10 Things You Should Know Before You Get an Auto Loan

(This is a guest article by Karen Schweitzer*)

Car dealers are working very hard to make sure that auto sales rebound over the winter season. And while it may seem like the ideal time to buy a new car, there are a few things you should know before you get an auto loan:

1. You Will be Subjected to a Credit Check

Although there are some car dealers who are willing to finance buyers without a credit check, most will not. If you get a loan through the dealer or through a bank, you will be subjected to a credit check. Lenders will evaluate your debt-to-income ratio as well as your credit score before deciding whether or not to give you a loan.


2. You May Need a Co-Signer

If you have bad credit or worse (at least in a lender's eyes) no credit, you may need someone to co-sign for your loan. Your co-signer doesn't have to be married to you or related to you, but the chosen individual will need decent credit. If you do decide to go this route choose carefully. The co-signer's credit score will impact the interest rate on the loan. The co-signer will also be responsible for the loan, late charges, penalties, and late fees if you default on the loan.


3. Loan Rates Will Vary

Like other loan rates, auto loan rates will vary from lender to lender. If one lender quotes you an interest rate of 5.25%, it may not be the lowest rate you are eligible for. Be sure to check with at least three different lenders before signing on the dotted line.


4. Loan Terms Affect Monthly Payments and Overall Costs

The average auto loan term ranges somewhere between 36 and 72 months. The longer the term is, the lower your monthly payments will be. A longer term may seem attractive initially, but it is important to remember that if you go this route you are likely to pay more in interest than you would with a shorter term. In other words, the longer your loan term is, the more the loan will cost you in the long run.


5. Zero-Percent Financing Isn't Always Available

A lot of auto dealers and manufacturers advertise zero-percent financing on new cars and trucks. They do this to get buyers in the door. It isn't necessarily a gimmick, because some people do qualify for this sort of financing. However, most people will not. Buyers need exceptionally good credit--a score of 700 or more--to be eligible for incentives like this.


6. Gap Insurance May Be Necessary

The average car is a depreciating asset. This means that the car will decrease in value as soon as you buy it and will continue to do so as long as you own it. If you pay too much for the car, don't make a down payment, or get saddled with a bad interest rate, you could end up owing more on the car than it is worth. This could leave you in serious trouble if you wreck the vehicle or need to sell it quickly. If you are worried about this happening, you can purchase gap insurance, which covers the difference between what you owe on the car and what it is worth.


7. Extended Warranties Can Be Financed

Nearly every auto dealer will try to sell you an extended warranty when you buy a new vehicle. The decision to purchase a warranty is a personal one and should be considered carefully. Before you make a choice, you should know that extended warranties can be financed. You should also know that financing an extended warranty will up your monthly payments as well as the total amount you pay over the life of the loan.


8. Some Lenders Charge Prepayment Penalties

A lot of people like to apply extra money to their auto loan each month to reduce the interest paid throughout the term of the loan. If you are one of those people, you will want to make sure you're lender does not charge any sort of prepayment penalty.


9. An Auto Loan Can Improve or Demolish Your Credit

An auto loan can be very beneficial for people who have bad credit or a limited credit history--if payments are made on time. Late payments or defaults will have the opposite effect and can leave your credit score in ruins.


10. You Can Refinance Later On

If you do end up with a higher interest rate than you'd like or loan terms that are not favorable, you can always refinance your loan later on. You may have to pay an application fee or another small lender fee, but the cost of refinancing will be minimal.

*About the author: This is a guest post from education writer Karen Schweitzer. Karen is the About.com Guide to Business School. She also writes about online degree programs for OnlineDegreePrograms.org

*Image Credit: Photograph by rev [via Flickr Creative Commons]

Paid $258 for a Pair of Eye Glasses Inspite of Having Insurance...

... And the lesson learnt: "Never let your guard down".

Here's what happened. I have been using my current pair of eye glasses for close to two years, and it was time for a change. So I went to my doctor, had an examination and as I always do, I told the lady I wanted to go over my insurance first to get an idea of the coverage before starting to look for the glasses. I did NOT want expensive glasses.

As we were going over the insurance, I indulged myself by inquiring about the frame-less "silhouette" glasses. I have always wanted to have those, but due to my weird astigmatism prescription, making the lenses of the quality that can be directly bored into was an expensive prospect. Every time I got new glasses, I would get an estimate for the frame-less lenses, find out that my insurance did not cover it sufficiently, and choose some old boring frames. And here she was telling me that my current insurance covered 100% of the expenses for whatever-the-process-is for making the frame-less lenses. I was exhilarated.

Now, generally, when I finish discussing the insurance details with the lady, my husband and I go off on our own to look through the frames and choose one that not only fits me, but fits our budget as well. But with frame-less lenses, how much could the thin temple bars cost after all, right? So, we let the lady show us some of the "frame-less frames" that they carry. And both my husband and I liked one, so we decided to go with it. Since all it is, is a pair of metal sticks that hinges on my ears to make sure that the lenses are held correctly over my nose and there is no "frame" as such, we did not even bother to ask her how much it costs. Or for that matter how much my insurance coverage was for frames.

