One in Five Could Not Maintain Lifestyle
Without Credit Cards

GailCunninghamBy Gail Cunningham

The ability to put away the plastic and successfully live on a cash basis is an indicator of financial stability, as it proves a person’s lifestyle is in line with their income. However, the recent NFCC online poll revealed that one in five people could not make ends meet without the use of credit. Another twenty-two percent of respondents said that if asked to live on a cash basis they would have to make significant lifestyle changes.

Credit should be used as a convenience, not to supplement income. It is a warning sign if a person is not able to manage his or her daily lifestyle without the use of credit cards, as this is a dangerous habit that could lead to serious financial distress. To illustrate the damage that can result from the overuse of credit, consider that in 2013 the average consumer who sought financial counseling from an NFCC member agency had between five and six credit cards with a total unsecured debt equal to half of their annual household income.

To help consumers know if they are entering the financial danger zone, the NFCC offers the following red flags that debt is becoming unmanageable:

  • Paying only the minimum on credit card bills each month;
  • Credit card balances growing;
  • Skipping monthly payments, paying late, or making short payments;
  • Accounts going into collection;
  • Moving debt around through the use of balance transfers;
  • Seeking cash advances, payday loans, title loans or other non-traditional credit;
  • Arguments in the home over money;
  • Charging items that were previously paid for with cash;
  • Attempting to obtain new lines of credit since existing lines are near their limit, and
  • Considering bankruptcy or debt settlement.

People may feel as though they have no alternative to using credit to supplement their income, but that is a dangerous habit that can lead to financial ruin. No one ever intentionally digs a deep financial hole, but breaking one of the basic rules of personal finance – spending more than you make – is not likely to have a positive outcome.

The NFCC posed the identical poll question to consumers in 2012. Comparing the results only revealed one positive change: the number of people who would be able to maintain their same lifestyle without the use of credit increased four percent in the 2014 findings (27% versus 23%). There was no statistical difference between the two years in the remaining answers.

Consumers seeking answers to their financial concerns would be well-served by reaching out to an NFCC member agency for free or low-cost financial counseling. To be automatically connected to the agency closest to you, dial (800) 388-2227, or to find an agency online, visit www.NFCC.org.

The actual 2014 poll question and responses are below, with 2012 data in parenthesis.

If asked to live on a cash basis, I

  1. Would be able to maintain my same lifestyle 27% (23)
  2. Would make some changes, but basically be fine 32% (32)
  3. Would have to make significant lifestyle changes 22% (24)
  4. Could not make ends meet without credit 20% (22)

Note: The NFCC’s August Financial Literacy Opinion Index was conducted via the homepage of the NFCC website (www.DebtAdvice.org) from August 1–31, 2014, and was answered by 1,878 individuals.

Gail Cunningham manages Media Relations for the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Create and Grow Your Emergency Fund
Safety Net

MarkFoster_CCOABy Mark Foster

Emergencies are a fact of life. A lot of things in life aren’t planned – a flat tire, an emergency room visit, or a broken air-conditioner, for example. The question isn’t whether an emergency will pop up, but whether someone is prepared for it or not. Many people are not financially ready for an emergency. In fact, 39 percent of American adults have no savings to cope with a financial emergency. Almost 60 percent of adults age 45 and under have less than $500 saved to deal with any emergencies.

Arkansans are struggling with personal finances. A CCOA website poll found 67 percent of participants state that they have absolutely nothing saved to deal with emergencies. Nothing. These people are living on the edge of financial disaster.

Families who have little or nothing saved for an emergency will face an even bigger emergency when they don’t have the savings to pay for that ruined tire, hospital bill, or broken appliance. That is a very stressful way to live, without any security.

For some security and peace of mind, people need to create an emergency fund which will be a helpful safety net if they encounter a problem. Non-profit CCOA recommends:

  • Open a savings account if you haven’t already.
  • Regularly deposit money into your account.
  • Automatic deposit is the best and easiest way to save.
  • Set a specific goal, such as $750, and write it down.
  • Post your emergency fund goal where you will see it so it will be an ongoing reminder for you to save.

