Chicago Bankruptcy Lawyer Blog

The future of the U.S. Social Security system continues to be in doubt. Some experts predict that when the 78 million baby boomers are ready to retire in a few years time (maybe you’re among them -- I certainly am) the U.S. Social Security and Medicare systems will be woefully underfunded to the extent that both systems will be in “financial crisis.” In simple language, both systems will be “broke.” What? Yes! Afraid so. Retirees will not be able to get all their entitlements. That’s absolutely terrifying, especially if you’re relying on Social Security and have no other pension plan.

Will the money be there when you need it? The government gives all kind of assurances and guarantees that it will still be around. They tell us not to worry. They also said that we weren’t in a recession, but that’s another matter. Let’s face it, how much can you believe the politicians?

But, let’s assume they’re telling the truth (for once), and you are counting on that monthly Social Security check to tide you over. Do you have any idea how much you’ve got coming to you? Do you even know how much you have contributed? This year, it’s 7.65% (6.2% towards Social Security and 1.45% towards Medicare) of your income, which is matched by your employer, and you keep paying that until you’ve paid in $102,000. If you’re self-employed, it’s 15.3%. Every year that you’ve worked, the contribution is higher than the year before, to keep up with inflation.

Figuring out how much Social Security you’re entitled to when you retire is simple enough; you should be receiving an annual statement from the Social Security Administration, but if not, you can request it here.

Be sure to look over your statement carefully – mistakes happen, and it’s better to correct it now, when you don’t need it, then to wait till later, when you do. Verify your social security number, and check that your earnings year-to-year-to-year are correct; if you’ve got copies of previous W-2s use those for confirmation. Don’t despair if there are earnings missing – that is a fixable problem; contact the Social Security Administration for information.

Now, for a lot of people the real issue is when can they apply for Social Security benefits. Widows and widowers can apply for reduced benefits at the age of 60, while everyone else has to wait until they’re at least 62. The “normal” retirement age to receive full Social Security benefits is between 65 and 67 years of age, depending on the year in which you were born.

So, the big question is: Do you take the early benefit at 62 or do you wait till it’s the full benefit at 65 (or 66 or 67)? Let’s assume that you retire at the age of 62 and receive a reduced pension; the reduction is 80% of what you’d get at regular retirement. Let’s put some numbers here, it makes it a lot easier. If you retired at normal retirement and got $2,000 a month, then the early retirement will get you $1,600 per month.

By taking the early benefit, by the time you reach the “normal” retirement age, you would have received a total of $57,600 ($1,600 multiplied by 36 months). Granted, at “normal” retirement you’d be getting an extra $400 a month, but how many months would you have to be receiving your maximum social security benefit before you reach that $57,600? How about 144 months ($57,600 / $400 = 144)?

Let’s look at it another way. Say you take your reduced benefit at age 62, and you live to age 70. That’s 8 years or 96 months, so you’ll get $153,600 total ($1,600 x 96). Now, say you wait until your “normal” retirement of 65, and you live to age 70. That’s 5 years or 60 months, so you’ll get $120,000 total ($2,000 x 60). That’s a pretty big difference. You’ve got to live at least 12 years past your “normal” retirement to make up for the difference, i.e. the amount you forfeited by not taking the early benefit.

That’s a long time to wait, in my book. I say, don’t be “normal,” take the money and run.

-- Debt Diva for DebtStoppers

Practically every budgeting or financial advice article trots out the old adage: “use your credit responsibly.” However, the current credit crisis, rising bankruptcies and foreclosures show that many Americans don’t get the message, in spite of hearing it again and again. Why can’t people seem to get it? At least part of the reason is that many Americans don’t understand what financial analysts mean when they say “use credit responsibly.”

Don’t just ignore your credit cards.

If you’ve ever had uncomfortable credit card debt, it can be tempting to tuck them away and forget about them. Many people who experience debt issues or bankruptcies vow never to use credit again, reasoning that they don’t want to make their credit worse. You’ve probably even heard stories about people freezing their credit cards into blocks of ice so they can’t use them impulsively.

Well, I’ve got news for you, people: pretending like you don’t have credit cards may help you avoid increasing credit card debt and making your credit score worse, but it also won’t help you make it any better.

Improving your credit score isn’t rocket science.

In order for your credit score to improve, you must spend and pay money regularly on your credit cards. Tucking them away and forgetting about them isn’t going to improve your score, and that means you won’t be making yourself eligible for better interest rates, better loan rates and better mortgage rates. Failing to give yourself those opportunities can cost you thousands of dollars in high interest rates, so you owe it to yourself to work to actively improve your credit score.

