Living Rich for Less

A Grounded Pilot and A Flying Wife

2011-09-01T06:45:00.000-07:00

Being married to “The World’s Greatest Fighter Pilot” has its ups and downs, and one of the things I discovered about my man is: His feet are restless while on the ground.

He flew fighters for a decade before I met him and eventually accumulated 4500 flight hours in seven different jets. There’s one phone call that a pilot’s wife always waits for, but hopes will never happen. I got that call two years ago when I was in NYC on business and at a Broadway show. The five minutes it took to check my voicemail during intermission forever changed our lives:

Bob had been in an accident and broken his back.

He punctured his lung, broke four vertebrae and four ribs on a gas and go in Abilene. He had just flown his last sortie: a fluke accident that happened during a routine delivery of a jet.

Bob did recover his health and is able to maintain a pilot’s license, but his back will not sustain an ejection seat aircraft. While he enjoys “flying” the Global Hawk as a civilian contractor and Cessnas as a pilot, but he always gets a sad look in his eye when a fighter flies by. I didn’t understand the depth of his loss until something amazing happened to me.

I got to fly in a fighter.

After bringing the “Heroes at Home” message to military families in 7 countries, at 100 venues, and traveling 300,000 miles to do this, with 500,000 military families reading my work and 1,000,000 military families having seen my presentations and work…the Air Force rewarded me with an incentive ride.

Bob and Joshua were also invited to Seymour Johnson Air Force Base, home of the 4th Fighter Wing and the world’s most lethal tactical fighter: the F-15E Strike Eagle. They flew the simulator, but I was to fly the real deal.

I went to the flight surgeon, egress training and physiology. At the 333rd FS Lancers squadron, we were met by LTC “Rosie” O’Donnell, who took us to briefing that was led by Captain Ryan “Goat” Roper, he told me to think about the mission and how we would fly over Kitty Hawk at 1000 feet and view it from the back seat of an F-15E. His Weapons Systems Officer, Captain Sriram “Fuze” Krishnan, told me to drink a bottle of water after I asked my pilot if I could take off my air mask so I wouldn’t get sick.

Then the big man himself, Colonel Pat “Moon” Doherty, the 4th Fighter Wing Commander, could have been “Cool Hand Luke” because his demeanor was both calming and compelling. He said he knew I’d be fine and I believed him. But when we got ready to step to the jet I noticed something that surprised me about Moon. In fact, I noticed it in all the air crew for our two ship sortie—there was an excited gleam in their eyes. It was as if they were little boys but instead of being excited about playing baseball, their collective countenance said, “we get to go fly jets today!” It was the same look I’d seen on Bob’s face when I watched him launch out into the wild blue yonder.

I put on my g-suit and harness, grabbed my helmet and air mask, tucked in those pesky air sickness bags into my flight suit and we were ready. Excitement overtook me as I realized I was truly going to do this thing—I was going to fly in a no kidding, real world, operational fighter with the second best fighter pilot in the world (Bob always has to be the first).

We signed out the jet, stepped to the hanger, met the amazing maintenance crew, pre-flighted the aircraft, strapped on 30 tons of sheer power, and taxied down the runway. At the end of the runway, while we waited for clearance to takeoff, Bob and Joshua met us in a truck and took a gazillion pictures. There was a wistful look on the World’s Greatest Fighter Pilot’s face. He never would have dreamed that his wife would fly in the one fighter he had always wanted to pilot, but never did.

Moon and I were cleared for takeoff and we watched Goat and Fuze roar down the runway and head into a vertical climb. Then it was our turn, no going back now! As we blasted down the runway, the afterburner screaming, we took off on the wildest ride I’ll ever had this side of eternity. We pulled about 5 g’s in a straight vertical climb and then a sharp turn out to sea. The one hour car drive to the coastline took 8 minutes. It gave a whole new meaning to the bumper sticker that says, “If I were in my F-15E, I’d be there by now.”

Fuze snapped photos of us airborne as we rose above the clouds. Moon asked what I wanted to do as he didn’t want to push me. But I was game for low levels, aileron rolls and what I call the loop-de-loop. I battled airsickness by doing every I’d been trained to do to avoid it—and Moon was right, I was fine.

We flew a formation approach (ten feet from the other airplane), then flew back out in the traffic pattern for a couple more approaches. After 1.7 hours of flight time, we could say, “The Eagle has landed.” I was beyond euphoric to have flown in this premier jet with a big time pilot and not get sick. We taxied back to a cheering crowd and when Bob learned that I held down that wonderful breakfast that Dee Dee Doherty made us earlier in the day, he gave me the highest praise that could ever come from a fighter pilot when he declared in all seriousness, “Beloved, I am as proud of you today as I was every day that you gave birth.”

****************
I learned some things on the hot tarmac on that humid North Carolina day. For one thing, we have the finest group of military professionals in the world. Each team member I met that day was very secure in their place on the team and performed their duties with pride and professionalism.

I learned that big boys still act like little boys when they get to do what they love.
I also learned why Bob loved his work for 30 years and how hard it was for him to have his feet on the ground.

But most importantly, I learned that as much as my man suffered from clipped wings, his love for his wife and excitement over her living out a bucket list dream was greater than any thing else.

Ellie Kay
America's Family Financial Expert (R)

Back to College -- Debt Free (Part 1)

2011-08-18T02:06:00.000-07:00

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”

1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board. I’ve recently partnered with Follett and found that by renting textbooks through their Rent-A-Text program, students can cut costs by 50 percent or more. CafeScribe’s digital textbooks are another great way to save, and both options are available to purchase at more than 800 Follett bookstore locations and online through efollett.com. Students at non-Follett schools can also purchase their digital textbooks on CafeScribe.com. I ordered Joshua’s textbooks this week and saved 52%!!

3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Go to www.collegeboard.com or www.salliemae.com to find scholarships that might be a fit for you.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by loading funds on a campus card to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Ellie Kay
America's Family Financial Expert (R)

Kiss Off those Group Buying Deals!

2011-08-05T14:56:00.000-07:00

We recently had the kids back in town and one of the pix included this group shot with my four sons. They love their mama! They also love some of the good deals I buy them from sites like Seize the Deal, Local Living, Living Social,the ever popular Groupon and new group buying deals from OTA (Online travel agents) such as travelzoo. There's paintball for $35 a person, Broadway shows for $20 each, a four course meal & Flamenco show at El Cid for $22/person, and even a massage therapy session for $22/hour. Ok, that was last item was for me (and so was the Flamenco deal, if we're being really honest--OLE!).

But what is the use of spending money to save money if you do not or cannot redeem those coupons? Maybe the boys didn't come home for college break, you chickened out of the skydiving gig, or you had a really busy schedule and couldn't fit in a trip to the Beverly Hilton for that four course meal including champagne? In some ways you may be taking a leap of faith when you purchase some of these group buying deals.

The latest research shows that 20% of these daily deal vouchers go unused. But your loss may be another person's gain. Especially when there are companies set up where you can unload unused vouchers. Consumers can now sell their unwanted deals at sites such a CoupRecoup, Yuupon or Lifesta. Whether you want to unload a vacation you cannot take or a helicopter tour your wife won't let you go on, you can do it at these sites. There's even one place, DealChicken, that will give you a full refund up until the deal's expiration date.

For every deal you buy, there's a guy out there who wish he would have bought it, but passed. Lifesta will charge you 99 cents plus 8% on deals they sell and they provide refunds for phony deals. DealsGoRound has been in business the longest and is suppose to be the only deal reselling site you can use on your smartphone. Plus, they help you track the deals to remind you if it's going to run out.

So if you want to kiss off on one of your group deals, you can. But remember that you can never kiss off the fact that you love your mama!

Ellie Kay
America's Family Financial Expert (R)

Top Tips To Titanic Savings on Cruises

2011-07-27T10:22:00.000-07:00

There he was, my retired military man in full uniform, with pants that could still zip and pockets that didn’t bulge at the seams! I was so proud of him as I stood proudly at his side, waiting for formal night aboard the cruise ship to start. As we chatted by the closed doors to the waiting room, Bob checked the new watch I gave him when his Stealth F-117 fighter jet was retired earlier in the month. Two warriors, a man and his jet, were now a part of history—but he still looked great in his uniform.
“Excuse me” a woman in a black jet beaded dress said to Bob, “Can you tell me how long it will be before the dining room doors open.”
Bob checked his watch, “About 3 more minutes, ma’am.”
She glided back to join her party but scarcely had she left before a older gentleman in a black tux tapped his shoulder,
“Captain,” he began, “my friends and I were discussing the average speed of a ship this size and wanted to know if you could tell us how fast your ship cruises.”
Suddenly, Bob and I both realized that some of these people thought he was the ship’s captain! The rest of the night, I enjoyed watching the attention that my retired fighter pilot got as passengers asked him various questions about the ship!
Cruising can be affordable and a great experience experience. So how you find the cheap cruises and what are savvy and simple ways to keep the costs down?

Here are some Top Tips for Titanic Saving:•

Cruise the Sites - The first step is to find the best price on a cruise by going to get competitive bids on CruiseCompete.com or CruiseNow.com. If you are worried that the prices will go up or down, go to Cayole.com which predicts rates based on seven months of data. Plus, try to look for packages that include the gratuity in the cost and other benefits like an online credit voucher, gift certificates to restaurant.com or free room upgrades.

Pre-Cruise Hotels – If you have to fly in the night before your cruise, then book a hotel ahead of time and look for a non-refundable purchase where you can save 40% or more on a room. For example, Priceline.com. For more info, go to BidOnTravel.com

On Board Extras – This can include some of the tips below (drinks, spas, etc) but can also include jewelry “deals”, art auctions, premium dining options or photography classes

Spa Tips - Be prepared to say "no" when you go to the spa on that $99 special (or the equivalent) because they make most of their money on the products they try to sell you. It's pretty amazing, the staff starts to "sell" while they're massaging your shoulders or finishing up your beautiful hair, and while you are relaxed and vulnerable. Be prepared to say “no” even if you’re told your hair will fall out if you don’t buy their product!

Pass on the Soda Pass - The first day you may be offered a "soda pass" that gives you all the pop you can drink for one low price. Au Contraire! You want to drink lots of water, not soda on this cruise to get your money's worth. Water keeps you healthy from all the salt in the rich food.

Pack Two Water Bottles - Each person should pack two bottles of water (we stick them in shoes in our luggage) to save big bucks. You cannot bring in cases of water, or six packs of soda--that's not allowed. But you can bring a couple of bottles to use and refill. The tap water in your room is the SAME water source used for glasses of water in the dining room.

Digital Pix - One of my fave nights is formal night with Bob in his dashing Air Force Mess Dress uniform that he spent 25 years earning. Be sure to have your new friends onboard take plenty of digital pix with your own camera--you'll save the cost of the formal photo and probably get better shots anyway.

Digital Detox – Plan to go through this on your cruise. While newer ships have Wi-Fi, you’ll pay anywhere from .35 to $1.25 a minute to connect. Roaming cellphone charges take a major bite, too. So just abstain and concentrate on your family, friends and fun on the cruise.

Rank and Research Shore Excursions - You could easily double or triple the bottom line cruise total by spending money on shore excursions. Before you sail, go to the cruise website and print out the shore excursions options. Or do this as soon as you get onboard. To get the best value rank the top three for: things you want to do, the amount of time included on the excursion and the cost involved.

Book Your Own Excursions – Just because the cruise line offers the excursion doesn’t mean you’re getting a discount. In some cases, you are pay a premium for the cruise line to get their commission! Go to PortPromotions.com, ShoreTrips.com and Viator.com . If you are in a US port, try websites such as TravelZoo.com’s local deals, Dealery.com or Yipit.com, which aggregate city specific deals available through Groupon, Living Social and the like.

Excursion Extras - It's important to walk and work off some of that rich food--you'll feel better and get more for your money, time and effort. Try to walk as much as possible on excursions and avoid bus, shuttle or cab fares. Eat breakfast on board before you go to save $$ on food. Try to postpone lunch until you're back on ship, or bring an apple or banana to tide you over.

It's SHOW Business - The entertainment on board is generally pretty good--but it's a hit and miss. Get your money's worth by going to the shows (and walk out if it stinks). Sign up for free classes (salsa, line dancing, pilates, yoga, etc) and try your hand at karaoke.

Ellie Kay
America's Family Financial Expert (R)

Gold Hits $1600/oz - What are some "safe" investments?

2011-07-20T10:07:00.001-07:00

I was on Fox News - Your World with Neil Cavuto -- this week discussing the fact that gold hit $1600 an ounce. I want to give a big shout out to Larry Shover, the author of Trading Options in Turbulent Markets who (literally) wrote the book on how to invest during economic turmoil.

First of all, remember that "safe investing" is an oxymoron. When you invest seriously (for more than 1% on a bank CD), then you are going to face some kind of risk. But there are some areas to invest that present less risk than others. So with that disclaimer, let's look at where to put your money in a turbulent economy.

1. Stock Market (S/P 500 stocks): It's important to acknowledge that there have been and will likely be strong corporate profits. The stock market is very attractively priced - especially given the good profits and strong balance sheets of the top-tier US stocks. Could the stock market go lower? Of course, yet the "cheapness" in the stock market is a reflection of: Sovereign debt, US issues, concern of slowdown in emerging economies. It would appear a lot of this negative stuff is already priced into the market. Any top-tier (dividend paying) issue is a good long-term bet.

2. CTA: Invest in a "Commodities Trading Advisor" most of which take advantage of the various/sundry trends in the market whether they be up or down. CTA's tend to perform very,very well in economic uncertainty - especially in very toxic markets like 2008. Every portfolio should take advantage of a CTA fund that captures trends in: FX, oil, grains, indexes, bonds, et al. Warning: CTA's can be very volatile yet, history has proven that even with the volatility they tend to be less risky.

3. Gold: According to my friend, Larry Shover, "Gold is the Casual driver of global liquidity" and,I agree. If you believe that money is to remain cheap than gold makes sense. However, if you feel there will be a spike in inflation or reverse monetary policies I wouldn't own gold with a ten foot pole. Also, golds most recent run-up to 1600 has had more to do with contagion fear than fundamentals. I wouldn't be suprised to see it back at around 1550 in the near-term.

4. Asian Tiger Exposure: Invest in either a mutual fund or ETF that has genuine exposure to the asian tigers (Hong Kong, Singapore, South Korea, Taiwan). These are countries that are booming - without all the fetters of taxation and regulation. In fact, most of them have been described as replicating the US back in the early 20th century! Cheaper labor, low taxation, growing middle class = success!

Ellie Kay
America's Family Financial Expert (R)

The Writers Corner - Can You Handle an SMT?

2011-07-11T20:32:00.000-07:00

So you're a writer. Then you get a book published and now you're an author. Now it's time to try your hand at media and you begin to do "phoners" or radio interviews on the phone. Next, you have a nice break and get to do some regional and even national television. Eventually, you'll progress to the point where you'll hit out of the nearest large city via Satellite and do an interview for a major cable or network station. Then, if you're among the top 10% of authors, at some point, you may be ready to try an SMT or a RMT.

A Satellite Media Tour or Radio Media Tour is where an author is interviewed in back-to-back shows for anywhere from 3 to 6 hours. It usually starts at 6:00 AM Eastern Time, which is 3:00 AM Pacific Time (my time). This means I'll wake up at 1:30 in the morning, go to the studio, go through makeup, then rehearse the interviews, then hit the first show live at 3:00 AM. The challenge is to stay alert and high energy for the next six hours through sometimes as many as 35 interviews. You won't see your interviewers, but they will be in your ear as the the morning news teams from Boston to Los Angeles. You'll hear them ask questions while you look straight into the camera and sometimes they'll stick to the question list, but at other times they'll throw you a curve ball. You will have 3 minutes for the entire interview in which you will need to deliver your points and then it's off the air with a 2 to 3 minute break and on to the next show. Forget about going to the bathroom, that's a luxury that isn't built into the schedule!

Who sponsors SMTS? Sometimes, if your publisher has a boat load of money, they'll give you media training and sponsor a book tour SMT. But those are quickly becoming a thing of the past. Most of the time there is a corporate sponsor, who will handle the bookings, pay the expense of the SMT and handle all the details. Your job is to give a good interview based on the predetermined focus of the SMT. It becomes a win/win for the author and the corporate sponsor. You get to promote your book and the sponsor gets to say "this interview brought to you by...."

SMTs are a strange breed, but I find them to be loads of fun because I like a good challenge. They're like a media marathon and at the end, you get to go back to the hotel and go to sleep. Since most SMTs are done out of NYC, you might also wake up in time to hit a Broadway show.

It's an adventure, but one that is worth it!

Ellie Kay
America's Family Financial Expert (R)

Letters From Home

2011-07-06T10:06:00.001-07:00

Dr. Dobson said that a good parent will eventually work themselves out of a job & we are quickly approaching that "jobless" state! We launched child #6 (out of 7) in the Kay Clan as Bob, Philip and I dropped of Jonathan at the United States Air Force Academy. It's in lovely Colorado Springs and Philip, our newly minted 2 Lt in the Marine Corps was on hand for the honor of seeing his hairless little brother off.

The president of the AOG (Association of Graduates) gave us a briefing, saw Philip in the audience and asked, "What are the best 4 years of a Naval Academy graduate's life?" We were thinking it was probably his four years at USNA, but the correct answer (according to the Air Force Academy graduate) was actually "Third grade."

During BCT (Basic Cadet Traning), it's similar to other military training scenarios in that there is NO communication other than the written letter. No phone calls, texts, email or facebook. This "cold turkey" withdrawal is tough on the military member as well as the family, but it is also similar to some deployments into the war zone or other "classified" areas. If you have a loved one who is in this kind of situation, no matter what kind of communication you are allowed, it's important to remember the following things:

Happy

Jonathan (and Bob when he was deployed) were intent on their training and in a very difficult environment. My letters to my son don't include bad news or griping or complaints. I've written about funny things that our grandson says or good news about my work. There will be plenty of time to catch him up on the not-so-good stuff later, but right now, he needs to be focused and just get through. Keeping the letters lighthearted really helps him.

Home-y

No, I don't mean that kind of homey. I mean that news about home, even though it may sound mundane is good. For example, our little puppy, Belle, was tethered in the living room (because of potty training) and I left the room for 10 minutes only to find that she had COMPLETELY chewed through the magazine rack---scattering loads of paper, cardboard and a huge MESS in the living room. When Bob was deployed, I told him about the kids nap schedules, play dates, trips to the store, etc. Bringing a bit of home to a military member also brings a sense of normalcy to his or her life. It communicates that the things we take for granted are sometimes the most precious parts of life.

Help

We let Jonathan know that we are here to help. He needed us to mail him his volleyball shoes because he was asked to help work out the intercollegiate girls Division I Volleyball team. (What a lucky guy). He knows we're here to next day air those shoes. He can't receive any other packages right now, but he knows that our church, friends and family are all praying for him. This is the biggest kind of help of all!

Hope

Philip gave his baby brother a few words of advice on how to get through BCT. He said, "take it a meal at a time." I know that advice is helping him in the middle of all the chaos. Bob (a class of 1978 graduate) told his son, "If you are good enough to get into the Academy, you are good enough to get through." In our letters, we express our confidence that he's going to do fine. We don't communicate contingencies such as "Even if you don't make it..." He knows that we are here for him. He needs to know we THINK he'll make it through.

Humor

The heroes (those who serve honorably and put service before self) need to keep a sense of humor. That's why we send funny pictures of puppy Belle's latest antics...like how she always grabs Anna's leash (our 4 year old mini schnauzer) and pulls her around the yard. But those "heroes at home" also need to keep a sense of humor. At the Air Force Academy, the AOG has this wonderful service called "web guy" where a small group of photographers take thousands of pictures of our basic cadets. We sign up for this opt in service and see Jonathan communicating to us through pictures. He knows we'll spend HOURS scouring the site, so he'll smile at the camera whenever he won't get in trouble for doing so. It's his way of saying, "I'm OK, Mama and Papa."

I just read Jonathan's third letter home today. He was talking about waking up at 4:30 AM, getting "hallway PT" where he's yelled at for 2 hours. Then miles of running, marching, formation, rucking (marching with a pack), or sandbag (30 lbs) PT. He tells us about "drowning" where you start to fall asleep while you are marching. Getting a letter from CO to CA may not be as fast form of communication such as texting, emailing, phone calls and facebook. But it is a heap better than what the generations from times past went through. Telegrams or letters were the primary source of communication about their loved ones. When a letter came from a servicemember, the whole family would come home from work or school and read it together.

As Bob and I devoured every word, I suddenly remembered a packet of keepsakes I received from my Great Grandma Laudeman's legacy. Her only son died in World War II after surviving the Bataan Death March, only to have dysentary at a prisoner of war camp. There was a letter in the pile that was smuggled out and was not in an envelope or stamped. It was marked "his last letter home." He said, "I suppose you have been looking for a letter from me for quite some time. Well, maybe you will get this. I am entirely all right and there isn't a thing for you to worry about. I am eating so much rice that my waistline is getting like Dad's. I can't write on both sides of the paper, so I will have to close. Love you, Dick." The letter arrived two months after his death.

We value and treasure letters home. We thank those military men and women, as well as their families for their full measure of devotion.

Ellie Kay
America's Family Financial Expert (R)

Leaving Home 101 - Launching Money Smart Kids

2011-06-27T12:54:00.000-07:00

My five-year-old son, Jonathan, was very mad and having a horrible, no good, very bad day. His three-year-old brother, Joshua, had taken all his favorite GI Joes and threw them in the toilet—again.
“I haffa tell ya’ mama,” He announced when he came into the kitchen where I was mixing a batch of brownies, “I’m gonna’ run away.”
Gazing at his determined face, I leaned down and met his eyes, “Well, we’re going to miss you around here, son. Let me at least pack you a lunch before you go.”
As a veteran mom of many, I knew Jonathan’s terrible, no good, very bad day would pass and that he was probably just going to his friend’s house to play. I asked his older brother, Daniel, to get on his bike and follow his younger brother to make sure he would only go as far as the Maerten’s house.
I dialed Leanne Maertens number, “Hey Leanne, is Jonathan there yet?”
I heard her doorbell ring, “Yes, I think he’s at the door now.”
“Well, he’s run away from home and I figure he’ll hang out until dinner. Let me know when he leaves.”
Fast forward a few years and Jonathan’s left home again—for good. He’s earned a $435,000 scholarship to The United States Air Force Academy. He learned that there’s a good way to leave home and a not-so-good way to leave. Here are the things parents can make sure their children know in order to leave home well.

Budget Babies
Before your child leaves make sure that you help them establish a workable budget. Go to my tools page at www.elliekay.com . The categories should include housing, transportation, clothing, food, entertainment, and (if necessary) tuition and books. Decide, up front, what they will pay for from their own work money and what you will cover. Ask them to send you a monthly budget report and review it with them. Look at this as an opportunity to coach them in right choices but beware of funding their failures by bailing them out on a regular basis. This is the time for them to learn to live on their own in a healthy way. A great resource is www.MoneyTrail.net , a free, online allowance and money management system for kids, teens and families. Kids & teens track their allowances, IOUs, cash and gift cards. They learn to make smart saving and spending decisions, too.

Bucks and Money Cards
Your college bound student will need banking accounts for checking and savings. Research banks (or savings and loans) that offer student banking programs. In our family, we like to get money cards like the American Express prepaid credit card that is safer than cash, do not require a credit check and are easily reloaded. With this money card, our college kids have the benefits of a debit or credit card without the liability or temptation to get into debt. They are convenient, safe and efficient—plus we can reload funds onto their cards either online or at our local store.
Now is also the time to educate your child on the dangers of easy credit. Direct them to order their free annual report from each of the three major credit reporting bureaus to make sure no one has stolen their identity.
Help your children set up their own credit card through your own credit card company with an "additional card" where you are the gatekeeper. You can set up credit limits and turn off ATM use as well. As they charge items that you were planning on pay for (such as books, rent, food) then pay off the balance each month, they’ll build their own credit score as well. Our son, Daniel, as a senior in college built enough good credit to prequalify for a townhouse! It all started with our involved effort to help him establish and build credit wisely—without getting into debt.

Borrowing and Student Loans
Parents often ask, “How do we pay for college, should we get a HELOC or a second mortgage?” I do not believe you should leverage the equity in your home (which is part of your future retirement) in order to pay for your child’s future. HELOCs (Home Equity Lines of Credit) are also a poor choice. Instead, look at a variety of scholarships, work study programs, and other options available through the financial aid office at the school. Another financially healthy option is to have your child attend a college you can afford. Our mantra for our college bound kids is: I will go to the school where I can get the best education possible for the least amount of student loan debt.
My oldest step-daughter took a year off school between her sophomore and junior years at Columbia University in order to work to help pay for college. Some employers will help pay for college as well. Exhaust all your options and think outside the box in order to minimize college debt. If you must subsidize tuition through student loans, then make sure the loans are in your student’s name and that they do not exceed $20,000 by the time they graduate from a four year college. Email assistant@elliekay.com and ask for the "College Crunch" file for dozens of great ways to get through college debt free!

Bagels and Broccoli
My daughter, Bethany, was graduating from high school and I decided to let her do our grocery shopping in order to teach her how to shop wisely when she was on her own at college. When she got the the bakery department, she exclaimed: “Wow! I can get this bag of eight bagels for less than this other bag with only six!” She was so proud (and so was I!)
Be sure your kids know how to price compare and how to read the store labels as well. Show them the “price per ounce” on the shelf so that they can recognize value. Walk them through the frozen foods section to compare the difference between buying fresh broccoli versus frozen and let them see the savings in frozen convenience foods versus fast food pizza. We also teach them to use www.couponmom.com in order to match up coupons with local sales in order to get items for pennies or for free.

Launching a child in leaving home can be costly and stressful unless you are strategic and purposeful in your planning. With the right moves, you can help your student finish well at home and start their new life with a healthy financial perspective.

Ellie Kay
America's Family Financial Expert (R)

Five Apps To Save Money in the Store

2011-06-10T10:44:00.000-07:00

I don't dumpster dive, hound my friends for coupons, or store up a years' worth of toilet paper in my garage--but I did manage to save $160,000 on coupons! That's enough money to put seven kids through college or buy a modest airplane for my hubby (he votes for the airplane, I vote for college and guess whose vote counts DOUBLE?).

You don't have to clip coupons to save with all the wonderful apps that are available on your smart phone. So there's really no excuse to pay full price in the store! Here are some of my favorite apps:

Five Apps to Save Money in the Store

1. Shopper –One of the reasons people overspend at the grocery store is because they impulse buy or get things they really do not need. Making a list saves money and is easy when you use Shopper. This app lets you make several lists at a time for different stores, it calculates sales tax, allows for quantities, tracks your coupons and is secure because you need a password to open it (just in case you’re putting those Reeces on the list and your hubby never sees them.) It costs .99

2. Check and Compare 1024 -- Ever wonder how much money you are spending at the store while shopping and if you’re getting the best price? Just enter your item prices and quantities and “Checkout" will show you just how much your bill will be at the register. The “Compare” portion allows you to compare prices based on quantity and size to show the best value. You can then transfer the best value price to the checkout price field. The Budget tool can be set and keeps track of your remaining budget for one or multiple shopping trips until cleared. This app costs $2.99

3. Coupon Sherpa – This FREE app eliminates the need for a traditional coupon book by providing hundreds of in-store coupons for many merchants on your iPhone or iPod Touch. The coupons can be scanned by optical scanners right from your phone! Save money on food, clothing, shoes, restaurants, electronics, travel, jewelry, sporting goods, books and more. You can find coupons by category or store name, email coupons to friends, create your own favorites list of stores and find the store nearest you.

4. Yowza – This is another FREE app to launch on your iPhone, iPod Touch, or android phone and it instantly goes about finding deals and coupons in your geographic area. When you walk up to the cashier, just show the deal on your device and let them scan the barcode or type in the coupon code. No clipping. No stashing coupons in your wallet or purse. No need to remember which location that restaurant coupon was good for. It features city and zip code based coupon searches, notifications when your favorite store adds a coupon and you can share your savings via Twitter, Facebook, or Email.

5. Amazon Mobile -- The FREE Amazon Mobile app allows you to quickly search, shop, compare prices, read reviews, and make purchases on Amazon.com using a simple, interface. Amazon customers have full access to their existing account. It also includes "Amazon Remembers" that allows you to use the camera on your iPhone to create a visual list. The photos you take from the app are stored on both the Amazon Mobile app and Amazon’s website. If the item you want to remember is a product, Amazon Remembers will try to find a product similar to your photo for sale on the web. If they do, they’ll send you an e-mail alert and post the result along with the photo.

Happy Savings!
Ellie Kay
America's Family Financial Expert (R)

Writer's Corner -- Should I Fund My Own Travel to Go on National Media?