Having a savings safety net will go a long way to cover the financial emergencies that will eventually happen.

Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. To schedule an appointment with a Certified Consumer Credit Counselor contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 6th Annual Jump$tart Educator Conference
Now Open for Registration

DrewKesskerBy Drew Kessler

Calling all teachers! Registration is now open for the 6th Annual Jump$tart National Educator Conference, devoted to classroom educators who teach personal finance or want to incorporate money lessons into other subject matter, grades PreK-12.  Join Jump$tart November 8-10, 2014 at the Omni Hotel at California Plaza, Los Angeles, CA.

Through the generosity of Experian, Wells Fargo Foundation, and many sponsors, Jump$tart is able to offer teachers the very special price of $425, which includes conference registration; conference meals and receptions; some materials, including a print copy of the National Standards in K-12 Personal Finance Education; and two nights’ hotel accommodations. Teachers are offered optional, private sessions with financial planners. The exhibit hall is devoted to personal finance curricula and other resources. For more information, please visit their website or Facebook page or contact their conference director, Dan Hebert.

The conference web page includes links to register as sponsors and/or exhibitors.  There’s still room for more exhibitors! Conference registration for those other than sponsors, exhibitors, and licensed, PreK-12 classroom educators will launch on October 6.

Drew Kessler is Vice President of Marketing & Communications with the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Divorcing? Protect Your Finances,
Personal Data

alderman_color_1By Jason Alderman

No doubt you’ve seen many warnings against sharing personal or financial information with strangers, but what about your spouse – or ex-spouse? A recent study by McAfee revealed some unsettling findings:

  • Although 96 percent of adults surveyed trust their significant other with passwords, intimate photos, and other personal content they’ve shared via mobile devices, only 32 percent have asked their ex to delete the information when ending the relationship.
  • One in five people said they’re likely to log into their spouse’s Facebook account at least once a month.
  • Some 30 percent admitted they’d “cyber-stalked” their significant other’s ex on social media.

Given the high rate of divorce and how frequently marriages and other relationships end acrimoniously, it’s not a big leap to think that a scorned lover could cause just as much damage to your credit and reputation as an identity thief halfway across the world. If you’re getting divorced, here are some important legal, financial and privacy considerations:

Get good advice. If you and your spouse are in complete agreement on how you wish to divide assets and settle debts, you may be able get by with a do-it-yourself divorce kit. Laws vary by state, so make sure to get one that applies where you live. It’s still wise to have a divorce attorney review the forms to make sure you haven’t overlooked anything you’ll later regret.

If your separation is more complicated but relatively amicable, you may also want to try collaborative divorce, mediation or arbitration:

  • Collaborative divorce. Both parties retain a lawyer and the four of you hash out an agreement at a conference table, rather in a courtroom. You each control the final agreement instead of having to abide by a judge’s decision.
  • Mediation. You each have lawyers but hire a third-party mediator to work through differences on critical issues. Although mediators are often attorneys themselves, they don’t have the legal authority to impose final decisions.
  • Arbitration. Like mediation, except that the arbiter hands down a binding agreement by which you each must abide.

If you can’t settle out of court, be prepared to possibly pay many thousands of dollars in attorney and court fees. Ask around for referrals to lawyers who specialize in divorce. Another resource is the American Bar Association, which has a state-by-state search engine for finding legal help.

You may also want to consult a financial planning professional for advice on how to fairly divide property, calculate child support, and ensure you’re sufficiently insured, as well as explain Social Security and retirement plan implications. If you don’t know one, good resources are the Financial Planning Association and the Institute for Divorce Financial Analysts.

Safeguard your credit. To protect your credit status, close joint bank and credit card accounts and open new ones in your own name; otherwise, an economically struggling or vindictive ex-spouse could amass debt in your name and ruin your credit. If your ex retains the house or car, make sure your name is taken off the loan (and deed or pink slip) so you won’t be responsible if they flake on payments.

