Good News for Those Who Need Debt Consolidation!

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)

Prioritize Your Debt - What to do With Unpaid Bills

Recently, on ABC NEWS, I talked about the fact that some parts of the country still have unemployment in the double digits while other employees are facing cutbacks in hours and salaries. More and more people are having a hard time paying their bills in these economically challenging times. If you only have a certain amount of money available and you know you won’t be able to pay all the bills, you need to know that not all bills are created equal. There are certain bills that have greater penalties than others. Today, I want to help you look at how to tackle those unpaid bills as well as grace periods and the variable consequences for not paying bills on time.
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Q. Are people still having a harder time paying their bills? I mean, we hear about new jobs being created and the recession is officially over. Why are some families susceptible to continued financial difficulty?

ELLIE: Obviously, unemployment is a big issue as well as the fact that many workers have had to accept pay cuts or work fewer hours to keep their jobs. With these come a contagion effect in that if you are unemployed or you go part time, there’s additional costs involved such as purchasing health insurance. Even if these workers find new jobs, they still have the residual effect of having less income for many months. In other cases, some may have had homes foreclosed upon and it’s cost them a lot to get established in another place of residence, plus these individuals has tanked their credit ratings—which means that rental property will require a larger down payment. A poor credit score also means these renters have to pay more down to even get basic utilities hooked up to their rental property. All these expenses start to add up and eventually, families are finding that they don’t have enough to pay all the bills.

Q. So if someone is between jobs or had some unexpected expenses such as medical bills, then what bill should they pay first?

ELLIE: When it comes to paying the bills there are always consequences for not paying. However, it’s the severity of the consequences that people need to consider when they are rank ordering which bills they should pay first, second, and so forth. The rule of thumb is to look at how fast your creditors will be likely to move against you. Which brings us to the most important bill and first bill you should always pay—your mortgage. If you fail to pay, the bank can begin foreclosure in as little as three months. Plus, this is the most significant debt you have when it comes to influencing your credit score. And with a poor credit score, the bills will just stack up even more quickly as we know that those who have bad credit have to pay more for deposits, for auto insurance some times and a poor score can even influence whether you get a new job or a job promotion at your existing place of employment. So protect your score and your financial future by paying the mortgage first.

Q. OK, so we understand that the mortgage is the most important bill, what would come second?

ELLIE: The next most important bill to pay is your car loan. Not only because you need a car to go to and from work, but also because as the second most significant loan you have, it will also impact your credit score in a more significant way than a department store charge card or a utility bill will. As for the consequences of not paying, a lender can begin repossess your vehicle if you’re a day late, but in all actuality, most will wait about sixty days. If you are serving in the military in a combat zone, there’s a little more leeway for vehicle repossession, you should contact your base’s financial office if you’re in danger of repossession while on active duty. But for the rest of us, not paying this important bill will cripple your ability to remain gainfully employed as having a vehicle is essential in most cases.

Q. So we’ve paid the mortgage and the car loan, now we pay credit cards, right?

ELLIE: Yes, that’s right. As you know, credit cards payment are very important because if you don’t pay on time, you’ll get hit with late fees. But there are more consequences than just a late fee. You might be faced with a hike in your APR if you’re tardy and then it could spread to other cards as well. You might find your average APR going from 9% on your credit cards to 24% or more in just a month. After about six months of missed payments, credit card companies start to send your account to collections and then you have an entirely new set of headaches to contend with. Concentrate on paying bank cards first such as Visa, Mastercard and American Express. You can even go to www.bankrate.com and look for lower interest rate cards that offer a promotional for transferred balances which can help your overall liability on credit cards. A final option is to go to your local credit union to see about a consolidation loan.

Q. Let’s say you have a little bit of money left, what’s one of the lower priority bills that you can tackle?

ELLIE: The next bill to concentrate on just happened yesterday—taxes. While technically, there is no “grace period” you can ask about an installment plan. The IRS can eventually garnish your wages and seize property or bank accounts. The old saying, “death and taxes are inevitable” exists, it’s because you WILL have to pay that tax bill some day—whether you’re a celebrity dishing on talk shows and making 25 million dollars a picture or whether you dish up ice cream part time at Coldstone making $25 a day!

