DIVORCEHELPER

Six Money Tips For Late-in-Life Divorces

2011-11-04T06:02:00.000-07:00

Few leave marriages of any length unscathed, but the financial impact is often more extreme for those who have been together for decades. For example, when one partner has always assumed the money management duties, the other is left with atrophied skills and a dangerous lack of awareness about how much they may own or owe.

"One would be surprised how many spouses have no idea what the other spouse earns, has in a 401(k) or even where their spouse banks," says Elizabeth Durso Branch, family law attorney and partner at McCurley, Orsinger, McCurley, Nelson & Downing in Dallas. "One spouse could be hiding money and failing to disclose assets." Those who remain ignorant often sell themselves short.

Wives tend to be particularly hard hit when a marriage crumbles, and today's depressed economy is worsening matters. According to a 2011 U.S. Census Bureau study, women who divorced in the past 12 months reported less household income than recently divorced men, and were significantly more likely to receive public assistance than their ex-husbands (23% as opposed to 15%).

"For women who have never supported themselves or who have dabbled at part-time work and volunteerism, taking full financial responsibility for themselves can be emotionally paralyzing," says Debra D. Castaldo, a professor at Rutgers University and author of "Divorced without Children: Solution Focused Therapy with Women at Midlife."

"I have worked with women in my practice who have never written a check, paid a bill on their own or balanced a checkbook," says Castaldo. The typical result: poor decisions that lead to accepting an unfair divorce settlement and mismanaging cash and credit.

Even with the economic disparity among the sexes, maintaining separate households means both men and women will pay more to live, but at a time when their earning years are waning. "Many have an adjustment period when the reality of the leaner lifestyle hits home," says Branch. "There is simply not enough set aside to continue to maintain the lifestyle for either party."

Protect your finances before and after divorce

About to exit an extended marriage? Focus on gaining and maintaining financial stability. Here's how:

*Employ a lawyer, judiciously. Yes, you're probably going to need legal counsel. However, you'll be paying by the hour, so don't waste cash venting to your attorney -- call a friend instead. Think with your wallet, not your heart. "Litigation is by far the most expensive and emotionally damaging way to handle your divorce," says Stacey Lau Welsh, a San Francisco wealth manager for United Capital Financial Advisers, who specializes divorce matters. "Look for alternate ways to resolve your differences, such as mediation, to negotiate the division of your assets." On the other hand, do let your lawyer fight for what's rightfully yours. According to Branch, too many spouses "just want out" and are willing to take a fire-sale attitude to end the matter.

*Create a "Now I'm single" budget. Jerry Cohen, a Los Angeles Certified Divorce Financial Analyst says the majority of his clients who separate from a long-term marriage find it difficult to manage their finances afterward. To prevent overspending that leads to credit card debt, develop a realistic budget before the divorce is final. "The longer you delay making the difficult changes, the longer your financial well-being will suffer," says Cohen. "Consider what you will have to do to accept your current situation and take positive steps toward making the changes that will benefit you in the future."

*Prepare for merged debt. Owe money as a couple? Some of the repayment responsibility can fall into your lap, even if you didn't make the charges. However, if you end up with a disproportionate amount of the debt, Branch says that you might also be awarded a greater share of the assets to compensate. Mind that not all liabilities will be shared. "Student loans are paid by the student who incurred the debt," explains Branch. "For secured debts -- the debt follows the asset -- you get the house, you get the mortgage." Build all bill payments into your new budget.

*Plan to spend your settlement carefully. If you've agreed to a cash settlement, managing those assets wisely will be essential, says Welsh. "All too often, I see people spending too freely once they get their settlement," she says. "If you're 50, you need to plan on having your money last another 50 years. Most financial advisers can advise you on how much you can spend from your investment portfolio without running out of money. No one wants to be a 95-year-old bag lady!"

*Be house smart. Make absolutely sure you can afford the mortgage and other property costs if you'll be keeping the family home. Also, get an appraisal and conduct a title search right away. "You don't want to be surprised to find out after you settle that there is a lien on your house, or heaven forbid, that your soon-to-be-ex pledged it as collateral for a loan you don't know about," says Welsh.

*Discuss your finances with trusted loved ones. Avoid the urge to isolate. You may have adult children and other relatives who can help you through this difficult time. "Have a regularly scheduled meeting with your family to discuss your financial issues," says Cohen. "Talk about the challenges you have, what you would like to change, what's working and ways to improve." Listen to their advice and consider offers of economic and emotional support. Even if you don't need it, the assurance that they are there for you, just as you were for them, can prove invaluable.