2011-06-04T10:49:00.000-07:00

I’m beginning an “Writer’s Corner” for my friends who are in the publishing and media field. One of the questions that authors often ask is, “Where should I put my marketing dollars?” When you have an opportunity to go on a nice, national show and you have to fund the trip yourself, how can you make sure it’s worth what I call the “Media Investment.” So if you are invited on a show, make sure that they are a class act, with a nice set, great team of professionals, excellent production quality and easy to work with ahead of time. But NEVER pay production costs and RARELY pay for play! I do have a source that has a worthwhile pay-for-placement schedule and if you email me at assistant@elliekay.com, I'll send you her contact info. The main thing this blog is looking at is: paying your own travel costs.

When it comes to the ever present question: “should I fund my travel or should I not?” A big consideration is if your publicity dollars are tight--then you might want to pass. Instead, spend those dollars on your website, social media and radio or skype ops that can be done from your home office.

That having been said, there are some ways to make the possibility of a national television appearance more viable financially, even if you have to fund travel yourself. Here are some ideas:

1) TWO FOR ONE DEAL -- Dovetail the media trip off of a nearby major market media trip. If your publisher will pay for you to do a nearby media market tour, then let them know you’ll do the secondary show on your own. This might make your publisher more likely to fund the first market for you since they will be getting a “two for one” deal out of it –two media markets for their one market investment. Or, if you are speaking at an event near the proposed television show, then dovetail the media gig off the speaking gig.

2) MULTIPLES --Pitch the producer with the idea of recording multiple interviews. If you can do the live interview that day, then record 2 to 3 more interview segments on the set after the show, then they will have these shows in the can and you will be on once a week until these segments run out. It makes your monetary investment (for the trip) more valuable. This is how I was able to be on one international show 12 times in 3 trips. I did one live show on each of these trips and 3 recorded shows. But please note: THESE MUST BE ARRANGED BEFOREHAND. Don’t expect to make the pitch about multiple shows the day before you travel and then expect to record afterwards. Pitch the idea of multiples ahead of time, before you book the show and see if they have time in their production schedule to make it work.

3) TIMELESS – If your interview is not headline driven, then try to make it timeless by avoiding mention of events in the news, holidays, days of the week or seasons. Then tell the producer that you are going to try not to “date” the interview so they can re-air it at another time in the event it fits another show in the future and they want to drop in as a segment again on another show.

4) SKYPE - Pitch the idea of a skype interview (free for you). If the angle of your story can become newsworthy (highlighting something that is in the headlines), then they might consider a skype interview. These are usually reserved for those who have been in studio at least once and proven that they can handle an interview. But if you have media clips you could show them and if you’ve done skype interviews before, then make the offer. That way you don’t incur any travel expenses at all. Furthermore, if you go in studio (following one of the tips listed), then be sure you get the producer’s card for future skype opportunities.

NEW AUTHORS - For some writers who are new to the game, a show where you have to fund your own travel would be a good option for you if: 1) you are just starting out in media & want the experience 2) you have the money to invest, and/or 3) you really need a media clip of you on an international or national show. In these cases, it could be all right to invest in going on this show. But be sure you try to get the most “bang for your buck” by following some of the ideas I listed above.

BONUS TIP: If you are recording multiple interviews (in person or via skype) for a faith based show, then try to make one of them a bit more generic (or crossover friendly). Oftentimes these clips are required by national shows like The Today Show, the Nate Berkus Show, ABC News, CNN, CNBC, MSNBC, etc, when they are exploring the idea of having you on a show. These mainstream producers might come calling (or if your publicist pitches them) and they will ask for a media clip to see how you look and act on the air. If you have a clip that is more mainstream (and less evangelical), then you’re more likely to get the media booking.

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

Putting the Fun in Fundraising for Summer Mission Trips & Internships

2011-05-18T15:54:00.000-07:00

Summer is the time for baseball, hot dogs, apple pie….and fundraising for summer mission trips and internships. Here's a pic of our daughter, Bethany, preparing for her summer internship at Trans World Radio. My hubby and I are the parents of seven, and we’ve raised money for all kinds of non-profit programs to include the National Youth Leadership Forum, Rotary Youth Commission, the Young Continentals, mission trips to Mexico, China & Thailand and an internship with Trans World Radio. Hopefully, the following ideas will help you raise the funds you need so that you or your kids can help make the world a better place.

The Benefits of Fundraising

I recently had a friend whose daughter wanted to do some work so that she could raise money to go to a mission trip to Mexico. After the mission trip was over, she told her mom that the fact that she had to work hard to get there (and work even harder once she got there) changed her life forever. Working to fundraise is part of the gift to the people you will be serving. It also seems to mean more, when you have to work for it (rather than mom and dad writing a check). Finally, another value of fundraising is that it’s good resume fodder for college applications and future internship work—it shows that you know how to be a servant leader when you care enough to contribute. For the donor, there is usually a tax deduction benefit if the organization is a non-profit and they provide proof of the donation (a letter or receipt).

The Bill – Can I Afford to Go?

I like to say that “if it’s God’s will, then it’s God’s bill.” But there’s a difference between faith and presumption. That’s why it’s important to crunch the numbers and take a hard look at any internship or mission trip. I.e., if it costs $5,000 to go to Austria for the summer and you start fundraising in May with no money saved and few prospects, then you probably need to try again next year. Figure out how much you will need, divide that by the amount of time you have left to raise funds, then look hard at how much you’ll have to raise each month (and week) and make an thoughtful and informed decision. For example, an August trip to inner city Los Angeles, cost is $300, you start in early June, that’s $300 ÷ 10 weeks or $30 per week you need to earn.

The Beginning – Where Do I Start?

You’re going to start with a lot of prayer and a really good fundraising letter. But before you write the letter, look at how much you already have toward the trip (in your savings) and decide on other fundraising activities. Are you going to sell chocolate from door to door in 90 degree temps and 90% humidity (like I did as a twelve year old to pay for camp)? Will you babysit, have a garage sale, wash cars, clean houses, host bake sales, get a part time job, etc? Include the following in your letter:
• Tell potential donors what the trip or internship is all about & who it will help
• Share your passion for what you’re going to do for others & why you want to do it
• List the fundraising activities that you plan to do in addition to sending the letter
• Keep the letter to one page, 12 point font, with 1.5 line spacing (easy on the eyes) and send them via snail mail—otherwise, they’ll get lot in an inbox
• Ask for funds toward the beginning of the letter—be up front about what you need
• Send them to friends, family, your Christmas card list, doctors, teachers, lawyers, co-workers, neighbors—anyone who knows you personally & may want to partner with you
• Indicate if the donation will be tax deductible
• Add a photo of the group you are helping (or of yourself) to personalize the contact
• Tell them where to send the funds (or include an Addressed Stamped Envelope)
• Send these out ASAP and keep a master list with phone numbers & email addresses

The Big Follow Up

Two weeks after you send out the letter, make contact with everyone on your list to find out if they received it. You can make follow up contacts via phone (BEST OPTION), email or facebook. Have a plan when you make the contact and develop your own script so that you won’t be nervous. Here are the things to say in the follow up:
• Mention their name early in the call
• Use positive language
• Give a one to two sentence description of your mission trip or internship
• Ask if now is a good time to talk
• Ask them if they have any questions
• Ask them if they can help out financially (don’t beat around the bush)
• Thank them for their time, even if they do not commit to a donation

Another part of follow up is to send thank you notes to every person who sends in their support. Send these within a week after receiving them. Don’t just send a thank you via email, but physically mail them a thank you card. Once the trip is over, contact your donors with a one page letter (including photos) of what you did and how it changed your life and the lives of others. Your donors will see how their money made a difference and what their partnership means. It also paves the way for them to contribute to other projects in the future.

Happy Fundraising!
You're Making the World Better
Ellie Kay
America's Family Financial Expert (R)

Saving Money at the Pump This Summer!

2011-05-09T13:14:00.001-07:00

The good news for Joshua, the youngest Kay Kid - he inherited the 'Burb!
The bad news for Joshua, he inherited the 'Burb!

With gas prices rapidly approaching $5/gallon here in sunny southern cali, he may have to park that beast, before he ever gets a chance to drive it.

But there are ways to save at the pump, if you are strategic. Here are my tips:

• Plan – AAA’s Fuel Cost Calculator (www.fuelcostcalculator.com) helps you plot out the most efficient route. You can also put in the year, make and model of your car and it will compute what you’ll spend on gas.
• Prices – Get the app or go to sites such as www.gaspricewatch.com , www.fuelmeup.com , or www.gasbuddy.com and find the cheapest price for gas both at home and enroute. Find the app called Gas Buddy or AAA”s Trip’Tik Mobile iPhone.
• Pace Your Driving - Jackrabbit starts and constant speeding up and slowing down cost precious gas mileage miles. Instead, pace yourself.
• Pushing It Up! -- Will only speed up your fuel consumption. According to the Department of Energy (DOA) it takes a lot of energy for your vehicle to push the air out of the way as you speed down the road. Driving the speed limit of 65 versus 75 can save as much as 15% on fuel consumption because of the energy needed for higher speeds.
• Puhleeze Give Me Some Air -- At speeds of 40 mph or greater, it costs more to leave the windows open (due to drag) than it does to run the air. In a place like Palmdale, CA where the summer temps reach 110 degrees that's good news!
• Pitch the Junk! -- Take your golf clubs, soccer chairs, Salvation Army book donations and all the other JUNK out of your TRUNK. Otherwise, you're paying more to haul it.
• Pressure and Maintain - The National Highway Traffic Safety Administration estimates that one-in-four cars have under inflated tires by 8 pounds per square inch. By getting the right amount of air in your tires and taking a few minutes to change the air filter, you can increase your gas mileage by 3.3%! A tuned engine can save an average of 4% more and detected problems, like a bad oxygen sensor can help your mileage by 40%!
• Pool it -- Car pool whenever possible, and let everyone pitch in with their dough!
• Premium, Schmium -- According to AAA, only 5% of vehicles in the US require the premium gas--it does not help your vehicle for you to pay more for it. Buy the regular stuff and have no worries.
• Peak no More! – Plan trips, if possible, during off peak times to avoid traffic jams.
• Pay up! -- Make teens pay for gas when they aren't driving for sanctioned raod time (such as school, work, running your errands, etc). It's amazing how much less miles they will put on the car!

Happy Driving, Joshua!

Love Mama,
aka America's Family Financial Expert (R)

Mother's Day and Working Mom's - What Is Your Time Worth?

2011-04-25T11:27:00.001-07:00

When I married my husband we had five babies in seven years and moved eleven times in thirteen years. I also had two stepdaughters for a total of 7 children to support. I left a nice job as a broker to have a more rewarding career as a SAHM (stay at home mom). One of the questions that I frequently heard was: Do you work?

“What do you mean do I work?” I would think even though I politely answered, “Yes, I work very hard as a stay at home mom.” Sometimes, an unsuspecting troglodyte would go on to say something totally thoughtless such as “Well, I meant do you really work. Do you have a job?”

I would bite my tongue until it bled….

What I wanted to say was, “What do you mean do I really work? I work a heck of a lot harder that you do, mister! I’m an accountant, a contract administrator, a chauffeur, a nurse, a soccer mom, a stylist, a wife, and a chef! Plus ten other job specialties! I do all these things as a mom—I’M A CEO MOM, MISTER!”

They usually didn’t ask the same question twice.

These days, as a financial writer and speaker—and a mom, I’ve talked with scores of spouses who work outside the home because of the status of our economy and by necessity--not choice.

Each year, Salary.com issues a report on what a mom’s time is really worth. According to this site, “Based on a survey of more than 40,000 mothers, Salary.com determined that the time mothers spend performing 10 typical job functions would equate to an annual salary of $138,095 for a stay-at-home mom. Working moms ‘at-home’ salary is $85,939 in 2010; this is in addition to the salary they earn in the workplace.” That’s a lot of worth associated with this great job of motherhood!

By going to

http://swz.salary.com/momsalarywizard/htmls/mswl_momcenter.html you can log into a calculator that tells you what you would be paid on the economy for all the work you do as a SAHM or as a mom who also works outside the home and inside the home!

How effective is the mom’s work outside the home? Does it pay to work in today’s economy with rising prices and a modest hourly wage? Many military spouses who move frequently do not often have the luxury of annual pay raises at the same company. For example, let’s look at Jennifer.

Jennifer was an administrative assistant who needed to work outside the home to make ends meet. She made an average wage of $8.50 per hour and felt she contributed greatly to the family’s finances. She only had one child in day care, traveled a short distance to work, and paid no state income taxes. Then Jennifer attended one of my Living Rich for Less seminars and was challenged with the idea of “crunching the numbers.” She completed our “Working Mom’s Compensation” form and was shocked. The online version of this is a “one income calculator” is found at http://www.crown.org/Tools/Calculators/Work_HourlyWage.asp

The amazing fact Jennifer discovered was, by working full time--she was making $3 per week! She didn’t realize how those extra pizza nights (because she was too tired to cook), and the trips to the beauty salon (to maintain a professional hairstyle), and all those lunches (away from home) added up! She realized she needed to make some dramatic adjustments. She decided there was a better use of her energy and quit her job outside the home.

But Jennifer didn’t stop there. She implemented some money savings strategies and is making ends meet at home. She has less stress in her life and the freedom to contribute to her family’s financial needs through saving money and by launching her own homebased writing business. In her case, a penny saved was more than a penny earned.

Jennifer’s Salary – The Working Mom’s Compensation Form

Gross Income Per Week Jennifer’s Yours

($40 hrs @8.50/hr) $340 _________

Less:

Tithe or donations (10%) $34 _________

Federal Income Tax (18%) $61 _________

Social Security Tax (6.2%) $21 _________

Transportation (10 trips/8mi/@.45/mile) $36 _________

Childcare (1 child) $90 _________

Meals/coffee (@$7/day) $35 _________

Convenience foods at home $29 _________

Extra clothing (includes cleaning) $12 _________

Beauty Shop $14 _________

Other (‘I owe it to me’ items) $5 _________

Total Expenses $333 _________

Net Usable $3

Time Spent:

On the job 40 hours __________

Lunch 5 hours __________

Travel/Commute 5 hours __________

Total hours away from home 50 hours __________

Once you come up with a figure, ask the big question. Is my time, energy and effort worth ______ dollars a week? You’ll be surprised at how painless it is to cut back and save your family a significant amount of money. It’s not magic, it requires work and dedication. After all, not all compensation is measured in dollars and cents.

On the other hand, you might discover that it is worth it and that’s still a great choice—one that works for you and your family!

Whether you are a SAHM or a mom who works outside the home—you’re work is priceless in terms of all you do for your family and for others. You deserve a Happy Mother's Day! Thanks for your hard work, you’re leaving a legacy through your children that will last for decades to come.

Ellie Kay

America's Family Financial Expert (R)

The Family Road Trip

2011-04-20T13:47:00.000-07:00

When I was ten years old, I wrote a report on King Ludwig’s Neuschwanstein, also known as “The Disneyland Castle.” At that time a dream to see that fabulous site was birthed in my mind. Three decades later, I was able to fulfill those travel dreams, debt free, thanks my work in helping people save money.
Your travel dreams might come true in 2011, thanks to a recovering tourist industry. Here are some trends and tips to keep in mind when planning this year’s travel.

Flyer’s Market A recent poll conducted by USA Today/Gallup Poll indicated that only 16% of respondents plan to fly more or stay more often in hotels this year than they did last year. In fact, 30% indicate they will travel less often. This means there will be better travel deals for those who do their research and take advantage of the bargains that become available.
To take advantage, start by subscribing to the top travel email alert sites and check them daily in order to begin your research. Some of the best alerts are found at travelzoo.com, kayak.com, smartertravel.com and travel-ticker.com . Be flexible with your destinations and get even more savings. If a cruise to the Mexican Riveria ends up costing ½ of what a trip to Disneyland costs, then readjust your expectations and save the mouse ears for another year. Also check out the info from last week's blog.
Then compare the alert prices with values found at the one-stop shopping site called BookingBuddy.com . At this site, you’ll find deals from 140 travel sites including Orbitz, Travelocity, Expedia and Priceline. When in doubt as to whether “now” is the best time to buy your flight or package, go to bing.com’s Price Predictor to see if prices are likely to rise or fall in the next week. But before you click “buy” be sure that you’ve also gone to a coupon code site called RetailMeNot.com to enter additional codes that might get you an even better deal.

Fun Eats and Tech Savvy Treats Since you’ve already signed up for the email alerts on the best deals, be on the lookout for specials in your destination’s area. For example, on travelzoo.com, I received notification that Restaurant.com was running a special where $25 gift certificates were on sale for only $2. Since they are good for twelve months, I entered zip codes for our vacation areas and bought five different $25 restaurant certificates for a total of only $10! You can also go to entertainment.com, enter the zip code of your destination and look at the coupons and values for attractions, hotels, restaurants and more. These coupon books cost around $35. There are also money smart social media sites, such as FatWallet.com, that list great bargains across the country. Other savers post their experiences on the “deals” so that you know whether it’s worth your time and effort or not. I recently found a post for a free coupon for grande lattes at Barnes and Noble where there wasn’t a limit, so I printed four coupons. Three of my kids and I enjoyed free drinks—all courtesy of the FatWallet bloggers.

Fab Phonesdeals If you have a smart phone, then you know that the online world of travel deals make instant savings more gratifying than ever. If you haven’t signed up for a social networking site such as facebook or twitter, then you could be losing money! From these sites you can discover “flash sales” for everything from air travel, theater tickets, restaurant deals and hotel sales. It’s also a great way to get insider information. Another way to use your phone is to find out which TSA gate to go through with the new On the Spot System’s iPhone app that lets users rate TSA screening checkpoints.
“Check in” to your flight at Foursqure, a free app for iPhones, BlackBerrys, Palms and Android phones. There are also apps to order room service before you arrive at the hotel (apps for Hilton, Doubletree, Embassy Suites). These apps will save you time and we all know that time is money. To get the best value in a travel or vacation related app and to find out which ones might be free, go to the review site Appolicious.com.

Faith Tourism In the midst of a struggling global economy, one bright spot for the travel industry is the upswing in faith tourism. If you’re stationed overseas, you may be one of the more than 300 million people are traveling this year for religious and pilgrimage reasons. So if you always wanted to go to see the Western Wall in Israel, then this could be your year. Go to GoIsrael.com and click onto their specials to plan your journey. There, you’ll also find tips, such as: 1) staying at a kibbutz or guest house is cheaper than a hotel, and 2) buying a pass to all the country’s national parks save a lot over buying them individually.
So whether you’re going to Germany to see the original Disneyland castle or driving to Anaheim to see the replica—you can have the vacation of your dreams and your dream can remain debt free as well!

Savings Site Favorites
Hotels.com – Find best prices on hotels internationally and earn bonus stays
Ifly.com – terminal maps, estimates on how long security lines are, where to eat.
Flightaware.com – track flights by airline and flight number within 5 minutes of real time.
Elderhostel.org – worldwide educational travel adventures with 300 learning vacations designed for grandparents and grandkids
NPS.com – national park service website offering $10 park passes to seniors 62+
Sierraclub.org/outings - family camp programs that provide affordable camping and hiking
Astc.org. - Association of Science Technology Center with seasons passes to all participating science museums.
AMN.org– buy a reciprocal pass to multiple art museums.
Otalo.com – vacation house rental deals
Tripkick.com – detailed info on hotels and specific room info
TVtrip.com – photos of lobbies, rooms and neighborhoods
Oyster.com – pros and cons of different hotels
Voyij.com – checks best sales, promotions and package deals from departure city
Seatexpert.com – guide to the best and worst airline seats
Smartertravel.com – gives real price of airline tickets with all fees including charges for blankets, sodas, luggage and seats with more legroom.
Tripadvistor –traveler reviews on hotels, package deals, airlines and destinations
Airfarewatchdog.com – dealhounds post latest and best deals all day long.
Tripfilms.com – see traveler videos of hotels, restaurants and activities

Happy Trails to you!
Ellie Kay
America's Family Financial Expert (R)

Til Debt Do Us Part -- Money Matters Before You Marry

2011-04-14T11:43:00.000-07:00

This week is our anniversary and we are celebrating

by going away to the OC, riding segways on the beach & watching a concert called "Rain" (a Beatles Tribute). Hotel is free, segways are 1/2 price and Rain was 45% off!

When I married my husband, Bob, he was a young fighter pilot in the Air Force and I was a insurance/financial broker from Texas. We merged two different professions and two very different philosophies about money. Bob has a lassie faire style, a free spender who lives in the present. I am a structured person, a compulsive saver and always plan for the future. Even though it may seem that this marriage was made in any place but heaven, it has turned out quite the opposite. We’ve been happily merged and married for 24 years with seven children to show for it!

There were, however, a few things we learned after marriage that we wish we knew before the big date.

Talk, Talk, Talk,Communication is the key to dealing with money in marriage. According to a 2008 study conducted by California State University, 21% of couples fight over money daily or weekly. 10% fight monthly and 46% put on the gloves every few months. It’s no wonder that “money arguments” are cited as the number one cause for divorce in America. [[https://www.usaa.com/inet/pages/advice_merging_money]]

If couples spent as much time discussing this critical merger as they do in planning the honeymoon, they would have a great start in their new lives together. That is why it is critical for couples to get premarital counseling that specifically deals with money matters. Each partner comes to a marriage with different money management styles. Consequently, I recommend couples set aside date nights weekly to regularly talk about financial progress. Partners who discuss their views of money and work together to use their financial resources effectively may discover that they actually like the process.

Check, Check, Check, Some experts recommend running credit checks on their spouse-to-be. After all, “‘till death do us part” is the saying, and that means accepting everything about the other person, including any bad debt. On the other hand, if you don’t know how much money your fiancée owes, then the saying could be rephrased to: “‘til debt do us part.” Credit histories should be voluntarily shared among fiancées, preferably in front of a counselor. But you should never run a credit check on your future mate without their permission.

I like to say that “my love is unconditional, but my money is conditional.” It’s important to know about debt before the big date as the mingling of money could have an impact on your credit score. Initially, each score will be different, but if you are added to a spouse’s credit card or vice-versa, then that will have an impact for good or for bad. The merging of all financial resources means that in many cases---for mortgages, home improvement debt, car loans and joint accounts—his credit becomes your credit.

Usually, the bad score will more quickly impact the good score when joint credit is secured. However, it depends on how previous debt and accounts are handled. I do not recommend putting the person with good credit into the debt history of the partner with bad credit by adding her name to his accounts—this deteriorates the good payer’s FICO. But when it comes to future loans, there is a measure of unavoidable mingling. As a personal example, when we moved to CA and had to hook up electricity, with his FICO score the electric company required a $500 deposit. But by using my score we were allowed to establish service with no deposit. We put the bill in my name and in this particular case, it didn’t deteriorate my FICO and it saved us $500!

Yours, Mine and OursWhen two people merge finances, they will need to set up savings, checking and even retirement accounts. It’s important to decide if you will have joint or individual accounts.

There is no right or wrong answer on this one—it all depends upon what the couple mutually agrees to and what works for them. But it is something that should be decided ahead of time. If there are separate accounts, there needs to be full disclosure and accountability for those accounts. I’ve had the unfortunate experience of counseling many couples where one spouse racked up thousands of dollars in consumer debt and the other partner knew nothing about it until it was too late.

However, I’m a firm believer in keeping “mad money” and “surprise money” separate. After all, if Bob wants to give me a surprise trip to Paris for our anniversary—who am I to rob him of that pleasure?

A primary exception to joint accounts is any home based business account or trust funds that were established for children from a previous marriage. Those should definitely be kept separate at all times from a couple’s joint account.

Ellie Kay

America's Family Financial Expert (R)

Cell Phone Savings So Simple, Even A Child Can Do It!

2011-04-06T10:22:00.001-07:00

According to statistics provided by “Pews Study of the State of the Media”, 80% of Americans have a cell phone and 2/3 use it for something other than making calls. Nearly half of all American adults report that they get at least some local news and information on their cellphone or tablet computer. More and more families have more than one cell phone and they not longer have a home land line, opting to use their cells instead. And all of these trends are rapidly accelerating. How can you get the most value for your cell phone plan? Here are ways to save that your cell phone sales rep will not tell you.

Just Say "No" - We have to resist temptation when it comes to cell phone plans,especially when your contract obligation expires. If you do nothing for a few weeks, you'll begin to get all kinds of incentives and good deals that might be better than if you ugraded right away.

Timing is Everything There is a better time of the month to buy a plan or upgrade one and that is at the end of their accounting period when sales teams are trying to meet quotas or reach incentives. This usually occurs at the end of the month.

Don't Pay for Information -- There’s also a way to save on 411 calls, instead of getting gouged with ridiculously high fees for an information call. Just enter this free phone number in your address book: 800-FREE411 or 800-CALL411.

Rebates or FreeBates - I'm often asked if I think that phone rebates are they a deal or a dud? They are only a deal if you apply for them. Cell phone providers make money on rebates because many customers won't go through the hassle. Be sure you get all the info and apply online the same day you get the phone. That way, it won't get lost on your "to do" list.

Don't be All Wet! -- Protect your phone by securing it when you're around water (doing laundry, bathing the kids, etc) and don't even put it in the bathroom when you're taking a shower. Don't have it close to your skin when you're working out either! The results of a steamy shower or workout can be as bad as dropping it in the toilet. If you get your phone wet, then immediately dry off what you can, separate the battery and the phone, then submerge both in an air tight container of rice for 24 hours. This should absorb most of the moisture and may save your phone!

Kids Will Be Kids - So let's say, hypothetically, that you have a child who goes way over their minutes or text messages one month. You could end up paying outrageous fees for extra minutes. If the billing cycle hasn't closed yet, then call your company and upgrade to the next plan. It could save you 35 to 45 cents extra (per minute or text) for all the extra activity.

Little Known Discounts - When one of our teens, Jonathan, went in to see how much a new phone would cost, he decided to ask them if there were any extra discounts we could qualify for. We found out that my hubby's corporation, Northrup,offered a 28% discount for employees. Be sure to ask if your large company, government agency or credit union association can get you an additional discount on your already exisiting plan. You might be pleasantly surprised!

Ellie Kay
America's Family Financial Expert (R)

Mulitgenerational Travel Bargains

2011-03-31T09:48:00.000-07:00

When I was a little girl and dinosaurs roamed airport tarmacs, my Spanish grandmother took me back to Spain for the vacation of a lifetime. “Abuela” was a no nonsense woman, so I was on my best behavior. She asked the man sitting next to me in the airplane to put out his cigarette (yes, they used to smoke on airplanes back when).

He refused, so she took care of it.

When he went to the bathroom, leaving his ciggie on the ash tray, she leaned over, snubbed it out, then took his package of cigarettes and hid them. When he returned, he was confused for a minute and gave me a hard look. It was then he noticed the evil eye my 4’ 10” Abuela was giving him and he dropped the subject of smokes.

Ah, traveling with Abuela. Good times. Good times.

Multigenerational travel has always been popular, but thanks to a recovering tourist industry and great bargains available in a post recession economy, there has never been a better time for grandparents to hit the road with their progeny. Here are some trends and tips to keep in mind when planning this year’s travel.

Buyer’s Market

Being a part of a military family, meant that we had extended family members visit when my spouse deployed. Or, they may come to just see our part of the world. It also means that sometimes grandparents want to bond with their grandchildren and take the kids off your hands at the same time. Whether you are hosting family or getting rid of family (for a little while), you can take that multigenerational vacation for less.

To help extended family members get the best deals, start by subscribing to the top travel email alert sites and check them daily in order to begin your research. Don’t forget to check for military discounts, too! Some of the best alerts are found at travelzoo.com, kayak.com, smartertravel.com and travel-ticker.com . Be flexible with your destinations and get even more savings. If a cruise to the Mexican Riveria ends up costing ½ of what a trip to Disneyland costs, then readjust your expectations and save the mouse ears for another year.

Then compare the alert prices with values found at the one-stop shopping site called BookingBuddy.com . At this site, you’ll find deals from 140 travel sites including Orbitz, Travelocity, Expedia and Priceline. When in doubt as to whether “now” is the best time to book your flight or package, go to bing.com’s Price Predictor to see if prices are likely to rise or fall in the next week. But before you click “buy” be sure that you’ve also gone to RetailMeNot.com to find additional codes that might get you an even better deal.

Grand Times With Grandkids!

Some Grandparents’ idea of a dream trip is to vacation with their grandkids and make forever memories that provide enrichment and education. If they like the great outdoors, the look at some of the summer camps that are geared toward grandparents and grandkids, you can find these at found at Elderhostel.org. You’ll also find options to include intergenerational educational trips worldwide with 300 learning vacations designed for grandparents and grandkids such as Share a Marine Science Adventure in Virginia or Age of the Dinosaurs in Southwest Utah National Parks. Be sure to also check out Grandtravel.com, you’ll find a site that focuses on domestic and international trips with grandparents and grandkids. The founder, a grandmother of ten, believes in leaving your grandchildren with “a cultural inheritance” that will last them a lifetime.