The best way to improve your credit score, and the ‘secret’ that all the financial advisors refer to when they say “use credit responsibly” is to never spend more than you can afford to pay off. This probably seems like common sense, but it’s a difficult lesson for many Americans. It’s not bad to carry a balance on credit cards – in fact, it’s beneficial to let your cards carry a balance anywhere from 20-30% of your total credit and continually pay it down. That’s how you build credit and improve your credit score.

The must-know secret to curb your impulse spending.

When I say don’t spend more than you can afford to pay off, I mean it – literally. Before you make a credit card purchase, set cash aside from your checking account into a special ‘credit card’ savings account. If you want to buy a $200 pair of shoes, put it on your credit card – but only after you’ve put the money aside into a special account. Putting the cash aside first helps you to decide how much you really want something that you'd purchase with credit, and it gives you a chance to evaluate your purchases instead of spending impulsively.

Using this method, you’ve always got the cash to cover your credit card bills, even if you have an unexpected injury or layoff that prevents you from earning money. Most people have enough money to pay credit card payments until something unexpected happens, so having money set aside into a savings account to pay your credit cards can help you stay afloat, even if you run into financial difficulties.

Yes, carrying a balance on your credit cards will cost you money in interest rates, but if you carry a low balance, the money you save by having a good rate on large purchases will far outweigh the money you spend on interest rates; especially if you request periodic interest rate reviews from your credit card company, or switch to lower-interest cards as your credit score improves.

-Money Maven

I love that line, from Mary Poppins, in case you didn’t recognize it. Most people are more familiar with the old adage, “waste not, want not.” It’s a simple concept, if you don’t waste your food, you’ll never go hungry. Unfortunately, statistics prove that Americans continue to waste food in astronomical proportions… not quite as much as our British or French counterparts, but still way more than necessary. The United Nation’s World Food Program estimates that the whole of Ethiopia and the Democratic Republic of Congo could be fed daily with the leftovers of France and Italy. Wow.

Feeding the world’s hungry with your leftover food… that’s a noble cause if ever there was one. But, closer in, how much money are you wasting every time you throw away those soft potatoes you left in the crisper drawer too long, that extra gallon of milk you didn’t use as you thought you would, the white rice that you made too much of with dinner last night? That waste adds up.

And every bit of food that you threw out is like money that you’ve thrown down the drain. Although there are conflicting reports, one study by the USDA says that 25% of food is thrown in the trash, and another by the University of Arizona claims it’s as high as 50%; it’s still a ridiculous and shameful number. If the USDA figures are right, and you waste 25% of your food, then your food budget is 25% higher than you think it is.

I was guilty of such wasteful habits, but our living in a third world country – Ghana, West Africa -- has revised my thinking. Food is so much more precious here, in terms of its availability and cost. We’re fortunate; we can afford a variety of foods inaccessible to the average Ghanaian, and have the option to shop either from the local food markets, or the newfangled supermarkets. Supermarket shopping is a new concept here, but unlike the U.S., our average shopping center only stocks about 4,000 products; the average American supermarket stocks 40,000 products.

The cost of some goods here is a major consideration. If you toss out a gallon of milk in N.J. because it’s past its expiry date, you’ve only lost about $4. If you toss out a gallon of spoiled milk here in Ghana, you’ve thrown out more than $11. The price of "convenience" foods that you're accustomed to in the states, is ridiculously overpriced here... a box of 10 taco shells for $10, a can of Campbell's tomato soup for $1.90, 8 flour tortillas for $8 -- it's just flour, water, oil and baking powder, for goodness sakes! Waste any of those? I don’t think so.

So, how do we do it? Almost nothing goes to waste. Milk is frozen, if it appears we won’t finish it up in time. So are overripe fruits, to be added to yogurt or for making quick breads. Chicken parts -- skin, bones, fat, tendons, whatever parts we don’t eat -- go into a stock pot or are boiled up for the dog’s food. Same goes for fresh fish. Potatoes or carrots that went soft in the fridge get peeled and cut up and put into ice water to “perk” them back up, then cooked. Leftover rice is turned into fried rice the next day. Leftover pasta is turned into pasta salad. The heels and ends of bread are kept in the freezer until we’ve got a big batch, and then we turn them into croutons or bread crumbs; when I use the bread crumbs for coating fried food, I keep the leftovers in the freezer for the next time I’m breading chicken or fish, just separate from the fresh crumbs. Leftover pickle juice is boiled with cut-up cucumbers for new pickles. Fresh herbs, even the parsley stalks I didn’t use the first time, are frozen and added to stews. Even the waxy bits of cheese are saved; they can be grated into the homemade spaghetti sauce I make every other week, from the tomatoes that get too mushy to eat raw.