Q. Thus far, we haven’t mentioned student loan debt, isn’t that an essential bill as well?

ELLIE: Yes, it does seem kind of crazy that student loans haven’t made it into our priority list yet, but I think that it illustrates the fact of how quickly the money goes for more “essential” bills and how there’s often more month left at the end of the paycheck Lenders for student loans will wait about nine months before placing a federal loan in default. As of last July, graduates can opt for a loan program that bases payments on up to 15% of your annual gross income. If you have these kinds of bills, then you can go to www.IBRinfo.org for help in how to pay your student loans more efficiently.

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

When Two Incomes Become One - WIN A BOOK!

Here is another chance for you to win a copy of Ellie's newest book, The Little Book of Big Savings (Waterbrook, 2009) by having Ellie answer your question on ABC News Now.


Do You Fear Unemployment?
Are you a two income family, that is suddenly down to one income?
Are you afraid your company's cutbacks might include your job as well?

If so, then we want to hear from you! What question(s) would you like to ask Ellie about your situation?

The producer(s) of ABC News Now will select the questions for Ellie to answer on the "Good Money" show to air on October 27, 2009.

Please email your questions to: assistant@elliekay.com or posted it on today's blog (below).

The deadline for your questions is: Monday, noon PST, October 26, 2009

Remember the ABCs of past prize winning questions:

• Accuracy- Questions that accurately fit the show's theme for the day are most relevant. This week's theme is "When Two Incomes Become One."
• Brevity - If it takes two minutes to ask the question, then it won't be selected. A question that can fit into a 10 to 15 second soundbite is ideal.
• Clarity - The world of TV news revolves around questions asked in a way that is easily understood by viewers.

We look forward to hearing from YOU as you join Ellie on ABC News!

Is the Recovery for Real?

One of my favorite musicals is The Phantom of the Opera. I've seen it on Broadway, in Spokane and in Los Angeles and it's always a powerful reminder of the phantoms we struggle with in life. This recession has been a formidable foe for many Americans as they wonder when (and how) it will end.
Recently, Federal Reserve Chairman, Ben Bernake, announced that he believes the recession is over. How do we know if this is the real deal or just a phantom? Here are some signs that the recession is really over:

• Retail Sales - With the holidays right around the corner, retailers are forever watching to overall gains and losses. Any signs that retail sales are on a sustainable upward trend (3 or more quarters of growth) are good signs for a recovery.
• Corporate Profits -- We will need to see genuine revenue growth from US Companies in order for us to say this area is picking up. We can't just look at profits that result from cost and job cuts or stimulus incentives. Real growth means real revenue.
• The Market - When investors move away from safe havens such as low yielding CDs and money market funds and they instead go back to investing in stocks--then we can be sure that confidence in the stock market has been restored.
• Jobs -- Just try to tell the guy who is unemployed, "hey good news! The recession is over!" He's still without a job--it doesn't feel like it's over for him. We've lost almost 7 million jobs since the beginning of 2008. Signs that companies are creating jobs, done firing and even looking to hire mean that their cash flow is improving and so is our economy. When there's a drop in the number of jobless claims (getting below 500,000), then we can believe we're in recovery.

Whether the recovery is real or we're still in a recession, it's important to practice the basics of good financial management: get on a budget, live a more frugal lifestyle, pay down debt, and follow the seven steps to thrive and survive during a recession. If you allow this recession to be a wake up call as to how you manage your money, then your personal recovery will last a lifetime!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Is the New Frugality Here to Stay? -- Ellie on FOX NEWS - Neil Cavuto

A new study by research firm AlixPartners indicates that when a new normal sets in after this recession is over, Americans will spend at about 86 percent of their pre-downturn level. Today, I was on Neil Cavuto to discuss with guest host, Stuart Varney, whether this new frugality is lasting or just a passing fancy.

I believe it's here to stay for several reasons. I think that the hard-earned, hard-learned lessons of the recession are not likely to fade as soon as our economy shows its first two quarters of growth. Some of those lessons came through job loss, foreclosures and underemployment and if you weren't directly impacted--you know someone who was.