If your family members are active grandparents, then check out the Sierra Club’s intergenerational program in Lake Tahoe, go to Sierraclub.org/outings to find other family camp programs in your area that provide affordable camping and hiking. If grandparents are 62+, then visit the National Parks site at NPS.com where they pay only $10 for a parks pass. Usually, children sixteen years of age and under get in for free. While at this site, look at the list of camps and trails for the young and young at heart to conquer.

The most important aspect of any vacation is to concentrate on meaningful time with family members. Families can do this in any part of the country by taking advantage of daytrips where multigenerational members can share a historical experience together in your city. For example, Colonial Williamsburg may not offer a specific grandparent program, but they do offer family packages that would allow the city’s exploration to stay within a budget. Other fun trips include buying a season pass to a museum that offers reciprocal passes to other museums across the country. Go to Association of Science Technology Center (Astc.org) or the Art Museum Network (AMN.org) to explore these creative options.
Sometimes a new experience for a child becomes an adventure as well, so look for activities that your children have never participated in and open the doors for loads of fun. For example, a cross-country train trip is a wonderful way to try something different while seeing the country through a child’s eyes. Creating forever memories with your family is what true adventure is all about!

So whether you’re going to Spain with a Spanish Grandmother or driving to the Grand Canyon with a beloved Grandparent—you can have the vacation of your dreams and your dream can remain debt free as well!

Sites for Savings

Hotels.com – Find best prices on hotels internationally and earn bonus stays
Ifly.com – terminal maps, estimates on how long security lines are, where to eat.
Flightaware.com – track flights by airline and flight number within 5 minutes of real time.
Otalo.com – vacation house rental deals
Tripkick.com – detailed info on hotels and specific room info
TVtrip.com – photos of lobbies, rooms and neighborhoods
Oyster.com – pros and cons of different hotels
Voyij.com – checks best sales, promotions and package deals from departure city
Seatexpert.com – guide to the best and worst airline seats
Smartertravel.com – gives real price of airline tickets with all fees including charges for blankets, sodas, luggage and seats with more legroom.
Tripadvisor –traveler reviews on hotels, package deals, airlines and destinations
Airfarewatchdog.com – dealhounds post latest and best deals all day long.
Tripfilms.com – see traveler videos of hotels, restaurants and activities

Happy Travel!

Ellie Kay
America's Family Financial Expert (R)

Don't Get Scammed When Giving to Japan

2011-03-22T17:31:00.000-07:00

The tragedy in Japan is one that makes us want to open our wallets and help in a practical way. But with every tragedy there arises a new crop of scamsters, out to make a profit off of someone else's sorrow. How do you give smart and make sure your dollars go to the people who need it most? Follow these tips:

Email Scams

McAfee recently reported a significant increase in the amount of spam being generated by "Japanese Earthquake Relief" scams. So NEVER respond to an email, even if you suspect it is legit. Do not link to the link provided in such an email. Instead, go directly to your browser and type in the link to investigate--even if it's a charity you recognize. Some criminals are linking to sites like the Red Cross but the link will actually take you to a false site where they skim your money and your credit card number.

Don’t Fund Overhead or Fund Raising

You don’t want your dollars going to pay fat salaries, fancy overhead, or excessive fundraising expenses. The Better Business Bureau’s (BBB) Wise Giving Alliance offers guidance to donors on making informed giving decisions through their charity evaluations, various "tips" publications, and the quarterly “Better Business Bureau Wise Giving Guide.” You can access this information by calling (703) 276-0100, going to www.give.org

You can ask them to mail you the various tip guides or read them online. These guides include information on:

Charitable Giving

Police and Firefighter Organizations

Handling Unwanted Direct Mail From Charitable Organizations

Child Sponsorship Organizations

Direct Mail Sweepstakes and Charities

Contributing Used Cars to Charities

Tax Deductions for Charitable Contributions

Record Keeping

If you itemize, you’ll need all receipts for donations of $250 or more. If you give away more than $250 worth of clothing throughout the year, you should have saved all receipts for tax purposes. The money donated directly to a needy person is not deductible. It would be better to donate the amount, anonymously, to your church and have them send the donation to the family in need. Check with your tax specialist every year for your state and federal tax laws.

Starting Your Own Foundation

If you are fortunate enough to have a large gain from a stock or mutual fund that you have held for over a year, consider using it to become what is essentially your own “foundation.” For example, if you own $5,000 worth of stock that you bought years ago for only $1,000, then you can donate the stock by setting up a Fidelity Charitable Gift Fund account (call 1-800-682-4438 or go to www.charitablegift.org ) By doing this, you get an immediate $5,000 tax deduction and save having to pay taxes on the $4,000 gain. In the years to come, as that $5,000 grows, you instruct the company that manages your “foundation” where to donate the proceeds. Besides Fidelity, there are also charitable gift funds available thorough Vanguard at 1-888-383-4483 or www.vanguardcharitable.org or Schwab at 1-800-746-6216 or www.schwabcharitable.org .

Kid Philanthropists

You may want to allow your children to manage a donation in a predetermined amount $25, $50, or whatever you have budgeted.) They get to research a variety of non-profit organizations and decide which one will receive their donation. Then donate the amount in your child’s name. You get the tax benefit, your child gets the thank you note—you both feel good about giving.

Ellie Kay
America's Family Financial Expert (R)

Identity Theft and Other Nightmares

2011-03-15T16:54:00.000-07:00

My husband brought me the credit card bill and asked “What did you DO on your last trip to New York?” He was hurt and stunned, “This charges are to a tattoo shop, an liquor store and a series of bars. Please tell me this is some mistake!”
It was a classic case of identity theft. I may have been guilty of buying one too many lattes and pastries at Dean and Delucas in New York, but I had no new tattoos! I tried to respond to my hubby but couldn’t speak . . .
And then I woke up. Yes, I know. I’m a strange breed because my “nightmares” consist of dreams about identity theft. Unfortunately, those nightmares are other people’s reality.
According to the U.S. Federal Trade Commission, it takes 12 months, on average, for a victim of identity theft to notice the crime. So how do you keep yourself safe from the ever growing threat of identity theft? Learn to identify the latest scams:

• Phishing Scams – Never give your social security number, account numbers, date of birth or other personal information via email or on the phone unless you initiated the contact. Most major internet sites and financial institutions have been targeted including Citibank, PayPal, eBay, Bank of America, Wells Fargo, the Internal Revenue Service (IRS), and America Online (AOL). These scams usually show up in your email inbox with a message from the "System Administrator" telling you to perform some urgent maintenance on your account.

• Checks – When you pay your credit card by check, never put the full account number on the check, just write the last four digits. This will prevent someone in transit from harvesting your account number.

• Auction Fraud – This was the second most reported consumer fraud complaint to the FTC, totaling 51,000 auction complaints. The fraud is simple - put up a fake ad on eBay, let someone "win" the bid and send in their money, but never send out the merchandise. Make sure the seller has an established history before you click “buy.”

• Identity Theft or Credit Repair Scams -- The Federal Trade Commission has warned that some companies that claim to be identity theft prevention companies are scam artists trying to get your driver’s license number, mother’s maiden name, Social Security number and credit and bank account numbers. If you are unsure about a firm, check it out with the Better Business Bureau at www.bbb.org .

• Prize Scams – If someone calls you on the telephone and offers you the chance to receive a major prize but insists on gathering personal data first, ask them to send a written application in the mail. If they refuse, then hang up.

Credit Card Applications – Consider getting a secure mailbox (key access) as many identity thieves like to take your mail directly from the box (or from the trash), fill out your credit card applications and put their address in the information box. Always shred all credit card applications and contact your credit card companies to never release this information to other companies.

Ellie Kay
America's Family Financial Expert (R)

Healthy, Wealthy and Wise

2011-03-10T12:41:00.000-08:00

Our son, Jonathan, is a senior this year and we're glad he made it this far! Last year, he had a concussion on the soccer field that could have ended quite badly. The total hospital bill for that little trip was over $18,000! According to the Healthcare Cost and Utilization Project, if you or your child broke a leg, you would incur costs in excess of $15,000. It’s no wonder that in my experience with mainstream American families, I’ve found that the greatest financial concern they have is how find affordable health insurance.

Be Healthy

The best protection against rising medical costs is still prevention. So get involved in a healthy workout program or plug into a support group to regain control of your health such as www.weightwatcher.com.Another great program is First Place 4 Health (www.firstplace4health.com) for men and women of all ages. Using a support system that incorporates prayer, balanced eating and exercise plans, this non-profit group provides the opportunity to change your life, not only physically but spiritually and emotionally.

A healthy lifestyle can also have other advantages. Many health insurance companies offer a refund on an annual premium if the insured can prove that they have attended a health and fitness center three times a week.

Be Wealthy

There’s no need to pay more than necessary for health insurance.Compare plans and prices by going to a non-intrusive site such as www.Ehealthinsurance.com. It’s possible to get a relatively anonymous quote instantly without the intrusion of a salesperson calling your home or office. It’s also a good place to compare plans by remembering that you shouldn’t buy what you don’t need. For example, if you do not need maternity benefits, eliminate them from the plan you choose.

If you can consider a higher deductible, then the money saved on premiums could go into a Health Savings Account (HSA), which is basically a health insurance policy you can bank on. When an HSA-eligible policy is purchased in conjunction with an HSA account, then the Health Savings Account is funded with pre-tax dollars, and taxable income is reduced at the same time. The money in this account is used, tax-free, to fund healthcare related costs including prescriptions, insurance deductibles and over the counter medications. The money that is not used in this account is rolled over from year to year and can serve as a retirement plan.

You do not have to insure all family members on the same policy. If there’s an employee benefit in a group plan, it doesn’t mean all family members have to be covered on the same plan. An average family can save as much as $2500 a year by pulling family members out of pricey group plans and purchasing individual health insurance. The exception to this would be if the family member has a pre-existing condition (such as asthma, a heart condition, high cholesterol, etc) that might be temporarily or permanently excluded in an individual plan. In that case, it would be better to pay the higher premium in order to keep the comprehensive coverage consistent.

Be Wise

Know the difference between health insurance and discount health or medical “cards.” According to the Coalition Against Insurance Fraud, many companies are selling so-called discount health cards to consumers seeking affordable healthcare. Usually for a monthly fee, the cards claim to save subscribers money by offering discounts on physician visits, hospital stays, prescription drugs, dental work, eye care and other treatment. The CAIF says that, “Discount health cards are spreading rapidly. Many may offer valuable, money-saving benefits for people without health insurance. But these cards can also be confusing, because they are not insurance. You still must pay the medical bills yourself. These cards simply offer lower prices on services that accept these discounts.”

If you have a question about a policy or a card before you buy, go to www.insurancefraud.org to make sure you’re being wise in your choices.

Finally, for the 45.8 million uninsured Americans, who may feel they cannot afford health insurance, go to the non-profit arm of a previous site found at www.EHealthinsurance.org to see what services and benefits are available for your particular situation and in your state and community.

Ellie Kay

America's Family Financial Expert (R)

Spring Cleaning - Garage Sale Success

2011-03-02T14:08:00.000-08:00

I'm going indoor skydiving next week with a coupon that I bought from Groupon for only $35. I'll get two flights, a DVD and bragging rights. I look at life as an adventure—especially when it comes to stretching my dollars and finding creative ways to make and spend money. Sometimes we need to have the ultimate adventure—a garage sale! Paying a dime on the dollar for a product still in its original box is a not only a thrill—it’s eco friendly because no new resources are made to create that product. Not only do garage sales simplify your life by helping you de-clutter, but they also provide a way to keep more change in your pocket and teach your kids the value of a buck.
Here are my top ten tips to host a successful garage sale. If you follow them carefully, you’ll find yourself flying high—without the bungee cord!

 Collect – Throughout the month, throw stuff in a big box marked, “Garage Sale.” Not only will you relieve clutter, you’ll soon have enough diverse items to host a sale. Of course, you may have your husband keep taking things out of that box.

 Location –It’s great to buddy up with a friend whose house has a better location than yours, in order to catch the attention of drive-by traffic. Or, ask a neighbor (or two) on your block to host their own sales—you could get three times the garage sale traffic with combined sales.

 Advertise-- When you create garage sale signs for the neighborhood, use brightly colored poster board and a good contrasting color. Keep the lettering brief and legible and tape some balloons on it. Go in with your neighbors on a small ad in your local paper, it will really help bring people to your sale.

 Pricing – If you put a price your product, you are more likely to sell it. Most people don’t want to keep asking, “How much for this?” Even with the item marked, there will be some who will barter with you on the price—but that’s to be expected. Begin pricing items weeks before the sale, placing them in a “finished” pile in your garage.

 Cash – Have at least $20 in coins, 50 one-dollar bills and 6 five dollar bills. Keep your money box in a safe location and never leave it unattended. Bring each $100 earned into your house for safekeeping.

 Checks – Never take a check from someone you do not know. This isn’t just a matter of trust, it’s one of responsibility. Most people know to bring cash.

 Hold – Never hold an item without a substantial non-refundable deposit. If you hold it for free, then the customer might not return and you’ve lost your opportunity to sell that item.

 Marketing – Place furniture and bikes that will draw attention by the curb where people can see them. Try marketing ideas such as “buy three books/get three free.” It’s amazing how well this works—people respond to the word “free.”

 Clean –If an item looks newer because it’s clean, you’ll be able to get as much as 50% more for it. Run sturdy plastic toys through the dishwasher, spot clean the armchair, wash and hang clothes on a hanger, and polish wood furniture—it’s worth it!

 Expand – Let your kids get in on the action by selling lemonade on hot days or coffee and donuts on cool mornings. Let the kids go to the store with you to buy cups, donuts, napkins, lemonade and sugar. Be sure they understand how to make change and how to be courteous to customers. You'll see the photo where one of my sons opened a "Cowboy Autograph" stand. Who knows? They may earn enough to fund their college education (or at least buy a new bike!)

Ellie Kay
America's Family Financial Expert (R)

Bargaining 101 - How to Quibble Respectfully

2011-02-21T14:28:00.000-08:00

If you save money by paying less on consumer items, you could “earn” anywhere from $100 to $10,000 a year. It’s just a matter of learning how to negotiate on everything from shoes to salaries. James 4:2b says, “You have not because you ask not.” The key to asking is to learn how to bargain without embarrassing yourself, your friends or your family. Here are a few successful strategies to try:

• Compare –Furniture, phone plans, electronics, jewelry and appliances are all highly negotiable. Find your desired item on a search robot such as Froogle.com, MySimon.com, NexTag.com and eBay.com or in sale circulars from the Sunday paper. Then print out the price, take it into your store and ask them to match it. Some stores, such as Walmart, will automatically match competitor’s ads (even on food items).

• Compensate – If the salesman cannot match the price, then ask for other freebies such as complimentary delivery, free accessories, or an extended warranty.

• Continue – If the salesman grants extra perks, don’t stop there. After you’ve secured these, ask for the manager and ask her to match the competitor’s price.

• Counter – It never hurts to counter a price, if you ask for 20% off and they offer 10%, then counter with 15%. When it comes to salary negotiations, you shouldn’t accept the first offer. Most salaried professionals ask for 10% to 12% more than what they're offered, and often settle for 7% to 8% more. If you did this with your first salary, it could add up to $500,000 by the time you are 60 years old!

• Consideration – Don’t limit the odds of success by asking for too much. The store has to make a profit. Small appliances are usually marked up 30%, while larger ones such as washing machines are marginalized by only 15%. However, most large furniture items and jewelry are increased by a whopping 100%!

Communication – Learn to say: “Is this your best price?” “Was this recently on sale and can I have the sale price?” “Do you think you could ask your manager, I’ll be happy to wait,” “Hmmm, this item is a little damaged (makeup on the collar, an already opened box, a ding or scratch) could it be marked down?” and last but not least, “Thank you, I’ll be back!”

Ellie Kay
America's Family Financial Expert (R)

Cheap Dates - Part II - Taking Your Questions!

2011-02-13T15:38:00.001-08:00

QUESTION: My boyfriend is a tech junkie, and while he never forgets to get the latest upgrade, he does sometimes forget special days like my birthday or our anniversary. Is there a way to help my high tech love realize that Valentine’s Day is around the corner?
Simmering Cindy in Cincinnati

ELLIE: There’s some good news for you, Cindy, there are quite a few apps you can buy for your romantically challenged love. The first one is only $.99 and is called CREATIVE ROMANTIC IDEAS: $.99, IPHONE, IPOD TOUCH, IPAD This app will give him ideas that are ranked by price and difficulty, from personalized M&Ms to more elaborate ideas that go beyond the usual candy and flowers. OPEN TABLE: IPHONE, IPOD TOUCH, IPAD, ANDROID, BLACKBERRY This app will help him from being caught without a restaurant reservation. This popular app lets him find restaurants that are nearby, check to see availability and make a reservation. Get info you need from restaurant profiles to menus, including for the budget-minded $$ ratings so you can stay in your price range. Finally, there’s a free app called CINEPLEX MOBILE: IPHONE, IPOD TOUCH, IPAD, BLACKBERRY, ANDROID. Useful for dates or any other occasion when he wants to find out what's playing at a theatre near you. Read entertainment news and reviews, see trailers and buy tickets online. Cindy, by speaking his high tech language, you’ll find better results.

QUESTION: My husband has been off work for 18 months and works odd jobs here and there just to help pay the bills until he can find regular work as a full time welder. Do you have any ideas for Valentines gifts for people with NO money to spend?
Jessie Johnson from Detroit, MI

ELLIE: Trade chores for the day. Surprise your loved one by completing all of his/her chores. Clean the house for your wife or take out the trash for your hubby. Add a special touch by leaving heart shaped cookies in the home or a meaningful note in their car. No matter how small the chore, having someone else complete it will be sure to leave a smile on your loved one’s face.
Make a book of coupons. The coupons could include a massage, free pass for a girls or guys night out, cooking a favorite meal, or even promising a day of sports TV without any interruptions! Recognizing things that are important to your significant other will go a long way in showing how much you care. My husband just presented me with a 12 year old coupon that says, “good for a new corvette when I sell 100,000 copies of my book. I passed that mark several years ago and he just found the coupon when cleaning out a drawyer!

QUESTION: My fiancée is in the military and is overseas. Do you have any extra special ideas that I can send him via email. I already mailed a package, but I wanted to do something. Jason Sampson, submitted via facebook

ELLIE: There’s an app that costs $1.99 and is called VOICE VALENTINES: IPHONE, IPOD TOUCH, IPAD. You can impress your Valentine with a customized ecard that you can send by email, Twitter or Facebook. Design your card, add a photo and message and your Valentine's Day love delivered in your own voice. Or you could get an app for $1.99 or under that is called BUILD-A-CARD, CUPID ADDITION: IPHONE, IPOD, $.99 AND $1.99 FOR IPAD. With this app you can create customized ecards to email, Facebook or Twitter. You can take photos from your camera, your album or your Facebook account to build a one-of-a-kind card.

QUESTION: I’ve been married three years and my husband and I have a very good relationship. The only thing that bothers me is that he doesn’t have any photos of me at work, he says he has them on his iPhone and shows people that way. We are on a budget and for Valentines Day, I wanted to give him a photo for his desk. Any ideas to make this gift not seem too cheap? Amanda from San Antonio, TX

ELLIE: By all means, Amanda, frame up all kinds of his favorites—not just photos. In the digital age, chances are good that your mate doesn’t have a hard copy of some of your favorite memories. If your man has a treasured baseball card or an old family photo, have it framed so he can hang in a special place. Then add a second gift of your best photos as a couple. You can get a customized collage for less than $5 at Costco.com or Walgreens and request same day or next day service. If you want to be less obvious, you could do the same in a mousepad or coffee mug for

QUESTION: My wife and I have been married for 25 years and we raised 3 outstanding children together. I love her very much. For Valentines Day, I like to give her chocolate because she likes it. The problem is that she’s been on a diet off and on for months now and if I don’t give her chocolate then she may think I’m saying she’s overweight and doesn’t need it. But if I do give her candy, she might go off her diet and blame me. What do you suggest? Anonymous but still in love in Destin, FL

ELLIE: This has the potential to be one of those no win situations, so you need to approach this carefully. If you buy your woman a 5 lb. box of chocolate in the shape of a heart, she's either going to eat a few pieces and waste the rest or eat a bunch of it and feel guilty or sick.
I recommend that you find out what kind of candy she likes and get a small portion of that kind of candy. Since you’ve been married for so long, you could also include a mix “tape.” Burn a CD of your favorite songs or those that are special to your relationship. Create a personalized cover with photographs of the two of you and place it in a plastic CD case for presentation. You can also load a special mix onto your significant other’s MP3 player so you can share it together in the car or at home. The thot you put into the CD should outweigh any potential conflict from the candy and you should emerge unscathed. 

Ellie Kay
America's Family Financial Expert (R)

Valentines Day - How to Make the Date Cheaper Without Being a Cheap Date - Part 1

2011-02-09T16:31:00.000-08:00

Valentine’s Day is a few days away, and according to the National Retail Federation, the average consumer will spend more than $115 for Valentine’s Day this year – up more than 11 percent from last year. Coupled with the money spent during the holidays, many will carry extra expenses over the coming months – particularly if a credit card is the chosen method of payment.

On Valentine’s Day, we all like to do things for our significant other to make them feel loved. But while buying a beautiful piece of jewelry or spending a fortune on dinner may make them feel special, creating a mound of debt in the process is not very loving. Today, we will look at creative ways to keep that date cheap without being a cheap date.

Is it OK to Scrimp on Valentine’s Day?

For Valentine's Day, you might feel the need to pull out all the stops, but it's not necessary. Sure, some people want to celebrate the holiday in a lavish way, but others prefer to go the low-key route. Whether you fit into these descriptions or fall somewhere in the middle, there are a romantic date ideas for Valentine's Day or the weekend before that suit every budget.

The Least Expensive Way to Spend Feb 14th

After a home-cooked meal, snuggle up with your honey and enjoy a movie night on the cheap. Now through Feb. 14, Redbox is running a special promotion: rent two items at once from a kiosk and get a promo code for a free one-night rental. The code expires one week after you receive it. “The Romantics,” a romantic “dramedy” will be released Tuesday, but you can also watch the love story “Letters to Juliet” or the tear-jerker “Toy Story 3.”

Flower Power

When it comes to flowers, you usually get what you pay for and one way to cut costs is to hand deliver, this can save anywhere from $8 to $20. You could look at www.groupon.com which has been offering $20 for $40 worth of flowers with FTD. Another option is to grow some flowers by planting some or getting a potted bowl of blooms that she will see everyday. Treat them right and they will survive all year or longer for the price of cut flowers.

One kind of fun option reminds me of one of my favorite romantic comedies, “Kate and Leopold” and that is to give flowers with specific meanings. Go to TheFlowerExpert.com to find out the meaning of different flowers. For example, red roses mean romantic love while a bouquet of mixed roses means “I don’t know my feelings about you yet, but I’m sending you roses anyway.” Carnations are a less expensive option and a red carnation conveys love pride, beauty and admiration. Daisys are also inexpensive and convey “loyal love.” A sunflower symbolizes pure thoughts and it’s one that my 16 year son is getting his special friend-who-is-a-girl. So you can select a cheaper flower if, and only if, you write a note explaining the meaning of the flower and why you chose it for your true love.

Dinner and a Show

Going out for dinner seems to be a Valentine’s Day mainstay and dinner for two can range anywhere from $20 to $200 or more. How to you have a nice meal without sending a signal to your mate that you want to spend as little as possible? After all, aren’t they worth a splurge on Valentine’s Day?

There are quite a few ways to save a lot in this area and still have a nice time together. Lunch or brunch can be half the price of dinner and you could go on the Sunday before the big day. In fact, some restaurants are offering prix fix menus for the weekend or entire Valentine week. Go to your favorite restaurant’s twitter or facebook page and see what specials they are offering to get the best value. Some of these values are only offered to social media friends.

You can also go to www.restaurant.com where gift certificates have gone on sale this week. You can get a $25 gift certificate for your favorite restaurant for as little as $2. Check community billboards at your local chamber of commerce website. For example, in our area, a local Greek center is offering a romantic, candlelight dinner for two with champagne, flowers, dinner and dancing for $50 a person. While this may not seem like a bargain at first, when you add up the cost of the individual items like the food, flowers, bottle of bubbly and a cover charge you would have to pay to dance, it’s an all inclusive deal that is sure to please. Plus, you can learn how to dance the Kalamatianos, a traditional Greek dance.

Great Dates that Double As A Great Gift

Right now, there are some great deals to be had at www.travelzoo.com such as a quick, 2 night getaway on a $99 cruise, with an oceanview room. Bob and I took a cruise this way and really loved it. This week, there are also really nice hotels from Orlando to Seattle that range from $49 to $99 a night. Or, if you want to get up, up and away, there’s a $125 two hour helicopter ride featured. Don’t forget signing up for your local Groupon.com or equivalent such as www.seizethedeal.com, www.livingsocial.com, and www.mamapedia.com. The current offerings include $49 for a discovery flight, great spa deals for only $39, or two tickets to the opera for $39.

The Really Big Show

Going to a show or a museum is also a fun date for a lot of couples. Go to www.broadwaybox.com or www.goldstar.com to find great prices on tickets. Remember that you don’t have to attend on Valentines week for it to count, you only have to have purchased the tickets and presented them as a gift! We saw Phantom on Broadway for 50% off and got great orchestra seating. Or, if you want to give a gift that will cost less each time you use it, buy a season’s pass to a museum at www.museumca.org and not only can you visit your local museum whenever you want for the year, but you also have reciprocal privileges at 400 other museums. The same applies to zoos and aquariums, go to www.aza.org (association of zoos and aquariums.

More to come in a couple of days when I answer YOUR questions!

Ellie Kay
America's Family Financial Expert (R)

The Financial Case for Marriage

2011-01-31T17:59:00.000-08:00

Two of the seven Kay kids are married and loving it. We've always believed that marriage is the best option from a spiritual perspective and I'm often asked about how it stacks up from a financial perspective. Recently, on ABC news I addressed this issue from the viewpoint of a financial expert.

According to the Census Bureau, the number of opposite sex couples living together jumped 13% this year to 7.5 million. Demographers attribute the increased number to a post recession economy and increased unemployment which has forced many young adults to share living quarters. Older adults who have previously been married may view living together as a way to avoid the issues often associated with the end of a marriage. But if you and your partner share property, a breakup could be even messier than a divorce.

Q. Ellie, while there are economic reasons that account for the increase in the number of couples living together, there is also a broader societal issue involved as well. What are some other reasons for these new statistics?

ELLIE: While the downturn in our economy is certainly the top reason that more people are choosing to postpone or forgo marriage, there are other factors as well. Researchers estimate that more than half of married couples live together before they get married. Only 38% of Americans believe that unmarried couples living together is bad for society; half said it doesn’t make much difference, according to a Pew Research Center survey.

Q. What would you say is the biggest financial issue that unmarried couples face?

ELLIE: Without a doubt, I would say it’s the issue of “yours, mine and ours.” A legally binding marriage is a system that organizes the landscape for you. If you had it before, it’s yours. If you earned it while you were together, it’s ours. But when there is no marriage contract, there’s nothing in place that legally defines this landscape and it’s all up in the air.

Q. The first area you say is a drawback for unmarried couples is when buying a home. Isn’t it enough to assume that your partner wants to put both parties names on the title and that will take care of it?

ELlIE: Unlike married couples the courts won’t assume you have equal ownership of the houe in the event of a breakup. The house will go to whoever is on the title, even if one partner puts 75% of the money into the home and the other only antes up 25%, it will be an equal divide. So if you break up two years later, and you’ve put in more, you’ll take a significant loss on your investment. Furthermore, I know relationships are all about trust, but you can’t assume your partner will put your name on the title unless you see it first in writing.

Q. What issues do couples who are living together face in regards to estate planning and why is it especially important if you are not married?

ELLIE: Personally, I believe that everyone should have an estate plan but for unmarried couples, it’s essential. If you die without a will, your estate will be divided according to state law, which usually doesn’t recognize domestic partners or common law spouses. Family members that you don’t even like could end up inheriting everything you own. But even if you have a will, your partner could still be forced to sell the home to pay federal and state estate taxes. Whereas a surviving spouse can inherit an unlimited amount of assets, tax free. This makes a strong case for marriage, especially for those couples who are planning to stay together a lifetime.

Q. The final area we want to consider is health care. Most large companies let their employees add domestic partners to their health insurance so why is this a financial matter differ for those who are living together?

