If you want to learn a little more about personal finance, you might consider signing up for free seminars from the National Association of Personal Finance Advisors (NAPFA). This is a 12-month course, with a single one-hour seminar held each month over the Internet. You will have to RSVP for each session that you want to attend. Each is taught by a certified financial planner. Here are the planned topics for the seminars:

August 7, 2009 –       Money 101: Knowing the Basics

September 4, 2009 – Kids & Money

October 2, 2009 –      What is Financial Planning?

November 6, 2009 –   Protecting What You Have

December 4, 2009 –    Investments: The Basics

January 8, 2010 –        Investments: Advanced Concepts

February 5, 2010 –       Managing Your 401(k)

March 5, 2010 –            Leaving a Legacy

April 2, 2010 –               Women and Money

May 6, 2010 –                Financial Planning and Small Business Owners

June 4, 2010 –               Your Retirement

July 1, 2010 –                 Financial Windfalls

In our society, there is an aversion to negotiating. For some reason, we feel as though it is rude to haggle and ask for a better price. However, it turns out that maybe we should be negotiating more. Two weeks ago, my husband and I got a 15% discount for an already-on-sale griddle for offering to take the display model. Of course, the item was out of stock. I doubt the display model trick would have worked as well if there were more griddles sitting on the shelf. And when we bought our dryer (and a couch later), we managed to successfully get free delivery and set-up (normally $50) on top of a discount of $75. Just for asking.

But it appears that I am in the minority. Consumer Reports has a graphic in the August 2009 issue that shows that only about a quarter of consumers try to negotiate. However, those who do negotiate tend to have a pretty good success rate:

Consumer Reports also offers these tips on how you can increase the chances that your haggling will prove successful:

1. Know store policy about discounts and matching deals, and research prices for similar items online and off.
2. Time your visit so that you arrive later in the month. Additionally, avoid times of the day that are busy. You want your salesperson to be thinking of his or her quota. And you want him or her to have the time to negotiate with you.
3. Show fixable flaws to the salesperson (or take the display model).
4. Avoid asking for a discount in front of others. Salespeople don’t want to have to give a discount to everyone who sees your successful negotiation.
5. Ask for a manager if the salesperson can’t deal.
6. Offer cash. In some cases, you can get a cash discount by asking. It means the business doesn’t have to pay a transaction fee for accepting your credit card.
7. Walk if you don’t get the deal. Part of negotiating is being able to walk away if you know you can get the same deal elsewhere. At the very least, when you walk you know you can get the same item for the same price someplace else.

For an interesting personal story about negotiating, Man Vs. Debt has a pretty cool story — and some good tips for beginning negotiators.

Do you haggle?

I remember the days of my undergraduate career. Every year, tuition went up. I had a scholarship, so it didn’t impact me that much, but student fees generally rose along with tuition. And every year that my husband has been in grad school, we’ve watched tuition increases and student fee hikes. But this year, things are different. Yes, tuition is going up. But it’s not going up by quite so much. BloggingStocks reports on the new tuition hikes:

Tuition is up only 4.3% for the coming school year, the lowest rate of growth in 37 years, according to a survey of 350 private schools by the National Association of Independent Colleges and Universities. This is down substantially from the 5.9% increase for the 2008-2009 school year. Of course, this is for tuition only and does not include room and board inflation.

To further help some folks, financial aid is seeing an increase of 9.2%. So that means that, for some, it may actually be manageable to keep up with tuition hikes this year. But, as the BloggingStocks article points out, room and board have likely gone up as well. This might offset some of slowed inflation in tuition and fees.

Money troubles and higher education

It is getting more and more difficult for the schools themselves, as well as the students. This is because new money is down as benefactors reduce their contributions. (After all, the number of billionaires is decreasing, and those who are still billionaires have, well, billions less.) Not only that, but many universities have trusts and other investments that are significantly reduced in value, thanks to a bear stock market. While these investments will eventually rebound, for now it means less money to go around — and in some cases staff cuts and project terminations. The project my husband is working on here at USU got cut. He is fortunate in that a graduate in the department moved on and vacated a spot on a different project. He was successfully shifted, and retained his position. But not everyone is so lucky.

Image source: Widosu via Wikimedia Commons

Numerous stories are popping up around the personal finance blogosphere with regard to the fact that Chase is raising the minimum payment on its credit cards. Last month, I wrote a post about things are about to get ugly for consumers in terms of their credit card accounts. So it was no surprise when that post (although a month old) saw this recent comment from a reader, Lisa:

Yesterday (6-25-2009) I got a notice saying my “minimum” monthly payment was going from 2% to 5%. That means my payment of $345.00 will start to be $810.00 in August. I will not be able to afford that. Mind you, I always pay my bills, don’t get late payment charges and the last time I checked, my credit score was like 797. Yes! I’m having financial troubles and am just barely holding on. This will send me over the edge - especially if my other credit cards follow this one. … HELP!