Secondly, I think that we're not going back to those pre-recession spending levels because there will be what I call a forced frugality. While there will always be spenders out there, it’s going to be harder to spend because:

· NO MORE EASY CREDIT the days of easy credit won’t be so easy as lenders continue to scale back on available lines of credit. One of the reasons Americans could spend beyond their means was because of the ready availability of easy credit.
· NO EQUITY - there’s not going to be the equity in your home to leverage in order to pay for consumables. The people who used home equity to pay for vacations, get out of consumer debt or add a new kitchen are now wishing they had the equity instead. Some of these people are even upsidedown in their homes because of leveraged equity.
· EMPLOYMENT ISSUES – Because spending is down, more job sectors are going to continue to be impacted. As people spend less, more folks lose jobs and unemployment may continue to rise even after the recession if officially over. It’s going to take a while for the job market to bounce back—unemployment and underemployment are going to be continued problems.

Thus, the need to adopt the new frugality as a classic style rather than a passing fad. People like me, who have been preaching the gospel of living within your means, paying cash, paying down consumer debt and letting your kids go to a college you can afford---are now in high fashion.

I hope this kind of fiscal sensibility never goes out of style!

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

Seven Steps to Thrive and Survive a Recession

Today, many families are facing the same issues that Bob and I faced when we were first married—paying bills, stretching paychecks, and still trying to maintain a reasonable quality of life. We read in the news that homes are being foreclosed upon in unprecedented numbers across the country. Consumer confidence isn’t very high these days, sub prime rates are fluctuating and wages are remaining relatively constant—which usually means more inflation. Let’s face it, the headlines aren’t all that cheerful in the midst of a recession. If most families aren't concerned about losing their homes in uncertain times, they're certainly concerned about rising food and fuel costs, keeping their kids in clothes, or the freedom to go on vacation. But there are answers for those who are willing to do something about it. Here are seven basic tips to help you beware and prepare:

1. Be Diligent: FICOS (Fair Isaac Credit Scores) – Now is the time to improve your FICO as these scores can determine your auto insurance premiums, whether you’ll get the promotion or the job (employers are checking FICOS these days), and whether you pay a security deposit for utilities. If you downsize a home or a vehicle, you’re also going to need to have an excellent FICO to get the best APR rates. To improve your FICO in three easy steps:
· Pay your bills a day early (rather than a day late) by setting up payments online
· Pay $5 to $10 more than the minimum balance on your credit cards, which means you are paying down debt
· Proportionality: make sure that you don’t have more than 50% of the available credit charged on any one card (for example, $3000 charged on a card with a $6,000 limit).

2. Be Smart: Save Money- I get loads of emails every week from families who are cutting hundreds from their household budget by following simple savings tips. From insurance to groceries, there are savvy ways to save at your fingertips. (See the money savings tips on blog). Start to implement these savings and it will create good discipline that will prepare you for the inevitable highs and lows of the economy. Use the money you save to pay down debt and build short term savings. This prepares you and solidifies your financial picture.

3. Beware: Debt Consolidation Companies: With rumors of economic challenge comes an influx of those who want to "help" prepare you for the worse by consolidating your debt. However, many of the for profit debt counseling companies charge a hefty fee for their services, which is usually tacked onto your debt load. Instead of going through a for profit company, consider going to the nonprofit, National Consumer Credit Counseling Service found at http://www.nfcc.org/.

4. Be Aware: Refinancing to Pay Debt - As things begin to get tight, you might be tempted to get a HELOC (Home Equity Line of Credit) or refinance in order to pay your consumer debt. This isn’t a good idea if you’re using it to pay consumer debt and you haven’t learned the discipline of living on a budget. This kind of borrowing will only deteriorate the equity in your home and chances are really good you'll be right back in that HUGE boat load of debt by this time next year. The better option is to cut costs, budget, and only use a HELOC for home improvements.

5. Be a "B" Word Person - If you don't have the "B" word as part of your lifestyle, then yesterday was the day to start budgeting. Set one up with online budgeting tools, found at my web site . Make sure your budget has “fun” figured into it and isn’t so restrictive that it is impossible to follow.

6. Be Careful: Recalculate Your GPS (Gross Personal Savings): When my husband takes a wrong turn, our GPS (who we've named Bitty) says "Recalcuating. Recalculating." In this tip, you are building savings and paying down debt with the previous tips. But you are also recalculating your budget to accommodate the act of actually writing a check to pay debt or to fund your savings account. Otherwise, all the money you save is just flying out the door.