ELLIE: The main reason is that while benefits to spouses are tax free, the IRS doesn’t recognize domestic partners. Consequently, the benefits provided to your partner are treated as taxable income. This is a huge tax hit which makes extending group coverage to your partner more expensive than just buying an individual policy. If you’re both employed, then keep your separate plans, unless you get married. If your partner is a legal dependant, then that would be the other exception. However, getting legal dependency declared is very difficult. You should draw up a durable power of attorney for health care and make sure you’ve drawn up advanced health care directives. Without one of these, hospitals and doctors don’t have to give you information about your mate.

Viewer Questions

Q. My girlfriend and I are getting real serious and thinking of living together or getting married. With so many things going on, Ellie, tell us where you can start when it comes to dealing with money before you live together. Submitted via online – Ted from Thomasville

ELLIE: The most important financial merger of your life requires hard work—but it’s worth it. COMMUNICATION is the key to dealing with money in marriage. According to a 2009 study conducted by California State University, 21% of couples fight over money daily or weekly. 10% fight monthly and 46% put on the gloves every few months. So start talking about money matters to include: expectations, budgets, long term planning, goals.

Q. My boyfriend and I decided not to live together before we get married. We’re engaged and have set a date for next spring. What steps should we take to make sure we start off on the right foot when it comes to our finances?

ELLIE: I think it’s critical for couples to get premarital counseling that specifically deals with money matters. Each partner comes to a marriage with different money management styles. For example, I was a born saver (big surprise) and my husband, who had a good work ethic from the time he was a child was a born spender. In fact, his money never say the inside of his pocket! Consequently, I recommend date nights should be set aside monthly (if not weekly) to regularly talk about your financial progress with your mate. Spouses-to-be who discuss their views of money and work together on how to use their financial resources may discover that they actually like the process.

Q. My parents argued about money so much it led to their divorce. What are some specific topics I should learn to talk about with my girlfriend before we make any kind of long term commitment? Greg submitted via facebook

ELLIE: There are some basic topics that all couples should cover as they talk about financial matters
• Long Term Financial Goals (buy a car, home, have kids, vacations)
• Spending Plan
• Saving Plan
• Retirement
• Debt Management
• Short Term Financial Goals (new furniture, trip to Europe)

Ellie Kay
America's Family Financial Expert (R)

The Top Do's and Don'ts for Tax Time

2011-01-23T14:40:00.000-08:00

Last week, the IRS issued a press release that the delayed returns, any returns including Schedule A (itemized deductions), the educator expense deduction or the tuition & fees deduction – will begin to be processed on Feb. 14 – Happy Valentines Day! This is good news because taxpayers didn’t know when their returns might be processed and rumor had it as late as the end of February. The delay followed the Dec 17 enactment of The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which extended a number of expiring provisions. So you can file now and the sooner you file, the sooner you will get that tax refund back, especially if you e-file and select direct deposit. I’ve been doing a lot of research on taxes this year and my best tips are listed below, courtesy ofhttp://www.TaxACT.com TaxACT Free Federal Edition, a free filing solution that quick, easy, and available to everyone.

DO:

• Do Get Organized Ahead of Time – I recommend my “Sixty Minute Tax Workout” where you whittle down the tax task a bit at a time. Get organized before you sit down by gathering all your W-2s, 1099s, and other tax documents.

• Do Get Smart – Familiarize yourself with the new tax law changes by going to IRS.gov and look at Publication 17, the first few pages summarize the major changes. You can also go to taxact.com/taxinfo.

• Do Ask Questions – It’s smart to ask for help when you don’t understand something about your return. Use the Answer Center in TaxACT, type in your question and get fast answers. Or, email your question for free.

• Do E-file – For the fastest refund (in as few as 8 days with direct deposit). Unlike paper filers, e-filers get an e-mail when the IRS has processed your return.

• Do Get it Free – Use a free tax preparation solution. I recommend TaxACT Free Federal Edition. You can print, prepare and e-file simple complex return absolutely free. TaxACT will guide you step by step through your return and all the tax law changes. Includes free tax help via e-mail. Even if your return won’t be processed by the IRS until February 14th, there’s no reason to wait. You can prepare and e-file with TaxACT now, and they will let you know when the IRS has processed your return.

• Do Pay What You Can – If you cannot pay your tax balance, then file and pay as much as you can by the April 18th deadline to avoid penalties and interest. Call the IRS to discuss payment options, including installments.

DON’T:

• Don’t Forget to Import – Save time and aggravation by importing key data from a PDF copy of last year’s return. If you have multiple W-2s, a 1099 or investment data, use the quick entry features available on TaxACT Free Federal Edition at taxact.com.

• Don’t Procrastinate – Although this year’s filing date is April 18, 2011, don’t procrastinate because rushing can = errors.

• Don’t Get a Cash Advance On Your Refund – When you can get your refund in as little as 8 days by e-filing and selecting direct deposit, it’s a dumb money move to pay all kinds of interest to get your cash a few days earlier. You need that extra money, don’t throw it away!

• Don’t pay more than $15 to e-file State Taxes – If your state charges income tax, then all your federal info transfer to your state when you use an online solution such as TaxACT. The federal solution is free and the state solution costs less than $15.

• Don’t Use A SmartPhone Application – TurboTax released a smartphone application for 1040EZ returns. When it comes to taxes, it’s not about saving time as much as it is about ensuring accuracy and getting the largest refund you possibly can. Spending the extra few minutes could mean a bigger refund or less taxes owed.

• Don’t Spend your Refund on Disneyland or a new iPad – Instead, use 50% of the refund to pay down credit card debt and the other 50% to build up your emergency fund. You may not get the mouse ears this year, but you’ll be in better financial shape!

Ellie Kay

America's Family Financial Expert (R)

Five Top Money Moves for 2011

2011-01-16T15:05:00.000-08:00

This week I'll be on over 25 television and radio stations talking about the Top Five Money Moves for 2011.

According to a recent survey, 40 to 45% of American adults make one or more resolutions each year. Among the top new year’s decisions are resolutions about weight loss, exercise, and money management or/ debt reduction. While a lot of people who make decisions during the new year do break them, research shows that making a decision to change is useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don't explicitly make resolutions.

If one of your resolutions involve getting fiscally fit, then there are five things individuals, couples and families should do every January, year in and year out, to help their financial picture. These five money moves will help you pay down debt, save more in your emergency fund and be prepared for possible financial setbacks in 2011. They include:

1) CUT COSTS ON FIXED EXPENSES – there are some expenses that people rarely check, but they could be missing out on hundreds of dollars of savings. For one thing, it’s important to call your homeowners insurance provider and ask about getting a better rate. Oftentimes, you don’t think about this policy because the bank may cover this premium and you put that renewal to the side—wrong answer. The other biggie in fixed expenses is auto insurance. If you drive less, in safer ways, and during safer times of the day you can save money on your car insurance. With Progressive’s Snapshot Discount you can save up to 30 percent. It’s currently available in select states so go see if it’s available where you live. A lot of these money savings tips are courtesy of Progressive Insurance, where you can compare rates with a local insurance agent or online at. It’s a good idea to look at the rates listed from different insurance providers because drivers who saved when switching to Progressive reported saving an average of over $500. Shopping around can add up big time! One final, quick tip to cut costs by shopping around, is for groceries. Go to www.couponmom.com where the site will tell you what’s on sale in your neighborhood, which items have coupons, double coupons and store coupons. Using this layered savings approach in the store helped our large family save hundreds of dollars a year on food.

2) COMPLETE TAXES EARLY & FREE– The sooner you file, the sooner you’ll get your refund. When you have your tax forms, do your “Sixty Minute Money Tax Workout”. I recommend TaxACT Free Edition has everything you need to prepare, print and e-file your federal return free. I’ve partnered with TaxACT because it guides you step by step through your return and guarantees your biggest refund. It’s fast, easy and even offers free help. Remember to e-file and choose direct deposit for the fastest refund. Go to TaxACT.com. And once you have that refund, put the money to smart use.

3) CATCH UP ON SAVINGS – In money moves one and two, you freed up extra money by cutting costs and getting your refund back early. I recommend that you take a hard look at your emergency fund. If you are a single income family, you should have twelve to fifteen months of living expenses in this fund. If you are a dual income family, you need six to nine months of living expenses. With unemployment hovering between 9% and 10% in early 2011, it’s important that you save for a rainy day. Use 50% of that tax refund and money saved from cutting fixed expenses to help build up your emergency fund. Then every time you save money on expenses, write a check or transfer those funds into this important account. It will become a habit and you’ll build that account up more quickly.

4) CUT DOWN DEBT – You took 50% of the money you gained from steps one and two and put it in your emergency fund—good job! Now it’s time to use the other 50% to pay down credit card debt and get started on the “snowball effect” of getting rid of consumer debt. This snowball plan works by paying off the credit card with the highest rate first. Then you take the payment you would have made on that first card and put it toward the next card on your list. Each time you pay off a card, you keep taking what would have been that minimum payments on paid off cards and put them toward the next credit card balance. By the time you get to your last few cards, you are paying 2, 3, 4 times the minimum payment, thus getting ahead of interest charges and paying your debt down more quickly.

5) CARE AND SHARE MORE – This is a good time of the year to map out a strategy to give more and get more out of your giving so that you can itemize your deductions. Go through closets and donate clothing and furniture to IRS- approved charities, but keep track of your donations. Ask charities for receipts. You usually get more for each item than you would selling it at a yard sale. Getting certified values for your donations is where a solution like TaxACT can also help. Remember, monetary donations and certain expenses for volunteering are also deductible.

Happy 2011

Ellie Kay

The Sixty Minute Money Workout

2011-01-04T20:52:00.000-08:00

Today's blog is a test: do my kids read my blog or not? For example, here's a pic of my son , from a few years ago, making a New Year's resolution to be more buff. He's now a senior, how long will it be before I'm forced to remove the photo.

According to a recent survey (Source: Auld Lang Syne) 40 to 45% of American make one or more resolutions each year. Among the top new year’s decisions are resolutions about weight loss, exercise, and money management or/ debt reduction.
The following shows how many of these resolutions are maintained as time goes on:
- past the first week: 75%
- past 2 weeks: 71%
- after one month: 64%
- after 6 months: 46%
While a lot of people who make decisions during the new year do break them, research shows that making a decision to change is useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don't explicitly make resolutions.
If you are wanting to make a decision to get fiscally fit in the new year, then take a look at my newest book, The Sixty Minute Money Workout (Waterbrook, 2011) Let’s go through each part of the workout:

Boundaries:
As people prepare for the workout, it’s important to establish boundaries, here are some of the things that you need to know before you begin.
First of all, people need to understand that you don’t have to be a couple in order to do the workout. You can do it by yourself, or with a trusted friend, or even a family member who isn’t your spouse if you are single. But whoever you do the workout with, it’s important to set some boundaries to prepare:
• no condescension or negativity
• no interrupting your workout partner when they are talking
• no name calling
• no throwing food - :-)
• start by saying one positive thing to each other
• end by saying one positive thing to each other
• create an environment that encourages comfort and success
• have a timer on hand
• Do the pretest to prepare you for the work. Each pretest will vary according to the chapter or topic you choose.

Part 1 - 5 Minutes - Make Up Your Mind Warm-Up
Here is where you set your timer for each section. When the timer goes off, then move on! In this section, you set the topic for the hour and begin with a "can do" attitude. It’s important to begin by saying or doing something positive. If you’re working out with a spouse, then begin by taking your spouses hands, looking into their eyes and saying something affirming.

Part 2 - 10 minutes - Strength Training
While step one was to start with affirming words and decide on your money topic, this next section is a time to write down goals on paper so that you will have a tangible and objective standard to work toward. Decide how you would like to see the topic resolved today, in six months and what the outcome of your goals will be in the long run. This gives you both a temporary focus (for today) and a long term focus (for the next few months) as well as a big world picture (for the long term.) Your goals will depend on your topic of the day. For example, if you are discussing a budget your goals might include: a) to set up a budget that is real and workable, b) to stay on that budget for the next six months in order to learn how to spend less than what you make, c) to have a budget become such a habit that it is a financial vehicle that will get your family out of consumer debt, help you pay for your kid’s college and fund your retirement.

Part 3 - 20 Minutes - Cardio Burn

In this step, you give feet to your goals. If you’re setting up a budget, then you write down the specifics and course of action for your topic of the day. This may not seem like a lot of time on this section, but realize that you may not get it resolved during the first workout. The key is to keep the discussion moving and work on what you can, whatever you missed, you can get the next time around. Go to my tool section for free online financial tools, http://elliekay.com/financial-resource-center.php

Part 4 - 20 Minutes - Taking Your Heart Rate
This is the point where you do any “work” that needs to be done after you’ve written a step by step plan from the previous section. For example, if you need to save money on your expenses in order to live on the new spending plan you set up, then you could spending this time on quick ways that will save you hundreds of dollars:

1) Save on Tax Preparation - Go to www.TaxAct.com in order to prepare and file your federal income tax return for free. This free software asks you all the right questions to make sure you are getting every deduction that you have coming your way.

2) Save on insurance – Go to www.progressive.com to compare auto insurance. It only takes a few minutes to get several quotes from different companies. You can save as much as $500 by shopping around.

3) Save on groceries – When you can combine sales, coupons, double coupons and store coupons, then you can save thousands of dollars every year on your grocery bill. We’ve saved over $160,000 in the last 20 years by doing this. Go to www.couponmom.com and enter your zip code they will show you what is on sale and what coupons match up with the sales items to get things for pennies or free.

4) Save with Social Media – By going to the www.facebook.com page of your favorite retailer or signing up to follow a beloved restaurant on www.twitter.com, your savings can add up to hundreds of dollars every year. Social media followers are often the first to know about limited offers or free items. For example, my college student daughter, in Chicago follows her favorite cupcake store and by saying the word of the day, she gets a $5 cupcake free. That’s a savings of $1865 every year! Somedays, she gives the cupcake away—so she saves and shares!

Part 5 - 5 Minutes - Congratulations Cool Down
The workout has gone by quickly and now the last 5 minutes are dedicated to the “Congratulations Cool Down.” End your workout and sit back, grab a glass of something cool to drink and reflect on all you've accomplished in just one hour! You started on a positive note and you’re going to end positive as well. Take this time to tell your partner one thing that you appreciate about today’s workout in order to end the discussion well.

Keep in mind that just as you don’t get physically buff in just one workout, your finances aren’t going to get in shape after the first try either. But after you and your mate have exercised with this money workout a half a dozen times you’ll find you are making progress that can revolutionize your finances in only an hour a week!

Ellie Kay
America's Family Financial Expert (R)

The Gift of Communication - Christmas Gifts that Keep Giving

2010-12-16T08:19:00.001-08:00

In my series on “Gifts that Keep on Giving” I’m reminded of my college daughter, Bunny, and the fun we had staying at the Drake hotel in Chicago on a business trip. I really miss seeing her and today’s gift is perfect for her and her friends, it’s the “gift of communication.” When she was little, she talked non stop and now that she’s grown, she still love to chat whenever possible!

In my work with families who are on a budget, I have found that many have had to rethink their cell phone plan. In an effort to pay the bills, they may have had to cancel a cell phone plan or in some cases, they don’t have the credit to establish that service. In my quest to find a great communication alternative, I came across a cool new partnership in prepaid plans. This year, if you want to give the gift of communication to a family who is on a budget or a struggling college student, you can do so through a prepaid phone from Boost and Virgin Mobile as well as prepaid mobile broadband with Virgin Mobile’s Broadband2Go plans.

This is a partnership that is easy for me to talk about because it really benefits people who are on a budget. Let’s face it, those who need to limit their expenses, still need the ability to have a cell phone or connect to the internet. Whether you are happily employed or unemployed, it’s important to be able to pursue work situations through the use of a cell phone and through broadband connectivity.

Prepaid cell phones:

I think that prepaid cell phones are perfect for those who might not otherwise be able to afford or have the credit to qualify for a contract plan. I’ve also found they are a good option for families who have members who routinely go over their traditional cell phone limits, sometimes costing their parents lots of dollars in extra charges each month. (Ahem, not that this has ever happened to the Kay family! All I will say is: the leaves were raked and the laundry was folded by penitent teens for the several weeks.)

Prepaid plans from companies like Boost and Virgin Mobile were created for consumers such as college students who want to be able to afford freedom and independence on a budget. However, economics aside, cell phone plans such as the Virgin Mobile $25 Beyond Talk plan or the Boost Mobile $50 Unlimited plan keep both students and their parents happy. Parents appreciate being able to keep in contact with their kids, especially if there's an emergency. On the other hand, students, many of whom spend little time in their dorm rooms or apartments, like the flexibility and convenience of not having check if they’ve gone over their monthly allotted minutes.

Prepaid Mobile Broadband:
Another great gift of communication involves giving the gift of connectivity! Whether you are searching for a job, or the best price on a new pair of jeans, you need to be connected. Virgin Mobile’s Broadband2Go plans offer unlimited 3G, nationwide internet access for $40 a month with no contract. The Virgin Mobile MiFi device allows up 5 wireless enabled devices to connect at one time, so college roommates can share their gift all year long & divide the costs among themselves.

When you are selecting your gifts this year, be purposeful and try to give a gift that will keep on giving the whole year through. And Bunny, keep on calling, I love to hear how those finals are coming along!

Merry Christmas!
Ellie Kay
America’s Family Financial Expert ®

Give the Gift of Education

2010-12-05T15:19:00.000-08:00

Christmas is one of my most favorite times of the year and this year, more people are getting into the idea of gifting than last year. In fact, according to a recent survey, 73% of consumers say that they will spend the same as last year during the fourth quarter, and 18% of consumers report that they will spend more. So spending is back up again, but I think that strategic spending is more important now than ever.
It’s important for consumers to be careful and thoughtful in the decisions they make when it comes to buying gifts this holiday. That’s why I’ve partnered with Upromise to tell my friends about the gift of education. So while parents and grandparents (even favorite aunties) are splurging on kids, why not work on saving for kids, too by providing for that cute kid’s college education?

You can open a 529 account for any beneficiary, or gift money using Ugift into an Upromise Investments 529 plan. If you don’t already have a 529 plan, then you are really missing out because the contributions can benefit from tax deferred growth. Also, gifting into one of these plans this time of year also means that you can possibly take advantage of year end tax deductions. Just check to see if you are eligible for states income tax deductions or credits for saving for college. For example, parents and grandparents can contribute as much as $13,000 ($26,000 if married filing jointly) into a 529 plan without incurring gift taxes. A special rule allows married couples to gift up to $130,000 ($65,000 if single) as long as no additional gifts are made to that beneficiary over a five year period. This also applies to recent college grads who might appreciate a meaningful gift to help pay a student loan payment. Plus, you don’t have to be a parent or grandparent to participate, other friends and family can make contributions to your child’s 529 plan by gifting money or by buying gifts, which brings me to my next point—how to save money by spending money.

Most people, know about Upromise from signing up for their buying program. I’ve been participating for years by going to Upromise.com and then purchasing through participating online retailers. These are stores where I would shop anyway and I get anywhere from 1% to 25% back for the purchases I make. And our family isn’t the only one doing this. Last year, during the holiday season Upromise members received $12 million in college savings rewards from eligible holiday spending. Because membership is free and members have collectively earned $575 million in college savings from purchasing items online or even by buying gas or groceries. I book a lot of travel for my business and often find myself eating out—all these are also included toward my children’s 529 plans.

So consider giving the gift of education to a child you love—either by saving or spending, and the world will be a much smarter place!

Happy Holidays!

Ellie Kay
America’s Family Financial Expert ®
www.elliekay.com

Gift Cards and the New Card Act

2010-11-30T17:35:00.001-08:00

Christmas past, Christmas present and Christmas future! I love looking back at holiday pix when my babies were babies, that's part of the fun of the season.

Recently, I was on ABC NEWS, talking about the fact that for the past three Christmas seasons, the present at the top of most people’s list is the gift card. While recent surveys indicate that people love to give and get gift cards, this year, gift cards are not just for those who are short on time or scrambling for ideas. In a post recession economy, gift cards can help some families make ends meet for months to come. This year, there’s good news for those in the market for gift cards, the Credit Card Accountability, Responsibility and Disclosure Act enacted last year has imposed new restrictions on gift cards so they are more consumer friendly.

Understanding the new CARD Act rules will help you make the best selection when purchasing gift cards. First of all, there are different kinds of gift cards, so it's important to know the options and how to you decide which card to buy. There are basically two kinds of gift cards and they each have had their advantages as well as drawbacks. The credit card or bank issued cards have the advantage that they can be used almost anywhere, but traditionally, they’ve been racked with fees, including a hefty purchase fee. The other kind of card is a retailer card, which may not have the fees attached, but the obvious disadvantage is that they can only be used at a specific retailer.

Billions Lost in Christmas Past

Over the past several years there have been billions of dollars lost each year. Consumer have lost out because of expiration dates on cards, fees that can deteriorate their worth, and lost or misplaced cards. Plus, some businesses went under and the customer who had not yet finished using their card was out of luck.

CARD Act is Helping With Christmas Present

The CARD Act changed the scene on behalf of the consumer when it comes to gift cards in several ways. For example, gift cards sold after Aug 22, 2010, can’t expire in less than five years. The law also bars issuers from charging an inactivity fee unless the card has been dormant for at least 12 months. In the past, some gift card issuers deducted inactivity fees after only 30 days. Issuers are also barred from charging a fee to replace a lost or stolen card.

Even though these restrictions can do away with a lot of unpleasant surprises, it’s not all smooth sailing, there are still some drawbacks that people should be aware of. The first area is purchase fees. If you decide to give someone a gift card from a credit card or bank, then you need to expect to pay more than the face value of the card. All eight of the general purpose cards included in Bankrate.com’s annual gift card survey charge between $3.95 and $6.95.

Why do credit card and bank issuers charge these fees? What kinds of services do they pay for?

They do pay for a variety of services, including the infrastructure that allows gift card holders to check their balances online. To contrast that with retail cards, none of the 46 retailers and restaurants in the Bankrate survey charge a purchase fee for their gift cards. Some retailers go even further, offering customers a gift or discount with the gift card purchase.

Beware the Ghost of Christmas Future

There are still areas where you should consider the future in purchasing your gift card. While the CARD Act restricts inactivity fees it doesn’t eliminate them. Consumers who allow them to languish for a year or longer could still get hit with fees, which are typically subtracted from the value of the card. Most of the general purpose cards in the Bankrate survey charge a $2.50 per month inactivity fee if the card isn’t used after 12 consecutive months. But this is primarily true for the credit card and bank based cards, not for retailers and restaurants.

Isn’t there suppose to be full disclosure at the point of sale for any kind of gift card and how do you decipher these disclosures, they can be really confusing?

All of these disclosures, as mandated by the CARD act are now suppose to be on the back of the gift card itself. The info is supposed to include fees, expiration dates, and a toll free number. In July, though, Congress agreed to extend the disclosure deadline until Jan 31, 2011 for gift cards produced before April 1st. So this holiday season consumers won’t get in on that part of the good deal. This is because Congress granted a reprieve. You would think it would be a good idea, especially during the holidays, to have full disclosure for the consumer. But the gift card industry would have had to destroy 100 million gift cards, which might have had a negative trickle down effect for the industry, and would have also made it virtually impossible for card manufacturer’s to meet retailers’ order in time for the holidays. So be aware of the fact that the cards you buy this holiday may have some outdated information on them. You can find the correct information through websites that the retailer will give you as well as signage and advertisements.

Ellie Kay
"America's Family Financial Expert" (R)

Thanksgiving Family Tradition - Our Thankful Tree

2010-11-12T07:57:00.000-08:00

There are some family traditions that are passed along from generation to generation. Then there are others that we establish for ourselves.

Well, it's time (again) for the 22nd annual "Kay Thankful Tree"!

Yes, for over two decades now, we have been collecting the following statement from our friends and family:

____________________(state your name) is thankful for __________________.

We print your message on a "leaf" and tape it on to our "Thankful Tree." At the beginning of November, the tree is bare, but as the season goes on, it gets full of your thanks. We then save each leaf and put it in an envelope marked 2010.

The photo here was our family featured in Woman's Day magazine from a decade ago. The photographer took 8 rolls of film just to get this one shot. There was an entire roll, where Joshua (the youngest) was missing and we didn't notice. We found him in the other room, playing with his army men because he was bored with the photo shoot.

We have leaves from way back when Daniel was thankful for his dinosaur, Philip was thankful for his red blankie, Bethany was thankful for flowers, Jonathan was thankful for his pacifier and Joshua was thankful for his sword!

So please don't forget to add what you (individually or as a family) are thankful for this year!

Ellie Kay

ABC NEWS - Q&A From Military Members & Families

2010-10-31T09:55:00.000-07:00

Here's a "Hero Shot" of hubby Bob and his F-4 Phantom, that he flew up until last year when a jet incident caused him to break his back. Thankfully, he is fully functional, but his injuries will not allow him to fly an ejection seat aircraft. The good news: he's gainfully employed flying "regular" airplanes and also the Global Hawk UAV (think the high tech airplane on Transformers).

We had a lot of questions when he had that accident and I speak with a lot of military members and their families who have questions about their lives and finances as well. Some of these fine people were on ABC News with me recently for a Q&A. Here's the recap for you to share with others you know who are in our armed forces. The questions that made it on ABC NEWS won a free copy of their choice of my books! But here are the answers to many more questions.

Q. Is SGLI enough insurance for families or do you need an additional supplemental insurance? From Melody O’Sullivan

ELLIE: SGLI is relatively cheap, term group life insurance that is offered to members of the military on active duty, in the ready reservists, members of the National Guard, members of the Commissioned Corps of the National Oceanic and Atmospheric Administration and the Public Health Service, cadets and midshipmen of the four service academies, and members of the Reserve Officer Training Corps. The insurance is also offered to spouses as well.
Servicemembers’ Group Life Insurance coverage is available in $50,000 increments up to the maximum of $400,000 for members of the military. The price for this insurance is very cheap, so it’s certainly a good value. But is it enough? If you are a young family with only one or two children, then it could be enough. But if you are a more senior servicemember with a lot of family members depending on you, then you might want to buy some term supplemental insurance. Remember that once you leave the military, SGLI is no longer available to you. So if you know you are going to separate in the next couple of years, then it would be a good idea to get a modest supplemental life insurance policy in place.

Q. As a “Key Spouse” how do we encourage other spouses to take advantage of all the benefits the military has to offer? From Starr Vuchetich

ELLIE: Thank you, Starr, for your volunteer work with other spouses, you are to be commended as should ALL our Key Spouses! There’s an old saying that “you can lead a horse to water, but you can’t make it drink.” Your job, as a key spouse, is a difficult one. You know the benefit of taking advantage of the services and perks available to military families, but others have to decide for themselves. The best thing you can do is to lead those spouses by example and express the benefits you are personally receiving from taking advantage of, such as free childcare for volunteering, free financial counseling, free oil changes (or whatever program your base offers), as well as the many benefits listed at sites such as www.militaryonesource.com or www.ourmilitary.mil

Q. How did you arrange childcare during deployments with very little money and how did you maintain sanity with so many small children on a tight budget?
From Jana Baez

ELLIE: I do remember what an incredible challenge it was when all my kids were so young and my husband was gone for weeks (or months) on end. But the first thing I did was plug into all the “free babysitting” I could get. Go to the Family Support Center and see if they offer free childcare for those who volunteer. I also got on site childcare provided when I attended Army Family Team Building classes, so sometimes you can get a break and learn something, too. Don’t forget the community outside of the base gates, either. There are a number of churches, community centers and MOPS (Mothers of Preschoolers) groups that try to support military families during deployments by offering free “Mother’s Day Out” programs or onsite classes where childcare is provided. Last, but not least, form a babysitting co-op, where you get tickets for every child you babysit for every hour. You can “redeem” your tickets with other co-op members and it serves as a way to escape for a while as well as a playgroup when you are watching other children.

Q. How does one begin a business without acquiring debt?
From Chana Montgomery

ELLIE: In the case of a military family, you need to start a business that is completely portable and can move with you. It’s important to select a homebased business that requires little initial investment and will still yield an income to keep you in the black. Do your research and talk to a mentor at SCORE.org where you can get free business counseling in your desired field. If you follow your passion, you’ll be far more likely to succeed. Just email assistant@elliekay.com and ask for the “Homemade Business” file, we’ll send it to you for free as it contains all the information you need to be successful in your endeavor.

Q. When you have extra income flowing in, is it better to work on paying off debts or continue paying normal payments and stash the money into savings?
From Emily Haffner

ELLIE: The answer is “both” if you pay even $5 to $10 more on your credit card minimums, you’ll improve your FICO score and begin to pay down that debt. But you also need a safety net in savings just in case your car breaks down and your husband is downrange and not home to fix it. The optimum savings goal is to have 12 months worth of living expenses. But even if you just save up to 3 months (and keep adding to it little by little) you’ll be better prepared for rainy days.