Be sure all closed accounts are paid off, even if you must transfer balances to your new account and pay them off yourself. That’s because late or unmade payments by either party on a joint account – open or closed – will damage both of your credit scores.

Check your credit reports before, during, and after the divorce to make sure you’re aware of all outstanding debts and to ensure that all joint accounts were properly closed. The three major credit bureaus, Equifax, Experian and TransUnion, don’t always list the same accounts, so to be safe, order credit reports from each. You can order one free credit report annually from each through AnnualCreditReport.com or more frequently for a small fee directly from each bureau.

Protect your reputation. Be sure to change all passwords, PINs, security questions/answers, and any other information your ex could use to access your electronic devices and financial, email, and social media accounts. Also, resist the temptation to email or post malicious, salacious, or revealing information that could be damaging if presented in court by opposing counsel.

A few additional tips:

  • If your ex knows the answers to common security questions (mother’s maiden name, first pet, etc.), you can always change them to something fictitious that only you know. Just make sure you keep track of all your fabricated answers so you’re not locked out as well.
  • Before hiring an attorney or financial advisor to oversee your divorce, make sure you fully understand how they will bill their time – whether hourly, fixed fee, or some combination, depending on the case’s complexity.
  • To simplify their task (and thereby lower fees), gather copies of important financial paperwork including: tax returns; retirement accounts; pay stubs; employee benefit statements; life, health, homeowners and auto insurance policies; bank, brokerage, mortgage and credit card account statements; home deed or lease; and wills, trusts and other legal documents.
  • Your attorney may need to file a Qualified Domestic Relations Order (QDRO), which establishes your right to receive a portion of your former spouse’s pension or other retirement plans. Be sure to consider the accounts’ future value, especially if an IRA or 401(k) suffered recent investment losses.
  • Appraise real estate, artwork and collectibles to determine their value before dividing. The same goes if you co-own a business and one spouse will be buying out the other.
  • If alimony or child support is included in the settlement, take out a life insurance policy on the person paying it, which names the receiving ex-spouse as beneficiary.

Bottom line: Divorce can be a painful experience to live through. Don’t make it worse by not protecting your own financial interests.

To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney

Jason Alderman is Senior Director, Global Financial Education, with Visa, Inc.           

This article is intended to provide general information and should not be considered legal, tax, or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Ten Reasons Credit Card Applications
May be Declined

GailCunninghamBy Gail Cunningham

People apply for a credit card for many different reasons. Some are new to the world of credit and just getting started, while others are hoping to expand their access to credit. Regardless of the reason, no one applies for a card hoping their application will be rejected. To improve the likelihood of approval, consumers need to understand the credit decisioning process.

Each lender has different criteria for extending credit. Therefore, consumers should do their research in advance, and only apply for the cards that are likely to grant the credit they seek. The NFCC provides the following 10 reasons a credit card application could be declined, along with the steps consumers can take to correct the problem. The list is not inclusive, but will help borrowers better understand the review process and how to position themselves to increase the likelihood of credit being extended.

Not enough existing credit – Lenders prefer being able to review a track record of how a person has managed credit in the past.  A thin or nonexistent credit file can give a conservative lender reason to deny.

What to doJudiciously build credit, perhaps starting with a secured credit card, but confirm in advance that the issuer reports activity to the credit bureaus.  Also consider becoming an authorized user on another person’s card, as the activity of the primary cardholder as well as the authorized user is reported to the bureaus.

Poor pay history – The highest weighted element in the scoring model is how a person repays his or her debt obligations.  A history of skipped or late payments can be a knock-out punch when attempting to obtain new credit.

What to do – Identify any issues by obtaining the credit report for free at www.AnnualCreditReport.com.  Next, start making payments on all accounts including those that are past due. This begins building a positive history and helps to establish creditworthiness.

Existing credit lines maxed out – Creditors don’t like to see that a person is utilizing all of their available credit, as this can signal that they are living on credit and opening a new line will only increase current indebtedness.