*Can you pull through and make ends meet? Yes, says Castaldo, who survived the dissolution of her own long-term union, but a major shift in thinking is often necessary to move forward: "Exiting a marriage later in life often requires the calling forth of strengths and capabilities that may have been stifled for decades."

Source

4 Critical Money Questions to Ask Before You Get Married

2011-05-25T05:19:00.000-07:00

Welcome back, Starting Out fans! My name is Stacy Rapacon, and I hope that I can fill this space as well as former columnist Erin Burt did over the years.

Speaking of daunting yet exciting new opportunities, I just got married in October. Topping the long list of things my husband, Dave, and I do to keep each other happy (placed just slightly above volunteering to do the dishes) is communicating clearly and openly -- an especially helpful habit when it comes to money matters.

In fact, Dave and I started our financial talks long before we strolled down the aisle. Sure, it was embarrassing to admit that my college years were riddled with late bill payments, leaving me with a credit score about a hundred points lower than his nearly perfect record. And he struggled to fess up to the thousands of dollars in debt he had amassed, coincidentally, since we started dating. But we knew that if we wanted to share our lives, we also had to share our finances. So we laid out all our dollars and cents and hoped those early discussions would prove that we’re each other’s perfect money match and prepare us for the long journey ahead. So far, so great.

What should you find out about each other’s money before making a lifelong commitment? Here are four questions that need to be answered. Have other suggestions? Please feel free to drop them into the comment box below.

HOW MUCH IS THERE?

It’s not an appropriate first-date conversation, but if you’re in it for the long haul, finding out each other’s net worth is only fair. When assigning dollar figures (priceless as your significant other may be), be sure to include retirement accounts, investments and debts, as well as checking and savings accounts. Plus, you should share your credit scores, another important piece of the financial puzzle.

If you find that debts severely outweigh assets, or that your partner’s credit score is in the gutter, you’ll want to ask some other questions, such as “How did this happen?” or “What’s your plan to deal?” Unromantic as it may be, you may not want to commit to someone who’s careless with credit, especially if that person has not considered how to fix the problem.

When Dave and I faced the issues of my late payments and his growing debt, we obviously didn’t call it quits. We focused on finding solutions. Fortunately, I had already started working at Kiplinger and had picked up good tips on how to keep up with bills, such as setting up automatic payments and e-mail alerts for due dates. As for his credit-card debt, he stopped using the card, and we made paying it all off a top priority. Mission accomplished!

So, before you dash for the door, talk out your issues and see whether you can come up with a plan to balance your finances better. But if your partner’s deep debts came from years of spending beyond his or her means, be ready to deal with this issue for the rest of your life. After all, you can’t force people to change if they don’t want to do it for themselves.

WHERE DOES IT COME FROM?

At this point in your relationship, each of you knows what the other does for a living. But you should also talk about what you plan on doing and earning a year, five years, ten years and even 20 years from now.

Consider what it will take to make those plans a reality. Is there room for that kind of growth at your current companies? Or will a move be necessary somewhere down the line? Would more education or training be beneficial? (Measure the payoff of going back to school.) Asking these questions now will help you draw a road map for your future.

WHERE IS IT KEPT AND INVESTED?

You probably brushed over what kinds of accounts you both keep when you tallied up net worth. But you should also dive into the details of where the money sits within those accounts. Sharing this info can help reveal financial attitudes.

For example, someone who pours heavily into emerging-markets stocks is a bit of a risk taker. (Test your risk tolerance.) And someone who invests 401(k) money entirely in a single target-date mutual fund is likely more laid back. Whatever you two discover, be sure your fiscal personalities mesh. Otherwise, you could be in for a bumpy ride, and you might want to get off before it’s too late.

WHERE IS IT GOING?

Take a look at your budgets. If you don’t keep one, now’s as good a time as any to get started because you’ll have to make a new one to cover both of you anyway. To do that, bust out the pencil and paper (or Excel spreadsheet) and lay out all of your recent and regular expenses. Use our Household Budget Worksheet to get started.

Or try Kiplinger’s favorite budgeting site, Mint.com, which can organize data from all accounts into different expense categories and help you identify the biggest outlays. For example, in a deliciously colorful pie chart, you might see that a big slice of your mate’s budget goes to dining out. Is that a cost you’re willing to eat? Or are your love’s gastronomical desires subject to compromise?