Happy with our purchase, we went to the register to pay. Lo and behold, the bill was for $258! Surely there must be a mistake somewhere! As I carefully went over the bill, my heart sank to find out that the frame-less "frames" cost $330 while my insurance only covered $180. So my out-of-pocket expenses was $150 for two thin 4 inch metal sticks! Add to that the co-pay, my portion of the anti-reflective coating, blah, blah and more blah, there it was - a $258 bill :( I was too embarrassed to tell her I wanted to change my mind and go for the regular frames. Or to say that I just needed the prescription, so I could go online and order the same "frame-less" frames with the anti-reflection coating and the other bells and whistles for around $50. So I quietly signed on the dotted line.

Today, my glasses arrived. I love the way they look and feel. Nevertheless, every time I put them on or take them off, I can't help but feel a slight sense of shame for having been a sucker and so grossly overpaying for them...

Sigh!

*Image Credit: Photograph by Daniel Y. Go [via Flickr Creative Commons]

10 Best Gift Cards for the College Student on Your List

I am a huge fan of gift cards, and think that they make much better gifts than arbitrary stuff that I don't really need. They do lack the charm and personality of a hand picked gift, but that usually flies out the window when I have in my hands this tiny piece of plastic that I can use to buy what I want, when I want. And this year, if you are looking for a gift for that college student on your list, here are some great ideas for what gift cards will be a hit!

1. Amazon.com: This is undeniably going to be the most popular choice. Amazon offers such a range of options that it can satisfy the needs of most people, not just college students. But for college students in particular the choice of books, CDs, DVDs, games, cell phones and a lot of the items that they will use on a daily basis is incredible. Add to that Amazon’s free shipping policies for purchases over $25, and you have on your hands the making of an ideal gift.



2. Ikea: If your college grad is just starting out or moving out of the dorm into an off-campus housing, then this is certainly the way to go. Ikea has a lot of low priced inexpensive furniture with a modern take that many college students like. One thing to note though is that if there is no physical Ikea location close by then the shipping policies by Ikea are not all that great and may eat away into the gift budget.



3. Best Buy, Circuit City or Fry’s: Many college students love cool electronic gadgets. And there are tons of new toys coming out every year that you may not even be aware of. So giving a gift card to an electronics store and letting them take their pick is surely going to be a great gift, if your college grad loves tech toys.



4. iTunes: If your college grad has an iPod, this is sure to please them to no end. On the other hand, if they don’t have an iPod and you have a big enough budget, then throw in an iPod with the iTunes gift card and you will be their hero for a long time to come!



5. Gift card to favorite restaurants: Most college students are perpetually broke. Eating out is usually a luxury that is much looked forward to. So if you know the favorite restaurant that the gift receiver likes, then buying a gift card to that restaurant is bound to be a sure fire hit.



6. Gift card to a travel site: This may be a gift they may not appreciate right away, especially if they have traveled a lot to meet you. But come spring break time, which is not that far from Christmas, you are bound to receive a huge “Thank You” note :)



7. Mall: The local malls in my area allow me to buy a gift card that is good in all the stores within that mall. If your college grad was a big spender before she/he went to college and got all sobered up due to the high cost of tuition and text books, they are bound to enjoy an evening of splurging at your expense.



8. Gas Cards: With the gas prices starting to climb up again, and the prices of crude oil showing no signs that this will slow down in the near future, this is a great gift. It does not have the wow effect like many of the other gift cards on this list, but if you are a family with a history of practical gift-giving, then this is bound to be better appreciated than a pack of socks or ill-fitting clothes.



9. Local grocery store (Walmart, Target, HEB etc.): While we are on the topic of practical gifts, we may as well cover the gift cards to local grocery store. Personally, I would hate to receive a gift card to a grocery store, since I already have a budget for grocery shopping and can get it done even without the help. Any other gift card in the list so far, let’s me “indulge” but the grocery store gift card is just too practical to be any fun. But like I said, if your family has a history of giving practical gifts, then this is something you might want to consider.



10. The good old Visa Cash Card: Finally, if you just can’t decide, go for the good old Visa debit card. They are as good as cash and can be used anywhere credit cards are accepted. Depending on who you are giving it to, this could be treated as the king of all gifts, or the most impersonal cop-out ever! Your call :)

Do you like receiving gift cards? What are some of the “best” gift cards that you have received?

~~~o0o~~~

Broke College Kid? Take a virtual spring break in Vegas: http://www.partycasino.com/.

~~~o0o~~~

The Ten Commandments of Black Friday Shopping

This year, thanks to all the medical bills that are piling up, I have decided to sit out the Black Friday (day after Thanksgiving) sale :( But I impart unto you the knowledge and experience gained from years of surviving the stampede and gaining some sweet deals :) Here we go, the ten commandments of Black Friday shopping.

Commandment 1: Thou shalt be prepared.
There are many, many websites that allow you to do your research ahead of time and find out which deals are really worth it, and which are not. You don’t need to worry about not receiving the fliers any more since adscans to most popular stores are available online. Add to that the deal discussions on forums and blogs, and there really is no excuse for not being prepared. Here is a list of few good sites to get you started.

• Excel spreadsheet of all the deals (via Fatwallet. You’ve got to see it to believe it!!!)
• bfads.net
• fatwallet forums
• blackfriday.gottadeal.com
• blackfriday.info

Commandment 2: Thou shalt make a prioritized list.
Not all deals are created equal. As you look through the different sites, note down the items that you like best (and really need), the store where it is available and price at which it is available. After you are done looking through all the deals (if ever), then organize your notes so that they are prioritized by the stores which have the most number of items that you would really want to buy.

