Free Money Finance

How to Get Mortgage Relief

Quite frequently I have a commenter ask me how they can get some relief on their mortgage because they are having trouble paying it, the interest rate is about to reset, etc. I don't know what to tell them exactly (I've never had this trouble) but here are the five steps MSN lists for getting mortgage relief:

• Step No. 1: Gather information. There are two keys to getting a workout: being able to explain why you're in trouble and what you can afford.

• Step No. 2: Call your lender. Most major lenders have workout departments that do nothing but talk to troubled borrowers. You can reach these departments by calling the lender number on your bill or by calling a hotline dedicated to workouts.

• Step No. 3: Fill out the paperwork.

• Step No. 4: Consider a contingency plan. If you don't qualify for a standard workout, all is not necessarily lost. If you think you've been unfairly denied, ask to speak to a supervisor or write the president of the bank a letter clearly and politely spelling out your case.

• Step No. 5: Ask about other options. Sometimes, when you don't qualify for formal relief, you can still get some sort of accommodation, like a short respite from payments that allows you to find a job or sell your house.

Of course, two ways you can get your finances back on track if you can't afford your mortgage are to make more money and save more money. I currently have hundreds of ways to do either of these (at the preceding link), so check it out of you're having mortgage trouble and are looking for ideas to get out of it (or even if you're doing well and want as big a spread as possible between your income and expenses.)

Reminder to Bloggers: Space is Filling Up Fast

If you're a money blogger and want to participate in my March Madness tournament this year, you need to submit your entries quickly. Inclusion is on a first-come first-served basis and spots are filling up. If you're one to wait awhile to enter (or if you put things off too long), you'll probably be left out in the cold on this one.

Just a friendly reminder. ;-)

Is Giving Part of Your Life Strategy?

Here's an interesting question from US News:

Is giving part of your life strategy?

They go on to state the following:

If it’s not, it should be. I don’t say that from a finger-wagging, “Thou Shalt Give” perspective. I say it from a personal benefit point of view. Study after study on altruism has shown that giving in its many forms can strengthen both physical and psychological health, contributing to your happiness, health, positive relationships, and more.

What studies, you might ask, show a link between giving and happiness? This one, for example (with a link to another one in the post.)

But back to the original question -- is giving part of your financial life? Do you budget for giving? Do you give both money and time or just one of them?

Here's what we do:

• We budget for our annual giving -- both tithes and offerings.

• We also volunteer with a few charities -- my wife and I serve on the board for a non-profit and we both have additional commitments at our church.

How about you? How do you plan for your giving? During these tough times, many people need extra help. If you're in a position to lend assistance, please consider giving both your time and money in 2009 to whatever charity you feel is appropriate. You'll not only feel better (happier?) for doing so, but you might actually be helping yourself get rich in the process. :-)

YNAB Winner Named

Just wanted to let you know that I named the winner of the free YNAB giveaway announced Wednesday. Click on the link and scroll to the bottom to see if you've won.

Four More Uses for Gold Dollar Coins

I've asked you all if you use or plan on using gold dollar coins and followed that up with a post on some various uses for them. Well, since that time, I ordered $500 more in gold dollar coins to help out my annual credit card rewards balances, but I also found a few more uses for the coins, and thought I'd share those with you. Here goes:

• We used them as "blessing money" throughout the holidays. We gave them in Salvation Army kettles as well as to a few friends we wanted to bless. Kids REALLY love them -- you should see their eyes light up when they get a free gold dollar! ;-)

• Stocking stuffers! Our kids love them too!

• Chores bonus! One of my son's chores is to help me clear snow off our driveway and sidewalks. But he went above-and-beyond the call of duty in late December (where we got pounded with snow the second half of the month) and I gave him a few coins as an extra thank you. You would have thought he had won the lottery!

