsis of the changes put in effect this year to help credit card owners.

1. Credit card companies cannot arbitrarily change your interest rate.  They cannot use issues paying other bills as a reason to increase your rate.  They must give you 45 days advance warning before changing your interest rate or other major terms in how your credit card operates.

2.  If you carry a balance on your credit card, the credit card issuer must pay off the highest interest rate balances first.

3.  Credit card companies must make the statement easier for clients to read and understand.  Many companies have also added a section on your bill to show how long it will take to pay off the bill if you pay the minimum amount.  They also show you how much you would have to pay on your account to pay off the account in full within 3 years.

Keep on top of those statements you receive from your creditors to ensure you are not unpleasantly surprised.  Remember, you can decline the changes to your credit card terms.  The credit card company will in turn cancel your card.   However, this might be the best thing for you depending on the change they are offering you.

Let’s discuss mortgage options in today’s financial climate. Some of you are thinking, I need to pay my mortgage down as quickly as possible while I still have a job. Others are thinking, my home is paid off or I have a small mortgage and lost my job, can I get money out of my home without selling it?

These are great questions.

Let’s start with those wanting to pay their mortgage off faster than 30 years. There are a number of programs out there that will allow you to pay off your mortgage early. Some of those programs require a set up fee and a loan modification to work. I see no reason for you to pay for something you can do for free.

First things first. Does your mortgage have a pre-payment clause? If you are not sure, check the documents you received at closing. Most mortgages do not have such a clause, however, its best to confirm that for yourself.

Next thing you need to do is to get a copy of the amortization schedule for your loan. This document lists every payment and shows the amount of your payment that goes to pay principal and the amount that is going to pay interest.

I will show you a part of an amortization schedule to illustrate this next point. I am assuming a $100,000 mortgage at 6% for 30 years.

In english this means you borrowed $100,000 from the bank to buy your house and agreed to pay that amount back in 30 years. You also agreed to pay interest of 6% to compensate the bank for loaning the money to you.

You can create an amortization schedule for yourself by going to http://realestate.yahoo.com/calculators/amortization.html

Month Beginning Balance Interest     Payment          Ending Balance
1                  $100000                   $500     $600                    $99900
2                       99900                      500        600                        99800
3                       99800                      499        600                        99700
4                       99700                     498         600                        99599
…..
24                     97580                     488        600                         97468
25                      97468                    487        600                         97356
26                      97356                     487       600                          97243
27                      97243                    486       600                           97130

As we can see when we reach month 24 (2years after you first took out the mortgage) you have only paid off $2,420 in principal. There is still $97,580 left to pay bank to the bank. You can also see that eventhough you have been sending $600 to the bank only $100 has been applied to the principal payment, the rest is going towards interest payments.
You also notice as you get ready to write your check to make your 24th payment that $112 is going towards principal and $113 is going towards principal with your 25th payment. Instead of writing your check for $600 you decide to write a check for $713.

You find that making that additional principal payment, you have eliminated $487 in interest and have jumped from payment 24 to 26. This also decreases the amount of time required to pay the loan back by 1 month. Each month you can do this will decrease your interest paid, and the length of time you have to pay the mortgage.

The advantage to using the numbers from the amortization schedule is you know exactly how many months you have cut off your mortgage and can get a confirmation from the bank as well. When you pay off different amounts it is harder for you to prove that the bank has applied the extra payments to principal first which is what you wanted them to do.

Another popular mortgage acceleration program is the bi-weekly mortgage payment. What this program does is take your normal monthly mortgage payment, cut it in 1/2 and have you send that amount every 2 weeks to a processing center. How this works is there are 52 weeks in a year and by sending the mortgage payment every 2 weeks you have made 13 full mortgage payments by the end of the year. This program often has high fees associated with it and often does not pay off your mortgage as quickly as the extra principal payment approach. It is also harder for you to figure out where you are in the cycle and more importantly unlike the extra principal payment approach, it is difficult to change back should you be unable to continue making the extra payment.

Finally, Heloc or home equity line of credit. This is not a mortgage reduction program, this is a way to get money out of your home should it be paid for or almost paid for. This may be a way for you to make ends meet while you are underemployed. The caveat to using a Heloc to pay current expenses is that you could lose your home should you be unable to keep up payments on the home equity loan.

Free ebook solving internet marketing challenges may sound like a scam, yet Lauryn makes the material simple and easy to use.

For those of you terrified of making a mistake with your marketing dollars, Lauryn shows a number of ways to gain traffic and credibility that require no cash. Pretty good deal for anyone in these tough economic times.