7. Be A Planner With A Purpose - Whenever a "theory" is tested, it must stand up to a "proof" in order to be established as true. You can have all this good stuff on paper, but if you slap down the credit card to pay for a "40% off" killer Marc Jacobs suit, or buy a new boat during summer vacation--and you have consumer debt--then your plan is only a theory. For it to become REAL, you need to make it part of your daily life. This means your family starts to live with the plan and they don’t incur more debt. Your purpose is to live a life with more financial freedom in order to benefit your family and your kids future in the long run.

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

MAJOR MEDIA - Couples Money Workout

One of the most requested files I have is for my "Couples Money Workout" as it is helping save marriages by giving couples a tool to discuss money matters without throwing food or calling in the SWAT team. I recently recorded a segment with a fabulous couple, Chris and Kathy Hansen, for a major media news show. Once it's going to air (later this month), I'll announce the show and the date.

When Bob and I were first married we didn’t like to say that we “argued” about money. Since he was a born spender and I was a born saver it was natural that learning to manage money as a couple would require a certain amount of give and take—but the word “argue” was just kind of negative for newlyweds like ourselves. So we called it “intense fellowship” instead! We learned that there was a right way to approach this dreaded topic and a very, very wrong way.
One of the things I did before I talked about the One Hour Money Workout for Couples, with the Hansens was to play a game—the Newlywed game, in fact! You can do this by getting 12 pieces of paper (or cardstock) and two big markers (like they use on the show) and get ready to learn some things about your mate! Answer each of the following for yourself and your mate and have your partner do the same thing.

1. Complete the sentence, when it comes to money, I wish my partner would stop _______.
How do you think your spouse answered this question? ___________
2. If you won $1000, what would you do with it? ____________________ How would your spouse spend it?____________________________
3. How would you answer this statement (circle one) “I would rather have: money * beauty * brains.
What would your spouse circle?________________
As you answer these questions, I think you’ll find that you and your spouse are different. You may discover that you didn’t know as much about your mate as you thought you knew or vice versa! But part of any healthy relationship is realizing we are different and we can give each other permission to have their own thoughts and feelings about financial matters. The goal, whether you are a newlywed or you’ve been married forever, is to communicate effectively about money, get on the same team and find financial freedom!
As we prepare for the workout, it’s important to establish boundaries and do a little bit of preparation work as well. Here are some things to keep in mind as you set up boundaries and prepare:

• table all financial talks until your couples money workout time



• no condescension or negativity



• no interrupting your 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 - for each segment in the workout

Bob and I developed a one hour money workout because we thought that if our “money talks” had a start and a finish they would be a lot less painful. We knew we wouldn’t get all our problems solved in just one hour, but we also knew that if we kept at it, we’d make progress. Email me and ask for the "Couples Money Workout" and you'll find a miracle happen in your marriage, too!

Ellie Kay

America's Family Financial Expert (R)

Ellie on Neil Cavuto -- Financially Pinched Companies Pinch Employees

Goodyear Tire announced that they were reinstating their 401(k) program after cancelling it in 2003. But it's not the "good news" it appears to be because at the same time they froze more traditional pensions, thereby saving hundreds of millions of dollars at employee's expense! So what do YOU do when your company cuts benefits--do you have a recourse?

Basically, you take charge. You don't rely on your company to be your uncle sugar, you realize that you have to rely on other resources that are available to you. Today, I shared this on Neil Cavuto

1) TAKE ADVANTAGE WHILE YOU CAN: Invest in your 401(k) if/when it comes back into play. Companies are reinstating formerly suspended 401(k) plans. These may come back for six months, a year or longer. TAKE ADVANTAGE OF THE MATCHING PORTION up to the the % the company allows (usually 4% or 5%). Even if they are only matching 25%, that's a much better percentage than what you can make on your money in today's market.

2) TAKE MATTERS INTO YOUR OWN HANDS: One of the things that companies are doing is kind of a bait and switch tactic. For example, they may be reinstating 401(k)s but they are coming in the back door and cutting pension programs that are far more costly. It used to be that you could cound on social security and your pension to retire, but that is no longer true during a recession. Therefore, you need to fund your own retirement through Roth or Regular IRAs or even a SEP IRA (Simplified Employee Pension) if you or your spouse own a small homebased business. Max out the amount you contribute to your IRA based on your age (up to $5,000 for a traditional IRA or $6,000 if you are over 50) and don't trust your company to fund your retirement.