• I've decided to keep about $500 in coins in my home safe. After our discussion on keeping cash at home, I thought about keeping a bit extra around, but I want to be sure it's safe from potential fires and floods. My safe is fire-resistant, but with coins, I don't need to worry about fire or water as they'll make it through anything.

How about you? Anyone out there bought/used the coins lately? If so, do you have any creative ideas for using them?

FMF Giving Report for 2008

As many of you know, I give away all the proceeds from Free Money Finance to charity each year. Everything from every sponsor, every affiliate, every sale, every everything. Every single penny goes to charity. We're now closing in on $200,000 donated since this blog started (we'll pass $200k sometime in 2009). It's pretty cool that by simply writing (me) and reading (you) a personal finance blog that we all can help so many people from around the world.

As I do each year, I give a list of many of the organizations FMF has supported the previous year. Here's the list for 2008 in alphabetical order:

• American Cancer Society
• Crown Financial Ministries
• House of Mercy
• James Fund
• Leukemia and Lymphoma Society
• Make-a-Wish Foundation
• Meijer Gardens
• Russian Children's Welfare Society
• Samaritan's Purse
• Shaohannah's Hope
• Union Gospel Mission

I just want to say thank you to all the sponsors of Free Money Finance who have made this possible. It's an amazing list and I'm honored to help these charities. But most of all, a huge THANK YOU goes to you, the readers of FMF. You're the ones that make this site what it is and because you come back day after day, we're all able to help those less fortunate around the world. Thanks!

And here's to helping even more people in 2009!

Star Money Articles and Carnivals for the Week of Jan 5

Here are some recent interesting posts from around the web as well as a list of the carnivals Free Money Finance was in this week and my posts that were included:

• The Digerati Life covers business cycles.

• The Sun’s Financial Diary does a net worth review.

• Lazy Man and Money lists 20 tips to be successful.

• BripBlap says free time doesn't lead to productivity.

• My Dollar Plan is resolved.

• Money Smart Life discusses lending money to friends and family.

• 20 Something Finance tells how to beat inflation.

• No Debt Plan has goals as does Cash Money Life.

• Financial Reflections lists four places to sell your stuff online.

• Carnival of Money Stories -- Don't Let Shipping Fees Sour a Good Deal

• Carnival of Personal Finance -- The Cost of Commuting -- Balancing Time Versus Money

• Carnival of Debt Reduction -- What to Do When Relatives Ask for Loans

• Festival of Frugality -- The Key to Successful Negotiating

Enjoy!

P.S. Carnival Hosts -- If my post is in your carnival in a given week, please send me the URL to the carnival and I will include it in my weekly roundup.

Top Posts in 2008, Posts 6-10

Here is the next set in my series of Free Money Finance's top posts for 2008. This time it's posts #6 through #10, in countdown format, along with may reasons for including each post. Enjoy!

• #10 -- Small Cities Better at Growing Net Worth -- I know many people don't like it when I bring up the fact that some places are cheaper to live in than others, but I think it's a critical personal finance issue which should be considered. As such, this post cracks the top ten.

• #9 -- What I Learned from Almost Buying a House -- I was so very close to buying a new home this year. We ended up calling it off, but we did learn a lot in the process.

• #8 -- I Apply My Own Advice -- I think it's important for FMF readers to know that I actually do what I say I'm doing and that it's been successful for me so far (based on my net worth versus the stated averages.) I'm telling you what's worked for me based on 20 years of managing my personal finances -- not dishing out advice that I hope will work as I figure out what personal finances are all about.

• #7 -- How to Have Half a Million Dollars at Retirement by Controlling Wedding Costs -- A very provocative piece. With so much being spent on weddings these days, imagine how much better off people would be if they pocketed most of that money instead.

• #6 -- All You Need To Make Ends Meet: Just a Little More -- Unfortunately, most people think all they need to balance their budget is to earn a bit more. In reality, the more they earn, the more they spend. What they really need is a bit of discipline.