If we’ve bought something that the kids don’t like after they’ve tried it, we give it away. There’s always someone who would appreciate it, and often they’re thrilled with the opportunity to try something new and different. The truth is we’re embarrassed to throw away perfectly good and still edible food. One day, we were tossing out the heads and husks of about 10 lbs worth of fresh shrimp that we had bought (shrimp is blessedly "cheap" here, the whole batch cost us about $10). The garbage man had come to the gate to collect our trash, and we ran in the house to bring out the bag of shrimp remnants… he took one look in the bag, and asked us, incredulously, “Are you throwing this away? Can I have it?” Please, with our blessings. You see, here in Ghana, those shrimp bits could be dried and powdered, and added to fish soups and stews. Waste not, want not.


-- Debt Diva for DebtStoppers

If you’ve budgeted every penny and still can’t seem to get ahead, it might be time to think about trying to make more money at work. These tried-and-true tips will help you figure out if there’s anything you can do to increase your salary:

Keep up with your job skills.

How is this related to budgeting? Studies have proven that people who undergo continuing education or seek advanced degrees and certification in their chosen fields make more money than those who simply go to work every day. Continuing education keeps you on top of the latest technology and techniques, making you more valuable to your employers, and it also opens doors for you to move on to bigger and better opportunities. Value as an employee = more money. More money makes it easier to budget and cover all of your financial needs.

Play to your strengths.

This is another case where being successful at work brings more money into your life. Don’t just find a job that ‘pays the bills’ – find a job that truly utilizes your talents and skills. Just about anyone could do ‘any old job,’ but finding a job at which you perform exceptionally well virtually guarantees you promotion opportunities. Do you have a good sense of style? You could do everything from working in retail as a clothing stylist to working as an interior designer. Regardless of your level of education, look for a job at which you’ll perform well, and advancement opportunities will come – and bring you more money. Go to work every day at a mediocre job just to ‘pay the bills,’ and you’ll never get ahead.

Find out how much you should be making.

Before you can think intelligently about your salary and how to make more money at work, you must first determine how much money you should be making. Many online resources, such as Salary.com, offer basic reports as to average salary in a field, region, etc. For more detailed (and free!) information, check out The Bureau of Labor Statistics at www.bls.gov for breakdowns of salary average, high and low for people in your region. If you’re already making well above the industry standard in your area, you might not have a lot of room to negotiate for higher wages. If you’re lagging behind earnings in your region, though, you’ve got a great starting point from which to address your salary.

Track your achievements.

Keep track of your notable achievements or contributions to the company. Start a portfolio with reports, sales information, notable designs or even positive customer feedback – any way in which you stand out from the crowd and do positive things for your company. Bring this portfolio with you to your annual review so that you’ve got documentation on-hand to demonstrate how valuable you are to your company. If your raise has already been set at X dollars, try asking for a bonus, instead. If you can easily prove how valuable you are to your company, you’ll get more money than the guy who just shows up and waits to be told what he’s earning.

-Money Maven

For a lot of people, especially those down on their luck, they’ve no where to turn when they desperately need money for basic necessities. Maybe the regular lending channels (such as banks and credit unions) are closed to them, maybe their credit scores are too low, or maybe they’ve got no credit history, at all. Yes, they can go to one of those “predatory” payday loan centers (though I hope that they won’t), and get a little money to tide them over until payday.

But there’s a practical, legal and reasonable alternative available. Ever hear of peer-to-peer lending? The principle of peer-to-peer lending has been around forever. It’s borrowing from a friend. Do you remember the old Popeye cartoons? For those of you too young to recall, Popeye the Sailor Man had a portly little friend named Wimpy who was a hamburger fiend, and who was always broke and trying to mooch money off of someone to curb his cravings.

Several websites are devoted to peer-to-peer lending, the largest among them being www.prosper.com. If you’re in the market for a loan, it’s worth a try. And if you’ve got discretionary funds to lend, it’s also worth a try.

If you’re a (hopeful) borrower, you are basically given the opportunity to tell your story of woe. And you can provide as much or as little information as you want to put out there. But the truth is the more compelling your story, the more likely you are to get your loan request funded. Potential borrowers can request as little as $1,000 or as much as $25,000 for practically any reason; all approved loans are unsecured and fully amortized (meaning fixed monthly payments) over three years. You can also state the maximum interest rate that you’re willing to pay.