Commandment 3: Thou shalt know the store layout.
There is no point in going to a store and trying to find out where the item might be. So stick to stores that you most often go to, so you are familiar with the layout. I read on one of the websites that many stores have a “store map” which they hand out during Black Friday sales. I personally have never found it, but it is definitely won’t hurt to ask a sales person for one (if you can find a sales person in that crowd, that is).

Commandment 4: Thou shalt know the sale hours.
More and more stores have the midnight madness and all-night marathon sales these days. And almost all have exclusive “early bird” and “door buster” deals. Make sure you know the timings for the items on your list and that you are there as early as possible if you really want to lay your hands on that item.

Commandment 5: Thou shalt know the store policies.
The stores do not have unlimited supplies of items on sale, and the hot items in particular are very limited. It is not uncommon for the stores to have only 15 – 50 items of big ticket products like TV, laptops, game consoles etc on door buster sales. So, if you are not planning to camp out the store all night and elbow your way in when the doors open, don’t bank on such items. Also, many stores have per-person limits on the number of items. For instance, you may find a 2GB USB flash drive for $7.99, but more than likely you will not be able to walk out with a handful of these. Don’t waste your time on lost causes.

Commandment 6: Thou shalt shop in tag teams.
Always, always go to a store in twos or threes. The first person goes directly and stands in the check out line, while the others go scour for the deals on their list. The person in the checkout line acts as the central coordinator. In addition, if you have a big group of friends share your lists with each other and split up into different groups and hit different stores. Remember commandment 5 though – you may be limited by how many items a person can buy. So use this strategy wisely.

Commandment 7: Thou shalt make sure that your cell phones are fully charged.
If you are tag teaming or better still coordinating with friends in different stores, you should be able to communicate efficiently and fast. So it is vital that everyone has cell phones that are charged to the hilt. In addition, treat cell phones with Internet access as premium commodity since they will come in very handy for looking up the reviews, price comparison and staying up to date on the latest deals. Make sure you carry your car charger with you, so you can charge the cell phones back up while going from one store to the other.

Commandment 8: Thou shalt wear comfortable clothes and preferably running shoes.
The Black Friday sale is not about being fashionable – its all about being efficient and agile. You have the rest of the year to fashionably show off your spoils. But for this one day, make sure you dress in sensible comfortable clothes and shoes. Also, you might want to go with the layers approach – even though it is freezing outside, it may be pretty warm inside the stores because of the crowds of people milling about.

Commandment 9: Thou shalt keep some water and snacks in the car.
If you have just a few items on your list and after hitting a store or two, you plan to retire, then you can skip this one. But if you are a hard core veteran and plan to hit many different stores and come home with the best of the deals that can be had, you better make sure you have enough nutrition supply in the car to keep you fed and hydrated between stores.

Commandment 10: Thou shalt not buy junk just because it is on sale.
Finally, pay particular attention to this one. Just because it is on sale does not make it a deal. If you don’t want it, or if it is just poor quality junk that will likely break down after two uses, you are much better off without it. Buying junk will undermine all the hard work, melt away the benefits of all the deal that you scrambled so much to grab. So only buy those items that you really need and are really worth buying.

Well, have fun y’all. I will be rooting for you from the warm comfort of my home :) Happy Thanksgiving and seeya back on Monday.


Other similar articles from around the web:

• Black Friday Stories, Thoughts and Strategies @ Wise Bread.


• How to Shop Like an Expert @ Alpha Consumer column on usnews.com.


• Black Friday Thoughts and Strategies @ Not Made of Money


• 2007 Black Friday Buying Guide for Electronics and Gadgets @ Finance Is Personal.

*Image Credit: Photograph by Johnia! [via Flickr]

How to Maximize the Bang for the Buck When You Buy Organic Food

At the grocery store, I have noticed that organic food in general costs about 25 – 50% more than regular items, and in some cases the mark up is more than 200%. According to the USDA certification guidelines - “Organic meat, poultry, eggs, and dairy products come from animals that are given no antibiotics or growth hormones. Organic food is produced without using most conventional pesticides; fertilizers made with synthetic ingredients or sewage sludge; bioengineering; or ionizing radiation.” For some, especially those with young children, it may seem like the benefits of using organic foods justifies the extra cost. But like everything else, it is important to look beyond the label to get the best bang for the buck. Here is some information that can help decide which organic purchases are worth the extra cost and which may not be.

Pesticide Retention
Let’s start out with the “Dirty Dozen”, a list put together by not-for-profit Environmental Working Group (EWG). This list is based on the results of nearly 43,000 tests for pesticides on produce collected by the USDA and the FDA between 2000 and 2004. This list identifies the foods and vegetables that retain the most pesticide content in them. By switching to the organic equivalents of these items you can cut down the pesticide content in your daily food intake dramatically, hence maximizing the bang for the buck of your “organics budget”.

1. Peaches
2. Apples
3. Sweet Bell Peppers
4. Celery
5. Nectarines
6. Strawberries
7. Cherries
8. Lettuce
9. Grapes (Imported)
10. Pears
11. Spinach
12. Potatoes

On the other hand, if you are buying organic Onions, Avocado, Sweet Corn (Frozen), Pineapples, Mango, Sweet Peas (Frozen), Asparagus, Kiwi, Bananas, Cabbage, Broccoli or Eggplant, you may not be getting much benefit from spending the extra dollars for going organic. The same study as above indicates that these fruits and veggies retain very few pesticides. For full information about the items that you most often buy and to determine if the additional cost for going organic is really worth it, check out this detailed article or their complete data set.

