The Annual Review The Dollar Stretcher.com by Gary Foreman When I worked in the corporate world the annual performance review was always important. Not only was it a way of telling how I was doing compared to what my employer expected, but it was also a good opportunity to identify areas where improvements could be made. Sometimes I agreed with the boss' comments. But, there were other times that I really thought that I could have done a better evaluation myself. The concept of an annual review can be helpful in your financial life, too. There are certain things that you should evaluate on a regular basis. And it's also a good idea to look at your own performance periodically. Most of us have some areas where we could do better if we're willing to make minor changes. So let's perform an annual review of our finances. In this case you'll be reviewing yourself. So if you don't like the score you get you'll know exactly where to go to complain! Have you reviewed your auto insurance within the last year? As your cars and family grows older your needs will change. And, you might find a better rate by shopping around. 3 points for checking for appropriate coverage and comparing rates. 1 point for checking either. 0 points for thinking that your brother-in-law the insurance agent is taking care of it! Have you reviewed your homeowner's insurance in the last two years? While not as likely to change as your auto policy, homeowner's coverage still needs to be reviewed periodically. 3 points if you reviewed it this year. 1 point if you reviewed it the year before. 0 points for thinking that you only need to look at your homeowner's policy when you buy a new home. How much money do you owe? An easy way to measure your economic well-being is to see if you owe more or less money than you did last year. 3 points for reducing your total debt by 10% or more. 2 points for reducing it by 5 to 10%. 1 point for reducing it by 1 to 5%. 0 points if it remained the same. Minus 1 point if the amount you owe went up. How is your debt structured? Generally borrowing to buy something that will hold it's value (like a house) isn't as bad as borrowing for something that will be gone long before the payments are (like a pizza). 3 points if you don't owe any money to anyone. 2 points if you only owe money on your home. 1 point if you owe on your house and car. 0 points if you owe on a credit card or personal loan. Minus 1 point if you owe money to everyone in your office. Did you add to your retirement savings last year? Each year brings you that much closer to retirement. And, the magic of compounding means that a dollar saved for retirement in your 20's is much more valuable than a dollar saved in your 50's. So every year counts. 3 points if you saved 4% of your salary or more last year. 2 points if you saved 2 to 4% of your salary. 1 point if you saved 1% of your salary. 0 points if you didn't add anything to your retirement accounts. Minus two points if you borrowed from your retirement plan last year. Have you reviewed your investments in the last year? You don't need to be a Wall Street wizard to know that today's investment climate changes quickly. That means that you need to look at your investment position regularly to see if adjustments are required. It's tempting to focus on whether you made money since your last review. Yes, that's something that you should check. But, the more important question is are you positioned for the future? Do you need to make any changes now? 3 points if you reviewed your investments at least once each quarter. 1 point if you reviewed them at least once during the year. 0 points if your account statements are stacked on your desk waiting for you to look at them. So how did you do? If you scored 15 or more you really have things under control. You're probably only reading this because it's after-hours and you can't call your broker or insurance agent at this time! A score of 10 to 14 points indicate that you're trying, but still need a little work to be a personal finance pro. If you scored between 5 and 9 points you probably need to pay more attention to your finances. And if you scored less than 5 points make sure that your rich uncle has included you in his will. You'll need the cash! Gary Foreman is a former financial planner who currently edits The Dollar Stretcher.com website and newsletters. You'll find thousands of time and money saving articles. Permission granted for use on DrLaura.com More >>