That's it for today. Come back in a few days to see the top five posts of 2008.

Top Five Home-Buying Blunders for 2009

US News lists the top five home-buying blunders of 2009 as follows:

1) Buying for the short term: With home prices at the national level expected to continue declining throughout most of next year at least, 2009 won't be a good time to try to turn a quick buck in the real estate market. Many homes that are purchased in 2009 will lose value in the short term.

2) Not understanding what's happening in your local market: Although it's easy to get caught up in the gloomy national housing trends, prospective home-buyers should be paying more attention to what's going on in the market where they are considering purchasing property.

3) Not scouring for deals: With the fall in home prices expected to continue for some time, 2009 will be a buyer's market. As such, people considering purchasing a home should understand that they are in the driver's seat and be on the lookout for deals.

4 ) Purchasing a foreclosure just because it's cheap: While foreclosures can offer home-buyers big discounts, such properties sometimes come with a great deal of baggage.

5 ) Overly aggressive buying: Even if you've found the perfect property, make sure it is something you can reasonably afford.

As a person who's in the house-buying market (and who may actually get a place in 2009), this piece was quite interesting to me. Here's my take on the list above:

1. It's interesting that they think home prices will keep going down through 2009. If this is the case, we shouldn't be in a rush to buy a new place. That's really nothing new for us. We've been looking for two years, so nothing has rushed us yet. ;-) That said, if we found a place, we'd certainly want to live in it for quite some time, so the time element they discuss here is not an issue for us.

2. After two years of looking, endless online searches, and seeing 50 different homes, we're pretty familiar with the local market. Unfortunately, most sellers aren't. Many are still holding on to two-years-ago pricing -- and thus their homes are just sitting on the market. Wonder if the dam will break in 2009.

3. Oh yeah, we understand we're in the driver's seat alright -- that's why we're even considering a move! Plus we're very attractive buyers (high credit rating, good down payment, no debt, etc.), so we have all the cards in our favor. Of course, you still need a cooperative seller to make a deal.

4. Of course. You don't want to get a "great deal" on a place just to discover it's on top of a toxic waste dump. We'd only buy a foreclosure after a complete inspection.

5. Again, a no-brainer. Unfortunately this wasn't common sense for many buyers the past five years, and it's one reason we're now in this housing mess (people bought homes they couldn't afford.) But my formula for buying a home ensures we will only buy something easily in our price range.

Revenge!!!

Check this out -- Sears sales down 7.3% and Macy's sales down 4%. Think it could have anything to do with the facts that they have poor customer service and high prices?

I (we all) better use those gift cards quickly...

13 Smart Insurance Moves for 2009

Bankrate lists 13 smart insurance moves for 2009. Several of them are "no brainers" and really don't need any comment. But here are a few that I think are worth adding a bit more on:

Investigate the financial health of your insurance carriers.

Of course. You want to be sure that your company is there if and when you need it, right?

Discuss payment options.

I'd suggest "pay annually" as an option. It's likely that you'll save money this way instead of paying monthly, quarterly, or semi-annually.

Don't cut back on health insurance coverage.

Many people are doing this rather than cutting elsewhere. My advice: cancel the cable TV and keep your medical insurance coverage where it is.

Build your own insurance policy in the form of an emergency fund.

In particular, if you've raised your deductibles in order to save money on your premiums, then you'll need to increase the amount in your emergency fund to make up the difference.

Raise your property policy deductibles.

A great way to save on both home and auto insurance.

Revisit your life insurance.

One of the best ways to save on insurance is to regularly compare premiums from different carriers.

Do you want to diversify your life insurance?

Interesting concept -- I'd never seen it suggested before. Here are the details:

Find out at what level of coverage your state insurance department backs life insurance, since it varies by state. Then keep policies below that amount and simply buy several policies from different carriers to give you the desired amount of coverage.