Growth Hormones
Recombinant Bovine Growth Hormone (rBGH or rBST) is a genetically engineered hormone that is injected into cows to increase milk production. Even though FDA approved the use of rBGH as safe for consumption in 1993, further studies have linked rBGH in humans to susceptibility to breast and colon cancer (Note: the results are not conclusive, though). In addition the cows treated with rBGH are more susceptible to diseases and hence likely to be treated with antibiotics, the remnants of which could be found in milk and other dairy products. Hence, spending your organic food budget on organic dairy products may be a wise decision. Here is a listing of artificial hormone-free brands listed by states.

Genetically Engineered Food
It is not quite clear if genetic/bio engineering will make the agricultural produce better or create frankenfoods. The debate rages on. If you would like to avoid the genetically engineered foods however, you might want to watch out for products containing corn, soy, canola and cotton. According to the True Food website, these four crops account for nearly 99% of the genetically engineered crop acreage in North America. As mentioned above, the USDA description of “organic” precludes the use of bioengineered ingredients, and so going organic for items that use corn, soy, canola and cotton seed can get you the best bang for the buck if you want to avoid genetically engineered food. Here is a list of brands that use/avoid genetically engineered ingredients for items ranging from baby foods to cookies to frozen dinners.

Shelf life
An informal study conducted by the authors of this MSNBC article found many organic items had much lower shelf life compared to conventional products. They used lettuce, broccoli, chicken and milk in their tests. They found that there was a significant difference, and in case of lettuce, broccoli and chicken, the organic produce went bad much sooner than the conventional produce. However, in the case of milk, they found that the organic milk had similar shelf life as regular milk. In general, when you plan your menus, make sure you use up the organic food items before you reach for the conventional groceries, to prevent wastage of those items that you have already a paid a premium for!

Understanding the labels
Finally, it is very important to understand what the labels mean when you purchase something organic. According to the USDA National Organic Program the labels can be interpreted as follows

“100% Organic”
Products labeled as “100% organic” must contain 100 percent organically produced ingredients, not counting added water and salt. Label may show the USDA organic seal and/or certifying agent seal(s).

“Organic”
Products labeled as “Organic” must contain at least 95% organic ingredients, not counting added water and salt. Also, they must not contain added sulfites. They may contain up to 5% of non-organically produced agricultural ingredients which are not commercially available in organic form. Label may show the USDA organic seal and/or certifying agent seal(s). The label may also show “X% Organic”.

“Made with organic ingredients”
For products labeled as “made with organic ingredients” the percentage of organic-only ingredients drops down to 70%. Up to 30% of the ingredients may be non-organic. The label may show the certifying agent seal(s), but NOT the USDA organic seal.

Any product with less than 70% organic ingredients may not claim to be organic and may not show the USDA or any other certifying agent seal. They can however, list individual organic ingredients used.

So to sum it up, if you have a limited budget to spend on organic items make sure you understand which items offer the best benefits by going organic. Also, to me it looks like the best bang for the buck will be to buy something with the USDA seal since it guarantees that at least 95% of the ingredients are organic and the product does not contain sulfites, which cause allergies and asthma in some people. And finally, consume organic produce soon since they are likely to have smaller shelf life.

Do you buy organic food? What are the most common items that you prefer to buy organic? What do you do to save money in your organic groceries list?

Gifts to Avoid this Holiday Season

OK, it’s that time of the year again. Sale signs have started to go up as the stores begin to woo customers and their holiday shopping dollars. Whether you are an early shopper or a last-minute person, here is a handy list of what gifts you should avoid this holiday season!

Pets
Puppies and kittens are so cute and cuddly – so they make perfect gifts, right? Wrong! For one, the choice of a pet is a very personal decision. Pets come in all shapes and sizes and it must be up to the pet owner to decide whom to choose for a life-long friend. Second, the cost of owning is pet is ridiculously high and you must consider if the person really wants to spend that much money before giving them a pet. Third, pets require a lot of time and attention – can the person receiving the gift really take care of the pet? Finally, if the person does not like your gift, what do they do with it? It’s not like a toy that you can return back to the store. A lot of pets given as gifts end up in shelters and this holiday season don’t be someone responsible for another abandoned pet.

Hi-tech items, when you are hi-tech challenged.
If you are hi-tech challenged, you should in general stay away from giving hi-tech gifts. Hard-core gamers have very specific favorites and unless you know enough about gaming yourself, picking a computer game at random just because it is on sale or on the hot-item list is a bad idea. A laptop can be configured in any number of ways, and unless you know whether the person whom you are gifting a laptop wants a lot of memory or processing power or a great graphics card, you may end up with an expensive gift that no one is happy about. If you don’t know a 16MB USB Flash from a 1Gig one, it may be better to stay away from giving flash drives! Same goes for digital cameras, MP3 players etc. And oh, blank VHS tapes are so old news. Gift cards are great alternatives. But if you think they are impersonal, and want to give the real thing, at least, try dropping a few hints and check out the reaction before you blow your money away. Or see if you can recruit a spy and a consultant (usually a sibling or spouse of the person receiving the gift) to help you select the right gift.