Say your story is this: You want to borrow $2,500 to help your daughter pay for her college tuition and books, because she didn’t get the scholarship she had hoped for, and you’ve maxed out on the government sponsored loan programs. She graduated from high school at the top of her class, has a 4.0 GPA, and is a volunteer at a local orphanage and soup kitchen. You want her to have the opportunities you didn’t, etc. You tell this story, include copies of her report cards, letters of recommendation, commendations, that kind of stuff; anything to support that your daughter is a good cause.

What happens is a whole host of lenders (people like you and me) read your story, and think to themselves, “Hey, this little girl is deserving; I’d like to help. But I only can spare $50.” That’s great. Now, say you get 50 people who think that way. There’s your $2,500. The website alerts you that your loan request has been approved, and deposits the money (minus the website fees, of course) into your banking account. Then, on a monthly basis, the repayment is automatically deducted from your account, and the lenders get repaid.

As far as the interest rate you will be charged, the better your FICO score, the lower the interest rate. At Prosper, for example, a Borrower’s interest rate is dependent upon the FICO score, and they assign you a letter grade, with AA being the best, and E being the highest risk. If your FICO is on the low side, you might be assessed with a 35% interest rate, but if you’ve got a great FICO score, it will likely be significantly lower than the interest rate on a loan from a traditional lender.

A recent comparison survey of interest rates showed that the peer-to-peer loans had an APR of 7.68%, compared to double-digit interest rates of traditional lenders, such as CitiBank and Capital One. Naturally, your interest rates will vary, depending on your creditworthiness.

The lenders who agree to your loan basically acknowledge that they’re willing to accept your loan at your maximum interest rate, and they decide how much they’re comfortable with lending you. It’s their way of spreading the risk. For a lender, there’s tremendous potential for income generation, if you’re willing to finance a riskier borrower with a lower credit rating.

In a perfect world, you’d never have to incur debt. But this isn’t a perfect world, and when you’ve got a need, it’s nice to know that there’s help, only a website away.


--Debt Diva for DebtStoppers

No, my calendar is not screwed up; I do realize that it’s the middle of July. But, the fact remains, in less than six months, you may have to fork out a lot of money for holiday presents. And it’s never too early to stop planning for that eventuality. Here are a couple of ideas to help you get through the “best time of the year” without ending the year in the poor house.

Holidays are for children

Some people opt for gift giving only to the kids in the family, and let the parents stand by to oooh and aaah and provide gentle reminders (“Now, what do you say? You say, ‘thank you’ that’s what you say”). Set a fixed price that you plan to spend, per child, and keep to it; most importantly, don’t cheat. Really. Kids know when they’ve been gypped, and they’re not too shy to point it out, clearly and loudly (“How come he got a PS3 and all I got was a pair of socks?”). Avoid the mortification, stick to the plan.

The family gift

If you’ve got a large family, however, such as the one my poor sister married into (12 siblings and at least 2 kids per, so figure 24+ nieces and nephews… on that side of the family alone!), you might want to consider a “communal” gift per family. As a kid, I hated when that happened, but as an adult, I say, “tough noogies, you’re lucky you’re getting anything, at all.” I know, I’m so mature.

Holiday savings plan

Remember the days of the Christmas club accounts you signed up with at the bank, and every week you deposited $5. It’s a little late for signing up (if banks even still offer such things), but it’s not too late for you to put a little away every week. There’s still about 22 weeks left till Christmas, so put aside what you can each week, and use that for gift buying. You can also save online at www.smartypig.com, which allows you to make regular deposits until you’ve met your savings goal; deposits are FDIC insured.

Lay away

Given how the U.S. economy is in the toilet, retailers are offering all kinds of bargains and sales, so now is the time to take advantage. Don’t have the money for an outright purchase? Try the lay away option, this way you can take advantage of a good sales price, and pay for the gift with regular payments. Believe it or not, you can also shop online and put an item on layaway, if you use an online service such as www.elayaway.com or www.lay-away.com. It works the same way as the B&M stores; you find what you like through their linked merchandisers, put the item in your basket and make the first monthly payment on it. When you’ve paid in full, the item is sent to you.

Sorry, no gifts this year, I’ve converted…

My DH (dear husband, for those of you not familiar with cyber-speak), back in the days long before he became my DH, used to tell people that he was agnostic or atheist or some such thing, so that he could entirely avoid the hassle and expense of holiday gift exchanges. Unfortunately, that excuse won’t work on your family, who know you better, so you’d best make other plans. And as for my DH, that “line” only worked the first year, and he’s been paying for it ever since.

Happy Holidays!