And a few more insurance-related thoughts from me:

• Buying Life Insurance from Your Employer

• Six Ways to Save on Homeowners Insurance

• What Kind of Life Insurance Should I Buy?

• How to Determine the Amount of Life Insurance You Need

• Don’t Let Disability Sideline Your Financial Health in 2008

• 12 Ways to Save on Insurance

How to Save on Home Improvements

Bankrate offers us the following idea on how to save on home improvements:

If you are in need of building supplies and would like to help a charity in the process, check and see if your city or town has a Habitat for Humanity ReStore. This is a place where contractors, home improvement stores and homeowners donate new or gently used items for sale to the public. All proceeds minus minimal expenses go toward building homes for those in need. It is a great way to get a deal while helping the environment by recycling gently used items. Most importantly it helps to provide affordable housing to those who need it.

I don't know much about Habitat ReStores, so I went to their website and here's how they summarize their stores:

Habitat ReStores are retail outlets where quality, used and surplus building materials are sold at a fraction of normal prices. Proceeds from ReStores help local affiliates fund the construction of Habitat houses within the community. Many affiliates across the United States and Canada operate successful ReStores—some of which raise enough funds to build an additional 10 or more houses per year.

Unfortunately they don't offer a way to see if there's a ReStore near you -- you need to contact your local Habitat for Humanity affiliate to find out.

We don't have one in our area (at least I don't think we do), so I don't know much about these stores. But if we did have one, I'm sure I'd check it out. Not only would it help us save money, but the proceeds benefit a worthy cause. That's a great deal for everyone in my book!

Anyone out there have a Habitat ReStore in your area? What are they like? Do they have a good selection at great prices? Or maybe it's hit-and-miss -- kind of like a Goodwill or Salvation Army store except one that focuses on home improvement?

Top 10 Gifts of 2008

Thought this post was interesting. It lists the top 10 gifts and pledges announced by individuals in 2008. Wow, those are some big numbers!

Help a Reader: Refinancing Question

Here's an email I recently received:

I purchased our home right at the peak of home prices.  I financed 100% so I have very little equity in the home and it would probably appraise for $10-$20k less than I owe on it.  My interest rate is over 7% (with great credit).   I've tried asking for a rate reduction but since I'm not behind on payments, they won't do it.  I could save around $300 per month at today's interest rates but it doesn't seem like I have any options.  Help!

So, what would you suggest for him?

Win a Free Copy of You Need a Budget!

I am giving away a copy of You Need a Budget! All you need to do to enter is to leave any comment on this post. Sometime in the next day or two, I'll select a winner at random and announce with a new post that a winner has been selected.

It will be the winner's responsibility to email me their contact information. I'll then send the winner's information to the You Need a Budget people and they'll work out getting the prize delivered.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I've worked with the YNAB people before and they're great, so I'm sure it will all work out smoothly. That said, I won't be held accountable if there's a mess up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. I won't track down the winners -- it's your responsibility to come back and see if you won.

5. Local laws, rules, and regulations apply.

Good luck! Post a comment below for your chance to win!

Reminder: Pay Attention to Scanners

Here's a reminder from Consumer Reports to pay attention to check-out scanners when shopping. Why? Because the price that rings up is often different (and most likely higher -- what a shocker, I know) than what is on the shelf.

This is exactly what I said a couple of years ago, but it never hurts to bring it up from time to time as a reminder. It's one of those things that many people simply take for granted -- that the scanners are always right -- but that smart shoppers know the truth about (there are far more mistakes than most people imagine.)

Just think about the likelihood of problems in your average Walmart, Target, or local grocery store. These places have tens of thousands of items, many going on and off various sales/promotions every week. The store needs to change these out quickly and accurately with ever-lower levels of staff that are often poorly trained, many times under-qualified, and sometimes lacking the motivation to do an excellent job. When you think about these facts -- it's amazing that stores get as much right as they do!