What to do – Pay down credit card debt to equal no more than 30 percent of available credit.  Credit utilization is the second highest weighted element of the scoring model, so lowering debt could also benefit the credit score.

Overall debt is too high – A person’s debt-to-income ratio is a reflection of how much is owed relative to their income.  People have expenses beyond credit cards, thus lenders take all existing obligations into consideration.

What to do – Increase income or decrease debt.  The important thing is to not appear that more is owed than can be responsibly managed.

Too many inquiries – It’s a red flag if a person is attempting to obtain too much credit at one time.  Too many inquiries or recently opened accounts can make a lender reluctant to give the person another chance to spend.

What to do - Only apply for the number of cards that are necessary and are appropriate for your financial situation.  If declined, do not continue applying.  Instead, take steps to remedy the reason for the rejection.  Wait a few months to reapply, as that will give the credit report time to update.

Serious negative notations – Unpaid tax liens and Chapter 7 bankruptcy can remain on a credit file for up to 10 years. Foreclosure, late and missed payments, collection accounts and Chapter 13 bankruptcy can remain for seven years.

What to do – The further a person moves away from the date of the negative activity, the less impact it has on credit decisions.  A person doesn’t need to wait until the activity rotates off the credit report, but putting distance between the harmful information and applying for new credit is helpful.

Insufficient income – Although often not made public, issuers have minimum income limits that must be met in order to grant credit.

What to do – Research which cards are more likely to grant credit to people with low incomes.  In the absence of other eliminating factors, getting a part-time job to supplement the primary source of income should enhance the likelihood of credit being extended.

Unstable job history – Recent unemployment or consistent job hopping indicates an unstable income, thus putting a person at risk of default in the lender’s eyes.

What to do – Make steady employment a priority.  Changing jobs within the same field may not weigh as heavily against a person, particularly if it is a promotion.

Too young to apply – Applicants must be a minimum of 18-years-old to apply for a credit card.

What to do – As a result of the Credit Card Accountability, Responsibility, and Disclosure Act, Americans must be 21-years-of-age to independently receive credit unless they can prove ability to pay or have a co-signer.  It is not a bad idea for a young person to learn to manage money by living on a cash basis or using a debit card before applying for credit. 

Errors on the application – Credit card applications can be long, making it easy to inadvertently skip completing all areas.

What to do – Avoid unintentional errors by filling out the application online, as these forms often do not allow a person to submit until all required fields are complete.

When applying for credit, ask yourself if you would loan money to you.  If the answer is ‘no,’ then it’s likely the financial institution won’t either. That’s the signal that it’s time to take action and improve your credit profile. Credit card companies want to extend credit, but only to people who represent a low risk for default as defined by their business model.

If denied credit due to information contained in the credit report, the Fair Credit Reporting Act requires lenders to send the applicant an adverse action notification which includes the reason for the denial. To be in a better position for approval next time, review the reasons for the rejection and take the necessary corrective steps.

For help understanding the credit granting process and learning how to improve your credit picture, reach out to an NFCC member agency. Ask about the NFCC’s Sharpen Your Financial Focus™ program which offers solutions to many everyday financial issues. To be automatically connected to the agency closest to you, dial (800) 388-2227, or find an agency online by visiting www.NFCC.org.

Gail Cunningham manages Media Relations for the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

 

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 What is a Credit Score Hard Pull?

Melinda_1By Melinda Opperman

When your credit report is pulled for any reason, it is counted as an “inquiry”. There are two kinds of inquiries; hard and soft.

  • hard inquiry is when your credit report is pulled by a financial institution for credit purposes. That is, if someone is considering whether or not to give you a loan, that’s a hard inquiry. Hard inquiries can include mortgage, auto, and credit card applications. Usually, the borrower will sign a form authorizing the inquiry when the application for credit is completed.
  • soft inquiry is when your credit report is pulled by you or someone else for different reasons other than loan applications. You might access your own credit report (do so for free at www.annualcreditreport.com), or a potential landlord or employer might check your credit as part of a standard background check.