This is probably a common refrain across the nation right now. And, sadly, this new rule is aimed exactly at folks like Lisa. Chase will keep your minimum payment at 2%, if you agree to allow the company to raise your interest rate. The most common recipients of this change to credit card terms are those with low introductory rates of between 2.9% and 5.9%. You can see where this is going. The higher interest rate means Chase gets more money, and allowing you to keep the lower minimum means that you make payments for longer — meaning Chase gets more money. The way I see it (and every situation is different), there are three options here:

Option #1: Suck it up and make the new minimum payment

If you don’t agree to the higher interest rate (and keeping the current minimum payment), you will have to make the new payment. Since you have about a month, now is the time to do some serious surgery on your personal finances. Look over your budget and see where you can make cuts. This may include cuts to entertainment, cell phones, eating out and other negotiable expenses. (Note: Your housing payment, especially if you have a mortgage, is not negotiable. Always make sure this is paid.) Figure out which expenses you can cut and get it so you can make the new minimum payment. It’s not pleasant, but in the long run, you will save money in interest and pay off your debt faster.

Unfortunately, many people do not have the option to cut back so dramatically. The current economic conditions mean that some folks, due to cutbacks or layoffs at work, do not have the ability absorb an increase of the magnitude proposed. In such cases, you might go with:

Option #2: New loan

In some cases, it might be wise to get a new loan to cover the amount of what you owe. Pay off the credit card, and move on. Of course, you still have a loan. You might try switching to a different credit card with an introductory rate of between 0% and 3.99%. You could also consider getting a debt consolidation loan from somewhere. If you have reasonably good credit, you might be able to get a personal loan with an interest rate of between 7% and 12% from your bank or credit union. (While this is higher than your intro rate, it is likely to be a lower rate than what the credit card will offer you in exchange for keeping the minimum low.)

Another possibility is to use P2P lending, such as Prosper or Lending Club to help you lower your payments. In any case, though, I would think twice (or thrice) about using a home equity loan to secure your credit card payment. Do that last.

Option #3: Debt settlement or bankruptcy

If nothing seems to be working at all, you can reach for the final tool of desperation in these cases: Debt settlement or bankruptcy. You can usually reach settlement for unsecured debt, allowing you to pay less than you currently owe on your credit card. As an extreme last resort, bankruptcy can help lower your payments to something affordable (even though in recent years bankruptcy laws rarely allow you to walk away). In both cases, your credit will be shot, so it is not a decision to be taken lightly.

What will you do if your credit card minimum is raised?

image source: daylife

Disclaimer: I am not a financial professional. Any information you get from this site is not intended as advice. It is likely to be incomplete, and it may not apply to your individual circumstance. Do your own research, consider your situation and/or consult a professional before making money decisions.

We’ve all heard about the great deals being cut for a number of companies. They’ve enjoyed bailouts and preferential treatment on their financing. Now, consumers may be able to get a bit of a break — and the intiative is coming from the credit card companies.

Credit card debt settlemtent made easy

It has always been possible to employ debt settlement as a method of getting rid of unsecured debt. However, the process has long been fraught with complications and strenuous negotiations. Not so much anymore. CNBC offers an example of what happened when one customer asked to settle his credit card account:

Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.

It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.

As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.

Clearly, the economy is forcing credit card companies to consider their options. With delinquencies and late payments on the rise, it is often easier to collect whatever the customer can offer than to try to collect on a debt that the consumer may not be able to pay. With unemployment and the threat of foreclosure forcing people to prioritize their obligations (your mortgage payment should come first), it is becoming a necessity to accept a debt settlement.

Even though you are getting a good deal with the debt settlement, it is worth noting that by the time you get to this point, you have likely paid more than you originally borrowed — and then some — due to the high rate of interest. Credit card companies may not get their entire interest earnings from you, but they’ve probably already made their profit. And, you should also realize that your credit score may be impacted.

Image source: Daylife

Even with optimistic prognostications for economic recovery pouring in (thanks largely to yesterday’s payrolls report), don’t expect credit to be much easier to come by. The credit market has been heavily damaged, and financial institutions are not likely to forget that fact anytime soon. Indeed, credit has been tightening, and it is not likely to loosen for quite some time.

For those looking for a 0% balance transfer credit card, the news is pretty bad. You are unlikely to find a good deal on a credit card, and the debt management methods that usually follow such a course are likely to become less effective. Indeed, the tightening of credit card availability is likely to be further exacerbated by the recently passed Credit CARD Act of 2009. While the intentions are good, and many of the reforms are sorely needed, credit card issuers are likely to begin tightening their requirements, raising their fees and slashing rewards programs.