--Debt Diva for DebtStoppers

The Associated Press reported today that consumer prices jumped 1.1% in June – the second-fastest inflation increase in the last 26 years. Consumer inflation rose 5% in the past 12 months, reflecting the largest annual increase in more than 15 years. These numbers may not seem like a lot, but it’s an alarming trend for the average consumer; especially if you work in some big corporation and only get a 3% raise per year, if you’re lucky. With economic times being tight, consumers must find creative ways to save money just to keep afloat. One of the most effective ways to do this is to find creative ways to manage your credit card debt.

Credit card interest drains your cash.
For most people, it isn’t the credit card itself that causes a problem, but the credit card interest. If you’ve got a $2000 credit card balance that you’re not paying down, you could be paying over $600 per year in interest with a high-interest credit card. Multiply that by the average consumer debt of $4,000 per individual or over $8,000 per household, and you could be paying an extra $200-$300 per month in interest alone. That money never gets applied to your credit card balance, so if you actually want to reduce your credit card balances, you’d have to pay $300-$400 per month on your credit cards. With a weakening dollar amidst rising inflation, that’s just not practical for many households.

Take advantage of 0% APR balance transfers.
One effective way to manage your credit card interest and reduce your total debt load is to take advantage of 0% APR balance transfers. Resist the temptation to do a wholesale transfer of all your credit cards – that’s not an effective strategy here. To take advantage of 0% APR balance transfers, carefully read the fine print. Find out how long the 0% rate is effective. If you pay 0% for six months, do the math and calculate how much debt you could pay off in 6 months.

If you’re already paying $200 per month in interest, and you could be paying that on an interest-free account for 6 months, you could pay off $1,200 in debt without increasing your payments. If you can afford to increase your payments by another $100, making it a total of $300 in monthly payments, you could afford to pay off $1,800 in credit card debt. This is a significant chunk of credit card debt for an individual, and even a good dent for household debt.

Once you’ve effectively paid off that 0% APR balance transfer offer, take another look at your finances. Are you still paying on a high-interest credit card? Look for another 0% APR offer, transfer a reasonable balance and pay it off. You can also improve your credit score in this manner by reducing your total debt load, although that would be temporarily offset by opening new credit card offers. In the long run, though, you’ll save yourself tons of money in interest and actually pay down your credit card debt. Your credit score will thank you in the next few years.

-Money Maven

This is not a commercial for gecko insurance, so don’t worry, no one is going to try to sell you anything. I’m just going to try to save you some money. There are a fair number of things you can do to keep your car insurance premiums are down, and you might be doing them already, but does your insurance company know that you are?

Here are some obvious and not-so-obvious tips to reduce your premiums.

• Drive safely, but defensively. Your personal driving record, whether perfect or not, plays a major role in figuring your premium. If you are buying new insurance, while you might be tempted to “fib” and not list a ticket or two (moving violation, I mean, not parking), but by not disclosing it, your application for insurance can rejected.

• Rethink your deductible. Remember, there’s an inverse relationship between your premium and your deductible. You could lower your premium by raising your deductible; put the savings aside for an emergency.

• On older vehicles, it’s not worth keeping comprehensive or collision coverage. Here’s a way to figure that out – times your monthly premium by 10, if your car is worth less than that, drop the coverage.

• Don’t split insurance companies – use the same one for homeowners or rental insurance as you do for auto insurance. Often, you can get a discount for an umbrella policy, which could be as much as 10-20%.

• Pay your premiums as few times in a year as you possibly can. Insurance companies generally tack on a processing fee, so if you pay by the month and the monthly processing fee is $5, over the course of a year that comes up to $60. Also, the premiums are often cheaper when paid quarterly or semi-annually.

• Ask the insurance company if they offer discounts. Many insurers provide discounts for successful completion of a defensive driving course, or for membership in specific organizations, clubs or alumni associations, even for specific professions or if you’re a member of a specific “class” such as a retired person.

• If higher gasoline prices have got you carpooling, or taking mass transit, it is very important that you advise the insurance company. Because you use the car less, statistically, there’s less risk that you’ll get into an accident.

• This might not seem obvious, but keep a watchful eye on your credit report. Unfair as it may be, the insurance companies use your credit report to evaluate you. If your FICO score goes up, you might be able to reduce your premium. Of course, the opposite is also true, so pay your bills on time, and keep your debt load down.

• When your teenager goes off to college, make sure you alert the insurance company of that fact.

• For the teenager still at home, believe it or not, it might be cheaper for you to buy them a second-hand car for which they are primary driver, than to allow them to drive around in your newer car, even as an occasional driver.

• Teenagers with good grades also may be eligible for car insurance discounts, so encourage them to keep up the grades and let the insurance company know about it.