If you’re concerned about your credit score, hard pulls are the only kind you need to be concerned about. No soft pulls affect your credit in any way; even soft pulls from pre-screened credit card offers will not impact your credit score. The only inquiries that have an impact on your credit score are hard inquiries, which result from your application for credit or a loan.

Inquiries remain on your credit report for 2 years, and will continue to have an affect on your credit score during that time. Over the two years, the impact will decrease until the inquiry goes away.

On a FICO score, new credit makes up make up 10% of your total score, and that is where inquiries affect your credit score. Hard pulls don’t have a huge impact by themselves, but a number of hard inquiries in a short period of time can have a great impact on that 10% of your score.

The scoring algorithm takes into account that you will want to shop around for the best rates, so if you make multiple applications for the same kind of loan in a 14 to 45 day period, those inquiries are lumped together as one. So if you apply for a dozen mortgage loans in one month until you get a rate you like, you’ll only have one inquiry counted against your credit score.

Melinda Opperman is Senior Vice President of Community Outreach & Industry Relations, Springboard Nonprofit Consumer Credit Management, Inc; and Executive Director, Springboard Education Foundation. Springboard Nonprofit Consumer Credit Management is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 800.431.8157, or visit Springboard’s website at www.credit.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Complete a Financial Check-up
Before Beginning Holiday Spending

GailCunninghamBy Gail Cunningham

The NFCC encourages consumers to be aware of their current financial situation before beginning holiday spending, and provides the 2014 Holiday Financial Reality Check-up to evaluate their readiness to take on new debt.

Consumers may still be receiving the summer vacation and back-to-school bills, but should not lose sight of the fact that the holiday spending season is just around the corner. This makes it vitally important for a person to understand their current financial situation before taking on new debt obligations. Doing otherwise could result in damaging an already fragile financial situation.

The NFCC recommends that consumers take the Holiday Financial Reality Check-up quiz to determine if they are in a position to begin holiday spending. Complete the following sentence with a true or false answer: “Concerning my current financial situation, I…..”

  1. Know how much I currently owe on each credit card.
  2. Am receiving collection calls and notices.
  3. Have money saved to pay cash for holiday expenses.
  4. Will be adding new debt on top of old debt if holiday expenses are charged.
  5. Have reviewed my credit report and score in the past 12 months.
  6. Am near the maximum amount allowed on my lines of credit.
  7. Am current on my vehicle payment.
  8. Have applied for a payday loan, title loan, or credit card cash advance in the past 12 months.
  9. Have savings in addition to that earmarked for holiday spending.
  10. Have overdrawn my checking account more than twice in the past 12 months.

A person is in good financial shape to begin their holiday spending if they answered true to all odd-numbered statements. Consumers answering true to even numbered statements should use this quiz as a wake-up call to take action about their financial situation before it spirals out of control, and certainly before taking on additional holiday debt.

Reaching out to an NFCC member agency for help is one of the smartest things a person can do. Allowing a trained and certified financial professional to review the financial situation now can put a person into a much better position to enter the holiday spending season.

To be automatically connected to the NFCC member agency closest to you, dial (800) 388-2227, or visit the NFCC website at www.NFCC.org to find an agency online.

Gail Cunningham manages Media Relations for the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Leave Behind the Paycheck to Paycheck
Struggle and Build up Your Savings

MarkFoster_CCOABy Mark Foster

People who are living paycheck to paycheck are basically living in financial survival mode which is a stressful, exhausting, and a dangerous way to live. Fifty-nine percent of adults age 44 or younger do not have even $500 saved, according to the Social Security Administration. It wouldn’t take much of an emergency to derail a family’s finances if they only have a few hundred dollars saved up – an ER visit, paying the deductable on a car accident, having to repair a home appliance, etc.