Exercise Equipment
I don’t know why anyone would do this. Particularly, avoid giving exercise equipment to women. While nobody likes being told that they need to start working out, women are particularly sensitive to someone hinting to them that they are “fat”. Even the skinniest ones of us will secretly hate you, if you give us exercise equipment as holiday gifts! In addition, the choice of what equipment to buy is again personal. So unless someone specifically asks you for particular equipment as a gift, strike this one off your list!

Gift cards to specialty stores
I know that a cousin of mine I am meeting for the holidays loves coffee. So I can’t go wrong with buying her a starbucks gift card, right? Well, here’s the catch – she goes to school in a small town which is probably one of the few towns now in the US with just one starbucks coffee shop in the whole town. It’s a town with old world charm where people love their local coffee shops which either boast live music, or mini-libraries and or great bakeries with pastries to die for! With a starbucks gift card, I would probably end up cramping her lifestyle! Another risk with gift cards to specialty stores is that the recipient may not have the specialty store in their town at all, or it may be one very long drive to get to the store! If you do choose to go for gift cards, make sure they are to stores that exist in the town of the recipient, or can at least be used online without having to pay hefty shipping charges.

Items that kids love but parents hate.
If you are buying gifts for someone else’s kids, be careful not to alienate the parents in your eagerness to impress the kids. For instance, you might want to skip that cute-but-loud clapping singing money for your colleague’s 2-year old kid, unless your real intention is to annoy the living day lights out of your colleague. And before you buy roller blades or skate boards or other high risk items for your nieces and nephews, you might want to consult with your sister/brother first.

What are some of the worst gift you have ever received? What are some of the worst gifts you have ever given? :)

Kicking off a Stress-Free Holiday Shopping Season

It looks like every year the holiday shopping season starts out just a little bit earlier than the previous year. I was quite surprised when I went to my grocery store the day after Halloween and in the spot where the pumpkin patch was, there stood Christmas trees! For Pete’s sake, it was Nov 1st and Christmas was still almost two months away – but that didn’t seem to daunt the store owner from trying to woo the shoppers by putting up a few fake trees and a huge banner next to it proclaiming “Get your fresh cut Christmas tree here!” So, it looks like the 2007 holiday shopping season is officially here. And you have only two choices - either get stressed out by it, or really enjoy it. What’s it gonna be?

If you chose to really enjoy it, way to go! If you can’t beat 'em, join 'em, right? Here are a few pointers to get rid of any lingering stress to make it a season of fun, joy, cheer, giving and receiving, without quite breaking the bank.

If you have a Christmas fund, take stock of it now. If not, start one ASAP.
If you learnt from your mistakes from last year, and the years before, and already have a Christmas fund, kudos to you! Whether it is a jar stashed under your bed or an online account, take stock of how much you have saved. If you have not started your Christmas fund yet, it’s still not too late. Start one NOW. There are any number of ways to save for your Christmas fund – raid your coin stash and cash it in at Coin Star, have a garage sale to get rid of all those gifts from previous years that are collecting dust in the basement, replace your lunch outings with brown bag sandwiches, cut your grocery budget by 10%, use (more) coupons, etc. Every dollar that you can stash away now, will reduce the stress and the resentment later. Think of it as paying forward for all the gifts *you* will receive :)

Make a budget of how much you are willing to spend.
Be honest and practical with your estimation. Remember that you will likely exceed that estimate, so be sure to leave some wiggle room. Do not make the estimate based on “what will people think of me” but rather “what can I/we afford”. Don’t worry about looking cheap – there are some great tips below for finding great gifts and still stay within your budget. With some advance planning (which I am sure you have got started on already as you read this post) and some hard work (don’t worry, you don’t have to leave your couch), you can make this Mission Impossible possible with as much finesse as Tom Cruise (Eww… I don’t know why I used that example, I don’t even like him anymore, but since I can’t think of anything else, the example stays. Moving on…)

Make a list of the expenses
Obviously high on that list will be gifts. In addition, there may be expenses associated with parties that you plan to throw. Or travel expenses to meet your family/friends or just getaway. Maybe you plan to attend someone’s party and need a nice outfit. Or you may be able to pull off a great attire by mixing and matching something in your wardrobe, but need a new coat to add the getup a new flare. Maybe you need a baby sitter (or a pet sitter). Think of all the things that could lead to inflated expenditure and add it to the list.

Break down your list and fill in the details
When it comes to gifts, make a list of all the people you need to give gifts to. Next to each name, jot down a few possible gift options and dollar amounts. If traveling, try and finalize the dates so you can book your airfare/hotel early and save some money. If throwing a party, sketch out some of the details like the number of people, place settings, stockable groceries etc.

***Start hunting for bargains***
This is THE most important step! At this point you probably have a good idea of what you want. Maybe there are still a few things that are hazy, but don’t worry about it. Every body’s list has that one person that is the difficult to shop for and every travel plan has a few details that just can’t be ironed out. Put them on the back burner for now, and focus on checking off as many of the other items as you can. Put technology on your side! Here is a great primer for using RSS feeds to track and save on items you are looking for. Bookmark this list of popular deal sites and check out the sites in the list to populate your RSS reader. And bookmark this list of price comparison sites to make doubly sure that you are getting the best possible deals! If you are buying books, make sure you check Addall.com to investigate the prices. Use this list of travel sites to find the best deals on travel. Add fare alerts on several different sites like orbitz, expedia, Travelocity, airfare watchdog, southwest airlines etc. so the deals come to you! And finally, when you find great deals, don’t hesitate to pull the trigger.