Q. I have three children and I wanted to know if I should apply the new 9-11 GI Bill to the first child (not knowing how long it will be around) or should I split it up among the children.
Stephanie Berg

ELLIE: Because the Post 911 GI bill is relatively new, and because we don't know how Congress will vote to continue this practice, it may be best to take the money while you can. It's still important to have your child go to the most affordable school possible, get scholarships and other means of payment. But go ahead and use as much of that GI Bill money as you can to pay what you can on your oldest child's college. In the meantime, the money you would have put toward his/her college (from your own 529 plan or other savings vehicle) put into another college fund for your other two children.

By funding more on the other two children's accounts, your money will continue to grow as the market continues to rebound. But in the meantime, you will also be able to take advantage of the current bill. Do not give your first child his/her saved "college money." Instead, put whatever you have saved toward the other two. You can tell your oldest that his/her college money is coming in the form of the POST 9ll GI bill. Because you don't want the youngest two to be stuck with student loan debt that the oldest child did not have to accrue.

Q. With limited funds, what should be the priorities for the best use of financial planning? Should I invest in the TSP (Thrift Savings Plan), IRA, life insurance or mutual funds? Major Anthony Smith

ELLIE: Once you’ve paid off your credit cards and funded a 12 month savings account, then you are ready to take your investments to the next level. It will depend on your family size, retirement needs and current income. I do not recommend life insurance as a good investment tool, even though agents may point you toward that route since the commissions are significant. Better to max out your TSP benefit since those funds will still be available to you if you do not make the military your career for a twenty year retirement requirement. It’s also a good idea to get a ROTH IRA or regular IRA. Go to your Airman and Family Readiness center and ask for an appointment with a financial counselor. It’s free advice and the expert there can look at your entire financial picture to help you come up with the best method of investing. Or try the military friendly company, USAA, they help to fund a lot of military events and can offer good advice on mutual funds.

Q. Being that you moved many times during your military career and have many children, how did you present it to the children when you had to PCS (Permanent Change of Station)? From Kristie Fromer

ELLIE: This is the hard part of military life, Kristie, and thank you for your willingness to go through this. One of the advantages of having so many kids is that they were sure to have built in playmates wherever they went! When we told our kids they would have to leave their friends, we allowed them the freedom to grieve and be sad over leaving. But we were also positive about where we were going. We printed out materials about the new base and all the places we could visit and where we would go camping along the way. By focusing on the positive, while allowing them the freedom to express their feelings, we had healthy, adjusted kids and a well bonded family.

Q. If your auto is less than two years old, is it a good time to refinance? We retire in 2011 and will be buying a house wherever my husband starts his second career. Is this wise to do before buying a house? From Lisa McClain

ELLIE: Refinancing a car will cause a hit to your FICO score, but it can be a good idea in order to get you a lower interest rate. I offer two words of caution: 1) refi at least six months before you get a home loan in order to give your credit time to recover and 2) refi with payments that will end at the same time your original loan would have ended (otherwise, you're just paying interest over a longer period of time.) For example, if you have 3 years left on your car loan. Then refi the loan for 3 years (instead of 4 or 5).

Thank you for your service, military members and your families. Remember three things:

America loves you
We support you
And together we'll be all right!

Ellie Kay
America's Military Family Expert (TM)

On ABC NEWS - Heroes at Home Corner - Military Financial Issues

2010-10-24T14:52:00.000-07:00

I'm going to fly in one of those jets one of these days! My work with military money matters makes me concerned with recent bad news for military members and their families.

I was on ABC News this week talking about this survey. And here's the short version of what we discussed:

The Investor Education Foundation of the Financial Industry Regulatory Authority developed a military survey in consultation with the Treasury Department and the President’s Advisory Council on Financial Literacy. Their findings were alarming in that there is a significant increase in consumer debt among military members with more than one in four reporting a credit card debt load of more than $10,000.

Q. Ellie, you work extensively with military members in addressing their financial concerns, how bad is the problem?

A. The information that came out of this new survey is pretty sobering. The study focused on the financial capability of military personnel and found that while some in the armed forces are handling their finances fine, an alarming percentage aren’t doing so well. Debt is only one of the concerns that came out of the report, but it made it to the top of the list because the average military member has more consumer debt than the average American civilian.

Q. Why is debt more of an issue for service members than for civilians?

A. There are a number of reasons that account for this higher debt burden. For one thing, the survey found that military personnel and spouses are generally heavier users of credit cards than are civilians. And we all know that the more you use them, the more likely you are to be more heavily indebted to credit card issuers. In online polling of 700 current members of the U.S. armed services and 100 spouses of current members, more than one in four respondents reported having more than $10,000 in credit card debt. Ten percent of respondents said they were carrying $20,000 or more in such debt. The percentage of those who made minimum credit card payments, took out cash advances and paid fees was highest among families of enlisted personnel and junior noncommissioned officers.

Q. I can certainly appreciate the concern over this increased debt load, but what are some of the reasons that military families have more debt besides the fact that they use their cards more? After all, they do get a regular paycheck, military housing and health care.

A. Even though active duty troops can count on a regular paycheck from Uncle Sam, many military families face the same pressures affecting other Americans during this downturn: Spouses are having difficulty finding work, and mounting debts and foreclosures are forcing them out of rental homes. For those who are stationed overseas those factors are multiplied even more because in some countries spouses are not allowed to work on the economy. Also, when your loved one is deployed in harm’s way, there’s a greater tendency to overspend on comfort items for yourself and your children, for childcare and for eating out because you’re too tired or too depressed to cook. So military families are feeling the effects of our economy…and doubly hard in some cases.

Q. Most Americans I’ve talked to are concerned about their own finances in a post recession economy, but there seems to be a greater concern when military members have money problems. What are the long term implications regarding a lack of financial stability among service members?

A. Yes, you’re right, all of us are concerned about our money and how the economy is going, but our individual money problems usually don’t impact national security. But when you have those serving in the armed forces bogged down with the same issues, it is elevated to that disturbing level of impacting national security. It’s important that military personnel not be weighed down with money issues. Their financial stability is directly linked to their military readiness, according to studies by the Defense Department and the Government Accountability Office. Service members with severe financial problems can lose their security clearances, and bad money management also can result in sanctions, impair career advancement or lead to a discharge.

Q. We’ve talked about consumer debt, but what are some of the other problems that tend to plague military families that may not necessarily impact civilian families?

A. More than one-third of the military respondents said they had trouble keeping up with monthly expenses and bills. Many service members have gotten payday or auto title loans and these kinds of loans deteriorate their assets. Members of the military use payday loans three times as often as civilians, a separate Defense Department study found. With a payday loan, you borrow against a future paycheck. On an annualized basis, I’ve seen the interest rate on such loans range from 400 percent to more than 1,000 percent. Although there are many similarities in how they handle their money compared with the civilian population, military families have unique issues such as frequent deployments. Being in the military may be a secure job, but for many the paycheck is small. It’s not hard to end up with ‘more month than money,’ especially if you are young and have little experience of managing finances. And the military does have special challenges with frequent moves that always end up costing money.

Q. What is the Department of Defense doing in light of the recent financial crisis among military members?

A. The DOD has had financial counselors as part of each branch’s family support centers, but one or two people servicing the population of an entire base isn’t enough. Consequently, they have also created a financial readiness campaign because of the number of military personnel in debt and because so many were losing their security clearances. The Investor Education Foundation is also helping, conducting financial education forums here and abroad and awarding fellowships to military spouses to help them become accredited financial counselors so that they can help their peers. A soldier who is worried about finances is not a soldier who can focus 100 percent on his or her job. I think that when we put our national security in the hands of our fighting forces, then it’s in all our interests that they be able to do their jobs without being sidetracked by financial problems.

Lest you be discouraged by this recent survey--there is hope! Next blog, I'll answer questions from our men and women in the military (and their families), so stay tuned.

And to all those who serve in our armed forces, we thank you!

Ellie Kay

America's Family Financial Expert (R)

Healthy, Wealthy and Wise!

2010-10-15T12:39:00.000-07:00

With our son well into football season, I'm thinking about his health a lot more and the cost of health insurance as well.

According to the Healthcare Cost and Utilization Project, if you or your child broke a leg, you would incur costs in excess of $15,000. It’s no wonder that in my experience with mainstream American families, I’ve found that the greatest financial concern they have is how find affordable health insurance.

Be Healthy
The best protection against rising medical costs is still prevention. My friend, Danna Demetre, has a is a fabulous health program for men and women of all ages. Using a support system that incorporates accountability, balanced eating, and exercise plans, this approach to health provides the opportunity to change your life, not only physically but spiritually and emotionally.

A healthy lifestyle can also have other advantages. Many health insurance companies offer a refund on an annual premium if the insured can prove that they have attended a health and fitness center three times a week.

Be Wealthy
There’s no need to pay more than necessary for health insurance. Compare plans and prices by going to a non-intrusive site such as www.Ehealthinsurance.com . It’s possible to get a relatively anonymous quote instantly without the intrusion of a salesperson calling your home or office. It’s also a good place to compare plans by remembering that you shouldn’t buy what you don’t need. For example, if you do not need maternity benefits, eliminate them from the plan you choose.

If you can consider a higher deductible, then the money saved on premiums could go into a Health Savings Account (HSA), which is basically a health insurance policy you can bank on. When an HSA-eligible policy is purchased in conjunction with an HSA account, then the Health Savings Account is funded with pre-tax dollars, and taxable income is reduced at the same time. The money in this account is used, tax-free, to fund healthcare related costs including prescriptions, insurance deductibles and over the counter medications. The money that is not used in this account is rolled over from year to year and can serve as a retirement plan.
You do not have to insure all family members on the same policy. If there’s an employee benefit in a group plan, it doesn’t mean all family members have to be covered on the same plan. An average family can save as much as $2500 a year by pulling family members out of pricey group plans and purchasing individual health insurance. The exception to this would be if the family member has a pre-existing condition (such as asthma, a heart condition, high cholesterol, etc) that might be temporarily or permanently excluded in an individual plan. In that case, it would be better to pay the higher premium in order to keep the comprehensive coverage consistent.

Be Wise
Know the difference between health insurance and discount health or medical “cards.” According to the Coalition Against Insurance Fraud, many companies are selling so-called discount health cards to consumers seeking affordable healthcare. Usually for a monthly fee, the cards claim to save subscribers money by offering discounts on physician visits, hospital stays, prescription drugs, dental work, eye care and other treatment. The CAIF says that, “Discount health cards are spreading rapidly. Many may offer valuable, money-saving benefits for people without health insurance. But these cards can also be confusing, because they are not insurance. You still must pay the medical bills yourself. These cards simply offer lower prices on services that accept these discounts.” If you have a question about a policy or a card before you buy, go to www.insurancefraud.org to make sure you’re being wise in your choices.

Finally, for the 45.8 million uninsured Americans, who may feel they cannot afford health insurance, go to the non-profit arm of a previous site found at www.EHealthinsurance.org to see what services and benefits are available for your particular situation and in your state and community.

Of course, I think it's friends and family that truly make you wealthy and those who are happier generally have better health. So kiss your kids and take your girlfriend to lunch and enjoy!

Ellie Kay
America's Family Financial Expert (R)

Considering Debt Consolidation? BEWARE!

2010-10-05T16:06:00.000-07:00

You could be in debt 3 to 5 years LONGER if you go to the wrong debt consolidation company. On ABC NEWS, I answered the following questions from viewers, so it's wise to review these before you choose a firm!

Q. I’m at the point where I have $20,000 in consumer debt and I know I need to do something about it. I’ve been looking around for a company that will help me, but I want to know what red flags I should look for so that I can find one that is legitimate.

Drowning in Debt in Durango

ELLIE: Well there are quite a few red flags to look for. Stay away from them if they:
• Guarantee they can remove unsecured debt,
• Promise debts can be paid off at pennies on the dollar,
• Require substantial monthly service fees,
• Demand a percentage of your savings as payment,
• Advise you to stop making payments to your creditors,
• Say that creditors never sue consumers for non payment
• Promise that their system won’t hurt your credit record.

Q. We went to a debt relief company for an initial meeting and we’re not sure if we should go with them. They don’t charge an upfront fee, instead they charge a percentage of the amount they will save us. But we’re still going to have to pay. Is this good?

Samantha and Tommy from Riverside, CA via facebook

Ellie: In the past, it wasn’t necessarily good, because there wasn’t a regulation about what they claim they’ll save you and many companies inflated their estimates to get even more money from consumers than if they charged an up front fee. It was still a fee, but it was wrapped up in prettier paper so that the consumer thought they were better off. But there’s good news, under the new FTC rule, if the company bases its fees on a percentage of the amount it estimates you’ll save, it must also provide both the percentage and the estimated dollar amount that represents in writing.

Q. We are talking to a debt consolidation company and it’s all so confusing. We want to save money on our overall credit card bills, which cost us about $800 a month. But the company is telling us to make payments and save up—how much are we suppose to save?

Alton and Sharon from Oxford, NY via online contact form

ELLIE: Before the FTC rule, you didn’t really have a way of knowing but now you do. These companies usually ask you to make payments to a dedicated account. When a certain amount has been saved, they’ll go to your creditors and offer to pay off a percentage of the debt. You should ask the company: “How much will I need to save?” The new rule requires debt settlement firms to provide a reasonable estimate of the amount you’ll need to save before they’ll make an offer.

Q: When my brother and his wife set up a debt consolidation, they had him set up a fund that he made payments to. It turns out that the place that held the money was also in partnership with the debt company and he wasn’t allowed access to the money. Is this the way it is suppose to be done?

Audrey submitted via Online Contact Form

Ellie: No, it’s not suppose to be that way and under the new FTC rules this kind of holding or savings account will have closer regulation. The FTC now requires that the customer have full access to the funds, they must be held at a financial institution not associated with the debt consolidation firm and the customer would have the right to withdraw the money at any time.

Q. I was thinking of calling my creditors myself but my friends say I should let the debt consolidation company call them. Who is right?

Moriah Stephens from Allentown, PA

Ellie: In this case, I think you are the one on the right track. You should try to call your creditors yourself before hiring a debt settlement firm. You can sometimes develop your own workout plan because it is in the creditor’s best interest to help consumers pay off their bill.

Q. Where can I find a legitimate non-profit debt consolidation company?

Mike from Mechanicsville, VA via Ellie Kay’s blog

Ellie: The National Consumer Credit Counseling service is a non-profit organization that has thousands of partners across the county. Go to Nfcc.org to find an office near you.

Ellie Kay

America's Family Financial Expert (R)

Good News for Those Who Need Debt Consolidation!

2010-09-29T15:22:00.000-07:00

This week on ABC NEWS, I was able to share GOOD NEWS for those who are in need of help!

Consumers in a post recession economy are easy prey for advertisements that claim their company can reduce your debt by 50% or more in just a few months. Thousands of those who have been battered by the recession have succumbed to the ads and dialed the toll free numbers featured in these ads. They’ve also signed up for debt-relief services, often at considerable expense. Sadly, many of these consumers have ended up even deeper in debt than before they made the phone call. Today, let's look at the facts.

Q. First of all, how bad is the situation among debt relief agencies—are most of those firms out to take advantage of consumers?

ELLIE: The situation is pretty bleak, the Better Business Bureau reports more than 3500 complaints about debt-relief companies since the beginning of the recession. Granted, it’s probably out of line to make gross generalizations and say that all debt relief agencies are out to take advantage of a debt ridden consumer. There are some out there that are doing a good job with minimal fees attached. But unfortunately, there are many more that are adding to the debt woes of those they say they are trying to “help.”

Q. Would you say that the debt consolidation industry has thrived during a down economy?

ELLIE: Absolutely, it’s one of those industries that tends to do very well during financially challenging times. All of the sudden, people can’t pay their bills and they hear about others who have gone to a credit union or a debt consolidation company that has combined their debt in order to reduce monthly payments. But I believe, personally, that this industry, which tends to be opportunistic at best---is about to see a major change.

Q. A rule approved by the Federal Trade Commission last week will make it much harder for debt settlement companies to make a living. How does this FTC ruling help consumers?

ELLIE: It’s primarily wrapped up in the way that debt consolidation companies can advertise. No longer can they promise to “wipe away your debt” or “reduce it by 50%.” These dubious claims about their success rates are coming under close scrutiny. But even more importantly, the rule will prevent them from charging upfront fees for their services, which is expected to put a lot of debt-settlement companies out of business.

Q. Do you think it’s a good thing that many of these debt settlement companies could go under?

ELLIE: Yes! As a financial expert for the last 20 years, I’ve seen a lot of businesses that are out to stick it to the consumer. I’m all about helping families get out of debt and in my opinion, the majority of these companies are adding so many fees, that a lot of the people I’ve talked to are actually in debt 3 to 5 years LONGER after going to these kinds of companies. It’s been a wild, wild west for debt settlement and it’s about time the sheriff showed up and put some of those guys out of business.

Q. But the problem is greater than just dealing with the debt settlement firms, right? Aren’t there other companies that contribute to this problem and what is the FTC doing about them?

ELLIE: Excellent point, and I’m glad you brought it up. There are others that contribute to the issue and the FTC is cracking down on those companies as well. For example, there have been marketing agencies that earn big commissions for signing up as many customers for debt settlements as they can. These businesses have no interest in determining whether consumers are good candidates for debt settlement—they are just going after the bucks. In fact, many of those who signed up for debt settlement end up in Chapter 7 bankruptcy.

Q. It almost sounds as if there are no good options when it comes to debt settlement—are there any “good guys” out there in the wild, wild west? Is debt settlement ever a good idea?

ELLIE: There are legitimate companies that don’t charge an upfront fee and they offer full disclosure about what they can and cannot do for the consumer. You can go to the National Foundation for Credit Counseling, a non-profit organziation that can direct you. There are consumers out there who have large credit card balances, need debt consolidation and are not good candidates for bankruptcy. In fact, a 2005 bankruptcy reform law created a “means test” that has made it more difficult for some individuals to file for Chapter 7 bankruptcy. And a bankruptcy filing will stay on your credit report for 10 years, which could make it difficult for you to get a job, particularly one that requires a security clearance.

Q. So, how to you find a company that can truly help consolidate your debt without taking advantage of your difficult situation?

ELLIE: The key is to ask them the right questions such as:
“What’s your success rate and what percentage of people drop out of your program?”
Before the FTC rule came into play, companies could cherry pick examples of successful customers to inflate their results. But now if the company claims it can reduce your debt by a certain percentage—for example 40% to 60%--then the consumer has the right to ask for objective evidence to support those claims. If they can’t provide the information, then they probably belong to the unscrupulous crowd.

Q. What are some other questions consumers should ask?

ELLIE: Besides asking about their success rate, the next most important question is: “How much will it cost, and how long will it take to settle my debts?” The biggest misconception that people have about debt settlement is they’ll get a service in exchange for an advance payment. Most of them do not do that. In fact, the new FTC rule now bars debt settlement firms from collecting any money until they’ve settled or reduced your debt. But you should still make sure you understand how much the service is going to cost and how long you’ll have to wait before you see results.

Ellie Kay
America's Family Financial Expert (R)

Your Questions about 401(k) Loans & Withdrawals

2010-09-24T09:58:00.000-07:00

On ABC News Now and KLOVE this past week, I answered YOUR questions!

Q. It seems like every other friend of mine is taking the loan option on their 401(k). How many people are doing this?

Samantha Jones from Pennsylvania
Submitted via twitter

ELLIE: The second quarter report we talked about earlier also noted an increase in 401(k) loans. If you want to go the loan route, you need to know that workers are required to exhaust all other sources of fund—including a 401(k) loan—before they can take a hardship withdrawal. During the past 12 months 11% of plan participants initiated a loan, which is up from 9% during the previous 12 month period. 22% of plan participants had outstanding loans during the second quarter vs 20% a year earlier.

Q. If you want to take a loan on your 401(k) what kind of a reason do you have to give?
James from Fort Worth, TX
Submitted via facebook

ELLIE: A loan option is not a hardship option. For a hardship, you have to have specific reasons that fall within a certain criteria established by the IRS and/or the company. But for a loan, you don’t have to give a reason. You can take up to $50,000 or 50% of the amount in your plan, as long as it is vested by company rules, whichever of these is less. Since you are required to take a loan before you can apply for a hardship, this means that you will have little to nothing left in that account by the time you are done raiding your 401(k).

Q. If you take a loan against your 401(k), then what kind of a percentage point do you have to pay when you pay it back?

ELLIE: Most plans charge 1 to 2 percent above prime, which means currently 401(k) loan rates are as low as 4.25%. Loan payments are deducted from your paycheck. You can still contribute to your 401(k) plan while you’re repaying the loan, so you don’t have the issue of lost opportunity, but you do have to pay that interest.

Q. Since taking out a loan on your 401(k) doesn’t impact your ability to contribute to the fund and since interest rates are so low right now, why shouldn’t we take out a loan for our son’s college education?

Stephanie from El Paso, TX
Submitted via online contact form

ELLIE: There are a number of reasons you should avoid a loan including the fact that it could leave a considerable and even permanent dent in your retirement plan. Most borrowers reduce their contributions or discontinue them so they’ll have enough money to make repayments—it’s just what happens. Also, if you’re laid off or quit your job, the entire balance become due, which could be a double whammy if you suddenly become unemployed. Most employers require repayment within 60 days of leaving a job.

Q. I may be losing my job and I have a loan on my 401(k). I’ve been told I have to pay it back and I don’t see how I can possibly do that. What will happen and what recourse do I have?

Ted Thompson from Denver, CO
Submitted via blog

ELLIE: So sorry to hear about your job situation. If you cannot repay the loan, it becomes a distribution, which means you’ll have to pay taxes on the money, plus a 10% penalty if your under 59 ½. You should go see a free credit counselor at nfcc.org in order to see about paying all your creditors while unemployed.

Q. I’m not real knowledgeable about investing and the stock market. Right now, I’ve been offered two different jobs and part of my consideration includes their respective 401(k) plans. How do I know if a 401(k) plan is any good?

Robert Kavanowsky
New Jersey

ELLIE: Your plan should offer a well diversified mix of low cost investment choices. An employer match is a plus because employees tend to save more when their company kicks in money. So check the amount they are offering on the match. Investment guidance and regular, personalized report cards to show you whether you’re on track are important parts of a great 401(k) plan. Look for a company that is holding the total fees in their plans to well below 1% of assets each year. It’s important for you to choose the managed portfolio in your plan that not only offers low cost index funds, but also suits your retirement plan. If you are a younger worker, under 30, then you might want to go with an aggressive growth fund that is heavily tilted toward stocks, but remember that it also has more risk associated with it. If you are over 55, then you will want to select a fund that is income heavy in order to assume less risk.

Q. How much of my salary should I be putting away each month?

David Johnson, Biloxi, MS

ELLIE: Probably more than you are socking away now! Most employees are saving 7% a year or less and employers that offer matching contributions typically kick in 3$ of pay. That isn’t enough. The old rule of saving 10% of your gross pay was designed in the days when ore people had access to traditional pensions and employer provided retirement savings. In today’s world, you’re pretty much on your own for retirement and should be putting away 15% of your gross salary, including any employer contributions. Workers are permitted to put up to $16,500 in retirement accounts in 2010 and those 50 and older can squirrel away an extra $5500 in catch up contributions. You should have about 11 times your annual salary, on top of Social Security benefits if you want to maintain your current standard of living. So if you make 50K, then you need to save 550K by the time you retire.

Ellie Kay

America's Family Financial Expert (R)

Raiders of the Lost 401(k) - Loans? Withdrawals? Good or Bad?

2010-09-20T14:56:00.001-07:00

Ellie was on ABC News and KLOVE discussing the attack facing 401(k) accounts.

The 401(k), which has long been known as the ticket to retirement for millions of Americans is under attack from within and has taken a hit in recent years. In the second quarter of this year, a record 2.2% of participants in 401(k) plans took hardship withdrawals from their savings, which is up 2% from the same figures available a year ago. What is the long term impact of raiding your 401(k)?

Q. The news about early withdrawals on 401(k) plans is worrisome and yet thousands of participants are making these decisions in increasing numbers. Why do you think people are taking the early withdrawal?

ELLIE: I think that it is worrisome when you are borrowing on tomorrow’s retirement to handle today’s financial issues. But I think that the vast majority of those who are taking this money out are doing it to pay their bills. Some have had their hours cut or maybe a spouse has lost their jobs. Others have seen their kids college fund shrink to where they cannot afford to pay tuition for this year and they’re raiding their 401(k)s to pay that hefty bill. It’s just a sign of the hard economic times in which we are living. Our parents’ generation tended to work for someone who gave them a pension check for the rest of their lives. This means that current workers may not have been raised with the mindset that they control their own pensions and need to make funding their own retirements a priority. There’s an alarming trend that involves looking at 401(k) accounts as “now” money when it’s really “later” money, that really must be saved for later.

Q. Aren’t there certain stipulations associated with a 401(k) hardship withdrawal? How easy is it to get?

ELLIE: I think that the increased percentage of those who qualify for an early withdrawal indicate the financial strain that many families are facing because this kind of withdrawal is not easy to get. Under IRS guidelines, 401(k) administrators can grant hardship withdrawals only for specific reasons, including tuition payments, the purchase of a primary residence, unreimbursed medical bills and prevention of foreclosure.

Q. The IRS has guidelines for hardship withdrawals, can companies also impose additional limits on their employees?

ELLIE: Yes, and in most cases the company rules are even tougher than the IRS. So if that number of Americans managed to actually secure a 401(k) hardship withdrawal, then it is a huge indicator of how the financial difficulty that many Americans are currently experiencing in our present economy.

Q. Of all the reasons you mentioned for taking a withdrawal, what is the number one reason that participants are raiding their 401(k)?

ELLIE: The number one reason is to pay the mortgage in the face of a foreclosure. In the second quarter, nearly 10% of households with a mortgage were at least one payment behind on their loans, this is according to the Mortgage Bankers Association report that came out last week. Families who feel they may lose their homes often believe they have no choice but to tap their retirement savings. But many of those families have not yet exhausted all their resources. If it’s a short term problem, then talk with your mortgage lenders and see if they will suspend or lower your payments over the next three to six months until you are back on your feet again. They can also go to MakingHomeAffordable.gov, which is a federal government website with the goal of helping families by providing free HUD-approved counselors who can help you modify your mortgage. These are far better options than raiding your retirement fund.

Q. What about those families who are tapping into their 401(k) to pay tuition, you say this is a very bad money move, why?

ELLIE: As a mom with three kids who have graduated from college, two kids in college and two more headed toward college, I believe I can speak to the importance of getting that college degree. That having been said, I still think that those families who pay for tuition with their retirement dollars have their priorities wrong. There are other ways to pay for college, including taking a year off and working, going to a junior college for a couple of years, getting funds through an internship or work/study program or even getting a loan. You can get a loan to fund college but you can’t get a loan to fund your retirement. I never think it’s wise to borrow on your own future to pay for your child’s short term goal.

Q. What are some of the taxes and other penalties that arise when you take a hardship withdrawal?

ELLIE: These taxes and penalties are the main reason I say that it’s not a good idea to raid your 401(k) and one of the primary reasons is that, depending on your tax bracket, you could end up giving a third or more of your money to the IRS. You’ll have to pay income taxes on the entire amount of your withdrawal, at your ordinary income rate. And if you’re under 591/2, you’ll also have to pay a 10% early withdrawal penalty. Since the average age of those who took the hardship withdrawal in the second quarter was between the ages of 35 and 55, this tells us that most workers who took the cash are paying the penalty!

Q. You also say that there is an intrinsic “opportunity cost” that arises at the time of withdrawal, what is this cost?

ELLIE: When you take a hardship withdrawal, you’re prohibited from contributing to your 401(K) PLAN FOR SIX MONTHS! That means you’ll miss out on any investment gains you could hae earned by contributing during that period. You’ll also miss out on the company match, which is a guaranteed return on your investment and depending on the match, it’s usually much more than what you can earn in the market if you made your own investment. For example, if your company matches 50% of what you put into the account, you just won’t find another investment out there where you would get a 50% return on the money you put into that investment. So there’s a double jeopardy penalty associated with early withdrawal. You’ll pay for it now and you’ll pay for it later---then at retirement, you’ll pay for it all over again because you won’t have that money in the account.

Q. What about the fact that you can deplete an asset that is off limit to creditors, how does this impact a participant?

ELLIE: While raiding an account to avoid bankruptcy or foreclosure is a well intentioned money move, it’s also foolish because if you end up in bankruptcy anyway, then you’ve passed up the benefit you have in the fact that most retirement accounts are protected under bankruptcy laws in most states. And when it comes to 401(k) accounts specifically, it’s important to know that when filing for bankruptcy protection, creditors will go after your assets to repay your debts but federal law protects your 401(k) from creditors.