Saving is an essential goal to have. Emergencies are a fact of life. It’s not a question of “if” you will ever have an emergency, but “when.” So having money saved is a necessity. It’s been widely recommended that adults save three to six months of their annual net pay. While this is a good long-term goal to have, it can unintentionally be very discouraging to those who have little or no money saved. A good short-term goal may be to save $500. Set short-term, mid-term, and long-term goals and write it down and post it where it will be a regular reminder to work toward your goals.

The most successful savers will have a budget to keep them focused and goals to motivate them to stay on-budget. Tracking expenses for a month to see where your money is actually going is an important first step to creating a realistic budget. Oftentimes someone will find a blind spot in their spending, such as spending too much on entertainment or dining out, and tracking expenses will discover this and allow the person to make necessary adjustments to a budget. With expenses tracked and a budget in place, it will be much easier to build an emergency savings cushion.

It’s typically easier to reduce or cut expenses than it is to earn more money. So review your spending. Look for ways to cut back or things to cut out entirely, at least until you reach your minimum savings cushion.

Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. To schedule an appointment with a Certified Consumer Credit Counselor contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

 

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 Don’t Let Back-to-School Tasks
Sneak Up On You

alderman_color_1By Jason Alderman

Parents, if this is your first time at the back-to-school rodeo let me share a few lessons my wife and I have learned the hard way. Chances are you’ll be spending the next few weeks filling out piles of pre-enrollment paperwork, lining up carpools, and of course, taking the dreaded shopping excursions for clothes and school supplies.

If you’re a first-timer or simply need a back-to-school refresher course, here are a few suggestions that can help you save time, money and sanity:

Get organized. Maintain a correspondence file from your kid’s school for things like registration requirements, report cards, permission slips, required vaccinations, school policies (absence, illness, discipline, etc.), contact information for teachers, aides and classmates’ parents, etc. Ask whether the school has a website, online calendar, or email list you can join. Also, create a family master calendar noting registration deadlines, school holidays, vacations and field trips, doctor’s appointments, your work events, carpool schedules, parent/teacher meetings, athletic and arts events, parties, etc.

Back-to-school shopping. Between new clothes, classroom supplies, and extracurricular activity fees and equipment, many parents end up spending hundreds or even thousands of dollars per child. Ideally, you’ve been setting money aside all year. If not, you’ll need to determine what you can afford to spend on school-related expenses without blowing your overall budget.

Here are a few organizational and money-saving tips:

  • Before you shop, make a comprehensive list for each child. Use previous years’ expenses as a guide and compare notes with other parents and school officials.
  • Engage your kids in the budgeting process. Share how much money is available to spend and get them involved in prioritizing expenses between “needs” and “wants.”
  • Use this as an opportunity to teach the art of compromise: If your kids truly want something outside the budget, work together to determine how they can earn the difference. And, as an inducement to save money, agree to split the savings if you come in under budget.
  • Go through your kids’ closets and have them try on everything. Make an inventory of items that fit and are in good shape, and take it when shopping so you don’t accidentally buy duplicates. (While you’re at it, share, sell or donate unneeded items.)
  • Spread clothing purchases throughout the year so your kids don’t outgrow everything at once. Many stores hold fall clearance sales to make room for holiday merchandise.
  • Although shopping online can save money, time, and gas don’t forget to factor in shipping and return costs, which could undo any net savings. If your kids are old enough put them in charge of online comparison shopping and coupon clipping.
  • Ask which school supplies you’re expected to buy. Go in with other families to take advantage of volume discounts and sales.
  • Find out how much extracurricular activities (athletics, music, art, etc.) cost. Account for uniforms, membership dues, private lessons, field trips, snacks, etc.
  • Rent or buy used sporting equipment or musical instruments until you’re sure they’ll stick with an activity. (Try PlayItAgainSports.com and similar outlets.)
  • Factor in public transportation, school bus, or carpool expenses.
  • Learn what your school charges for meals and weigh their convenience (and nutritional value) against the cost of home-prepared lunches and snacks.
  • Know when it’s important to spend more for higher quality. Cheaper notebook paper shouldn’t matter, but you shouldn’t risk buying poorly made shoes that might hamper proper physical development.
  • Before buying new clothing or accessories, look for “gently used” items in the closets of your older kids, friends and neighbors, at garage sales, thrift and consignment stores, and at online sites like Craig’s List.
  • Many states offer a sales tax holiday for back-to-school purchases. Go to the Federation of Tax Administrators website and search for “Sales Tax Holidays” to see if and when your state is participating.
  • Before checking out, ask the salesclerk if there are any available coupons or discounts. Even if you don’t have your own coupon, many clerks, when asked nicely, will scan one for you to ensure that they make the sale.
  • At this time of year, some credit card reward programs offer extra points for office supply stores or other back-to-school retailers. Another strategy: If you’re short on cash but have lots of reward points, use them to buy gift cards for stores you frequent.
  • Back-to-school loss leaders begin to pop up in discount and office supply stores around mid-July.
  • Follow your favorite retailers on Facebook and Twitter where many post special savings for their followers.
  • Review the school’s dress code so you don’t waste money on inappropriate clothing.
  • Clip newspaper and online coupons. Many stores will match competitors’ prices even if their own items aren’t on sale. Plus, many consolidation websites post downloadable coupons and sale codes for online retailers, including: CouponCabin.com, CouponCode.com, CouponCraze.com, DealHunting.com and Dealnews.com.
  • Mobile shopping apps let in-store smartphone and mobile browser users scan product barcodes and make on-the-spot price comparisons, read reviews, download coupons, buy products and more. There are hundreds of popular apps including Price Check, ShopSavvy and PriceGrabber.