3) TAKE CARE OF YOUR OWN HEALTHCARE: Just about the time we find out that healthcare costs are rising 7% to 8%, we also find out that more and more companies are cutting healthcare benefits. Yesterday was the time to check into a high deductible individual or family plan with an HSA (Health Savings Account). For example, if you're an individual and have a $2900 deductible on your health insurance, you can tuck up to $2900 into a tax favored HSA account. If you're a family you can contribute up to $5800 per year. These tax favored funds are not the old fashioned "use it or lose it" rather they are your funds that will be rolled over from year to year and can eventually be used at retirement. Premiums for this high deductible plans are about half what a costly group plan can cost you and your family, so now is the time to have that safety net of covering the big medical expenses while not trusting your employer to be there for you when it comes to healthcare.

4) TAKE IT TO THE TOP & BE THE TOP: Employers still want to attract and keep the best talent. Show them you are not the weak link and make yourself indispensable. Go the extra mile, do quality work, bring in business, get along with your peers, support your boss and make sure that YOU are the talent they want to keep.

5) TAKE THE HIGH ROAD: If you are in the position of having to accept a severance package realize that you can still negotiate it. You can often test the wiggle room to get a higher amount and you can determine whether you take a lump sum or a longer payout. You also need to be sure to negotiate for longer lasting health and life insurance benefits. Don't sign any papers the day you are let go and don't make any rash or emotional decisions. Take a breath, take your time and realize that you still have options.

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Texas to Toronto - From Ya'll to Eh!

My "Living Rich for Less" book tour took me from my original stomping grounds in Texas all the way to the frozen white north of Toronto. I tend to adapt easily to my surroundings, so when I did TV shows in Canada, I found myself saying, "The thing aboot finances if that you have to stay on top of them, eh?"

In Dallas, I had to keep myself from saying, "Hey ya'll, I'm fixing to tell you some thangs that are gonna help you a bushel with yer money." But somehow I managed and you can see some of these clips to get short, pithy and helpful hints that will help to save you $30,000 in 2009! This was on CBS NEWS You be the judge and tell me if you think the Financial Expert or the Texan took over in these interviews!

Ellie's personal story: Runs 2:40
- Ellie on the economy: Runs :43
- How to save on Homeowner's Insurance: Runs: 1:51
- How to save on Auto Insurance: Runs 1:31
- Grocery Savings: Runs 1:14
- Restaurant savings: Runs :55
- Saving Is Cool: Runs: :24
- Tips on Refinancing your mortgage: Runs: :47
- Charitable Donations: Runs: 2:09

I'll be back to Texas to do shows for CBS "Prime Time" (interactive perhaps?) and other shows on March 19th--so stay tuned!

Hey ya'll, check back again for more helpful hints on my blog, eh?

Ellie Kay

America's Family Financial Expert

http://www.elliekay.com/

An Economic Victim--The American Marriage

When our daughter, aka "Bunny" was three years old, she was convinced she would marry her Papa when she grew up. He was and is her hero.

Well, Bunny's hero (Bob) and I went to see the movie about another hero who was a firefighter featured in "Fireproof" http://www.fireproofmymarriage.com/ . It was made for $1 million dollars and as of this morning had grossed $20 million, a certifiable and unexplainable "hit" by Hollywood standards. The New York Times reviewer said: "Fireproof may not be the most profound movie ever made, but it does have its commendable elements" and "But the cast of mostly amateurs (Mr. Cameron of “Growing Pains” being the exception) is surprisingly good."

During the movie, I laughed, I cried, I cringed (at some of the acting). But we left feeling that three couples we know, who are on the brink of divorce, should see it and maybe it would save their marriage.

Saving marriages is also a big part of my work, believe it or not. When the number one reason cited in divorce is "arguments over money" I wanted to see if this "marriage movie" dealt with economic issues. Money made its appearance, when the main character put his money where his mouth was and as a result, his wife returned to their marriage.