My wife is an expert at this -- especially at the grocery store. As the clerk scans the item, my wife is looking at the scanner readout. If something is different than what she thinks it should be, she'll ask the clerk about it. The course from there can go many different directions (the clerk looks at the ad, my wife is informed she took the wrong item -- one similar to but not exactly the one on sale, the clerk gives her the discount on the spot, the clerk has to call someone for verification, etc.) But in the end, the issue is usually resolved in my wife's favor, saving us a decent amount of money for simply paying attention.

Why I Hate Macy's

As I mentioned, I received a Macy's gift card last year as a Christmas present. Guess what? I got another one this year. Now after a year of shopping the original one is down to a $40 balance. Then I have another full one to deal with. Ugh!

So we headed off to Macy's for the after-Christmas sales. The store is such a rip-off. Why do I say that? Let me give a few examples:

• We started on the ground floor and noticed they had holiday gift baskets at "50% off." I walked up and saw they were nice baskets -- comparable to what you could get at Harry and David for $50 or so. As such, 50% off should be a great deal, right? Nope. The "regular" Macy's price was $110 to $150, so even with the 50% off, many of the items were higher than what they should have been anyway.

• So we then went upstairs and noticed the Christmas decorations were on sale. 60% off stocking holders. We've been looking for some and knew that the full price at Target was in the $8 to $15 range (before any discount) for comparable items. The Macy's regular price: $36 each. So with the 60% off, they were still $14. (We later headed over to Target and bought some there for a discounted price of $4 each.)

• We finally made it to the men's coats. I wanted to check their prices versus a new Columbia winter coat I had purchased at Costco the week before for $99.97. (We decided that if I could find it or something similar cheaper after Christmas, we'd return the Costco one.) Anyway, Macy's had the EXACT SAME COAT. Same style. Same color. Same everything. Their "original cost" was $230 but it was now "on sale". Macy's new price: $165. What a rip!

• We finally made it upstairs. I have been looking for a chair massager from HoMedics and figured I could get one after Christmas at a great discount. The one I wants usually goes for $199 (I looked on the HoMedics site as well as a few others stores and sites). Macy's had the one I wanted for a "regular price" of $349, but it was on "sale" for $199. Now tell me, has anyone, ever paid $349 for this massager? (Other than an unknowledgeable Macy's customer, that is.)

We ended up finding a few things that were comparable to regular prices (or maybe even a bit better when you take into account both the sales and the coupon we had from the paper) -- towels and a crock pot. But other than those, there wasn't much there that we wanted -- and what was was waaaaaaay over-priced. Yeah, I've heard of people who "work the system" at Macy's and get "great deals", but are these really great deals? Some may be, but I suspect that most are "great deals" when compared to Macy's over-inflated prices. And imagine how many people pay full price or get 10% off and think they're saving a bundle -- when they're really paying way too much for something they could get for a lot less somewhere else.

Have I mentioned that I hate Macy's?

P.S. A few days after the Macy's trip, I found the massager I wanted on sale at Amazon for $149. Plus they offered $20 off immediately, so I paid $129 in the end. With free shipping. And no sales tax. On a rewards card that gave me cash back. ;-)

P.P.S. Anyone want to buy my Macy's gift card? ;-)

YNAB Winner Named

Just wanted to let you know that I named the winner of the free YNAB giveaway announced Monday. Click on the link and scroll to the bottom to see if you've won.

Financial Steps New Parents Need to Take

Almost every time I mention how expensive pets are, someone will comment something like, "You should write about how expensive kids are! They're way more costly." That's true, though it's not a fair comparison. It's like saying "homes are more expensive than cars." Duh. "Kids are more expensive than pets" is in the same league as the home-cars comparison. And before someone says it, pets are NOT a substitute for kids (or anything like them for that matter -- other than they are both living beings.) But I digress.