• If you’ve installed anti-theft devices on your car, tell your insurer. They want to know that you’re taking a proactive role in preventing theft, and your premiums will go down.

• Finally, the best way to save on car insurance – by not owning one!


--Debt Diva for DebtStoppers

Unless you’re living in Nome, Alaska, where the temperatures are hovering around the high 40s range, you’re probably expending a lot of personal energy on beating the heat, while still trying to keep your utility costs down. Good luck. Oil prices have, yet again, hit a new high this week, at $147 a barrel. Count on seeing the gasoline prices going up any day (maybe even any minute) from now, and know that you’ll see increases in your utility bills.

The cost of cooling or heating a home accounts for more than 40% of total energy expenditures, and inefficient cooling units, i.e. fans, window air conditions, central air conditioning units, can increase those costs by another 20 to 30%. Wow! Let’s talk about ways that you can keep cool and comfortable, without spending any more money than you absolutely have to.

If you’ve got a whole house fan in your attic, make use of it or if it is not working, fix it fast – open the windows and let the breeze in and turn the fan on if your house is stuffy and hot. It will push out the hot air (heat rises, remember?) and bring the cooler air in through the windows. It’s not as cooling as an air conditioner, since it only equalizes the inside and outside temperatures, but it does make the house more comfortable.

Speaking of air conditioners, while it’s nice to have central air, it’s also much more expensive since they cool your entire house. But sometimes you don’t need your whole house cooled. Remember to close the vents in the rooms that no one is occupying, so that the cooler air is not misdirected and wasted, and keep the open vents free of obstructions. Be sure to regularly clean the condenser (that’s the part outside the house). The fins tend to get pretty dirty, since the fan sucks the air in and pulls dead leaves, dust, grass and all manner of stuff. What that means to you is less efficient cooling system and higher cooling costs. Check your owner’s manual for instructions, or you can find generic instructions online here. If you haven’t already planned it, keep your condenser shaded from direct sunlight.

If you’ve only got window air conditioner units, keep the filter cleaned – vacuum it, rinse it or wash it with soap and water – depending on what the manufacturer suggests. Check the coils, they can really get a build up of guck (how’s that for a technical term!) and you can use a toothbrush to gently brush it all out. If the fins are misaligned, you can use a “fin” comb to straighten them out, or do it the cheap-o way, by using a soft piece of straight wood, such as a tongue depressor or a stick from an ice pop (any flavor will do). Don’t forget to vacuum the coils on the outside as well.

If you’ve got ceiling fans in your house, be sure to turn them on in conjunction with your air conditioner, provided that they are multi-directional, meaning that it runs clockwise or counter-clockwise. In the summertime, you want the fan to run counter-clockwise to cool the room, since it forces the air downwards and creates a breeze. By running the ceiling fan at the same time, you can lower the temperature on the air conditioner unit and enjoy the same cooling benefit.

When the weather is cooperating, just run the ceiling fans to catch a breeze beneath. But remember, ceiling fans cool people, not a room, so turn it off when the room is empty.

Finally, if you’ve done all you can to maximize the efficiencies of your cooling units, and you still can’t afford the monthly summer-time payments to the power company, call up your local utility and find out if they’ve got a budget plan which can spread your estimated annual charges over a year, so that every month is a fixed payment.

Stay Cool!

-- Debt Diva for DebtStoppers

There it is. The second most asked question of the summer, right after “Are we there, yet?” At long last, I, alone, am able to answer that question definitively: Maybe.

The truth is there’s no one-size-fits-all answer. Most people renting a car over their summer vacation will approach the car rental counter and be struck dumb and possibly mute, when they’re asked the infamous question, “Do you wish to purchase Loss Damage Waiver insurance?” Know exactly what your answer will be before you get to that deer-caught-in-the-headlights state of being.

Generally, most people don’t need to buy rental car insurance, and there are a couple of reasons why you might not want to buy it, either:

1. You might be covered already by your own auto insurance, and

2. You might be covered under the credit or charge card you plan using to pay for your car rental.

The easiest way to find out if you do or don’t need to take the optional coverage is by doing your homework (I know, I know, here she goes again with the homework), but you need to get out your phone book and make a few calls.

First, try the #800 number for your insurance company, and ask the representative if your policy covers car rentals. If you get a positive answer, that’s great, but ask them to confirm by fax or e-mail, sadly you can’t just take them at their word. Should something happen and you need to file a claim, you want to be sure that they don’t come back and say that you were, “unfortunately, misinformed.” Result: Claim: Denied.