Stay away from temptation to indulge yourself
With all this shopping and deal hunting, it is very likely that you will find at least a few items that you would like to buy for yourself. Don’t give in to the temptation! Instead drop hints for people around you that you found a great deal on something that you would really like to have as a Christmas gift. If the request is reasonable, they will be glad you just made it easy for them to buy your gift :) Oh, yeah, when you buy gifts ahead of time, leave room for some swapping so you can accommodate a few last-minute hints that come your way :)

Use your credit card!
I know a lot of you will scoff at this, but a credit card is a great way to keep track of exactly how much you are spending! Additionally, if you are going to be doing most of your shopping online anyway, you may not have a choice in the matter. Just make sure that the credit card has some reward points or cash back for the money you spend and you pay off the balance in full as soon as the statement arrives with money from your Christmas fund. (If your Christmas fund is not fully funded yet, make sure you have a strict deadline for paying back your credit cards in full within a month or two at most! And as soon as the cards are paid off, start saving for your next year's Christmas fund so you can skip this step next year!)

With such a well-planned agenda, you will be way ahead of everybody else with your holiday shopping. When Christmas finally arrives, you can enjoy decking the tree and putting out gifts knowing full well that you got the best possible presents for the people you love while not getting yourself into debt in the process.

"I'm Bored. I'll Go Shopping"

I can’t even remember how many times I have said that! During the last year though, thanks to blogging about money and frugality and consumerism and what not, things are a lot more under control. Here are a few things I learnt along the way about dealing with the bored-shopping syndrome.

Recognize the pattern.
Do you go shopping because you have to buy something or just because you are bored and want to kill some time? The first step to control the expenditure is to recognize the behavior!

Budget for it.
Once you admit to yourself that you sometimes shop “just because” you can be prepared for the next attack by budgeting for it ahead of time. In your weekly/monthly budget, make sure you set aside some money for “indulgence”. Remember though, just because you have an “indulgence fund” doesn’t mean you have to go shopping. If you don’t have a spontaneous shopping attack, let the money roll over to the next month’s budget.

Don’t exceed your budget.
It is OK to go indulgence shopping as long as you don’t over do it. Now that you have an indulgence fund, make sure you always stay within the limits allowed by the fund. If you think you will be enticed by the items in the store then leave the credit cards at home and only carry as much cash with you as your indulgence fund allows.

Keep a list of items you need.
During the course of the week, when you need something (eg., run out of makeup, the room freshener ran out, pillow not really comfortable, etc.) add it to a written list. When the shopping attack strikes instead of going to the mall and looking for things you can buy, start out with some of the items on the list and take it from there.

Buy gifts in advance.
I can spend hours looking for the perfect gift. So when I head out for a bored shopping trip, I try to remember if any birthday or anniversary is on the horizon. I enjoy looking for unique gifts that are customized to a person’s taste and bored-shopping trips are great times to go pick up some of these items. Recently a friend of mine got married and both she and her husband are big party throwers. So I spent a couple of trips putting together a “cocktail basket” equipped with everything from the margarita shaker to a martini mister to a cocktail recipe book to cocktail glassware etc. I doubt I could find a pre-packaged gift like that anywhere and even if I did, I doubt I would be able to fit it into the budget I had.

Hit the clearance racks.
When I have to go shopping and recognize it as an attack of the bored-shopping syndrome, and I can’t think of anything particular to buy, I tag those trips as clearance shopping trips. Any store I go to, I go directly to the clearance aisles. Only if I find a dramatic deal will I actually buy something. I enjoy deal hunting and finding a great deal that is within my budget really makes the whole trip worth it.

Finally, pick up an all-consuming hobby.
Ever since I starting blogging, I have hardly had the time to feel bored and as such my got-to-shop attacks have dramatically reduced. Every now and then, I still “need” to shop, but the damage is a much limited :)

Do you go shopping “just because”? What are your tricks to limit the damage?

Will Consumers Warm Up To The Credit Freeze Laws?

Last week the Consumerist had an article mentioning that Transunion will let you freeze your credit report so you may protect your credit from imposters. Recent laws in this direction go a step beyond and require all the credit bureaus to let you freeze your credit report. In Texas the law went into effect on September 1st. Since then I have had it on my “TO DO” list to look up more information and consider the possibility of freezing our credit reports. During the past couple of days, triggered by the Consumerist article, I finally got around to investigating it further. And the more I read about it, the less inclined I am to take any action :(

Quoting from the Consumer Union website here is how it works –

A security freeze lets consumers stop thieves from getting credit in their names. A security freeze locks, or freezes, access to the consumer credit report and credit score. Without this information, a business will not issue new credit to a thief. When the consumer wants to get new credit, he or she uses a PIN to unlock access to the credit file.

That sounds great to me! Currently this law is in effect in all but 11 states. (States that do not have this law are Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Ohio, South Carolina, and Virginia).