Anyway, I have written about how expensive kids are (BTW, check out this link to see if you can afford a baby). Now here's an article from MSN Money that talks about how expensive kids are and lists the financial steps parents need to take to prepare for them. They are:

• Start saving to build a cash cushion -- grow your emergency fund

• Create wills and define powers of attorney

• Review/update your insurance coverage

• Decide how to balance career/work with a child (and determine if one parent will stop working or work less)

• Don't try to "keep up with the Joneses" spending-wise

Overall, these seem to be good tips to me. There are a whole host of additional suggestions/thoughts from me in my kids and money category -- you may want to check out the posts there for more tips.

The bottomline is that kids ARE expensive (a HUGE expense) and you need to plan accordingly before you have them. What do I mean by "plan accordingly"? Basically, you need to do the same things you'd do before any major purchase (save up, re-look at finances, set priorities, etc.) These steps are even more important when you're talking about kids because you're dealing with human lives -- you can't simply walk away (like people are these days with bad mortgages) if things get tough financially.

Attention Financial Bloggers: Free Promotion for Your Top Posts and $500 Given to the Charity of Your Choice

Yes, it's that time of year again -- Free Money Finance March Madness is upon us!

For those of you who don't know what I'm talking about, it's our annual "tournament" of the best personal finance articles of the past year. They face each other in an NCAA-style bracket system, FMF readers vote for the winner, and at the end of it all, the best post is left standing. And like last year, it's all for several good causes. Here are some details from last year:

• My announcement post

• An example of a "round"

• The Champion is Named

This year I'm getting a head start on it. In the past, we've had so many posts in the early rounds that it's been hard for readers to keep up. So this year I'll be starting the tournament early (still ending near the end of March) and letting everyone have plenty of time to read all the posts.

64 posts in total will be allowed in the 2009 competition. Each one will be assigned randomly in a bracket set of "games" similar to the one used for the Men's NCAA basketball tournament. (If you want to see what one looks like, go to the end of this post and download last year's bracket.) Here are more details:

• If you're a blogger and have money-related posts you want to include you can email the following to me: 1. The name of the post you're submitting, 2. the URL of the post you're submitting, 3. two to five sentences on what makes this post so great (I'll be using this wording in the competition, though I reserve the right to edit it, so really "sell" your posts), and the charity you're playing for (see below for details on what this means.) I need to receive all this by Friday, January 30. Note: if you do not submit your posts in this format, they could be rejected. Also, the posts submitted need to be from the calendar year 2008.

• You can submit up to two posts, but if you do, be sure to list them in order of your preference. I'll start by allowing only one post per site, but if all the slots don't fill up, I'll start adding extra posts by sites already in the tournament. If I don't receive 64 submissions, I'll fill in the brackets with my own posts.

• Participation will be on a first come-first served basis. So if you're the 65th blogger to submit a post, you're not going to get a spot.

• The posts will "play" each other with the winner advancing and the loser being bumped. They'll "play" in this manner: 1) I'll post the competing posts, listing who's playing who, 2) readers can leave comments on which they like better, 3) the post with the most votes wins -- I'll break any ties, and 4) the winner will advance in the bracket to "play" again. Ultimately, there will be only one post left -- the "champion" for this season.

• Criteria for great articles is as follows: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Like last year, I'll make contributions to the charities of the top four winners' choices as follows:

• First Place donation -- $500
• Second Place donation -- $300
• Third Place donation -- $100
• Fourth Place donation -- $100

The charity has to be a registered charity to receive a tax deduction under U.S. law. In other words, I won't be giving $500 to a "charity" you and your brother came up with on the spur of the moment. In addition I reserve the right to ask you to select an alternative charity in case I don't feel it's appropriate for me to give to the cause you've listed. This wasn't a problem last year and I don't suspect it will be this year, but I'm putting this stipulation in up front just in case I need a bit of flexibility.

As readers, you get the chance to read some great pieces and help decide who wins this year's championship. It should be great fun and full of the best personal finance posts of the past year. Good stuff all the way around!