Ellie Kay
America's Family Financial Expert (R)

Bail Your Kids Out of Debt? Marry a Slacker? Co-Sign A Loan? - Ellie Kay's Q&A

2010-09-13T10:20:00.000-07:00

Ellie was on ABC NEWS, and others stations across the country again this past week. All the following people who asked questions will get a free copy of The Little Book of Big Savings!

Here's her answers to your questions:

Q. Our son is only 20 and has $4,000 in credit card debt. He’s not able to pay and wants us to bail him out. I warned him about his credit cards because I made the same mistake when I was in my 20s and he didn’t listen to me. But I feel like a bad parent if I don’t help him out. What do you recommend?

Tim from New Mexico
Submitted via Facebook

ELLIE: Sorry to hear about your son's decisions, Tim. NO, you should NOT bail him out. It sets a precedence and you'll have to do it again (or do it for other kids, friends or family members). You can come alongside him and help develop a recovery plan. Or, offer to go with him to a free financial counsling center. Go to my free tools and click onto the section about consumer debt for more help. Your love for your son is unconditional, but your money is conditional. He made his own choices, now he has to deal with the consequences. You'll support him emotionally, but you won't fund his mistakes.

Q. Our daughter has a used car that we bought her when she was 18. She’s now 22 and newly graduated with a $30,000 a year job. She has to pay rent, insurance and all her living expenses and wants to buy another car. The one she has now runs just fine, but since she got a new job she wants a new car. However, we would have to cosign on it, what do you think?

Christine Thomason, Minneapolis
Submitted via Facebook

ELLIE: Congrats, Christine! You raised a baby girl who not only graduated from college, but also found a good job right away--well done! Now, the next step is to help her learn delayed gratification. She WANTS a new car, she doesn't need one. The fact that she needs a co-signer indicates the bank does not consider her a credit worthy risk--neither should you. Instead, encourage her to set aside $350 to $500 per month (whatever her car payment would be) for a year. Then, she can sell her existing car, buy another nice USED car and pay cash. If she saves this way for another year, she can sell the 2nd car for a nicer used car (using her saved cash) and still pay cash. This way, she's driving her "dream car" for free with NO car payments!

Q. We have two kids that are 14 and 16 and are on competitive basketball teams. They take a bus two to three times a week to tournaments and other competitions. We have to pay for their meals on the road and they are burning through our cash constantly. They’ll spend $15 or more (each) for a fast food meal and we’re going broke. Is there a way to motivate them to cut back on how much they spend?

Thomas Evers, New York
Submitted via email

ELLIE: Thomas you've found yourself in the place where you are getting played by your kids. I know what it's like, I've found myself asking: "How did I get here?" when it comes to my teens running over me with their personal agendas. It's time to regain your lost ground and be the dad. Tell your kids that you are putting them on a food budget and they will now have $10 (each) to spend on fast food. If they were eating in a nice, sit down restaurant, it would be different. But they're not. Tell them if $10 is not enough, they can bring a sack lunch on road trips or pay the extra expense with their own money. Either way, they're not going to starve and you won't go broke.

Q. Our oldest daughter is suppose to get married in December. She is 24 with a good job and her fiancée is 30, has a degree in electrical engineering but doesn’t really have a job. He drives a truck off and on. It’s spooky, because when I got married, it was a similar situation and we ended up divorcing because I was the main breadwinner and he couldn’t hold a job. I don’t want her to make the same mistake. Do you think a couple has a “right” to know about each other’s finances and attitude toward money and work before they get married?

Donna Michaels from Oklahoma City,
Submitted via blog

ELLIE: History has a way of repeating itself. There are so many red flags in this situation, that you are right to be concerned as a mom. First of all, your daughter needs to go to premarital counseling with her fiancee and stress with the counselor that they want an emphasis on financial issues. If her fiancee will not go, then I think she should postpone the wedding. A couple of facts are clear: he is well educated and underemployed. The reason might be something legitimate like "the economy" and counseling will make that clear. But the other reason could be that he's unmotivated when it comes to providing a living--in other words, he could be a slacker. So if your daughter wants to be the main breadwinner and face a life of living with a man who is underemployed, then keep the December wedding date. Otherwise, get the wisdom of a third party involved to determine the real reasons for his unemployment.

Please submit your questions and if I answer them in a blog, I'll send you a free copy of The Little Book of Big Savings!

Ellie Kay

America's Family Financial Expert (R)

What Should You Teach Your Three Year Old About Money?

2010-08-30T15:31:00.000-07:00

Here we have the world's cutest four year old, three year old and 7 month old! But what should they be learning about money right now?

So how do you raise a kid that owns his car, debt free, owes no credit card debt and has a 760 FICO score upon graduating from college (no student loan debt) at the tender age of 22? We've been able to raise a kid (or two or five) that are financially fit. We still have some at home that we're working on! But you can raise financially literate kids, too!

It starts with a "Fiscal Report Card" and checking off what they need to know at various ages. Here's a partial report card you can review and if you want the full version (for free) just email assistant@elliekay.com and put "Fiscal Report Card" in the subject line.

Youngsters

Age 2 to 4
• Picks up toys cheerfully
• Is on a schedule for sleep, play, and work (or school)

Age 4 to 6
• Makes bed in a basic way (not necessarily neat)
• Picks up room regularly
• Brings clothes to hamper
• Knows how to set and clear the table
• Knows how to take out the trash

Middlers

Ages 7 to 10
• Knows how to sort laundry into whites, coloreds and darks
• Can fold laundry and put it in everyone's room
• Is given an allowance
• Has a savings account at home and at a bank
• Manages a fun kid budget (restaurant, zoo, amusement park, etc)

Ages 11 to 12
• Begins to do additional "jobs" for hire within the home and occasionally for friends or family.
• Has a savings account with at least $200 to $250 in it.
• Is learning the meaning of delayed gratification
• Can save up for half of a larger ticket item they want (bike, skates, video game, etc)
• Is regularly contributing to a community organization either through volunteer hours or donating goods (clothing, toys, money)

Teens

Ages 13 to 15
• Can manage and balance their own checkbook with supervision
• Has enough in savings to take out $200 to $300 to start a mutual fund
• Is able to do outside jobs for hire among approved "employers" in the neighborhood
• Regularly pays for outings (movies, theme parks, etc)
• Is saving for a vehicle
• Is aware of the fact their grades in high school will impact their ability to get into college and earn scholarships for college

Age 16 to 20• Can balance a checkbook without supervision
• Has an additional credit card (on parents account) and can use it responsibly
• Can manage and balance a clothing budget and personal financial budget
• Regularly works inside and outside of the home during breaks from school
• Has paid for 1/3 to 1/2 of the cost of their car
• Maintains a good GPA (or what they are capable of)
• Has a regular volunteer position (hospital, coaching, church involvement, etc)
• Can use social media to learn ways to save money

What are you doing with your kids that is working? Let me hear from you!

Ellie Kay
America's Family Financial Expert (R)

Atonement - How to Keep Your Kids from Making the Same Mistakes You Made

2010-08-15T16:05:00.000-07:00

Can you atone for the financial mistakes you made and keep your kids from making the same errors? This week in national media, I'm talking about how to help your kids make right financial choices. Here's my main talking points.

Statistics indicate that the majority of high school graduates cannot pass a basic financial literacy test and end up accruing $3800 in consumer debt in college. In fact, a 2010 American Express survey of parents with children between the ages 6-16 revealed that:

• 71% of parents say their children understand we are in a recession.
• 91% of parents say they are committed to instilling lessons of financial responsibility upon their children, with 62% giving their children a weekly allowance.
• One in five children (20%) has indicated to a parent that "maybe we shouldn't buy that due to the recession."

Q. Ellie, in a day where foreclosures abound and consumer debt is at an all time high, there are many parents who are watching who want to help their kids avoid the mistakes they made. Have you ever made any financial mistakes?

ELLIE: Yes, I’ve “been there/done that” and have the t-shirt to prove it. Our family had 40K in credit card debt when we were first married even though my husband had a good job. There were a couple of weeks when we didn’t have money for groceries, things were so bad. We were able to change our ways and became financially healthy and we don’t want our kids to make the same errors we did.

Q. Why do parents need to take responsibility for teaching our kids good money management, aren’t there new financial literacy programs, such as Jumpstart, that are making a difference?

ELLIE: I’ve spoken at Jumpstart conventions and they are a fantastic organization, but these programs aren’t available in every school and it’s up to parents to take that responsibility. In fact, I think that one of the greatest things we can do for our kids is to teach them about money management, something they don’t learn in the classroom. Since the number one reason cited in divorce is “arguments over money” teaching our kids to be financially literate can even help them in their future relationships.

If they don’t have to worry about debt, they know how to manage a budget and they learn smart ways to save money, then we’ve given them the best gift possible. We all know that kids learn most about how to manage money from their parents. And parents have a huge opportunity to teach kids healthy money management habits at an early age so they don’t make the same mistakes we made.

Q. What are your favorite ways to give your kids financial responsibilities without losing control?

ELLIE: There are several options out there for parents looking to stay in control of family spending while still extending financial empowerment to their teens and young adults. One of the things we’ve done is to teach our kids from a young age that if they “borrow” money from us, they pay it back at their next allowance, thus developing the habit of not carrying a balance from month to month. This concept is most closely identified with the Charge Cards that we have with American Express. In my work with their consumer education area, I decided to add additional cards with custom limits to our own account that is in the children’s name so we can teach them about the smart use of plastic and they can never spend more than the limits we’ve placed on the card. One of the reasons I believe in a charge card is that you have to pay it off at the end of each month. These cards are on the parents' account, not the teens, but we can go online and see how they spend the money and we can also set limits for each additional card. Once they turn 18, these cards, while still under our account, can be also used to develop our child’s FICO score.

Q. What are some of your favorite money management tactics?

ELLIE: One of my favorite money management tactics is to teach kids the art of managing an allowance. By getting an allowance, kids learn to manage their own money while they are still in our house and have the freedom to fail under our safety net. We teach them to give, save and spend smart. We’ve also used the tactic of a “Fun Kid Budget” where we set aside a certain amount for trips to the movies, zoo or an amusement park. They manage the money we’ve given them for the fun outing and the key is: they get to keep what they don’t spend. As they get older and become teens, their budgets expand to include a school supply budget, clothing allowance and a gasoline budget. A great option is to put their designated amount on a American Express PASS , which is a prepaid, reloadable card that once again, we control. That way, we don’t have to worry about them taking cash to the mall or using our debit card and the funds can be replaced if the card is lost or stolen. It’s like driver’s ed for the teen’s wallet but parents are in the driver’s seat.

Q. You have a “Family 401(k)” how does that work and what age do you start this kind of savings program with your children?

ELLIE: A “Family 401(k)” is a program where our kids have to earn half of the money for a large ticket item that they want such as a bike, videogame, roller blades, skateboards, etc. It may take months for them to earn their half, but once they’ve earned it and purchased the item, they take far better care of it than if we just bought it for them outright. They worked hard to earn their half so they’re going to make sure that videogame doesn’t get scratched and that they don’t leave their bike out in the rain. They can start this program as young as 6 or 7, depending upon the maturity of the child and their math skills. I remember our daughter, Bethany, saving for 8 months to get an American Girl doll, she was only seven years old but she was so proud of it and took such good care of it that it’s still in good shape and she’s now 20 years old!

Q. How can activities like back to school shopping help parents teach kids about money management?

ELLIE: A recent survey that examines consumer back to school spending intentions, notes that 39 percent of Americans plan to spend more on back to school shopping this year than in 2009, yet the majority (63%) say they will have a set budget and virtually all parents (94%) say they will look for ways to be resourceful and stretch their dollars.

I come alongside my kids and teach them how to compare prices, recognize quality and shop the sales, even using a coupon on some of these items. For our teens, we let them use our smartphone while in the mall to local coupons and the best deals that are accessed on the phone and used at the register. For example, retailmenot.com will list coupon codes and special deals. The fact that we’re using their “language” which is technology drives the financial lesson home in an upbeat and lasting way.

One of the other things we do is to teach them that “we pay for the item but you pay for the brand.” So if my son wants the latest Air Jordans, then we tell him we’ll pay $50 for the tennis shoes and he pays the additional $70 (for a total of $120) for the brand. It makes them realize what’s a need and what’s a splurge, then they can decide if it’s worth it to spend their own hard earned money on a brand.

If we can help our kids do better, then you can, too!

Ellie Kay
America's Family Financial Expert (R)

Red, White and Scammed - Part II- Answering Your Questions

2010-08-12T20:33:00.000-07:00

Here's a blast from the past--when our children were little & white tights were in!

This is part two of a series that is an effort to help military families. I've been on ABC News and KLOVE these past two weeks, answering your questions.

Here's a transcript for those of you who asked--Be sure to pass this link along to your military friends!

Q. Ellie, you came to our Army base to speak last November and I think that your message really helped me get through my husband’s deployment. Thank you for the work you are doing with military families. I did have a question about ordering items online. You showed us how to pay 40% less by using some websites, but how do I know if the website is legitimate?

Steph from Rothenburg, Germany
Submitted via online contact form

ELLIE: Steph, thanks for writing and thank you for what you do as a military family member, I admire you so much and know it’s a hard job! To avoid getting scammed online, make sure that you never respond to an email inquiry, but you find the site yourself on your own search. Then, go to BBB.org to make sure they aren’t listed and also check out the FTC.gov, plus the Internet Crime Complaint Center at IC3.gov, to investigate complaints against the company.

Q. I’m 19 and have been a soldier for 18 months. There are quite a few of my friends who regularly go to the payday loan business that is right outside our base. I keep telling them that they are losing a lot of money by getting a pay advance, but they say the interest rates are low and it’s no big deal. What do you think?

"Private Benjamin" from Ft Bragg
Submitted via Facebook

ELLIE: Private Benjamin, thx for your service and you’re the smart one. Tell your friends that some of these payday loan companies are charging as much as 500% interest. Even though the Defense Authorization Act of 2007 put a cap of 36% on interest loans to military members, many of these companies skirt the law by added exorbitant fees and calling the loans “revolving lines of credit” instead of payday loans in order to bypass the law.

Q. My husband’s hazardous duty pay was backlogged by red tape and didn’t arrive early enough for us to pay our bills. How am I supposed to pay things like our car loans while he is in the Middle East if I shouldn’t go a payday loan center?

Justine Long, Fort Drum, NY
Submitted via Facebook

ELLIE: In situations like yours, there are resources as near as your Army Community Services center where they can offer free financial advice. In extenuating circumstances, such as yours, you might even qualify for special programs offered by the Army’s charity, Army Emergency Relief or the AER. By going to these legitimate resources, you can avoid getting ripped off.

Q. Our community here in Alamogordo, NM is very supportive of the military and so is Las Cruces, which is a little further down the road. Many businesses carry banners that say, “we support our military.” Even so, a friend of ours bought a car from one of these places and it turns out that the dealership didn’t own the title and then went out of business. Now our friend has an $12,000 loan to pay and no car to show for it! How can we avoid being “taken” and who can we trust?

Heidi Rothenburg, Holloman Air Force Base
Submitted via blog

ELLIE: Heidi, I’m so sorry to hear of that situation, especially from a business that advertises its support of the military. Unfortunately, auto vendors are a huge source of complaints. In most cases, the salesperson will offer you “easy credit” but you pay jacked up prices, hidden fees and interest rates of 15% to 20%. Military financial counselors have files full of horror stories. Bad dealers have taken cars in trade, promising to pay them off and then they go out of business, leaving service members with two payments. Go to BBB certified dealers and if the deal sounds too good to be true, just walk away, because it usually is. Or go to your base's ACS, Airman & Family Readiness Center or Fleet and Family Support Center for local financial counseling.

Q. My daughter just got commissioned with the Marine Corps and I’m concerned about the possibility of someone taking advantage of her financially. Are military members bigger targets for fraud than civilians?

Sue Simpson, Stillwater, OK

ELLIE: Military members have guaranteed paychecks and won’t ever get laid off. This makes them good credit risks. But it also makes them targets. Some people see the military as cash cows and they want to get their cut. One of the greatest evidence of this fact is that outside of any large military installation, you’ll see businesses that offer payday loans, pawn shops, and check cashers. These are the kinds of businesses that prey on unsuspecting military.

Stephanie, Phoenix, AZ
Submitted via email

Thank you to those who serve!

Ellie Kay

America's Family Financial Expert (R)

Red, White and Scammed - Tell Your Military Friends to Beware!

2010-08-10T17:00:00.001-07:00

This week on ABC NEWS and KLOVE, I've been discussing how
thousands of service members engaged in fighting America’s battles overseas are now encountering a foe here at home. Enlisted men and women are easy marks for sleazy car dealers, insurance scammers predatory lenders, and identity thieves. So pervasive are the rip-offs and so troubling is the debt incurred by military personnel that US Department of Defense officials recently labeled the situation a threat to national security.

We have a long tradition of military service in our family. My grandfather was a bombardier who died in WWII, my father is a retired chief master sergeant in the Air Force, my husband, Bob, flew Air Force fighters for 25 years, our son, Philip, is a senior at the Naval Academy and will to cross commission into Marine Corp Aviation, our next son is headed toward the Air Force Academy next year and the youngest son wants to go to Westpoint and be in the Army. In fact, the photo you see is Bob, pinning on the Philip's Airborne wings--the very wings Bob earned 30 years ago when he was a cadet at the Air Force Academy!

Q. The DOD has labeled the fraud situation among the military as a threat to national security. How does getting scammed impact lives overseas?

ELLIE: It’s all about distraction. When military members are distracted, whether it’s worry over identity theft or trying to wondering if their spouse is able to deal with messy finances at home—then that’s when accidents happen. Distraction leads to worry which leads to accidents. And when accidents happen, then there is loss of life. So if we want to help save lives overseas, then we can all do our part to protect our military members by exposing rip offs and scams whenever possible.

Q. What kind of paycheck does a typical recruit make & what are some of the questionable ways that local businesses try to get a piece of that paycheck?

ELLIE: They earn about $1800 per month & these paychecks can be carved to bits by bad deals. For example, a computer store outside of Great Lakes Naval Training Center in Illinois employs attractive women to troll for new sailors. Once they get them inside the store, they are pressured into buying a very basic laptop for more than $4000, which is three times as much as the computer is worth. Then they finance the deal and the computer ends up costing even more with the store also making money on financing.

Q. What are some other common ways that the military is ripped off and people should be aware of?

ELLIE: There was recently a multistate investigation launched into life insurance scams that were being perpetrated against military members just before they took off to the Middle East. These scamsters sold soldiers extremely overpriced or misrepresented policies, taking advantage of the emotional situation of leaving families to go into harm’s way. This investigation ended with the companies offering more than $70 million dollars in refunds to thousands of service members. When it comes to life insurance, military members are offered SGLI or Servicemembers Group Life Insurance, which is a legitimate source for low premiums, so there’s really no need to secure other private insurance!

Q. Tell us about the “Red Cross” scam that is getting a lot of attention among military families?

ELLIE: This is fairly despicable, as it prays on the emotions of family members. A con artist claiming to be with the Red Cross will call a parent of a servicemember or their spouse, telling them their loved one has been injured and they need their social security number to authorize help for them. In some cases, they ask for an initial cash payment. Military members need to clear any report of injury through the chain of command or by contacting the base family community services.

Q. It seems that our military is very young, what is the average age of a service member and do they receive any kind of personal finance education as part of their training?

ELLIE: Yes, they are young, in fact, the average age range of military members is between 22 and 28 years old. Of the groups I routinely speak to around the world, I’d say that the average 22 year old has an even younger wife and a baby as well—so it’s a lot of responsibility for someone so young. The good news is that since 2004, service members learn about personal finance as part of their early training. When I go to give my “Heroes at Home” message I teach about finances and also encourage them to use the resources they have available to them on base. Army Community Services, Airman and Family Readiness Centers, Fleet and Family Support Centers—all of these have personal finance counselors there who are ready and willing to give free financial counseling to service members and their families. It’s what I call my $300 tip, because a couple hours with the caliber of financial professional at any of these centers is equivalent to paying $300 to a CFP or CPA.

Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

Back to School Savings Tips

2010-07-30T10:49:00.000-07:00

Back to School Savings Tips

I've been on KLOVE lately sharing these tips

• Loving The “Two For One” – (Financial Literacy and Back to School Budgets) – Why not teach your teen two things at once such as financial literacy by using a back to school budget? Set a spending amount on a prepaid card or their own supplemental card (I added cards on my American Express account) and coach them on what their limits are for the shopping season. Whether the budget is $50 for your teen to buy school supplies or $500 for your college student to buy dorm room essentials, you can monitor how they are spending and coach them on the best ways to use their budgeted money.

• Layer the Savings – In today’s economy it is no longer enough to just save by buying something on sale—today, you have to layer the savings. For the store, this means buying items on sale when you also have a coupon. Go to couponmom.com to see what is on sale in your neighborhood and the matching coupon.
For online shopping, look for sale items where you can also use a coupon or coupon code to save on the price, shipping and more. Go to RetailMeNot.com or CouponCabin.com to find the right code. It requires a little research, but it can also translate into hundreds of dollars of savings for your back to school season.

• Loss Leaders – When shopping for back to school, take advantage of the loss leaders that retailers are offering. You may get that name brand shoe for 50% off and they are hoping you’ll do the rest of your shopping at their store as well. If you take advantage of all the different stores’ loss leaders by shopping at places that honor competitor’s ads, you’ll not only save money, but you’ll save gas and time.

• Little from Big – When planning for kids school lunches this coming fall, buy lunch staples in larger sizes to save by buying in bulk, then repackage them into smaller sizes. For example, take that 5 pound bag of mini carrots and put them in snack sized plastic bags for a healthy and affordable option for lunch at a 30% savings over buying the smaller pre-packaged sizes

• Logistical Savings – When our kids went out of state to college and we had to buy items for their dorm rooms, we chose online retailers who also had physical stores in the town where they went to school. These vendors had site to store options where they would send the products to one of their local stores and not charge a shipping fee. This option allowed us to shop at our leisure online, incorporate all the savings factors we could, and have the convenience of our kids going to their local store to pick up the items we ordered. For example, Walmart's site to store program offers free shipping to the local store for pickup.

• Limited Spending Plan – One technique we’ve used for all our children, whether they are in elementary school or college is to make saving money a family affair. We give the kids a spending plan, telling them how much money we will give them for their back to school budget. The fun comes in when we tell them that they get to keep what they do not spend. So if we’ve budgeted $75 for tennis shoes and they find them on sale for $35, then they get to pocket the extra $40. It’s amazing how our kids can distinguish between “needs” and “wants” when it comes to this added motivation of learning ways to spend less and save more. This fresh idea not only saves our family money, but it has trained all our children in money matters, making them more adept as young adults.

• Lengthen The Shopping Season – One of the reasons families overspend for back to school items is because they are locked into the idea that they need all the school supplies, clothes and gadgets the first week of school. In reality, the majority of these items will be on sales or clearance, especially clothing, within the first month after school starts. So consider letting your child start the year with just enough clothing to get a good start and f inish out their wardrobe as key items go on clearance. The same can apply to backpacks, lunch boxes and sporting equipment. As long as they have a prepaid card or a supplemental card with their limit, you’ll find yourself right on track and get more for less.

• Leverage High Tech Savings – One thing that I’ve learned as a mother of seven is that I only have a limited amount of time to teach my kids the things that matter most in life. By making back to school shopping a family effort, I’ve been able to train our kids in money matters in fun ways that incorporate their strengths. For example, I let our teenagers shop in a different part of the mall, encouraging them to do their online research by comparing store prices with other deals on their smart phones. For example, they see a scientific calculator in the electronics store for their algebra class, they can search mysimon.com to see if it’s the best price. Then they text me the numbers and I give them approval to buy it, which empowers them to contribute to our family’s economic well being while allowing them to learn financial literacy as well.

• Long run Lessons – Every year, I’ve used back to school shopping as a key opportunity for my kids to learn financial literacy lessons. By setting them up with a budget through the use of a PASS or SUPP card, I’ve been able to teach them how to spend wisely and then helped them start to develop a good credit score when they are 18. They key is that I get tomonitor and track their spending so they can’t fail. The result is that my children have great scores at young ages. In fact, my 22 year old son, had a 750 credit score when he graduated, good enough to prequalify for a townhouse mortgage!

Look for Scholarships -- Millions of dollars of scholarship money go unclaimed every year. This is free-lunch money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Salliemae.com has over 1.9 million scholarships to research valued at 16 billion dollars! You child, for example, could write a 500 word essay on skateboarding or other areas of interest—there are thousands of scholarships that go unused every year because kids don’t apply for them. Don’t forget to have students apply to local civic organizations and community scholarships as well—the high school counselor should have a list of these scholarships.

: Locate Discount Books - Buying your books from a used bookstore can save money, but buying them online can save even more. My son, a journalism major, bought had a book that was $150 new, $30 at a used book store and he found it for $1.50 at amazon.com. You can also try Campus Books or Abe Books to compare prices across the internet to find the best values. Just be sure to buy them two weeks before classes start. As soon as you get your book list, begin your search because the early bird gets the best value on books!
Happy Back to School Savings!

Ellie Kay
America's Family Financial Expert (R)

The Family Road Trip

2010-07-22T20:46:00.001-07:00

This week on ABC NEWS NOW, I talked about how to take a Family Road trip that won't traumatize your children! I remember my dad stuffing us kids in the back of a VW bug and traveling from TX to IN, making about 600 miles per day. Need I say more?

Here are some ideas that will make your family trip a lot more fun and affordable.

Q. First of all, let’s look at a question that many families are asking: is it cheaper to take that long family road trip, or is it more cost effective to fly?

ELLIE: It’s all in the numbers including how far you have to travel, how many family members and how many nights on the road. It’s going to be pretty easy for you to calculate the bottom line for flying versus driving. Just go to costToDrive.com to calculate the mileage, gas, travel time and carbon footprint of anywhere in the US. You’ll also need to go to hotels.com to add that expense to your total. Then, go to bookingbuddy.com to find the best price on airfare. This site will compare the prices from other travel sites such as expedia, orbitz, Travelocity, cheaptickets and more. Don’t forget the rental car if you’re flying, you can research that on hotwire.com .

Q. One of the greatest expenses while traveling down the highway is for snacks, lunch and dinner. It can not only get pricey, but these purchases can also take a toll on health as there seems to be an emphasis on eating fast food while on the road. Do you have any ideas on other options?

ELLIE: If your children are little, the stops you make on the road are essential for them to be able to get out and stretch their legs—adults need that, too. When our kids were little, we packed a lunch for the first day on the road and stopped at roadside parks. It’s easy to plan these stops with the assistance of your GPS or your smartphone, just locate a parks along the way and plan accordingly. To save money on snacks, pack some healthy options in individual bags for each family member and include options such as carrots, grapes, cherries, pretzels or trail mix.

Q. One of the tips you share is to set realistic expectations. So how long can you realistically expect to travel in a car with a three year old?

ELLIE: I think that you shouldn’t try to conquer more than 300 miles a day with a preschooler, because they’ll arrive tired and cranky at your destination AND SO WILL YOU! You need to know your child(ren) and adjust your expectations accordingly. Are you one of those blessed families whose kids sleep as soon as you get in the car? Then you can probably handle a few more miles a day. Does any of your family members have health issues that require frequent stops, then add some extra time to your trip so you aren’t stressed. Setting realistic expectations will help you and your family have a better trip.

Q. Another challenge for families is keeping the kids occupied. Older children can use their Ipods to stay busy and everyone enjoys movies on the way. But even these options can lead to the inevitable boredom as kids start to get restless. You’re a mother of many, what do you suggest?

ELLIE: I think this is where creativity comes into play. When our kids were all school aged and we had a long trip (or a military move), I shop ahead of time for small games, books, activity puzzles, little toys and other trinkets I knew they would like. Then I’d wrap these “surprises” in gift paper and put each child’s name on it. At the top of every hour, if they were good on the road, we would give them their individual present. Sometimes, a grouchy child wouldn’t get his because he wasn’t co-operating. He’d watch his siblings playing with their gifts and it would motivate him to behave. I also think that an adult should be in charge of not only disbursing the surprises, but also handing out the individual snacks at certain times as well. You can give them out at certain mile markers that the kids can look for and it becomes an effective way of passing the time.
This is also the time to develop your own traditions. My older kids liked creating Mad Libs and played slug bug or I Spy. But our younger kids developed a game called, “Name that movie line” which became a tradition in our family. We still play it when we get together and find it creates family bonding moments and is a unique Kay Family Tradition.

Q. How do you feel about souvenirs? Do you think that saving money means you just say “no” to the t-shirts, coffee mugs, statues and commemorative books?

ELLIE: I think that souvenirs are an important part of any vacation time but it’s also important to not overspend on these category. We give our kids a budget for souvenirs and let them choose. We also encourage them to pick things that are of a better quality and yet inexpensive such as spoons, shot glasses, or magnets.