Saving Time and Money This Holiday Season By Ginita Wall, CPA, CFP www.wife.org The holiday season is fast upon us. With so many demands on our time (there are just so many cookies to eat, it's hard to know where to start!), and demands for our money, it's no wonder that we're all looking for a few extra ideas to make the holiday season run more smoothly. Give these a try: Go generic Keep a stock of generic gifts on hand. Picture frames, nonperishable gift baskets, or ornaments can help you provide for unexpected guests or holiday party invitations, so you won't have to rush out and buy presents at top dollar. Keep it in the family Join with other friends or family members to purchase big gifts, or give a family gift rather than individual gifts. A special meal for the whole family or a toy that both adults and children can enjoy may be just what Santa ordered. Draw names If you belong to a big family or have lots of friends, suggest drawing names so that each person only has to buy one gift. Or, only give gifts to the children in the family. Consider the trade-offs As you shop, remember that your money is limited. If you've been saving for a vacation, consider whether you'd like to dip into those funds for a more extravagant holiday season, or whether you'd rather cut back a little during the holidays so you can have fun the rest of the year as well. Bunch your lunch To make your holiday shopping more efficient, ask your boss if you can take a longer lunch one day each week during the holiday season, and cut your lunch short the other days to make up for it. That will let you go shopping during the day, so you can spend important time with your family at night. Let your fingers do the shopping Look for shopping bargains at your favorite Internet sites or at an auction site. There are some sites that do the price comparison for you, so you'll know you are getting the best deal possible. Shop early to allow extra time for shipping. Prepare for next year right after the holiday Buy all of your decorations, gift wrap, and cards for next year at this year's post-holiday sales. Shorten your gift list Is it really necessary to buy everyone on your list a present? Consider sending a thoughtful holiday card or e-mail, or even writing a family newsletter to update everyone about the past year. Next year, pay Santa first Set up a holiday savings plan. After paying off this year's bills, put aside $50 to $100 a month for next year's holiday presents. You'll emerge from next year's holiday rush debt-free. Decorate on the cheap Instead of splurging on holiday knickknacks, use your ingenuity to decorate inexpensively. You might buy wide colored velvet ribbon at a craft store and tie bows on everything from doorknobs and banisters to candlesticks. WORTH Magazine picked Ginita Wall as one of the top financial planners in the country several years in a row. The Women's Institute for Financial Education welcomes your comments, visit our website at www.wife.org . Permission granted for use on DrLaura.com. More >>

The Last-Minute Cook By Elizabeth Yarnell www.GloriousOnePotMeals.com Ask almost anyone who is in charge of putting the daily dinner on the table what the most dreaded chore is and you'll likely hear a complaint about meal planning. Figuring out what to make for dinner day in and day out is something many of us loathe. We'd like something easy to make, a recipe that won't require hours in the kitchen and it would be great if the meal was good for our family as well. And, of course, if it doesn't taste great we might as well give up before we even start. Of course, typically preparing exciting weeknight meals takes forethought, special trips to the grocery for specific ingredients and a couple hours set aside for preparation and then the clean-up of multiple pots and pans after dinner. We all want to serve our families dinners that are as good for them as they are good tasting, but, let's face it, only a few fortunate ones have the time to find interesting and achievable recipes, shop for fresh ingredients and spend hours in the kitchen every day of the week. More likely, we find ourselves racing from the morning send-off through two careers, soccer practices, piano lessons, the dry cleaners and the other tasks that make up our busy days. And that's just before dinner. Afterward there's homework, household chores, and everything else that didn't get done during the daylight hours. Really, who can blame us for choosing to eat out, bringing food home or reaching for highly-processed and expensive frozen meals? Here's a solution for our time-crunched lives: quick, healthy and easy infused one-pot meals. With a few strategic purchases stocked in your freezer and pantry, you can bring out your inner intuitive chef and eliminate the drudgery of meal-planning. Almost the opposite of crock-pot cooking, which requires that you think about dinner in the morning or it won't be ready, infused one-pot meals can cater to your last-minute mentality, allowing you to get a nutritious dinner on the table in about an hour with only a few minutes of actual hands-on preparation and less than 50 minutes of unattended baking. Infused one-pot meals offer a healthy, balanced meal of protein, energy-providing carbohydrates, and a variety of vegetables to offer the range of vitamins, minerals and nutrients that we all need. Here's an easy, last-minute recipe to throw together out of your freezer and pantry for a nutritious and delicious meal that doesn't require any forethought. So, even if you're a last-minute mom or dad, you can still serve up a meal to be proud of at a moment's notice. Santa Fe Chicken Servings: 4 Ingredients 2 15 oz. cans black beans, drained rinsed 2 green onions 4 pieces frozen boneless chicken 2 8 oz. cans green chiles or 8-12 Tbsp. prepared salsa 1 bell pepper, cut into 1" triangles 2 15 oz. cans corn kernels, drained 2 14 oz. cans tomatoes, diced, drained 2 6 oz. cans black California olives, drained and sliced Instructions