With an eye on the economy, we need to talk about keeping an eye on one of the main victims of difficult economic times--the American marriage. Believing that communication about money matters is the key, I developed the "Money Workout" which dedicates one hour to talking through your money issues with your mate. It has made a huge differences in marriages and if you want a copy of this workout, just email assistant@elliekay.com and put "Money Workout" in the subject line.

Don't let the economy make your relationship the next victim, fireproof your marriage.

Ellie Kay

"America's Family Financial Expert"

http://www.elliekay.com/

Wall Street Meets Main Street

The only thing worse than being associated with Wall street these days is being a Wall-Street-type going back to your college reunion. I've been remiss in posting the last couple of weeks because I've had back-to-back-to-back trips. The first leg was for my husband, Bob's, Air Force Acadmey reunion.

We saw generals, astronauts, corporate CEOs, airline pilots (lots of those) and even an occassional wayward fighter pilot or two. Bob clearly had the most enviable job--as a test pilot for the Sabreliner and F-4 fighter jet.

At this reunion, the week the Dow fell south of the equator, the least enviable job was that of a financial investor. Most of these Wall Street guys had a good attitude, but Bob and I spent a painful 20 minutes with one Financial Management guy who spent 1/2 the time talking about how rich he was (yeah, I believe THAT) and the other 1/2 about how smart he was to own the company. Bob tried to interject, "Well, Ellie works in the financial area as well--she's an author, speaker and media personality." He took one very condescending look at me, tightened his lips, raised his eyebrows and looked as if the idea of listening to me talk about my work would be as pleasant as the thought of having to stand in for the "Naked Cowboy" in the middle of Times Square. I spared him. Instead I said, "Bob, he probably needs to go and catch up with other class mates, if he wants to know more about me, he can go to my website."

The vast majority of Wall Street is so disconnected with Main Street. Their main interest is "my accumulated wealth, my ambition, and oh, yeah, ME." But then came the second leg of my back-to-back-to-back trips--Fort Polk, Louisiana or Main Street America. At this post, 85% of the soldiers are deployed NOW. They brought me out to speak at a spouse's conference that the leadership put together to help these (primarily) women deal with: 1) their finances and 2) the life and death aspect of their role as military wives. Just before I came to town,we got word that the post lost a soldier. So when I spoke, behind me on the platform, the stage was set up for a memorial service for the staff seargant who was killed in Iraq and left a wife and three kids. The memorial was to be held in the same building where we had our event. My message was practical and purposeful and one that gave hope in the midst of their real world life.


The next day I spoke again to another group on post. One of the women came up to me and said she had talked to her soldier the night before from Iraq. He said, "let me live vicariously through you, what did you do today?" She told him about the spouse's conference and some of the funny stories. He laughed. She also told him about other aspects of the presentation and said, "She made me laugh. She made me cry. She made me proud to be an Army wife."

He asked her to give me a message, knowing she would see me at the event that day. "My husband wanted me to tell you" she smiled shyly, "Thank you for making my spouse laugh. Thank you for making her cry. Thank you for making her proud to be my wife."

When it comes down to working on Wall Street or working with those on Main Street. I think you know where I choose to live. Later this week, I'll talk about the final leg of my back-to-back-to-back trips (hint, it involved Times Square and the good news was Bob's broker classmate wasn't there!)

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Twice As Stimulating!

The check is in the mail. The check is in the mail. Oops!

Can you remember the check you waited the longest to receive? Maybe it was your college roommate who borrowed $300 and "promised" to repay you within the month--some three years later you're still waiting. Or, it might be a deadbeat relative who is always wanting to borrow "just the rent money" and amazingly seems to be near homelessness without your check. But the next time you see him, he's driving a new Mercedes--that's a check you're never going to see.

Well, this year, Uncle Sam really DOES have the check in the mail--sometimes twice! Through June 6, the U.S. Treasury had sent 66.6 million payments totaling about $56.8 billion. Altogether, an estimated 130 million payments will be made this year. A hand full of people are getting a SECOND stimulus check in the mail. Don't take that as God's way of telling you to put the money down on a new Mercedes!

If that happens to YOU, then don't think it's a windfall from a doubly generous Sammy. The IRS will eventually catch their mistake and come back after you for the money. If you get the check, write "void" on the back of it (under the endorsement section) photocopy it for your records and return it to the IRS with a note indicating it was a "erroneous stimulus check." You should mail it to your regional IRS office where you filed your return http://www.irs.gov/file/content/0,,id=105693,00.html
This isn't just a matter of being honest, it's a matter of saving a huge headache in the future when you've spent the second check and the IRS is wanting it back post haste!