On more detailed review however, it seems like this may be yet another law that offers lip service to the consumer but in reality makes him jump through so many hoops that probably no many will actually use it :( The exact details of the law vary from state to state. However, looking through the overview, it seems like in most states, unless you are a victim of identity theft already, you need to pay anywhere between $5 to $20 to each credit reporting company for each operation such as placing the freeze, lifting the freeze temporarily or removing it all together. In addition, the response to your requests is not immediate and there is a possibility that you will have to wait while your credit report thaws (so to speak) when you try to lift the freeze. Whats worse, it is not really frozen from everyone. It is possibly a small price to pay to protect yourself from having to go through the harrowing experience of identity theft, but over a term of several years, those fees could really add up and moreover, I am not at all thrilled about the delay in being able to access my credit or selective access to my credit!

From the Instructions for using Texas’s security freeze law fact sheet,

Can a creditor get my credit score if my file is frozen?

No. A creditor who requests your file from one of the three credit bureaus will only get a message or a code indicating that the file is frozen.

And

Can an employer do a background check on my credit file?

No. You would have to lift the freeze to allow a background check, just as you would to apply for credit. The process for lifting the freeze is described above.

I would assume for the zillion other places where we use credit checks (e.g., apartment leasing, insurance, getting a store card etc) also, these would be true.

But…

Can anyone see my credit file if it is frozen?

When you have a security freeze on your credit file, certain entities still have access to it. Your report can still be released to your existing creditors or to collection agencies acting on their own behalf. They can use it to review or collect on your account. Other creditors may also use your information to make offers of credit. Government agencies may have access for collecting child support payments or taxes or for investigating Medicaid fraud. Government agencies may also have access in response to a court or administrative order, a subpoena, or a search warrant.

What?? I have marked the part that bugged me the most in bold italics. So my credit is hidden from creditors and employers, but the credit mongers still get to access my credit information and can keep bombarding me with offers??? That just doesn’t sound right.

In addition,

Do I have to freeze my file with all three credit bureaus?

Yes. Different credit issuers may use different credit bureaus. If you want to stop your credit file from being viewed, you must freeze it with Equifax, Experian, and Trans Union.

To protect my credit, does my spouse’s credit file have to be frozen too?

If Texas is a community property state, then yes.

Based on Texas fees, that means I have to spend $60 to put both the better half’s and my credit on freeze. And every time we want to unfreeze it, its another $10 per person, per credit bureau. I can almost hear the leak in my wallet go drip, drip, drip.

But here’s the part that made me decide that this is probably not worth it. From the website,

The freeze goes into effect five (5) business days from receipt of the consumer’s letter (by certified mail) by the credit reporting agency.

How long does it take for a security freeze to be lifted?

Credit bureaus must life a freeze no later than three (3) business days from receiving your request.

To me that feels like snails pace! In a world running at the speed of light, who wants to wait for three business days to lift the credit freeze?

There is one more thing that needs to be considered. Freezing your credit prevents someone from obtaining credit in your name, but it does not prevent someone who has already got hold of your information from cleaning out your bank account and piling up a mountain of debt on your existing open credit accounts. Consumers should be aware that while freezing the credit can offer some benefits, it is not a be-all end-all solution.

So frankly, I am not sure if this law will really be helpful to me – a consumer. I would love to put a freeze on my credit and protect me and my family from being victims of identity theft. But I don’t know if the 3 days needed to lift the freeze will mean I will lose out on some good offers. Maybe its my recent experience that is making me so skeptical. I found out just before the end of last month, that my credit union was offering a very low promotional low APR till the end of the month for auto refinancing. I immediately made a phone call and switched my loan. It saves me quite a bit of money in the long run. Something like that would not be possible if I place a freeze on my credit. In this particular example, I would have to first contact my credit union to find which credit reporting service they will use, and then contact that agency to lift the freeze. After the credit reporting agency receives the notification it would take them 3 days to lift the freeze. That is too much time, and by then I would probably no longer be able to avail the low rates. In addition to the hassle, the pesky fees really bug me. Frankly, I have no idea where and how my credit gets used and not really sure if I want to agree to shelling out $10 here and $12 there every now and then, because I went and put a freeze on my credit!

So, what do you think? Will you freeze your credit (if your state offers the option) or will you wait and watch to see how things go?

You can find out about the exact details of the law for your state here.

Auto Insurance Discounts

15 Minutes Can Save You 15% Or More On Car Insurance… (even if you are not a Geico customer)

The Geico ads may be annoying, but they do have a point – if you can convince yourself to take out a little bit of time to shop for car insurance you can save a heck of a lot of money. After our recent car purchase our insurance rates went up and it just didn’t seem right to pay the high premium that was quoted to us for the minimal coverage we had! So we shopped around and made the switch. Our premium is now about 60% of premium quoted by our previous insurance provider, and our coverage is much better. So much so that I think we have too much coverage. But with the new company (Progressive), the difference between the minimal coverage and the one with bells and whistles was very less and so we opted for the coverage with the bells and whistles.

While shopping for auto insurance, I found that most companies give out a base rate and then apply a bunch of “discounts” to reduce your bottom line premium. Technically, the sales person is supposed to check with you if you qualify for the discounts. But just in case the person you get hooked up with isn’t thorough, here is a list of discounts that you can ask your sales person for. (Note that not all of these may be available from all the insurance companies or in all the states)

• Multi-Vehicle Discount
  If you have more than one car in your household (or even a car and a boat or a motorcycle), buying insurance for all the vehicles from the same company will qualify you for a discounted rate.