Preheat oven to 450 degrees F. Spray inside of 3 1/2 or 4-quart cast iron Dutch oven and lid with canola oil. Open cans of beans, drain and rinse well. Pour in a layer across bottom of pot. Slice green onion into rings and arrange on bean layer. Rinse chicken and arrange on top of onions. If using chiles, blanket the chicken with them. If using salsa, spoon over the chicken, using as much or as little according to taste. Add bell peppers, corn, tomatoes and olives in layers. Cover and bake for 48 minutes or until the aroma wafts from the oven. Notes This is a great meal to make when you don't have any fresh vegetables in the house. Stock up on the canned or frozen ingredients and you'll be able to whip up this southwestern staple in a jiffy. Be sure to drain all cans well, refill with fresh water and drain again to remove extra preservatives and sodium. About the author: Elizabeth Yarnell is a Certified Nutritional Consultant and the author of Glorious One-Pot Meals: A new quick healthy approach to Dutch oven cooking , a guide to a guide to preparing quick, healthy and balanced one-pot meals. She is also a mother of two preschoolers. Visit Elizabeth online at www.GloriousOnePotMeals.com to subscribe to her free newsletter. The Glorious One-Pot Meal cooking method is unique and holds US patent 6,846,504. Permission granted for use on DrLaura.com. More >>

Spendaholic The Dollar Stretcher by Gary Foreman I am 22 years old and I live in NYC. I am in some serious debt, which I have turned over to a debt consolidation company. I make a decent amount of money, however, I can't seem to keep it for more than a few hours. I end up spending my entire paycheck within the first day I have it....seriously. I am trying to find a support group in NYC, but am having no luck. I know I have a problem and I can't continue to live like this. Donna My Dad used to call it 'letting money burn a hole in your pocket'. Call it what you will, but it's a serious problem for some people. If you regularly spend all the money you have, you'll always be broke. There are two main strategies that Donna can use. First, she can severely limit the amount of cash and credit that she has available for spending. Second, she can change the way that she relates to money. Let's begin with the tools that will limit how much money Donna has at any time. If her employer offers it, she should use direct deposit. If that's not available, she'll need to deposit her entire check as soon as she receives it. Donna should use payroll deductions to force savings. Otherwise, she's probably going to have trouble accumulating any. Deductions are also a good way to save for retirement. She might want to consider making regular monthly contributions to an IRA or mutual fund account. It's foolish for Donna to carry much cash. She'll just be tempted to spend it. Before she leaves the house in the morning Donna should list the items that she expects to buy that day. Include everything. Even snacks and the daily paper. The idea is to only carry the cash she'll need and get in the habit of only making purchases that are on the list. Donna has already seen what credit cards can do. They're meant to be convenient to use. And, that's the problem. It's easy to keep charging until she reaches her credit limit. Leave them at home unless they're needed for a planned purchase. Once Donna limits the amount of cash and credit that's available, it's time to change the way that she relates to money. She already recognizes that it's easier to reach your goal if other people are involved. Contacting a local social services agency could turn up a support group for spendaholics. Another source of support is an 'accountability partner'. It could be a friend, relative or mentor. Someone who can be trusted. Donna would regularly report to the partner on how well she was doing. Sometimes just knowing that we'll have to confess our failures is enough to keep us from stumbling. That partner can also be helpful when Donna does suffer a setback. And they will come. A compassionate partner can help dust us off and get us back on track. If you can't find someone to hold you accountable, create a system to hold yourself accountable. It could be as simple as keeping track of the days that you stuck with the morning spending list. Donna should also consider using a budget. It would put her on notice when she had already spent the money that she had allocated for entertainment, clothing or any other category. Avoid the places that are most likely to trigger spending. Just as the alcoholic can't hang around bars, the spendaholic shouldn't go window shopping. It's like dancing with the devil. You're bound to get singed. Use rewards and punishments to encourage good spending behavior. We all respond to appropriate rewards. Donna might find that she's never had the money for good seats at a Broadway show because the money is always gone. The idea is to pick something that had not been attainable under the old system and then reward yourself after an important goal has been met. It will get easier the longer you persist. It's hard to break old habits. Especially if they contain some behavior that could be addictive. Remember that tomorrow will be easier than today. But you have to get through today first. Donna has already taken the first two steps. She's recognized the problem and started to look for help in solving it. Hopefully she'll be successful in using some of the tools to take control of the situation and begin to build a new pattern of relating to money. Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website TheDollarStretcher.com and newsletters. You'll find hundreds of articles to help you stretch your day and your dollar! Permission granted for use on DrLaura.com. More >>