Q. What if you haven’t taken a vacation yet and don’t know if you can afford it. Do you have any creative ways to save money on a place to stay on the family road trip?

ELLIE: If you have friends that you like a lot and think your friendship can survive the test of a family road trip and vacation, then double up with that family and cut your bills in half. For example, the normal price of a week-long mountain cabin rental with three bedrooms in Manitou Springs, CO was $900. If each family pays $450 instead of the full price, they may be able to afford a vacation that might not have been available to them otherwise. You can go to vrbo.com or www.findrental.com. Suite hotels that offer extra rooms are also an option such as the ones found at orbitz.com or cheaphotels.com. For those who love the great outdoors, sharing campsite fees or RV rentals can split the price of a camping adventure. At RVRental.com we found rentals across the country that ranged from $117/day to $385 per day. Depending on the owner of the RV, other charges to consider are hospitality kits, kitchen kits, and/or emergency road kits. Cleaning fees will apply if the RV is not returned in the condition in which it was rented.

Q. What about saving money on food and entertainment once you get to your destination?

ELLIE: I recommend you go to entertaimnent.com and enter the zip code of where you’ll be traveling in order to preview their entertainment books for that destination. These are currently on sale and you can find discounts on food, movie tickets, amusement parks, hotels and much more. Also go to restaurant.com and enter the zip code to get gift certificates for half price and while you’re there, see if they have any sales. I recently bought $25 gift certificates at that site for only $2. Plus, use your smartphone by entering the attraction’s name to see if there are any coupons or codes you can download on your phone and use on the spot.

Enjoy your Family Road Trip!

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

Ellie Answers Your Questions About Job Scams & Homebased Businesses!

2010-07-11T20:57:00.000-07:00

This week I was on ABC NEWS "Good Money" show, answering your questions! Be sure to email us for a FREE "Homebased Business File" and mention you heard me on "Good Money!"

Q. We are interested in starting our own home business and want to know what first steps we should take in deciding what kind of business to operate from home.
Julie and Vick from Rancho Cucomonga, CA via facebook

ELLIE: There are basically three kinds of businesses: sales, service and manufacturing. Sales can take many forms such as retail or wholesale, mail order or direct sales. They tend to offer more flexible hours but require more paperwork. Service businesses are the easiest to set up and can require the smallest initial investment. If you do something well, like painting or decorating, fixing things, cleaning houses repairing computers, etc, you can start your own service business. Finally, there is manufacturing—everything from crafts to jewelry, furniture and more. Once you decide on the kind of business, do your research online or with the help of a research librarian, subscribe to industry magazines and talk to those in that kind of business.

Q. Are there any online resources available for us to find someone who will give us free advice on our small graphics and design business.
Mike and Victoria from Syracuse, NY via online contact form

ELLIE: Yes! You can go to SCORE.org, which is non-profit organization designed to help small business owners with over 12,000 volunteer counselors across the country. They can hook you up with a mentor to answer your questions online or in one of their offices. Their volunteers are made of experts in 600 fields who have been successful in their own businesses and include former CEOs! If you are interested in funding your startup business you can go to Kickstarter.com or since you’re an artist you may want to find funding for your project by going to IndieGoGo.com

Q: I’ve worked for the same construction company for 20 years and just got laid off. I have a dream to start my own carpentry business, but I’m not sure that I have what it takes to do it. How do I know if I can hack it or not?
Mark submitted via Online Contact Form

ELLIE: That’s a great question, Mark, and since the SBA says that 1 in 2 small businesses will fail within a year, you have every right to question your ability to succeed. I think the key lies in planning and doing your preparation work. It’s important and assess your personality and skills. You can take the Personality ID test offered at your SBA center, college, library or community center. It will help you look at yourself from a fresh perspective and asses whether your personality is best served as an owner or an employee. I also think it’s important to pursue your passion. Do you really love carpentry or has it just been a job to you? When you pursue your passion, not only does it get you up in the morning but it makes more likely to succeed!

Q. My mom sells Premier Jewelry and my best friend sells Mary Kay. Both of them are pressuring me to sign up under them in order to build their business. How do I make the decision about which homebased business to start.
Jenny Monroe from Oklahoma City, OK

ELLIE: Jenny, there’s a phrase you need to learn right away: It’s nothing personal, just business! You need to make your decision based on what is right for YOU, not based on who you love more: your mom or your friend! I’ll send you the Homebased Business file for free if you go to elliekay.com and in that file you’ll see 25 questions you need to ask each woman about their business including: What are the start up costs? What is the hostess plan? Does the company pay sales tax or do I have to do that myself? How many downline generations are paid? How much inventory is needed? It’s important to have all the facts available and then make your decision based on business and not on anything personal!

Q. I’ve dabbled in writing here and there but I want to try and go into it on a more full time basis, should I try to freelance various writing projects or should I offer my writing services as a subcontractor to an existing company that need writers?
Ted from Chicago, VA via Ellie Kay’s blog

ELLIE: The answer is “yes.” It’s easier to launch a service based industry, such as what you’re essentially talking about by subcontracting work to an existing firm. Outsourcing is becoming more and more prominent as jobs are streamlined and companies downsize. It’s cheaper to hire a contractor than paying benefits to a full time employee. So hook up with your local Chamber of Commerce and plug into businesses in your community. At the same time, get The Writers Guide online or from your local library and begin to pitch articles to various periodicals by writing a good query letter and tailoring each article toward the specific needs of the publication. Ted, with how work and bit of luck you’ll find yourself doing what you love and having your dream business at the same time!

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

Your Questions about Organics, Vacations & Broadway Tickets!

2010-07-06T16:30:00.000-07:00

I was on ABC NEWS Good Money again this week, answering your questions!

Q. We are trying to feed my family a healthier, organic menu, especially when it comes to fresh fruits and vegetables. But it’s making us go broke because organic costs so much. Are there ways to save in this area?

Samantha and Ted from Riverside, CA via facebook

Ellie: Yes, according to the USDA organic can cost as much as 50% to 100% more than non-organic. When it comes to fresh produce, spend your “organic” dollars on those products you have higher levels of pesticide residue, even after washing—such as any kind of berries, apples, potatoes, cherries and grapes. Then you could go with non-organic for pineapples, bananas, mangos, broccoli, onions, cauliflower and corn. Or, try to buy from Farmers Markets and local farms, for a list of organic farms, go to localharvest.org . When it comes to other products, look for store brand organics, buy in bulk or go to couponmom.com to find deals in your area on organic products.

Q. My husband says it’s going to be cheaper to drive from New York to our timeshare in Florida because there are fewer flights and the price of airline tickets is going up this summer. Once we get to Florida, we don’t need a rental car as everything is within walking distance and we’re mainly spending our time at the beach. By the time we pay for one night’s hotel each way on the drive down, I think it’s going to be much cheaper to fly. My husband said he’d go with your opinion.

Al and Sharon from Oxford, NY via online contact form

ELLIE: Wow, no pressure here! It’s going to be pretty easy for you to calculate who is right. Just go to costToDrive.com to calculate the mileage, gas, travel time and carbon footprint of anywhere in the US. You’ll also need to go to hotels.com to add that expense to your total. Then, go to bookingbuddy.com to find the best price on airfare. This site will compare the prices from other travel sites such as expedia, orbitz, Travelocity, cheaptickets and more. Do the math and the winner has to buy the loser an iced tea once you get there!

Q: We’re taking a big vacation to New York city later this summer and I’m really looking forward to it. We want to see some broadway shows while we are there. On one hand, I want to make sure we get tix for the nights we’re there at the shows we want to see, but on the other hand, I don’t want to pay full price. Should I buy the tix beforehand or should I take a chance and go to the Times Square half price ticket booth once I get there?

Audrey Dixson submitted via Online Contact Form

Ellie: Congrats, Audrey on an upcoming cool trip. I LOVE New York and try to go to the theater every time I’m there! If you go to the half price ticket booth, you’re going to save 50% but chances are good you’re going to “invest” about 3 hours of your time (or more) traveling to Times Square earlier in the day and waiting in line. Then, there aren’t any guarantees the show you want to see will be listed. You also have to pay cash. On the other hand, you can save 40 to 50% by buying your tickets online at broadwaybox.com or goldstar.com, which is where I always buy my tix. Most of the time I’m saving at least 40% (instead of the 50% I’d save at the half price tix booth). This translates into me paying $10 more per ticket. I also save three hours of my time in NYC. I figure my time is worth more than $3.33 per hour! So buy online and enjoy the show!

Q. What do you think of prepaid hotel rooms—the kind that are non-refundable? Is it worth it to “invest” in one of these ahead of time to save money? Or should I just wait until I get there and look around for the best deal?

Moriah Stephens from Allentown, PA

Ellie: I’ve purchased the prepaid rooms and it’s a good deal when: 1) rooms are going to be scarce or at a premium—such as a convention, sporting event or graduation and 2) the savings is at least 30%. To comparison shop, you can go to hotels.com, priceline.com and travelzoo.com .

Q. For the last few years, we’ve always bought the entertainment book that has coupons for restaurants, sporting events, oil changes, dry cleaning and more. We pay $35 for the book and I’m not sure it’s worth it because I don’t think we’re really using it that much. Do you buy these books?

Mike from Mechanicsville, VA via Ellie Kay’s blog

Ellie: Right now, Mike, you can get the 2010 book (which expires at the end of this year) for free when you reserve a 2011 book. If you use just one of the buy one/get one free coupons for dinner at an upscale restaurant, then it has paid for itself. Most offer $12,000+ in values and if you only use 1% of that, you’ve saved $120—less the $35 price of the book for a total savings of $85. Keep the book in your car, check it religiously and save righteously!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Invest Now and Save Later! What's worth it and What's Not?

2010-06-30T16:11:00.000-07:00

I was recently on ABC News, Good Money Show, talking about whether you should buy a hybrid, that extended warranty or a programmable thermostat--are they really worth it?

Consumers in a post recession economy are constantly looking for ways to save money. In some cases, there’s an upfront investment required in order to save more in the long run. Should you ante up now on the promise that the investment will pay off later? Today, I'm going to answer your questions about when to invest now in order to save later and when you should pass or just say “no.”

Q. When consumers consider purchasing a product that carries a good faith promise of “invest a little money now and save big money down the road” how can you tell which investments are worth the cash and which are scams?

ELLIE: Whenever there is a post recession economy, there is also going to be a proliferation of those unscrupulous individuals who will try to take advantage of a consumer who is out to save money and cut expenses. There is a difference between fraud, which is illegal and punishable by law and the empty promise, which a salesman might make to close the deal. Before you sign the dotted line with a solar panel sales company, check them out on the Better Business Bureau site. But just because there are no complaints doesn’t mean it’s a legitimate business. Ask for references, don’t give into pressure sales, never respond to an email inquiry, and guard your personal information.

Q. Let’s go down the list of common purchases that promise to save us money in the long run if we invest a little money now. Let’s start with a simple programmable thermostat that costs around $50. Is it worth it?

ELLIE: The average family spends $2700 a year on home energy and nearly half of that goes to heat or cool their home. A programmable thermostat is easy to install and should save you around $180 a year, so you’ll recover that investment in about four months. This is a “must have” purchase for every home.

Q. What about a hybrid car? The promise is that we will save enough on gas to recoup the extra cost of purchasing the car. How much more do these cars costs and do you think that it’s worth the additional expense?

ELLIE: If you buy a hybrid, you’ll pay 20 to 30% more than a nonhybrid counterpart. The answer to this question is Yes and No. Yes, if you buy a less expensive hybrid like a Toyota Prius (which starts at $22,000) and if you put 20K+ miles on your car every year. You’d also need to do mostly city driving for this to be worth it. No, it wouldn’t be worth it if you buy a more expensive hybrid, don’t put as many miles on it or if gas prices are under $4 a gallon.

Q. I use my laptop computer a lot and I’ve always bought an extended warranty on it because I want to make sure I can save on repairs. I spent about $100 for my laptop warranty for a two year extended warranty. Did I do the right thing?

ELLIE: If you have an expensive laptop ($1000 or more), then you did the right thing because laptops cost more to service than desktop computers. But if you bought a $400 desktop, chances are you can fix a lot of those problems yourself—they are very user friendly. So in the case of an inexpensive desktop, it would probably be best to just pass on buying an extended warranty.

Q. This past week the Mortgage Bankers Association released mixed mortgage rates. An average 30 year mortgage increased to 4.82% and the average 15 year mortgage rate was 4.23%. A big question on homeowner’s minds is: should I pursue a mortgage refinance? Ellie, when the average refi costs anywhere from 2% to 3% of the total loan, when is it a good idea to refinance?

ELLIE: There’s a good rule of thumb when it comes to refinancing your home. If you can get at least a full one percent break from the interest rate you’re now paying and if you do not plan to move for the next 3 to 5 years, then there probably won’t be a better time to refinance. Just make sure that you crunch the numbers, using my mortgage refi tool at elliekay.com and be sure you shop around with different lenders such as INGDirect.com, wellsfargo.com, and bankrate.com. Get a GFE (Good faith estimate) up front and don’t let them add the closing costs to the back end of your loan because you would be paying interest on your closing costs and that negates a good portion of the value of the refi.

Q. Summer is here and I’ve always heard that planting your own garden can not only yield great tasting fresh produce, but you can also save a lot of money. There’s also CSA (community sponsored agriculture) programs that allow members to purchase shares and get weekly produce from specific farms. Are these a good idea?

ELLIE: You’re going to pay around $70 to plant your own garden and it will cost around $450 to purchase a 12 to 15 week CSA share So the answer is “yes” this will save you money if you want to invest 5 hours a week on your own garden. If you go the CSA route, the breakeven point is spending more than $33 a week on produce. One other option is to split your efforts with a friend or neighbor. You can share a local garden or you can each go in on a CSA share (paying $225 each instead of the $450 for the full share). Plus, you’ll get some healthy and super fresh results!

Q. We’re hearing a lot about energy star appliances such as refrigerators and washing machines. They promise to save us 40% on energy and water bills but sometimes cost 70% more than non-Energy Star certified. Is it worth it to replace your existing appliance?

ELLIE: If you have to replace that appliance anyway and you shop around, then yes it can be a great example of spend now and save later. Let’s take the example of a washing machine. You have an older top loading model that costs around $44/ year in energy. An Energy Star rated front loader (such as the Frigidaire Affinity, 3.5 cubic foot model) costs only $18 per year in energy (gas or electricity). But, it also saves 40% on water, you use less detergent, the clothes come out less damp, which means less time in the dryer. All these additional savings, including the savings of around 7,000 gallons for an average sized family means that this is a good purchase. Plus, if you go to www.energysavers.gov , you’ll find a list of appliance rebates and tax credits that are available for Energy Star rated appliances in your state!

Q. What about credit card balance transfers. There are still a lot of offers out there that promise to save consumers money with a lower interest rate. It can cost up to 5% of your credit card balance. Every financial expert has an opinion on this. What’s yours?

ELLIE: I’m not a big fan of credit card balance transfers and it’s not just because of the transfer fee. I’ve seen too many “hoppers” who transfer balances frequently, chasing the lower interest rates when the existing introductory rate expires. I have an online calculator at elliekay.com that can help you determine how much money you would save in a balance transfer. A lot of these offers are for consumers that open a new card and when you’re opening multiple new cards and closing others down, just to chase a lower interest rate, you risk deteriorating your FICO, or credit score. So unless you’re going from an 18+% rate down to a fixed 5% rate (plus the transfer fee) and chances are not good you’re going to find that kind of good deal---then just pass.

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

College Debt - Ellie Answers Your Questions!

2010-06-24T10:06:00.000-07:00

One of Yahoo's most popular videos was yours truly on ABC NEWS NOW earlier this month answering your questions about college grads as well as debt!

Here's the scoop:

Q. Our daughter just graduated from UCLA and we’re very proud of her. But even though she has a prestigious degree, she still hasn’t been able to locate work. Should we allow her to move in with us until she finds employment?

Bill and Carol from Quartz Hills, CA via facebook

Ellie: This is a tough one! As a mom of kids in this age group, I know it’s a fine line between enabling and empowering and it’s definitely one of those individual decisions. What may be right for a particular child may not be right for another one. I think you ought to support her emotionally and psychologically, letting her know you believe in her. You can also offer to help with resumes or job research. But I would make the offer to have her move in with you as a last resort only. Furthermore, if she does move in with you, it’s important to sit down ahead of time, come up with a responsibility/income agreement and have both parties subscribe to the guidelines.

Q. My husband and I have a son who graduated last year and could not find work, so he moved in with us until he could find employment. He found a modest job, and is not making very much money. He decided that continuing to live with us would be a better financial option than paying rent on a limited income. I love my son, and he’s only 23 right now, but I’m afraid of a “Failure to Launch” syndrome and I need to know what you would advise me to do.

Allana from Lancaster, PA via online contact form

ELLIE: OK, the Failure to Launch syndrome, it’s every parent’s nightmare. We finally have an empty nest, then boomerang children come back to inhabit a place where they no longer naturally fit. I think, Allana, that it is imperative that you and your husband develop an comprehensive exit strategy for junior. Make sure this plan requires that he pays room and board with you, that he develop a clear budget and make himself accountable to you (while he’s living at home) and then be clear about D-day. The day he will depart. Be loving but firm. Remember that the decisions you are implementing with him today will be the precedence you set for tomorrow. You and you alone, enable the boomerang effect, yet you also have the power to put a stop to that boomerang before it’s ever launched. Then you won’t have a “Failure to Launch.”

Q: I am a 26 year old single girl with a bachelor's degree but not yet a Master's. I am working with children in a library setting currently and am considering various Master's programs. (Library Science included). I would have to take out loans for the program though, and I am not sure that taking on that debt would be a wise thing, even though it would lead to a professional job. What is your advice for women around my age who eventually want to marry and have a family and do not want the burden of school debt? I have read some of your books and very much appreciate your insights and time.

Jen Crouse submitted via Online Contact Form

Ellie: It's admirable that you desire to go back to college for a master's while you are still in your twenties and your work with children sounds very gratifying. Ellie usually recommends no more than 10K in student loan debt for any program (bachelors or masters). Instead, you could look into some of the following:

Step 1
Apply for a scholarship. There are merit based graduate school scholarships out there so go to www.salliemae.com which lists almost 2 million scholarships. Talk to the admissions office at the college or university at which you'd like to apply. They can give you advice on applying for their own scholarships (if they have them) or point you to the appropriate federal and/or state scholarship programs.

Step 2
Look into a fellowship or assistantship. Many colleges and universities offer programs that enable you to get a master's degree while doing research or assisting professors in the department in which you wish to study. This is a viable option that also enhances your hands-on experience in your chosen field.

Step 3
Talk to your employer. Many employers are willing to foot the bill for a master's degree, especially an MBA (Master of Business Administration). Talk to someone in your company's Human Resources department to get more information. Or another option is to talk to a military recruiter to join the guard or reserves. The Army, Air Force and Navy will pay up to $65,000 in student loan debts if you qualify for the program.

Q. My husband and I want to help with our son’s college expenses (he graduates in two years) and we don’t want him to be straddled with huge student loans. Several of our friends and other family members have said, “Just take out a second mortgage or use the equity in your home to pay for college.” What do you think about that?

McKenzie Thomas from Stanford, CA

Ellie: I believe that you should never borrow on your own future to pay for your child’s future. In any discussion of college costs, it’s important to keep priorities straight. Your kid’s education shouldn’t cost you your retirement. This means it’s not a wise idea to take out a home equity loan, an equity line of credit or refinance your mortgage in order to pay for school. This would reduce the amount of equity in your home, increase the risk of possible foreclosure and incur costs in interest charges that may cost more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

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Q. My son-in-law just graduated with his Masters Degree in Education. They have had a hard time while he’s been in school and don’t have the best credit scores. They’ve asked us to co-sign on a new automobile loan and we are reluctant. What do you think about co-signing for loans?

Amanda from Wichita, KS via Ellie Kay’s blog

Ellie: Since you son-in-law needs a co-signer, it means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Daniel, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Ellie Kay

America's Family Financial Expert (R)

www.elliekay.com

College Grads Avoid Debt Trap

2010-06-16T20:20:00.000-07:00

Son, Daniel graduates from college in this happy snap and it's that time of year when proud parents of the class of 2010 gather to watch their children graduate from college. I was recently talking about this topic on ABC NEWS, Good Money where you can watch the clip.

After the hats are tossed, tears are wiped away and the celebratory cake is gone—the graduates will begin their new lives in the real world. But this year’s graduating class faces a wretched job market where there may be as many as five candidates for every job. Consequently, one of the most daunting tasks becomes the challenge of not falling behind on student loans. While challenging times can build moral fiber, you don’t want to build character by getting involved in the debt trap.

Q. First of all, what are some of the consequences that graduates face by getting behind on student loans?

Ellie: As a mom of kids in college as well as a recent graduate, I know personally, how difficult the job market is and what a challenge these graduates face. First of all there will be interest charged for late payments as well as fees that will inflate the amount they owe---and chances are good that they owe too much as it is! If you default, the government could garnish your wages and withhold your tax refund. Not to mention a huge hit on your FICO score, when you’re just starting out and trying to build a good score that will help get lower interest rates on a car or a house. This isn’t a good way to start your post-graduate life!

Q. But you say there is good news and that these dire consequences are avoidable, as least as far as federal student loans are concerned. The key is to understand your options and take action before you fall behind on payments. The first tip you list is to understand your grace period, when do students have to start paying back these loans and how do grace periods vary?

ELLIE: Borrowers typically have a few months after graduation before they are required to start repaying their federal student loans. For most federal student loans, the grace period is only six months. Most loans have up to ten years to repay. It’s important that you contact your loan provider and find out when the statements begin—especially if you haven’t received notification yet.

Q. What if the graduate has trouble finding work or they find an entry level job that typically doesn’t offer much in the way of compensation? Is there recourse for the amount they are required to pay for their loans?

ELLIE: That’s an excellent point and it brings us to our second tip, they need to find out whether they qualify for the income-based repayment program. Under this program, your loan payment could be reduced, based on the amount of discretionary income you have available. In most cases your loan payments won’t exceed 10% of your total income. After 25 years, anything you still owe on the loan will be forgiven.

Q. Is this income based repayment program an automatic enrollment or does the graduate need to apply for it?

ELLIE: You definitely need to apply for it by contacting the company that is servicing your student loan. If you’ve moved a time or two and your loan papers have not been forwarded to you and you are not sure who services your student loan, then you can go to the database of the National Student Loan Data System.

Q. Is there some paperwork you need to compile before you apply for the income based repayment program?

ELLIE: Yes, it’s important to have this paperwork on hand in order to streamline the process because you do want to get this filed as soon as possible—especially if you’re in danger of being late on loans and you have a genuine financial hardship due to your current income levels. You’ll need to authorize the IRS to provide last year’s tax return to the Department of Education. If you feel that your tax return doesn’t reflect your current situation, there’s a form you can use to show how your situation has changed. Get info on these forms and criteria, as well as links to major student loan servicers at the Project on Student Debt.

Q. We’ve looked at income based repayment, but what about those who need a quick, temporary fix? Maybe they have to take an unpaid internment at first or they may have a job that will become available in six months. Are there options such as deferment or forbearance available to this class of graduates?

ELLIE: If you are unemployed, still in school or experiencing economic hardship, you can apply to have payments on your federal student loans deferred for up to three years. If you have subsidized Stafford loans, which are provided to students who demonstrate financial need, the government will pay the interest on the loans during deferment. Interest on unsubsidized Stafford loans will accrue during deferment. If you don’t qualify for deferment, then you still might be eligible for forbearance, which allows you to put off payments for up to three years. It’s harder to qualify for deferment than it is for forbearance because in forbearance you will still have to pay interest that accrues.

Q. Does it take a long time for the paperwork to go through for these kinds of programs we’ve discussed: income based repayment, deferment and forbearance? Couldn’t a graduate find themselves in default by the time the paperwork is processed?

ELLIE: It’s important that you continue to make full payments until you’re notified otherwise. It takes longer for income based repayments and doesn’t take as long for deferment and forbearance because the latter two are temporary relief from loan payments. Whereas income based repayments could be longer term, depending upon how long you are in that job, making that salary. It’s important to look at forbearance and deferment as short term fixes and not long term—that’s why it’s really important to file for these right away, while you’re looking for a job. But if it looks like your payment problems will last longer than a few months, you definitely need to look at income-based repayment.

Q. Some graduates have huge student loans, in some cases, they have more than $30,000 in principal and interest. It is especially difficult for these grads to face this mountain of student loan debt. Can they extend the payment term in order to get through the first few years?

ELLIE: If you are a borrower who owes more than 30K , most lenders will allow you to extend the term beyond the standard 10 years, thus reducing monthly payments. The amount of interest you pay will increase, though, particularly if you extend payment over the maximum term of 25 years. And who wants to spend the next 30 years paying off a student loan? So I would only recommend this option as a last resort. Try to pay it within the standard 10 year term so that you can avoid thousands of more dollars in interest.

Q. Finally, we’ve discussed federal student loans, but a lot of viewers may hold private student loans that they have to repay. What are their options?

ELLIE: Well, the outlook is not as sunny for those who have private loans. They have fewer options. Private education lenders don’t participate in the income-based repayment program and they’re not required to allow you to defer payments, even if you’re out of work. If you’re having trouble with your private loans, read your loan agreement. It may require that the lender grant you forbearance under certain conditions. Even if your contract doesn’t include an economic hardship provision, your lender may be willing to provide relief. Some lenders have become more flexible in this post-great recession environment. You could ask for interest only payments or even to change the terms of the loan. For more information, go to Student Loan Borrower Assistance

Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

The Great Escape Plan - Vacation for Less!

2010-06-10T14:43:00.000-07:00

There's nothing worse than anticipating a much needed getaway only to discover a lot of unexpected fees, add-ons and additional expenses once you get to your dream spot. With so many sites and so many choices, how do you know if you’re getting the best deal?

Today, I was on KLOVE, with the fun-loving Scott and Kelli to make some recommendations that will make the process easier and more rewarding.

STEP 1: Be the Expert - You may think you have a good idea of what a great price is for airfare to the Grand Canyon, but how can you be sure? By subscribing to a few travel alerts and newsletters, such as Travelzoo, SmarterTravel, Yapta are good as well as Bing.

STEP 2: Beware! -- You don't want to show up for your dream vacation and find out that the "Five Star" hotel you booked looks more like the Professor's hut on Gilligan's Island. For videos of hotels, restaurants, and attractions, go to Tripfilms and take a peek from videos posted by other travelers. You can also look at families' vacation photos of your destination at Flickr. Or read reviews by others posted at TripAdvisor.

STEP 3: Be Smart -- "A Wise man count the cost before he builds a tower" says Proverbs. When you're searching for the best air fare, go to BookingBuddy, which will save time and money because it will search almost all of the OTHER airfare research sites (such as Orbitz, Expedia, CheapTickets, etc) to give you the best price. Also, find out the real price of your airline experience by checking Airline Fees: The Ultimate Guide at SmarterTravel where you'll find the cost of carryons, checked luggage, blankets, pillows or if you have to cough up $100 more for that extra leg room!

STEP 4: Be Open -- It's really a buyer's market in some areas this year, especially if you are open to more than one vacation idea. For example, this year, according to the 40% to 60% off deals at Travel-ticker to go on a seven day Mexican Carribbean Cruise than it is for us to go to Disneyland. So we'll feast on fajitas this year and leave the mouse ears for next year!

STEP 5: Be Social - Do you want to know if that restaurant you're considering is good or not? Then turn to your social media friends (and a smart phone) to find out! By using facebook and twitter, just ask your friends what they think. Or log onto Yelp to see what others are saying. By getting a free app with FlightAware you can track your flight within five minutes of real time.

Question of the Week from Georgina from Baker, FL - Ellie, I know you purchase $25 gift certificates when they go on sale at Restaurant.com for only $2, but is there a "catch" or any restrictions involved?

ELLIE: Georgina, I find out that these are on sale by subscribing to the Top Twenty and I LOVE them! The restrictions are listed and usually include the fact that they will add 18% automatically at the restaurant for a tip (before the gift certificate, so don't double tip) and you have to spend $35 to use the $25 gift certificate. Even so, we still save about 50% and it's worth it!

More Sites for Savings
Hotels.com – Find best prices on hotels internationally and earn bonus stays
Ifly.com – terminal maps, estimates on how long security lines are, where to eat.
Otalo.com – vacation house rental deals
Tripkick.com – detailed info on hotels and specific room info
TVtrip.com – photos of lobbies, rooms and neighborhoods
Oyster.com – pros and cons of different hotels
Voyij.com – checks best sales, promotions and package deals from departure city
Seatexpert.com – guide to the best and worst airline seats

Have a Great Escape!