If your own car insurance doesn’t cover rentals, then your next stop is to make calls to your credit card companies… heck, you’re not paying those high interest rates for your health, are you? You deserve something back. Ask the same questions that you put to the insurance company representative, and if the answer is affirmative, tell them to back it up in writing or by e-mail. Be sure to check on coverage limitations, and find out if there are restrictions regarding the choice of rental agency – some insurance companies partner with a particular car rental company, and you may get a break in the daily rate, as well. Other credit card companies may restrict the number of days you can rent, or the kind of car you’re permitted to rent with the coverage – sorry, the Jag is usually not covered. If you have to pre-enroll for a program, find that out now, too.

Two charge card companies that (as of this writing, at least) provide loss or collision damage waiver coverage are Diners Club International and American Express; all you have to do is decline the insurance, and initial or sign the statement. Citibank also offers it for its charge customers. Restrictions and limitations on coverage do vary from company to company, so be sure to read the fine print.

A couple of things to keep in mind, accepting the LDW still exposes you to losses if you damage another individuals car or property, or if you are injured or cause an injury to another. You also cannot accept the car rental LDW coverage and the credit card company’s coverage -- it’s either or, not both.

If you decide not to do your homework and purchase the car rental coverage from the rental agency, keep in mind that the “loss” part of the Loss Damage Waiver is to the car itself, not to the contents, so if all of your possessions are stolen, you’re out of luck (and maybe out of clothes!). But consider this, on a 10 day trip, with the rental agency coverage being a minimum of $20 a day; you’re shelling out an extra $200. Think of all the great souvenirs that you can buy with that (that will collect dust on a shelf until your spouse tosses them in the trash next year).

Have a great trip!

-- Debt Diva for DebtStoppers

Saving money isn’t about deprivation; it’s about identifying unnecessary spending habits, and eliminating them. Our Free Downloads section includes a brochure called “Give Yourself a Raise,” and it contains tons of good tips to isolate and stop common spending habits. Want a bigger raise? Consider these extra tips:

Illegal parking: hard on your wallet.
If you live in a metropolitan area, it can be difficult to find a legitimate parking space during peak traffic hours – or sometimes, at all. Don’t take a gamble that the meter maid won’t notice you’re there longer than 2 hours, or that police won’t care if you’re double-parked. In Chicago, you can even your license if you let unpaid parking tickets accumulate. Even one parking ticket per month at $25 adds up fast, and towing is even more expensive – so take the extra time to find a legal parking space, or rent a spot if you park in a congested area frequently. Annual savings: at least $300.

Bottled water is overrated.
The average person is supposed to drink 60 ounces of water per day – that’s almost 4 16oz water bottles. Five 24-packs of bottled water per person per month adds up to a lot of moola, and you could be saving that money by investing in a water filter. Sink filters and water filter pitchers run anywhere from $40-150 – in a two-person household, it pays for itself in a month or two. Annual savings: at least $720.

Forget the gym: take a walk.
Gyms don’t make their money on people who use the membership – they make their money on people who don’t. Most people who sign up for a gym membership stop going after a month or two, but the gym still gets to collect your $50 (or more!) for services you don’t even use. Instead of joining a gym, just get out more. Walk, jog or run in your neighborhood or city. You might make some friends, see some interesting spots you never knew existed, and save money on that gym membership you never use. Annual savings: $600

What’s in a name?
It doesn’t matter what you’re talking about – the name brand of something is always more expensive, and usually isn’t worth the price difference. Sony televisions are usually anywhere from $200-1000 more than the competitors’ prices, while Kraft Mac & Cheese may be as little as $2 more than the store brand. Whether the price is big or small, these differences add up. Take an honest look at generics, and learn to love the comparable quality and reduced prices. Annual savings: at least $1,000.

Brush your teeth; not just a tip for kids.
It’s something we don’t think about as much as adults, but dental hygiene is important. If you don’t brush your teeth and go to the dentist for regular checkups, you’ll be looking at cavities, before too long – or maybe even crowns or an extraction. These expensive procedures add up, and even the best dental insurance may only cover 70-80% of your bill. Save the cash and the dental discomfort by practicing proper dental hygiene. Annual savings: $500.

-Money Maven

When you’ve got limited resources, entertainment is probably the last thing you have budgeted, isn’t it? And by the time you’ve finished making your mortgage or rent payment, paying your bills, buying gas and food, there’s hardly anything left for the fun stuff, right? Don’t sweat it, there’s plenty you can do, either at a discount or free, provided you do your research first. What? You thought I’d give you everything? Ever hear the expression, “there’s no such thing as a free lunch?”