• Multi-Policy Discount
  If your home owners (or renters) insurance are from the same company as your auto insurance, you can get a discount on your combined insurance premium. Even if your auto insurance does not provide home-owners insurance, check if they have a preferred company list and if you have the insurance from a company on that list, you might qualify for a small discount


• Home Owner Discount
  Even if your homeowners insurance is from a different company, just the fact that you are a home owner might qualify you for a discount. I was quite surprised when the salesperson offered this discount to me!


• Garaged Car Discount
  If your car will be parked in a closed garage that is locked (and hence is at a lower risk of being stolen) then you might qualify for the garaged car discount.


• Defensive Driving Class Discount
  In TX, if you have taking a Defensive Driving class (ahem, to dismiss a ticket), you can send a copy of your completion certificate to the insurance company and request for a discount.


• Good Student Discount
  Under-age drivers who are full-time students with good grades may qualify for a good student discount. Sure will be helpful to offset the steep cost of “under 25” insurance rates!


• Safe Car Discount
  Different companies have different definitions for what qualifies as a safe car – some of the things they consider are anti-lock brakes (ABS), anti-theft alarm, lojack, airbags, automatic seatbelts, etc.


• Safe Driver Discount
  If you have a clean driving record for several years, then of course you are the kind of customer every insurance company wants, and so they will offer you a pretty hefty discount.


• Loyal Customer Discount
  If you are with the same insurance company for several years, make sure you call your existing insurance company first to see if they will offer you a loyal customer discount. Also, make sure you tell the new companies that you are calling up that you were with your previous company for several years – they might offer you a good rate to tempt you to switch.


• Low Mileage Driver Discount
  I think the national average for the miles a person puts on his car per year is ~12,000. If the number of miles you drive is less than the national average statistic that the insurance company uses, you might qualify for a low mileage driver discount.


• Green Car Discount
  Some insurance companies want to make a point that they are green, and consequently offer a small percentage of discount if you drive a hybrid car.


• Military Discount
  If you are in active military duty, retired from military or coast guard, you will qualify for a military personnel discount.


• Online Discount
  Even though I spoke to a sales person on the phone to make sure that I was getting all the discounts we qualified for, the sales lady was really nice to suggest that I actually buy the policy online which qualified me for a one-time $50 online discount. She entered all the data I had provided her into the system and gave me a quote number. All I did was plug in that quote number on the website, and voila, all the discounts appeared along with the additional (one-time) $50 discount.


• Pay Ahead Discount
  In addition, since I chose to pre-pay for the next six-months and provided them with a credit card number to bill me at six-month interval, the premium was a little lower than what we would pay if we chose to go month-to-month.

Well, that’s about what I have for now. If you have availed any other discounts, I hope you will share with me (and the other readers) so we can check if we qualify as well. TIA.

~~~oOo~~~

Want to check if you qualify for some of these discounts? Get auto insurance quotes from a reilable provider.

~~~oOo~~~

The Squeaky Wheel Gets a Better Cell Phone Deal

This is a guest post by Linda Bustos. Linda is the Editor of Creditorweb.com, where you can learn more about credit cards. This article shares secrets for getting a better cell phone deal.

A couple years ago, I was using what some might call a "Zack Morris Cell Phone." It was huge, black and white, heavy and all you could do on it was play crab catch. Although all my friends and co-workers had slick phones that could take pictures and video - I could barely use my calculator. So around Boxing Day 2005, I started reading those colorful newspaper flyers from every cell phone carrier in town. They were all offering some pretty sweet deals and free, funky phones, so I decided it was time to upgrade - finally.

I was in a powerful position as I was not on a contract at the time (my original airtime provider was swallowed up by a behemoth telcom but my old plan was grandfathered). So I was able to swing a sweet deal from my current provider by notifying them I had found a more attractive offer. The phone call went something like this:

"Hi, my name is Linda and my cellphone number is XXX-XXXX, I found {deal from "competition"} and I'd like to end my plan with you now." When asked what about the offer I wanted, I detailed all that was offered by the other company. My cell phone company not only matched it but they gave me free caller ID and voicemail service for a whole year - $96 savings right there. Plus they threw in a free phone with no hardware switching fee, a phone that regularly cost $99 with a 3-year contract. (Although they thought I wouldn't notice when they tried to charge me the hardware fee anyway).

So if your contract is ending or you're currently not on a contract, this tactic should work for you. But what if your stuck in a contract for another year or more? You could try sites like Cellswapper or CellTradeUSA that help you find people to take over your remaining term of your cell phone contract. Once you're free you can sign up for any deal you want and get a newer, free phone (though you lose your cell number).

You could also take over someone else's contract for as little as one month. You'll save activation fees and when your contract takeover expires, you'll be able to try this little trick with the cell phone company.

Cell phone companies are not the only service companies that this trick works on. Long distance, Internet and credit card companies are equally as desperate for your business.

For example, if you want to get a lower interest rate on your credit cards, just call up your credit card company and tell them you'd like to close your account as you've found a better rate elsewhere. Say "I'd really like to stay with you but I found ." The credit card agent will most likely offer you a lower rate card right away (with an annual fee, of course). But before you jump to the phone, consider whether you really need a lower interest rate. If you don't carry a balance on your credit card, then there's really no point in paying an annual fee for a lower interest rate -- you pay no interest anyway. You'll also want to make sure the low interest credit card doesn't waive your grace period and charge you interest from the day of purchase. But if an annual fee of $25 will save you way more than $26 on interest charges per year, it's in your best interest to make the switch. Your credit card company won't offer this to you - you've got to take the initiative!