To Boycott or Not to Boycott, that is the question The Dollar Stretcher by Gary Foreman gary@stretcher.com In light of the recent arrests of illegal workers hired with the full knowledge of Wal-Mart, some have called for us to boycott their stores. Will you share your thoughts on this? I understand that small time boycotts (a handful of people in each community) will never register with the powers of the world's largest retailer. I would like to do my part but where do I draw the line? I'm cost-conscious and my best grocery value is with consistent Wal-Mart shopping. However, if it's at the expense of someone's job am I being fair to pinch a few pennies? Additionally, Wal-Mart is the only store in my area that sells general merchandise. If I want a spool of thread or a pair of pajamas, I have to drive 15 miles one-way if I don't shop at Wal-Mart. There's a huge trickle-down effect. If our local Wal-Mart has declining sales, our county loses revenue and people lose jobs because our shopping will have to be done in the nearby city. Ellie in Virginia Ellie sure asks a big question. Let's begin by finding out a little about boycotts. According to BoycottCity.org the practice began in Ireland and targeted a ruthless landlord named Boycott. All of his tenants were so upset that they refused to have anything to do with Boycott and his family. The practice came to the U.S. in support of labor movements. And in the 1960's it gained popularity as a political tool. Over recent years you've seen more boycotts. That's because they appear to be working. However, you won't find many statistics because companies are reluctant to comment on boycotts and certainly don't want to admit that they work. The purpose of a boycott is to get an organization to change because of an organized refusal to continue to do business with the company. For example, Ellie feels that Wal-Mart shouldn't hire illegal aliens. Boycotters argue that an organized refusal to shop at Wal-Mart will cause them to stop the practice. Please note that I haven't studied what Wal-Mart's hiring policies are so I don't have a position on this particular boycott. But I do believe that in a free market system it's fair to vote with your money by financially supporting businesses that you admire. Or to withhold your business from companies you disapprove of. Now on to the question of whether Ellie should join this particular boycott. To decide, Ellie needs to consider how important the goal is to her, whether the boycott could help achieve that goal, whether her personal sacrifice is worthwhile compared to the goal and would an alternative strategy be better. Ellie's goal appears to be to protect the jobs of American workers, primarily in her hometown. Can a boycott help achieve that goal? Even though Wal-Mart may be the largest company in the world, yes, a boycott could be successful. But, as she points out, it would take a large number of boycotters to affect Wal-Mart's bottom line. So good leadership of the boycott is required. One position for Ellie to consider is only shopping at her local Wal-Mart if that store meets her standards. Each store's sales and profit figures are measured separately. So it might be easier to affect a change in her local store. And, if her real concern is local jobs, then a national boycott might not be necessary. Plus, it is possible that boycotting the local Wal-Mart could cause them to lay-off her neighbors. For every job saved, the boycotters could cost two or three. Now for the toughest question. Is the goal worthy of the sacrifice? If she abandons Wal-Mart that means driving further to buy household items. No big deal if she visits the city regularly. But it's a different situation if her car is troublesome and she rarely leaves home. Or the difference in costs. For Ellie paying a little extra may be no big deal. But for a family just barely to pay the rent, those pennies might mean missing a meal. Plus the poorer family probably spends less in Wal-Mart when they do shop. So the wealthier family will have a greater impact on Wal-Mart even if their sacrifice is less. Finally, Ellie should consider the alternatives. A visit to the local store manager could reveal that the store isn't hiring illegal aliens. Or she might want to ask if the local paper would do an investigative piece on Wal-Mart's hiring practices. Another option would be to continue to shop at Wal-Mart, but to set aside the money saved for a contribution to the local food bank. In most cases it's wise to exhaust other options before resorting to a boycott. Boycott issues aren't often easy. You can't mathematically calculate the 'right' answer. So the bottom line is usually a decision about what is important to you. And that's a question that only Ellie can answer. Gary Foreman is a former financial planner and purchasing manager who currently edits The Dollar Stretcher website thedollarstretcher.com and newsletters. You'll find thousands of time and money saving articles. Permission granted for use on DrLaura.com More >>