Getting a loan with the tighter credit requirements

You will still be able to get a loan, even with the tighter credit requirements. However, you may have to work a little harder for it. Whether you are trying to buy a car or purchase a home, here are some things to keep in mind:

• Down payment: The bigger your down payment, the better your rates — and your chances of getting approved in the first place. The larger your down payment, the smaller the amount being financed. And that is in your favor.
• Higher credit score: The credit score you need just to get approved for a loan has gone up. It is more difficult to get a bad credit loan, especially for a house. If you want approval, you need to work to improve your credit score. A higher score will also mean a lower interest rate.
• Income documentation: While it may not be terribly necessary for an auto purchase right now, income documentation is being emphasized more for a home mortgage loan. If you want to buy a house, the days of using unverified income are over. (At least for now. There’s a good chance that in 15 years or so things will be good enough that this whole messy cycle will repeat itself.)

This means that you need to prepare better if you are planning to make a large purchase on credit. Do what you can to improve your credit score, and save up money for a down payment. Those who are prepared are likely to still find credit at good rates. But the unprepared will either be rejected outright or will have to pay a premium to get approval.

Sometimes it can feel like all of the information on finances can be too much. Information overload is when you have access to so much information that you become paralyzed. The video below is a funny look at information overload in a business setting. However, it is possible to experience information overload in nearly any setting. Enjoy the video.

Happy Friday!

It’s that time of year again. When the health insurance company sends me a letter telling me what my new premium will be. This year, my plan resulted in a $50 increase. Because costs keep rising. (Or the CEO of the company is finding his hundreds of million dollars in compensation is inadequate.)

At any rate, last year I received a rather long justification of rising rates — even for those of us who live healthy lifestyles and rarely use our insurance. This year’s justification was rather short, and included, once again the fact that, even though I have an individual plan, my costs go up along with the costs of those in my “group”. Basically, I’m subsidizing others’ poor health and, in some cases, bad health decisions. (Who says that we don’t have socialized health care? Society still pays for it, but not through a government apparatus. Of course, subsidizing it through insurance companies is much costlier to individuals, for the most part, than subsidizing it through the government through slightly higher taxes. But that’s another rant.)

This year, the nice, helpful folks at the insurance company sent me a cover telling me that they are here to help, and offering a very few ways that I might be able to reduce my costs.

I called to see what I could come up with. I did end up finding out about a plan that would reduce my health insurance premium to around $400 per month, rather than watching it jack up to $466 per month. The move will save me $792 on premiums in the coming year. I had to change my office visit co-pay, increasing it by $10, and agree to a $200 deductible for my prescriptions, but even with those changes, the new premium will save me $500 this year, over what the new premium would have been. I did have to raise my deductible as well, but that will only kick in if we have a major expense (which we haven’t yet), and the $2,500 deductible is something we can handle with our emergency fund — or the Health Savings Account I am thinking of opening.

I wanted an even higher deductible, but any plan with a higher deductible switches to deductible and then 20% coinsurance, which the lady explained to me means that I pay all of my out of pocket expenses and then 20% of all costs after the deductible is reached. After figuring out the fact that I would not reach the deductible this year, and would have to still pay a premium (only $20 less than the plan I chose), I realized that I would actually be paying more overall. Stupid cleft stick the insurance company catches you in. It sounded good at first, but when considering health insurance costs, it is important to factor in more than just the premium. You need to look at your out of pocket obligations and whether that 20% is more than the office visit co-pay. Hint: It usually is.

I wanted to get rid of maternity, but no plans with my company offer that, unless I go with an even more grotesque deductible/coinsurance plan. I looked for other plans from other health insurance companies (and will probably continue my search today), but none of them are really any better for the (rapidly dwindling, I discovered in my information) coverage I receive. In the end, I figure I’m kind of stuck. Sure, it’s crappy, but for all of my looking, I haven’t found anything much better.

Our health care is costlier than any other in the developed world, and it isn’t even the best. And, as my monthly premium goes up every year, I am continually reminded of the fact that in many cases, one insurance company is much like another. At least this year I’ve actually managed to reduce my premium. But it didn’t just happen. I had to go out there and look for a reduction. If I hadn’t taken the initiative, I would have had to swallow a $50 increase instead.

Has your health insurance premium been going up? How much? What are you doing to try and reduce your health insurance costs?

Tonight there is going to be a special on ABC, at 9 pm Eastern, called “Un-Broke”. The special is meant to help all of us learn what we should know about money. MainStreet.com is trying to spearhead a Twitter watch with the hashtag #unbroketv. I plan to participate (@MMarquit), but I’ll be at my parents, so who knows how that will go.

Anyway, I really enjoyed this commercial from E*Trade promoting the special. I’m still not sick of the babies…

Happy Friday!

Two disclaimers on today’s Friday Fun Video:

1. I don’t actually recommend freecreditreport.com. Instead, I recommend that you use annualcreditreport.com. And then for the other times during the year that you check your credit report, consider buying a triple report. They are usually less than $40 (and around $50 if you want your FICO score thrown in).
2. I enjoy a good trip to the Renaissance Fair as much as the next person. You get to dress up and eat junk food. Plus, I like to look at (and possibly purchase) weaponry.

Happy Friday!