Let’s start with the discounted stuff, and save the best for last. Theme parks and amusements parks are all over the place, and (especially if you’ve got kids) they’re what summer is all about. But the cost of admission, food and drinks are really budget-busting. But, the theme parks are also feeling the pinch, with lower attendance and fewer food and gift sales inside. So, they’ve been dropping prices and offering coupons as an enticement to bring in the crowds. To find printable coupons, visit the theme park’s website, and look for product tie-ins… you know buy a can of Coke or a Big Mac and get a discount off the admission price. Also, check out the online coupon websites, such as www.retailmenot.com or www.couponmountain.com. If you’re a member of any organization such as AAA, AARP or are a union member, check their website for discounts. You can also check the human resources office of the company you work for, as well. Here’s something you may not know, but some theme parks (including Six Flags) have “unpublished” discounts for certain classifications of people, such as military personnel, senior citizens, disabled and pregnant women. You have to ask if they offer it, though, but the worst that can happen is they’ll say no.

Now for the free stuff… several websites are devoted to helping you find free activities and attractions, such as museums, concerts, kid’s activities and other tourist attractions, and most major cities are listed. Check out National Geographic’s Travel section; the website is a little tricky to navigate, but just follow this link www.nationalgeographic.com/traveler/index.html and type the words free and the destination city in the search box and you will get a listing of any available freebies on offer. You can also try www.free-attractions.com for more free city-based activities and entertainment.

For homebodies, there’s a couple of great resource that lets you download free movies, music and books. No, I’m not talking about limewire or bittorrent -- I’m talking about legally downloadable media. Movies, television shows, cartoons, books, music, concerts that are in the public domain are free and legal to download. Two of the largest websites that provide the free offerings are www.emol.org and www.archive.org. You can find a lot of older (i.e. black and white) classic movies such as the Haunting of Hill House and My Man Godfrey, some older television series including The Honeymooners and the Dick Van Dyke Show, as well as old Superman, Popeye and Looney Tunes cartoons. You can either watch them online or download them to your computer.

If you’re more of a bibliophile, check out www.gutenberg.org for a listing of over 25,000 online, free public domain books. Granted, they’re mostly older books, but there’s lots of classics, including books by Jane Austen, Charles Dickens, William Shakespeare, Plato, Jules Verne and H.G. Wells, just to name a very very few. Most are available in text, word or PDF formats, but there are also some books in audio versions.

It doesn’t have to be a long, boring and expensive summer, if you don’t want it to be. The choice is up to you.

--Debt Diva

With rising fuel costs, food prices are going up and it’s getting harder and harder to make ends meet. Many consumers are now practicing a big juggling act between paying their bills, buying the necessities and staying on the road. If you want to pay less money at the pump and keep it in your wallet instead, try using these five tips to save money amidst rising gas prices:

1. Reduce your trips – run fewer errands.

Learn to multitask when you run errands. Instead of stopping at the pharmacy to fill a prescription and a supermarket for groceries, try to find a one-stop shopping solution that has both groceries and other services. If you can’t find a single store to run all your errands, try to find a mall or shopping plaza that has multiple stores you can use without driving to many destinations.

2. Save money at the pump with a gasoline credit card.

Many major gasoline companies offer gas credit cards that feature gas rebates. When you make a gas purchase using a special gas credit card, you may save up to 5-10% off your gas purchase. With gas prices in excess of $4.00 across the nation, this adds up – fast. If you use a gas credit card and pay it off regularly, you’ll also be improving your credit at the same time you’re saving money.

3. Keep your car well-maintained.

A well-maintained car burns less fuel than a car that’s processing gasoline inefficiently. If your wheels are out of alignment, your fuel filter is dirty or your oil needs to be changed, you may be using more gasoline than you need to use. Your car runs better when you keep up with all the little maintenance chores, and that translates to savings at the pump.

4. Obey the speed limit.

When you’re driving on the highway, try to keep your speed around 55MPH. On the interstate, stick to around 65MPH. Not only is this the speed limit, but it’s also the most fuel-efficient range for your driving. Drive much slower or faster, and your car burns fuel less efficiently – meaning it costs you a lot more gas for a slightly faster trip. Also try to avoid accelerating and decelerating frequently; use cruise control or stick to one speed to save gas.

5. Make your car light and streamlined.

Carrying around extra weight is a good way to burn fuel. If you have equipment in your car that you don’t need – take it out. Hang onto your emergency kit, but if your car is full of stuff that you keep meaning to drop off at home, make time to do it. A light car burns less fuel than a heavy car, so reducing the weight will save you money. The same thing goes for unnecessary obstructions, like luggage racks, bike racks and ski racks. Remove these things when you’re not using them, and you’ll get more gas mileage and pay less at the pump.

-Money Maven