So much for twice as stimulating!

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

Consumer Confidence Lowest in 35 Years--A Bad Thing?

According to today's latest bulletin, consumer confidence data measures at a 35 year low. That means when boomers were wearing hiphuggers and halter tops, listening to ZZ Top and the Eagles and lamenting the hedonistic value of vacuum cleaners--consumer confidence was as bad as it is now. So it's the worse it's ever been for at least two generations of consumers.
We may be in for a Marathon rather than a 50 yard dash when it comes to economic recession. Before you assume that this is a hopeless race for which you are ill prepared, let's look on the upside of the downside of today's news.

• The Stretch - When my husband and I married 20 years and five kids ago, I inherited $40,000 in consumer debt from his divorce. The upside was that I got two great stepdaughters out of the deal. But a total of seven kids to support and lots of debt was not fun for this broker-turned-bride. It was a stretch for me to give up my well paying career and take on the challenges of being a SAHM while trying to pay down debt on my husband's military salary. But being stretched isn't a bad thing, it gets us ready for the next phase.
• Flexibility -- One of the ways this business backgrounded mom made ends meet was to become flexible in the way I managed money. I developed a sophisticated method of recognizing ways to save on everything from clothes to corn to cars--and it worked. Flexibility did not include miserly, cheapskate, wierd ways of saving money--like collecting tin foil balls or taking other people's leftover pizza home at a restaurant (my parents generation did that kind of thing). No, I preferred the savvy savings approach that didn't embarrass me or my family. I still wear Calvin Klein suits bought at the Nordstrom Rack for the same price as a Jacqueline Smith (disposible) suit other people would purchased at K-mart. (I don't shop at K-Mart--ever!) But... I do have a Wal-mart brocaded jacket that gets more compliments than my designer suits! It's all about savvy choices. In today's economy, there's a couple of generations of consumers who can step up to the starting line and learn this same kind of "saving money is cool" approach to life.
• Endurance -- What did the easy-credit, low mortgage rates of the past few years do for consumers? Did it make couples stop arguing about money? Did it put their kids through college debt free? Did it improve their quality of life--especially NOW in light of today's recession? No, it didn't make life better, it only made it easier to get into debt by having a house that owns you (too much house) or escalating credit card bills that are cushioned with the idea that "my home equity can pay these bills if I get in a pinch." BAD, real bad. Now that the equity has deteriorated, it's time to learn the endurance part of running the great race. Learning how to cut back, curb impulse buys, be thoughtful and strategic in your spending and implementing a little-known thing called "self control" in money issues is a good possible outcome for a bad pronouncement. It depends on the choices consumers make at this point in time.
• Finishing Well -- David Bach's best selling book, "Smart Women Finish Rich" is a must read for all consumers (guys can get in touch with their feminine side and make a buncha money in the process--just look at Tyler Perry). Finishing well, means finishing rich but being rich may not mean having a multi-million dollar home or a self-propagating portfolio. We all know miserable misers who saved themselves into delusional denigration (ever heard of Howard Hughes? Being rich can drive you nuts!) The kind of wealth I think most Americans want is to have a nice home that will be paid for at retirement, put their kids through college debt free and have the ability to pay the bills without worrying about nastygrams from creditors. That's rich, baby!
• The Winners Circle -- OK, time for true confessions. My husband and I recently competed in the LA Marathon and finished. I didn't end up in the winners circle, but they create a similar circle for EVERYONE WHO FINISHES. You get a rose, a medal, & a sports massage. So, with my swollen toes, wilting rose, cramping calves and smiling husband, I could say as a forty-something year old mama of many--I finished the Marathon. Just don't ask me my time. There's a lot to be said about the finishing the process. If consumers will embrace the economic challenge that a 35 year low in confidence presents, then it can be a good thing. New generations of consumers, who have never had to put on their big girl panties (or big boy underwear) will have to step up and learn a thing or two about managing money and avoiding credit. It can be done and it can be done well so that we have a whole new circle of winners.

Run well, finish well, then celebrate!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/