A Painful Grocery Bill The Dollar Stretcher by Gary Foreman gary@stretcher.com My husband and I live alone. My mom comes over for dinner andbreakfast three days per week, and I send her lunches for worktwo nights a week. We are spending over $400 a week forgroceries. I am not buying extravagant things, and I reallydon't buy a lot of "junk" food. Where on earth are we goingwrong? Couldsomeone explain this to me? I feel like we are beyond help.What are we doing wrong? Diane O. Diane asks a great question. Groceries are the largestcategory of spending that we can affect without making majorlifestyle changes. According to the U.S. Statistical Abstract for 2002, thetypical family of three spends $6,093 on food each year. Andthat includes $2,407 for food eaten away from home. So Diane'stotal is significantly above the norm. But, as Diane points out, everyone doesn't include the samethings in their grocery bill. The Abstract shows typicalspending of $553 for "housekeeping supplies," $693 for"personal care products and services" and $399 for "tobaccoproducts." Those are not included in the $6,093. In fact, nine items (laundry detergent, peanut butter, fabricsoftener, toilet tissue, diapers, coffee, toothpaste, papertowels, shampoo) will account for $17 billion in annual sales.With the exception of peanut butter and coffee, none of theseitems are "food" items. Other bill boosters are pet food andliquor products. And don't forget greeting cards and videorentals! Many people buy non-food items at the grocery store. And eventhink of them as part of their grocery budget. With the riseof "supercenters," more people are combining their groceryshopping with their "other" shopping. Often it is moreconvenient to buy everything in one stop. But it's often notthe cheapest solution. If Diane wants to control her grocery spending, it's probablynot going to be helpful to compare her bill to her neighbor's.Every family situation is different. And some families areeven able to grow or raise their own food. A better way to reduce her bill is to study her own habits andsee where changes could save money. Start by analyzing your receipt. What items are the mostexpensive? Work on them first. Can they be eliminatedentirely? If not, are there lower cost alternatives? Buying junk food is not the only thing that can drive up yourgrocery bill. Your diet also makes a big difference.Vegetables and starches cost less than meat. A diet heavy inmeat will be more expensive. Likewise low calorie, low sugar,low salt foods will add heft to your bill. For instance, according to the Organic Trade Association,consumers are willing to pay up to 25% more for organics thanthey would for non-organic equivalents. Some consumers willpay up to 100% more. The grocery store is often not the best place to buy thosespecialty items. If you buy them often, look for more direct,lower cost alternative sources. Another grocery bill booster is our desire for convenience.Most of us are short on time. Grocers see this as anopportunity to increase their profits. Most are offering "everything-in-one-box" type of meals.Others are experimenting with a menu plan. A portion of thestore is stocked to allow the shopper to buy everything theyneed for a specific meal on one shelf. In either case, theconsumer pays for the convenience of not planning their ownmeals and buying pre-measured ingredients. While you're waiting in line, take a look at your grocerycart. How much prepared food is in the cart? You may not havetime to clean carrots. But you will pay extra for the littleprepared ones. If you know the difference in price, you canmake an intelligent decision whether to save your time or yourmoney. Finally, Diane needs to be able to compare prices so that shecan identify and stock-up when she finds a true bargain. Thebest tool for this is a price book. It's simply a listing ofitems that she commonly buys and the lowest price(s) for eachitem. That will help her identify the true sales. Shoppers whouse a price book regularly claim to save up to 20%. Diane will probably never get her bill down to $130 per month.But if she works at it, a lower bill is possible without asignificant impact on her lifestyle. Gary Foreman is a former purchasing manager who currentlypublishes The Dollar Stretcher website: www.stretcher.com andnewsletters: www.stretcher.com/menu/subscrib.cfm copyright2003 Dollar Stretcher, Inc. Permission granted for use on DrLaura.com More >>