Ellie Kay

America's Family Financial Expert

http://www.elliekay.com/

Your Summer Savings Questions: Drive or Fly? What's SHARE? Kids & Budgets?

2010-06-06T14:08:00.000-07:00

I recently appeared on ABC NEW NOW and answered your questions on summer travel, budgeting, SHARE for groceries and more!

Q. A friend of mine is in a part of a food co-op called SHARE and she gets $45 worth of food for $20. How do these co-ops work and do you think that they can save you money on your grocery bill?
Angie from Temple, TX via facebook

Ellie: S.H.A.R.E has been out there for quite a few years and our family even participated with this when we lived in New York. SHARE is an acronym for Self-Help and Resource Exchange – is a program where people get a break on their grocery bills by exchanging volunteer time for the opportunity to buy affordable food. For each package of food purchased, we simply ask for two (2) hours of “good deed” time, whether at SHARE, other institutions in your community, or your own neighborhood. Food packages (worth up to $45) offer meats, fresh fruits and vegetables and grocery items. The price you pay is based on what you select from the menu but you can generally save about 50%. SHARE purchases the food from growers, brokers and packaging plants and is never donated, government surplus, or salvage. Just google "SHARE" and your city to find the program in your area.

Q. We’re driving from Arizona to Louisiana for a family reunion. It’s just me and my wife, how do I tell if it’s going to be cheaper to drive or to fly this summer?
Al from Scottsdale, AZ via online contact form

ELLIE: That’s a good question, Al, because if you were going solo, it would definitely be cheaper to fly. But the way to figure the costs is to first do a mapquest to get the exact number of miles you would cover in a car. Figure your gas mileage and divide it by the total number of gallons by getting the price for gas at gaspricewatch.com. Multiply the number of gallons you’ll use by the average price per gallon and be sure to add the cost of a hotel in case you need an overnight stay. Then go to bing.com to look at the predicted costs of flights or go to bookingbuddy.com to see the average price of flights. You also need to factor in whether you’ll need rental car if you fly. Once you compare air fare versus driving, don’t forget to factor in the time off work it costs you to take the extra two days (or more) to drive.

Q: I read on your blog, Ellie, that you can purchase gift certificates at sites like restaurant.com. You said that when they run on sale, you can get a $25 restaurant certificate for $2. Are there any restrictions or stipulations we should keep in mind when purchasing these?
Steffy, Birmingham, AL submitted via facebook

Ellie: When you go to restaurant.com, you'll see that the restrictions vary from restaurant to restaurant. But all the stipulations are listed on the website before you. Most will not add in the alcohol to the minimum purchase and almost all will add an 18% gratuity based on the price BEFORE the certificate, just to make sure the server gets their full tip. So be careful not to double tip (adding yet another 15% to 20%) when you get the bill. You usually have to buy $35 in food to use the $25 gift certificate. You have up to twelve months to use the certificate. But if you do the math and if you spend the minimum $35, adding the 18% tip, then you’re paying $42 before the gift certificate and $17 afterward. Add in the $2 you paid for the certificate and you’ve paid around $19 for a $42 tab, which is a savings of over 50%.

Q. We are newlyweds and we’re trying to pay cash or debit for groceries, gas and entertainment, but still seem to go over budget. Do you have a secret for tracking how much we’re really spending? There are two of us and we don’t always know what the other is buying and before we know it, we’re over budget.
Joshua & Emmy from Fort Bragg

Ellie: My husband, Bob and I had this same problem when we were first married as well. It can get complicated when one partner is buying groceries and the other also stops in to get some essentials on the way home from work. Even though you may not be duplicating purchases (getting two gallons of milk instead of one), you may be overspending at the store, unaware of what your partner is spending. The easy solution is to get the cash you’ve budgeted for the week and put it in an envelope marked food, gas, entertainment. When you know you’re going to need gas on the way home from work, get money from the appropriate envelope. With both partners taking cash from the same source, you’ll soon see how quickly you’re getting to your stopping point and you’ll be able to more easily track your spending.

Q. We have three children ages 6 to 10 and when we go out to eat, they want to order the most expensive thing on the menu. Sometimes our eight year old has a more expensive meal than his father, and he never finishes it! How do we keep our kids on a budget so that we can afford to eat out more often?
Samantha Evans from San Diego

Ellie: I think that it’s important to get the kids in on the process of economizing and you can do it in a fun way. First, call a family meeting and discuss the fact that when you go out to eat (or to a movie, the zoo or a theme park) that you’re going to give each child a fun budget. You’ll pay for the outing, but they have an amount they need to stick to. If they come in under budget, they get to keep the extra money. That’s what makes it fun. When we did this with our kids, it was amazing how they suddenly wanted to order water instead of soda and eat ice cream at home instead of in the restaurant.

Happy Savings!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Five Ways to Stay on Budget this Summer!

2010-05-31T14:32:00.000-07:00

Summer means a lot of fun for the Kay Family, we're going to get to see mini pilots flying in from overseas as well as an airplane hopping son in the deep old south of Georgia.

Recently, I was on ABC NEWS NOW, talking about how summer is a tough time for anyone to control spending, much less stay on a budget. With the kids out of school and summer vacation around the corner, it’s a time when people fall victim to the thought, “I’ll go on vacation now and deal with the bills later.”

But there are ways to cut back on spending to stay on budget before summer hits. The three areas that require consumers to spend money on a regular basis, that do not go away with difficult economic times: groceries, gas and family essentials (such as clothing, birthday gifts, etc). You can plan for summer and still stay on budget for these “little” areas that add up to big expenses.

Q. Ellie, we often think of the holidays as a difficult time to stay on a personal finance budget, but this time of the year is really is a difficult time to stay as well. There are end of the school year gifts to buy, vacations to plan and a summer clothes to get for the kids. We have to start somewhere, and you say the first step is to start with a plan?

ELLIE: Yes, it’s amazing how kids keep growing every year and the summer clothes they wore last season are two sizes too small this year. But having a plan is a good place to start and while the basic a plan is a budget, now is the time to break down the household budget into a plan for the more manageable subsections. This time of year, stores and websites are cleverly designed to get you to spend more than you intended. So it’s important to know what you are going to get and spend before you go to the mall or online. This plan will take into consideration past spending behavior and any impulse buys that tend to kick in while you’re in spending mode. Write down what you are going to spend in the little areas and be specific. If your two preschoolers need clothing, then conduct an inventory of what each of them has—including any hand-me-downs and the vacation gear they may need for the entire season. If you’re planning a vacation and find that you will eat fewer meals at home because you’re going to be away, then don’t budget the same amount for the grocery store. Otherwise, you’re adding spending upon spending when you should be cutting in one area and adding in another.

Q. So we have a plan, the next step is to not fall for questionable “deals.” What do you mean by this?

ELLIE: This time of year, you’ll see sales on summer clothing, electronics and even summer foods—all the things that people are thinking about as the school year winds down and vacation time starts to gear up. But not all sales are created equal and you may see a lot of $90 digital cameras and $100 GPS sales but there can be a huge difference in the models. So before you pick up a steal of a deal, do a general price search on the specific model at Shopping.com or PriceGrabber.com before you get too excited. Plus, if you go into the store and they do not have it in stock, ask for a substitute that is an upgrade from the model that is on sale. You’ll be surprised at how much you can save by just asking. It’s also important to read the fine print in a sale advertisement. If there is a “limited quantity” or “no substitutions” then that could impact your spending plan. Finally, look at the whole world of “price comps” this is where a store offers to match the price of competitors in any sale advertisement that you bring into the store. While one store may not have that GPS in stock and may not offer rainchecks, another store might match the sale and have plenty in stock. We’ve taken advantage of this kind of offer quite a few times, so much so that price comping has become a habit in our family. This can also save quite a bit of money and help to keep you on track in the “little” areas that can tend to torpedo the budget.

Q. So we have a plan, we’re not falling for questionable “deals” and now you say that the next step is “don’t miss any discounts.” How can this help keep us on track and what if there aren’t any discounts—especially for things like gas and other essentials?

ELLIE: Just because a store or website doesn’t mention a discount on merchandise or shipping on its site or in the ads doesn’t mean its not offering any. There is often a number out there in cyberspace that can be retried into either the promotional code box online or even a coupon code into the register at the mall. To find out if what you are buying has an additional discount, go to RetailMeNot.com on your computer or smartphone and enter the store’s name. Or you can go to CouponCabin.com, BradsDeals.com and you may find digital coupons that you can download from the store’s websites.
The same principle applies in the grocery store or when filling up your tank with gas. Go to couponmom.com to save in the grocery store and Go to gaspricewatch.com to find the best values on gas. Don’t forget to check and see if the gas station may offer an unadvertised free car wash, cup of coffee or soda. I just found out that I could have been a lot more caffeinated, for free, at my neighborhood gas station when the attendant asked me, “are you going to get your free cup of coffee?” Once again, if you just do your research you’ll find all kinds of freebies and these “little” things, when multiplied and combined will add up to big savings if you create this awareness level.

Q. You’ve covered a lot of areas so far, but what about those birthday, Father’s Day, and “teacher gifts” that we still need to buy this time of year. Does your next step give us some ideas on what we should buy in terms of gifts?

ELLIE: Yes, in our family of seven, I remember those days when all the kids were in school and we had to buy as many as 40 “teacher gifts” to say thanks to what these educators do all year long. It really added up. Plus, there are birthdays, anniversaries, and other special days that may happen in summer months as well.
I have seen that there is a trend toward necessities rather than luxuries that has emerged since the great recession. Consequently, practical gifts including cookbooks, exercise equipment and power tools are on the top of the list for gift giving. This doesn’t mean that its OK to give your wife a microwave for your 10th anniversary, unless this is on her list, but it probably is OK to get your husband a new power drill for Father’s Day.
Do the research we recommended earlier and comparison shop, combine the lowest price with free shipping and coupon codes and you’ll find that those gifts don’t have to bust your budget. Furthermore, I think that concentrating on the “multiple use” gifts is also a practical way to go.
These are gifts such as DVDs, music, cookware, etc. Gifts that will keep on giving year round.

Q. The final step you recommend in order to stay on budget in the little things is to use cash or debit cards. There are pros and cons to using debit instead of credit, what are your thoughts on this?

ELLIE: Yes, there is a time to use a credit card instead of debit when it comes to charges that you may dispute on your credit card or when you want an extended warranty or the added protection that comes from using a credit card. However, for these little areas, we tend to track the spending better by using cash or debit and consumers are far less likely to go into debt because people simply spend less when they are using cash according to the Journal of Experimental Psychology, Applied. Store clerks have long found that it is easier to persuade people who are using credit cards to spend more than they were intending. And when it comes to shopping online, you dn’t necessarily need a credit card to have more protection than using your debit card online. One other option that won’t get you into debt is to research the layaway plan at your local retailer by going to eLayaway.com

Happy Summer!
Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

ABC NEWS - I'm Answering YOUR Questions

2010-05-23T15:36:00.000-07:00

Here are some of your questions that I answered recently on ABC NEWS "Good Money" regarding the blog I wrote called "The Road to Financial Heckie Fire."

Q. I’m in my mid thirties and I haven’t had the problem of friends and family asking me to co-sign on a loan before. But in the last year, I’ve had three requests for this. What’s your advice on co-signing a loan?
Jill, from Bradenton, FL via facebook

Ellie: If you have a friend or relative who needs a co-signer, then that means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? The answer is that you should not! Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Jennifer, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Q. We are boomers in our early sixties and we were thinking of getting a reverse mortgage. Is this a good move for people our age?
Allison from Granbury, TX via online contact form

Ellie: Recently, you’ll see older actors on commercials offering these kinds of mortgages to seniors who are house rich and cash poor. They are portrayed as a viable means of getting a steady stream of income that is easy to obtain. But the fees and other costs associated with reverse mortgages can sometimes be considerably higher than on other loans. This is a bad money move unless you have no other income than social security and because of the high cost fees, it should be a last resort not a first resort. The better option would be a home equity loan. You could sell your home and move into a smaller, less expensive house. Or, you could sell the home to your kids and have a multigenerational family under one roof—this is a recent trend I’ve seen emerging. Your kids can use the inheritance to pay down the mortgage.

Q. I have $10,000 in Stafford Student Loans, an $8800 car loan at 9.99% and two consumer loans at $3500 and $3700, both at 12%. All my loans are current and I have $1000 to put toward one of these loans—which one should I choose?
Viviene via Ellie Kay’s blog

Ellie: It’s great that you are current with your payments and even better that you have an extra $1000 to put toward your debts. I recommend that you put the $1000 toward the $3700 loan at 12% in order to retire the loan. Then once you’ve paid off that debt, double up the payments on the $3500 loan. You will feel motivated by the fact that you’re paying off debts and you will also experience the “snowball effect” where you gain momentum in paying these debts and as you pay off one bill, you can put those monies toward the next bill. Before you know it, you’ll have all your debt retired!

Q. Last year, my teenage daughter couldn’t find a summer job and ended up kind of wasting those months. She tried hard, but there just isn’t much work where we live. Do you have some ideas that maybe we haven’t thought of in terms of summers for this age group?
Stephanie Corlew from Branson, Missouri

Ellie: Summer camps are a great place for kids like your daughter to plug into a summer job. My daughter, Bethany, found a job through the American Camping Association by going to www.acacamps.org/jobs (or just google “American Camping Association” and “jobs.”) She’s making enough for her college spending money and gaining the opportunity to impact the lives of young campers as well.
Another way to broaden a resume for this age group is to go to the local, state or federal political representative from your district and offer to intern in the office. My son, Jonathan, did this last summer as a high school sophomore and this summer as a junior as well. He only volunteered a few hours a week at Congressman Buck McKeon’s office (California) and it made such an impression on his resume that it helped him get into an exclusive summer leadership seminar at USAFA (United States Air Force Academy). His summer internship contributed to the community and it also has contributed to his future as he applies for college scholarships.

Q. My grandchildren are teenagers and are coming to live with me for the summer. I wanted to know if you know of some jobs they can do where they could make some extra money, but still have time for fun, too.
Connie Green from Tehachapi, CA

Ellie: Connie, if you email assistant@elliekay.com, we can send you a file that includes 30 different jobs your grandchildren can do locally and make good money as well. Just ask for the “Kids Jobs” file. There’s also a list of safety items you should check out before they work for someone they do not know. For example, there’s job’s like Rent-A-Kid where there may be people in your church or neighborhood who need odd jobs done. There are also jobs like window washing, Garage Cleaning Service, Babysitting Services for summer groups that meet, Mail Checkers (for those who travel out of town), and even Pet Minders.

Q. Ever since I was a teenager, it’s been a dream of mine to go visit Israel
Is going on a tour with a large group the least expensive way to go to big tourist destinations? How can I save money on this trip?
Pamela from Acton, CA

Ellie: Tour groups with your church or community may not be the cheapest route to go since someone usually gets a free trip or two by booking a large group. In some cases, you actually pay more money to go to Israel with a reknown author or professor than you would if you go on your own. To help save money, go to the website GoIsrael.com and do as much planning as possible. Stay in a hostel, guest house, or a kibbutz, which comes with a free breakfast. Buy a pass for all national parks in order to save as much as 35% on the most popular attractions.

Q: Our company downsized and I laid off work. I’m thinking of launching my own homebased business, but there’s so much out there, I’m not sure what I should do. How do you know it’s a good business to get into and what should I keep in mind as I make my decision?
Nicole, Albany, NY

Ellie: One area of our economy that is thriving is direct sales companies (DSC) as people explore new ways to make money. As you are searching for the best fit for you in your homebased business start with following your passion. Do you love to cook? Then Pampered Chef may be a good option. Do you enjoy wearing the latest styles in jewelry, then try Premier Designs. If you follow your passion you are far more likely to succeed. But all DSCs are not created equal. Before you decide, find out what kind of inventory you have to stock. I know far too many people who went into debt to buy their inventory and then quit the business within a year—but kept the debt! Also find out the percentage you make on sales as well as the hostess plan that the company offers. Does the company take care of filing sales tax for you or do you have that job, too? For more information, email assistant@elliekay.com and ask for the “Homemade Business” file. Have fun pursuing your passion!

Please ask me YOUR questions!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Buying a Home: It’s Easy to SAVE BIG on Closing Costs

2010-05-16T18:00:00.000-07:00

I remember when we sold our home in New Mexico and relocated to California!

We learned to save a lot more on closing costs than we ever thought possible.

If you are considering buying a home, shop carefully for lenders and be sure that you negotiate, negotiate, negotiate with the LENDER as well as the SELLER. When discussing closing costs and fees, make sure that you don't over pay. Here are some key "dos" and "don'ts" to keep in mind when negotiating fees and costs with your lender:

Do Ask for a Good Faith Estimate -- Within three days of applying for a mortgage loan, lenders are required to give you a good faith estimate (GFE) on costs. Look at GFE sections 800 and 1100 for the following fees and be prepared to haggle lightly for reductions.

Don’t Pay for Inflated Credit-Report and Courier Fees - Some lenders are charging up to $65 for pulling your credit report. That is unusually high, considering the fact that credit reporting bureaus only charge $6 to $18 per report. Using the same tactics, some lenders charge courier fees for shipping your closing documents for as much as $100, while the majority of overnight express services only charge $22. Tell your lender, up front, that you refuse to pay any more than the going rate for these services.

Don’t Pay for Document Prep and Administration Fees - The origination fee should include these services, so don’t pay them! Ask your lender to waive these fees.

Don’t Pay for Yield Spread Premiums - Lenders increase your interest rate slightly to include origination and other fees so you don’t have to pay them out-of-pocket at closing but some lenders and mortgage brokers are double dipping—by charging both the fees and the higher interest rate. If they advertise "pay no closing costs" then this is what they really mean. Ask your broker directly if a firm charges you a yield spread premium. If so, you shouldn’t pay any additional fees.

Don’t Pay for Padded Title Insurance Fees - When you are shopping for lenders, look for all the above, plus look out for those who don’t tack on a lot of extra charges for services such as title search and document preparation. Theses can add hundreds of dollars to your closing costs and they really should be included in the price of title insurance, which depending on where you live, can be as high as $6,000.

Do Ask for your HUD-1 A Day Early - Federal law requires lenders to give mortgage applicants a copy of their settlement form at least one day before closing, but many won’t give it unless you ask for it. Compare the HUD-1 with your GFE (good faith estimate) and bring any errors to your lender’s attention.

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

The Road to Financial Heckie-Fire

2010-05-14T11:47:00.000-07:00

Here's one of my favorite picks taken a few years ago with the "Pastor to Presidents," Billy Graham. He's an amazing man of integrity and in the business of keeping people out of hell.

They say that the road to hell is paved with good intentions. When it comes to your finances, some of these well meaning money moves can actually become major slip-ups that only compound existing financial difficulties. While parts of the economy are looking better, unemployment remains at a rate of 9.7% and this means that many families are dealing with weeks of unpaid leave. Still others are trying to recover what they lost in their investments, home equity and in the stock market. Recently on ABC NEWS NOW, I shared with the host, Tanya Rivero, some advice on how to stay out of the bad place. Here are some things to avoid:

Q. Ellie, one of the primary money sources that some families are using to avoid bankruptcy is to raid their 401 (k), which, you say is a major misstep. Why is this so problematic?

ELLIE: Our parents’ generation tended to work for someone who gave them a pension check for the rest of their lives. This means that current workers may not have been raised with the mindset that they control their own pensions and need to make funding their own retirements a priority. There’s an alarming trend that involves looking at 401(k) accounts as “now” money when it’s really “later” money, that really must be saved for later. While raiding an IRA to avoid bankruptcy is a well intentioned money move, it’s also foolish because if you end up in bankruptcy anyway, then you’ve passed up the benefit you have in the fact that retirement accounts are protected under bankruptcy laws in most states.

Q. For twelve million Americans, their homes are worth less than they owe, which leads us to the next major money misstep that has become more common in the past two years and that is walking out on a mortgage. What are some other options available to families that feel this is their only option?

ELLIE: I would say that half of the people who walked away from mortgages didn’t have to take that path and probably didn’t consider all their options. Providing you still have some income to pay on a house where you owe more than it is worth, the first step homeowners should take is to decide whether their mortgage issue is a short term or longer term problem. For example, if you just got laid off and have no savings or small savings, but the job market in your town is such that you can probably get some part time or full time work to keep money coming in, then you have a short term problem. On the other hand, a long-term problem means you’ve been unemployed, you’ve wiped out your savings and you don’t see a way back into the job market.
The sooner you recognize the fact that it’s a long term problem, the sooner you can put your best food forward to sell your home in a short sale and move into a smaller, less expensive place. That way, you can preserve your capital for a better time.
If it’s a short term problem, then talk with your mortgage lenders and see if they will suspend or lower your payments over the next three to six months until you are employed again. You can go to MakingHomeAffordable.gov, which is a federal government website with the goal of helping families by providing free HUD-approved counselors who can help you modify your mortgage.

Q. In every newspaper and on television, we see advertisements for credit counseling agencies that will eliminate your debt. But you say that debt wipeout scams are a major problem. How can we tell the scam from the real deal?

ELLIE: It can really be confusing because they sometimes advertise as debt consolidation companies, but you need to be extremely cautious because I would say the majority of those advertisements are misleading at best and a scam at worst. If it sounds too good to be true, it usually is. Instead, go to the NFCC.org with is the National Foundation for Credit Counseling. This is a non-profit and free service that you can trust.

Q. An alarming number of Americans, some 19 million of them, have also resorted to payday loans in order to make ends meet. How do these loans work and are they ever a good idea?

ELLIE: These are high interest loans that have an average interest rate of between 390% and 520%. They are marketed as short-term cash advances to help meet emergency expenses between paychecks. But the problem, besides, the interest rate, is that it becomes a repeated pattern and consumers become trapped in this kind of borrowing. Avoid these at all costs, and if you have young adult children, especially those in the military, educate them on the dangers of payday loans since these companies tend to flourish near military bases.

Q. Credit card usage has dipped more than 13% in February and yet almost 15% of American families still owe more than 40% of their income in consumer debt, according to the Federal Reserve. Ellie, you say that another major misstep is ignoring the card balance.

ELLIE: Yes, Tanya, while it’s commendable that credit card usage has declined, it’s still an issue when the credit card is used as a means to spend more than you can afford. This is a strategic error that can lead to financial hell as consumers ignore the balance. The new government mandated box on your credit card bill will show you how long it will take to pay off your balance if you pay only the minimum and how much interest you pay to carry a balance. Pay attention to these numbers, instead of ignoring them, and ask yourself if you can afford that item before you put it on your credit card. Behavior modification doesn’t happen overnight, but eventually, you can begin the climb toward getting out of debt.

Q. One final area that we’ll look at today has to do with trying to fool Uncle Sam. Ellie, you say that this money misstep can cost taxpayers big bucks if they are caught and that there is a difference between mistakes and intent—what is the difference?

ELLIE: It’s really pretty simple. Everyone will make a mistake here and there can be accidental errors on the tax returns of the most honest kind of people. But some folks are looking to save money by “accidentally” misrepresenting large amounts of money. We see them in the news—whether you’re a celebrity or a politician, you still have to pay your taxes. By signing the box on your tax form that you believe everything to be accurate and true on your form, you open yourself up to significant liability. If you’re audited and they can prove that the misrepresentation is intentional, then not only are there penalties involved, but you could also be charged with federal fraud. So pay those taxes, even if you have an extension and call the IRS to set up payments if you cannot pay all you owe.

Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

Your Questions about Paying Bills, Credit & More

2010-04-29T15:34:00.000-07:00

Here are some Q&A that Ellie recently answered on ABC NEWS, Good Money Show.

Q. I’m single and my landlord recently raised my rent, plus the costs of others things are rising while my income stays the same. I’m having a harder and harder time paying bills and I don’t’ have a mortgage to refinance, would it be worth it to refinance my car? Joellen - WA

Ellie: Yes, most people don’t realize that you can refi an auto loan, but you need to be prudent! First, go check out some of the best rates that are being offered and that your credit score would allow you to qualify for by going to monitorBankRates.com or bankrate.com where rates vary from 3.99% to over 12%. Take the best rate and plug it into my auto loan calculator at elliekay.com to see how much you would save with a refinance. Sometimes, you’re offered a longer loan at a higher interest rate but the monthly payments are lower because you’re paying longer. I’ve also noticed that Wells Fargo will finance a car for 125% of its value—run from that deal as you’re guaranteed to owe lots more than the car is worth as soon as you sign the paperwork and your car will only continue to decrease in value. This is not a good deal for you as you’ll pay more over the long run.

Q. Should I pay my department store credit card first or my Visa credit card bill first—I don’t think I can pay the minimums on both of these this month because I just got my hours cut in half at work! Robin Hilldale, Tehachapi, CA

Ellie: Generally speaking bank cards such as American Express, Visa, Mastercard or Discover are the accounts that carry more weight on your credit report. A department store credit card does little to improve your credit rating, but that’s not to say that you can let this debt go bad because it will be turned over to collections and it will hurt your credit score. But if you can only pay one on time and have to pay the other late, then go with the Visa and even if you pay less than the minimum, try to pay something on the department store card.

Q. My husband was injured in an automobile accident and not only do we have a mountain of medical bills, he can’t work until he’s recovered from his accident. We can’t really afford to pay for financial counseling, is there some place we could go for help? Justine - Ohio

Ellie: Justine, I’m sorry to hear of your situation, it must be very difficult. But I do have some good news, you are a prime candidate for Consumer Credit Counseling Services. Go to nfcc.org to find a credit counselor in your area who will work with you for free. In some cases they are able to get some of your medical debt forgiven and in many other cases, they are able to get interest rates lowered. But beware, there are a lot of “for profit” counseling services out there that masquerade as “non profit” and you need to be sure to only go to nfcc.org .

Q. I was laid off from work last year, but I’m really happy to report they called me back to work this past month. However, our bills took a hit as we were trying to make ends meet. My credit score is now a paltry 590. What can I do to try and repair it? Heidi Rothenberg, New York

Ellie: Communication with creditors is the key when it comes to going through the rough patch that you just survived. If they know you are trying to be responsible and pay off your bills, they can, in some cases, lower the minimum payment or extend the loan (depending on the kind of debt you have). The three quickest ways to improve your credit are: 1) pay more than the minimum payment due on your credit cards—even if it’s just $5 over the minimum, it shows up on paper as you paying down debt 2) make payments on time – better a day early rather than a day late and 3) pay attention to the proportionality on your credit card accounts and make sure that you only have 50% or less of the available credit charged on any one card. Go to annualcreditreport.com to get a free copy of your credit report and you can see which accounts need the most attention.

Q. My problem isn’t that I’m not paying my bills, it’s that my estranged husband isn’t paying the credit card that is in both of our names. What can I do to protect myself in the case of his unpaid bills that also impact my credit? Stephanie, AZ

Ellie: Any joint accounts set up in both your names will continue to impact your credit score, even after a divorce. So it’s important, no it’s critical, to your financial health that you separate these accounts by setting up new account numbers. For example, you could ask your spouse to get a loan from your credit union to pay off the balance of the joint account. Or, you could propose that he could go to bankrate.com and find a card offering better rates, including transferred balances. In that case, it’s a win/win situation because he gets a lower interest rate through an introductory offer and once the balance is transferred, you can both shut down the joint account.

Q. Ellie, I’ve read all your books and they have really changed our lives! We ran into some trouble when our credit card company suddenly changed the due date on us and we were late on our payment. I thought they weren’t suppose to do that anymore because of the Credit Card ACT reform. Should I watch out for this with my other credit card companies in the future? Chris from New Mexico

Ellie: Yes, you and millions of others had the same problem with changed due dates that suddenly made you late on a credit card bill. But those days are suppose to be a thing of the pass with the Credit Card Accountability, Responsibility and Disclosure Act or the CARD act that has been implemented throughout the latter part of 2009 and into 2010. Now, credit card companies are suppose to give you 45 days notice for any significant changes on your account, including your due dates as well as increased fees and higher APRS

Q. Our problem is that we seem to be perpetually late on paying our bills—because we’re so busy that the bills creep up on us before we can send the check in on time. Is there something you can suggest to help us avoid being late on our bills? Hannah Ortega, Texas

Ellie: Yes, this is a problem isn’t it? In our house, I’ve asked my husband to be in charge of the bills because even though I'm the "financial expert," I felt it was important for him to be keenly aware of how much we’re spending and where it goes. But that meant that I had to oftentimes deal with the frustration of seeing bills paid late until technology came to our rescue and the advent of online bill paying came into existence. We pay all our bills online including the mortgage, credit cards, electric bill, etc and we’ve set these up for an automatic draft on our checking account on the day they are due. The only bill we haven’t been able to pay online is our water bill because our city is a little behind the times and doesn’t allow that for now. However, since we’ve set up automatic pay online, we’ve never been late on a bill again!

Ellie Kay

America's Family Financial Expert (R)