Don’t take my word for it. Visit www.SocialBlueGorilla.com and download the ebook for yourself. You do not even have to enter your email address. It truly is free information with no strings attached.

For those of you laid off or underemployed who were thinking that starting your own business would just be too hard or too expensive read this ebook first before you decide that now is not the time.

You’ll be glad you did.

For those of you wondering what the catch is, there is no catch. You simply go to the website get your copy of the free ebook and read then follow the instructions to take your business to the next level.

Some things in life really are free.

I stumbled across this video and I just loved how Vera pointed out all the ways the credit card companies are out to steal your money.

Watch the video and watch your mail. If these secret fees have not hit you yet, you are lucky. Even the fiscally responsible consumer is getting hit with rate increases.

What’s really sad is there is very little the consumer can do to stop the credit card companies. Especially those consumers who need the credit card to make ends meet due to downsizing or underemployment.

The key to avoiding losing it all is to watch those credit card statements carefully and make sure you fully understand what is changing on your credit card and why.

Financial Freedom and the Law of Attraction. Great title for this video and Jamie McIntyre does a wonderful job of explaining why in rich countries, such as Australia, New Zealand and the US more people are not rich.

Jamie makes the point that at age 65, approximately 95% of that population is looking to the government and family members to make ends meet. He also suggests that doing the opposite of what everyone else is doing will lead you to financial freedom.

Check out the video and see what you think.

Isn’t that a great motto? God, guns, guts and American pickup trucks is the motto of Max Motors, a car dealership in Missouri. A CNN reporter heard about his latest promotion, free AK47 to anyone who buys a new truck and this video is the result of that conversation.

Click on the video to play the CNN report.

Mark makes the point that he is not actually giving away an AK47, he is giving his customers a voucher that they take to the gun store. After they fill out all the appropriate paperwork and pass the background check, the customer then will receive their free AK47 from the gun store.

Mark also mentions that some may feel that giving away guns to sell cars is grandstanding, however, he believes in the 2nd amendment and more importantly in an individuals right to protect themselves.

For those who live in the Butler Missouri area and would like to buy a car or truck from a good old country boy at Max Motors just click on the link for their website and further information about the promotion.

President Obama’s Health Plan is rolling through Congress. There are many saying “Hurray, I can rely on the government to pay for my health care”.

There are those that feel that Obama’s Health Plan will bankrupt the country and that it is feel good legislation not practical.

Where are you on the government sponsored health care debate?

Do you believe

• that government should pay for everything?
• that the government knows what care is best for your situation?
• that quality health care is possible under a managed care system?
• that you will get the care you need when you need it?

OR

Do you believe

• that government should stay out of my medical care.
• that your doctor and not some government bureaucrat should decide the course of treatment for your illness.
• that health care system is not broken, that overzealous lawyers and medical malpractice suits are to blame for the increasing cost of health care?

As for me, I wish Congress would pass tort reform legislation to help drive down the cost of malpractice insurance and free doctors to help patients rather than fight frivolous lawsuits.

I still believe in the free market system of health care. Those who want care can get care when they want as long as they can pay for it, whether that is out of pocket or via insurance.

Work environment

Yes, there is something you can do to prevent being the next victim of your company’s downsizing effort. Do you want to keep your job?

Here are 5 tips for keeping your job and not getting laid off.

1. Everything is your Job. If you see something that needs to be done – do it. If your boss asks you to do something – do it without complaint. This one tip will make your boss see you as a team player and more willing to keep you.

2. Do not gossip also known as The water cooler clatch. The last thing a company needs is negative people making everyone around them miserable. Therefore, remember that old adadge “if you can’t say something nice, don’t say anything at all”. Make it your mantra especially while at work.

3. Step up and agree to handle the big assignments. When the company is looking at who they can lay off they look at how easy would it be to replace the person doing this job. By ensuring that you are getting cross trained in different areas as well as learning multiple skill sets means you will be harder to replace and more likely to be kept.

4. Let everyone know what you are working on as well as how the project is going, especially management. This tip will not only save your job. When handled well, you will make yourself and your boss look good. This in turn ensures that your boss will keep you around.

5. Make friends in new places. If you do not work in the finance or human resource departments make friends with someone who does. By having friends in these departments, you can keep on top of openings in other areas of the company. They will also let you know what skill sets are needed for opportunities in other areas of the company. Having friends in human resources can influence the way others in the company perceive your efforts.

Though these aren’t the only ways to keep from getting laid off, being well liked and skilled will go a long way to saving your position.