Bottom line: If you get organized before setting out on back-to-school shopping, you can save money, time and aggravation.

Jason Alderman is Senior Director, Global Financial Education, with Visa, Inc.           

This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Poll Respondents Admit Personal Finances
Keep Them Awake at Night

GailCunninghamBy Gail Cunningham

Close to four in five respondents (79%) to the NFCC’s July poll admitted that their personal finances keep them awake at night. The second highest number of responses came in a distant second, with 13 percent indicating that they sleep like a baby. The remaining choices were marital concerns, job security, and problems with the children which each had single digit responses.

In addition to the obvious credit problems resulting from overwhelming debt, financial concerns can wreck marriages, tear families apart, and put a person’s job in jeopardy due to being distracted while at work. Debt is like a dark cloud that follows a person 24 hours per day. They wake up with it, take it to work with them, and as the NFCC poll confirmed, they take it back to bed with them.

There are two pieces of good news that can be gleaned from the poll. First of all, the respondents were able to identify the source of their distress, and secondly, they went to a reliable and trusted resource, www.DebtAdvice.org, for help. Their next step should be to reach out to an NFCC member agency for customized and solution-oriented assistance.

If someone has personal finance issues, they are not alone. The 2014 NFCC Financial Literacy Survey revealed that 71 percent of consumers, or roughly 179 million people, admitted to having personal finance worries, with not enough savings, job issues, debt, and credit topping the list.

Regardless of the problem, NFCC member agencies stand ready to help through the many services they provide, including the following:

  • Budget and debt counseling;
  • Financial education and literacy courses;
  • Debt management programs;
  • Housing counseling, including first-time homebuying, foreclosure prevention, and reverse mortgage;
  • Student loan debt repayment counseling, and
  • Bankruptcy pre-filing counseling and pre-discharge education.

NFCC members provide financial counseling and education to millions of consumers each year, with clients receiving comprehensive money management services based on their individual needs. Spending an hour with a trained and certified NFCC financial professional can put a person on the road to financial recovery. To be automatically connected to the agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org.

The NFCC’s July online poll question and answers are below:

What keeps you up at night?

  1. Financial worries = 79%
  2. Marital concerns = 2%
  3. Job security = 4%
  4. Problems with the children = 2%
  5. Nothing, I sleep like a baby = 13%

Note: The NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of the NFCC website (www.DebtAdvice.org) from July 1–31, 2014, and was answered by 2,148 individuals.

Gail Cunningham manages Media Relations for the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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