Moving on a Dime: Save Money, Save Time, Save Your Sanity by Jill Cooper and Tawra Kellam www.notjustbeans.com Have you ever been so stressed out moving that you wondered if the easiest way to pack was to get a gallon of gasoline and a box of matches? Moving can be a stressful time for everyone involved, but don#146;t make it more stressful than it needs to be. Just getting started is the hardest part. Here are few tips to point you in the right direction. ORDER IN WHICH TO START PACKING Start with things you don#146;t use every day. Memories - Grandma#146;s dishes, quilts, old books, Bibles, childhood toys and photos Garage items - Christmas and Holiday decorations, camping equipment and things in storage Things stored in closets that aren#146;t used often and out of season clothes Knick-knacks, pictures, mirrors and wall hangings Seasonal dishes, canning equipment, roasting pans, good china, good silverware, large serving platters Unnecessary CD#146;s, DVD#146;s and video tapes. Sewing room and craft items. Home office - Pack as much as possible except bills that need to be paid. Leave office boxes open and tape them closed at the last minute before moving just in case you need something out of them. Children#146;s toys and games - Pack most of the toys they don#146;t play with regularly. One week before moving - Pack all unnecessary kitchen items, clothes and linens (except what you need for one week). Tips to pain free packing: Don't leave empty spaces. Here are some examples of how you might use all available space: I fill my china cabinet with light weight soft things like stuffed animals, balls of yarn, quilts, artificial flowers and greenery. If you will be moving your refrigerator or washer or dryer, fill it with pillows, wicker baskets or plastic items from the kitchen. Fill clothes hampers with bathroom items. If you have a lamp that needs special protection, wrap it carefully in towels and place it in a clothes hamper. Fill up even small items like plastic pitchers with kitchen utensils or kitchen knick-knacks. I clean out a large outside trash can and use it to pack my hoses, small pots and gardening tools. If I#146;m not sure if I should keep something, I allow myself to take it if I can fit it in that one trash can. My son-in-law says it is one step closer to the curb that way. Don't pack glass, porcelain or ceramic containers with loose items in them that could break them. Canning jars filled with marbles or baby food jars filled with nuts and bolts are recipes for disaster. Pack heavy things such as books in small boxes. Don't pack things like photos, videotapes, cd's, candles, plants or pets (especially pets!!!) where heat or cold can get to them. Don't think any of those things will be safe and protected in a car or truck overnight. If it gets cold, they will freeze. Also plants left in a hot car will not be safe because the heat will kill them. When transporting plants in a car, protect them from direct sunlight with a covering of newspaper because the sun will fry houseplants. Pack kids#146; rooms last. They need the security of having their room the same for as long as possible. Be sure to put their favorite items in the car such a blanket, stuffed animal or books. Jill Cooper and Tawra Kellam are the authors of Moving on a Dime: Save Money, Save Time, Save Your Sanity. To order Moving on a Dime and for more free money saving tips visit our web site at www.notjustbeans.com . Permission granted for use on DrLaura.com. More >>

Smallest Bill? Or Highest Rate? The Dollar Stretcher by Gary Foreman gary@stretcher.com My husband and I have accumulated some credit card debt, a personal loan from my mom, and a home equity line of credit. Recently getting married, purchasing our first home, and some medical bills have really put a hurting on our budget. Some advice that I have read says that one should pay off the debt with the highest interest rate first. Other advice says to pay off the smallest debt first and work my way up the debt ladder. Which one is the most effective in our situation? Amy According to the Federal Reserve currently there is over $1.7 trillion in consumer debt. So an awful lot of people are facing the very same choice. So let's see if we can figure out what would work best for Amy. Paying the debt with the highest interest rate will reduce the total debt quicker. The reason is clear. The higher the interest rate, the more interest is added to the balance you owe each month. Suppose you owed money on two different accounts. The first account charges 5% interest. Paying off $1,000 would save Amy $4.17 per month in interest expense ($1,000 times 0.05 divided by 12 months). Now suppose the second account charges 10% interest. Paying off $1,000 would save $8.33 per month. Clearly, she'll save more, and reduce her balance quicker, if she pays off the account the highest interest rate. But, there is a risk to this strategy. It might take Amy quite awhile to pay the entire balance of the account with the highest interest. And, after 6 or 8 months of trying she might get discouraged and be tempted to give up if she's still writing a check to them each month. Let's face it. Some people are more determined than others. And some of us need immediate feedback or gratification. One way to get that positive feedback is to have an account disappear because it's be entirely paid off. The fact that it's the account with the smallest balance doesn't matter. What's best for Amy? Paying off the highest rate of interest first is the most efficient answer. But depending on Amy's personality, paying off the one with the smallest balance might be the best answer. Before she decides, there are other ways to get positive feedback as you pay down debts. One simple way is to watch your total indebtedness drop each month. Just list the balance on all your accounts and add them up. Then compare the totals after a few months. Notice how the mountain of debt is getting a little smaller. If Amy is into visuals, she could keep a running graph of the total. Another way to encourage yourself is to watch the amount of interest owed drop each month. Remember that the interest you owe each month doesn't buy you anything. It's the price you pay for borrowing the money some time in the past. Just list the interest charged by all of your accounts and total it. Again, compare it to the total from a few months ago. If the total amount owed is going down, so should the amount of interest that you pay each month. Watching her balances drop might not be enough for Amy. She might be one of those people who won't feel successful until she's writing fewer checks each month. If that's the case she should pay off the smallest account first so she feels like she's making progress. Amy will probably find that her most expensive debt is on credit cards. The least expensive will be her mortgage. If she's sure that they don't have a problem with uncontrolled spending, they might even want to use a home equity loan to pay off some higher interest debt. But only if they're not "spendaholics". One other strategy would be to pay off one or two of the small accounts to get started. Once Amy is past the point of needing encouragement she can shift to paying more on the accounts with the highest interest. Finally, it's more important that Amy starts now than which account she pays first. Each month she delays all of the accounts add to the interest owed. The hole gets a little deeper. It's better to pay off low interest debt, than no debt at all. Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website: www.stretcher.com You'll find thousands of articles to help you stretch your day and your dollar. Visit Today! Permission granted for use on DrLaura.com. More >>

Tackling Back-To-School Expenses Homebodies www.homebodies.org By Cheryl Gochnauer Copyright 2003 Just when I#146;d settled into my summertime routine, the ads started blaring: #147;The first day of school is right around the corner!#148; According to local retailers, it#146;s time to hit the stores in search of the perfect everything. In the face of this media blitz, my one-income budget demands a clear head and a bit of creativity as I begin gathering true essentials for the coming school year. SCHOOL SUPPLIES. Thanks to discount stores like Wal-Mart, K-Mart and Target, school supplies aren#146;t too scary. Since everybody needs them, competition is fierce. They#146;re practically giving away glue, markers and folders, hoping that you#146;ll pick up a backpack or two while you#146;re there. Resist the impulse and recycle last year#146;s more expensive items whenever possible. Use coupons and bring competitor#146;s fliers for price matching. Keep your eyes open for rebates, which are very common this time of year. CLOTHES, COATS AND SHOES. Hopefully you remembered to purchase the kids#146; fall and winter coats last spring at the 70 percent-off sales. If not, it#146;s not too late to scour neighborhood garage sales in search of a gently-used jacket. Since jeans are the uniform of choice for most students, watch sales. Recently I spotted flares at Wal-Mart for my 5th grader - $15 jeans marked down to $10, then $7, then $3 each. I grabbed five pair and headed to the registers, where they rang up at ONE DOLLAR EACH. (God bless Sam Walton!) EXTRACURRICULARS. There#146;s not much lee-way in dodging sports and band fees, but you may be able to save on the uniforms and instruments. Check the classifieds for second-hand items. Email friends and classmates to see if anyone has something you need for sale. Ask coaches and tutors for leads on used equipment. If there#146;s a good chance your child will be on the same team next year, allow some growing room. Buy a little big; there#146;s a good chance that soccer or cheerleading outfit will work for two seasons instead of one. FUNDRAISERS. Most schools kick off with some type of fundraiser. Parents, I hear those groans! But don#146;t turn away every kid who knocks on your door, because they might be peddling something that benefits YOU as much as their sports or drama team. I#146;m talking about those Entertainment and Gold Coupon books (and their many clones). I love these buy-one, get-one-free deals. They allow me to splurge on a night out or fun fest #150; at half-price. The books usually pay for themselves the first time I use them. Hint: Think through fundraisers before pitching products to your neighbors. To offset cheerleading costs, I bought 20 fundraising coupon books at $1 each #150; which my daughter was then supposed to sell for $5 apiece. (She would pocket the extra $4 per book, clearing a total of $80.) But each book #150; which offered discounts at my favorite grocery store #150; included a #147;$5 off the total purchase#148; coupon, along with another $50 or so in additional savings. Since I shop at that store every week, I gave my daughter $80 toward her uniform, kept the books and used the coupons myself. The $5-off coupons alone saved me $100, plus I saved hundreds more with the remaining coupons in the 20 books. Next year, I#146;ll buy FORTY books and double this year#146;s savings! MORE QUICK TIPS: If your kids don#146;t take the bus to school, carpool with other families. (That goes for before and after school practices, too.) Most days, have children take lunches instead of buying at the cafeteria. Get required vaccinations through your local county health department, where shots are often offered at a discount or free. If you#146;re paying tuition, work part-time or substitute at the school to offset expenses. (It#146;ll make it easy to pop in on their class parties or keep an eye on your teen, too!) Comments? Email Cheryl@homebodies.org or visit www.homebodies.org to read more articles relating to at-home parenting. Copyright 2003 Cheryl Gochnauer. Permission granted for use on DrLaura.com. More >>

How 'Charge Offs' Effect You The Dollar Stretcher by Gary Foreman gary@stretcher.com Can you describe or define what the term "charge off" means concerning credit cards and credit reports? I am seeing it quite often and do not quite understand what it signifies. Thanks for your help. Patty Louisiana Patty's right. You are seeing the term "charge off" more frequently. That's because about 1% of all credit card debt is ultimately charged off. And, whether you struggle to make credit card payments or you have a perfect credit history, charge offs will effect your finances. Let's begin by finding out what a charge off really is. Wachovia Bank offered a good definition on their website: wachovia.com : "The removal of an account from a credit card issuer's books as an asset after it has been delinquent for a period of time, usually 180 days. When an account is charged off, the credit card issuer absorbs the outstanding balance as a loss." For those of you who don't speak 'financialese' that means that a 'charge off' or 'write off' is really just an accounting entry. The lender is saying that they don't expect to collect the debt and are not willing to claim it as an asset of the company any longer. But it will not affect whether the borrower still owes the money. A charge off does not free you from the debt. Think of it this way. Suppose you borrowed $100 from Joe. After a year passes he doesn't really expect to get his money back. Mentally he's 'written off' the loan. He doesn't believe that your IOU has value any more. But, that doesn't mean that you don't still owe Joe $100. You do. In fact, in the world of credit card debt it's possible that it will be harder to avoid paying the debt after it has been written off. That's because the original lender often sells those debts to a third party when they write them off. And the third party, often a collection agency, gets to keep any money that they collect. So they will work very hard to collect as much as they can. Even if that means using questionable pressure tactics. Note that it's the lender who gets to decide whether to write-off a debt as being uncorrectable. You may have lost your job six months ago and not made a payment since. But you really plan on making one next month. That doesn't prevent the lender from writing off the debt. On the other hand, in approximately 50% of the cases charge offs occur when a borrower declares bankruptcy. Between one and 1.5 million people declare bankruptcy each year. Their bankruptcy triggers the charge off. So what happens to your credit rating when your card balance is written off? Thirty-five percent of your credit score is based on past payment history. A 'charge off' is about the worst mark that you can get on your credit report. It says you are someone with a history of not paying their debts. And you don't need a charge off to be penalized. If you struggle to make your minimum payment, the fear of a write off will cause the credit card company to raise your interest rate. Based on a borrower's payment history they can predict when someone is becoming a high risk. When that happens they'll increase the interest rates on the account very quickly. That costs you more money every month. OK, what happens if you always pay your bills on time? Unfortunately, you're still effected by charge offs. The credit card companies expect that some loans will not be repaid. So in an effort to stay profitable, they have to charge everyone a little higher interest rate to make up for the losses. So everyone who uses a charge card makes some small contribution. One final issue. If you do have a charge off on your record you might want to consider repaying the debt if you have the money. Negative remarks will be stay on your report for 7 years. You may be able to negotiate a deal where you pay the debt and the lender changes the status of the account to "Paid as Agreed". If you attempt to do this, make sure that you get the agreement in writing. Thanks to Patty for a good question! Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website: www.stretcher.com and ezines. You'll find thousands of articles to help you save time and money. copyright 2003 Dollar Stretcher, Inc. All rights reserved. Permission granted for use on DrLaura.com. More >>