No matter your method, a clearly laid out budget will illustrate the spending habits you both have. From there, you can figure out whether those habits complement each other or if it’ll take some work to make them fit. It’s okay if one of you is more of a spender and the other is more of a saver -- in fact, that’s the way it is with most couples. What’s most important is that you know what to expect from one another and you accept it.

Once you’ve survived your first big money talk, you’re free to spend your lives in love. Just remember, this is only the beginning; throughout your relationship, you’ll want to discuss your finances regularly and update your plans and budgets accordingly.

Source

Seven Habits of Highly Unsuccessful Spenders

2011-04-15T08:22:00.000-07:00

After working with people and money for years, this is what I've learned: Money makes us crazy! "I have too many choices. I am inundated with too much information. And life is moving at warp speed."

What becomes apparent are the habits od these unsuccessful spenders.

1. I can do it, just watch me. We are overconfident that we can control our spending. We think we can control our behavior--this time. We accept the teaser credit card application because we think we won't use it. We buy "six-months-same-as-cash" because we know we'll have everything paid off in time. Bad things--life--only happens to the other guy.

2. I know I'm right and I can prove it. We rationalize and confirm our spending decisions. No one likes to be wrong and losses/failure emotionally hurt--a lot. We ask "experts" we agree with to confirm our spending choices. We discount anyone who disagrees with us. Over time, we can rationalize just about any spending decision.

3. I'm smart. We think the skills and abilities that have made us successful in one area will carry over to our spending decisions. I know a number of very smart and successful professionals who thought they could run a restaurant. They could not--regardless of how good their mom's pizza recipe. We tend to confuse luck with being smart. Admit it, some of our buying choices worked because we were at the right place at the right time. Brains had nothing to do with it.

4. This time is different. We want to believe that a bad spending choice in the past won't happen again. It can and it may. We aren't very good with figuring out risk and probability. If we were everyone would own life insurance and not more than 10% of their company's stock. Remember, the group can be wrong--dot coms, housing, and so forth.

5. It's an investment. We as individuals have no control over the market price or rate of return of anything. We can ask a price for our Beanie Babies, gold plated coins, and collector's edition presidential plates but the market will determine what it is worth. Just because the guy on television says it's a great investment does not make it so.

6. I have enough time to get my spending under control. We never have as much time as we think. Compounding is our friend--if we use it. We seldom get a "do over" with our money.

7. I don't have enough money. If we are really honest with ourselves, we have money. We simply don't like to make the hard choices about our spending choices. Instant gratification is great. Our feeling brain loves it. However, have to choose between the car that cost more than my first house and being able to retire in the future.

Ted McLyman is a fully licensed financial advisor and author. He is a retired Lt. Col, USMC where he served in various command and staff positions to include: economics instructor, U.S Naval Academy; Aide to the Assistant Secretary of the Navy for Financial Management; and served a tour in Southwest Asia during Operation Desert Storm.

Source

planning the split...

2011-02-08T06:31:00.000-08:00

At best, divorce is a time of distraction in one's life, when emotional and family concerns take center stage and financial issues often take a back seat.

Yet divorce is one of the biggest triggers of bankruptcy in a world where bankruptcy has gotten a lot tougher to file. That means that financial planning is crucial when a marriage breaks up.

Anyone filing divorce should seek the help of financial and tax advisers as well as attorneys skilled in divorce, experts say, because financial issues that get pushed to the background eventually can take a surprising and disastrous toll on the newly single ex-spouse and his or her children.

Planning
Reaching a Suitable Divorce Resolution Option for Your Family
Financial Planning Matters for Amicably Tackling a Divorce Settlement
Creating an After-Divorce Action Plan to Provide More Gold for the Golden Years
Divorce? Financially Prepare Yourself
The Biggest Financial Mistakes People Make in Divorce – and How to Avoid Them
Getting a Divorce? Avoid Common Financial Mistakes
How to Handle a Divorce Settlement

source: financial planning association

Find additional resources on bankruptcy, debt management, credit and foreclosure go to http://www.debthelper.com/ or call
Credit Card Management Services, Inc. 1-800-920-2262

Mail thieves are waiting for your tax documents | Pamela Yip Columns - Personal Finance - Business News for Dallas, Texas - The Dallas Morning News

2011-01-28T05:07:00.000-08:00

Mail thieves are waiting for your tax documents | Pamela Yip Columns - Personal Finance - Business News for Dallas, Texas - The Dallas Morning News

You should always guard your mail, but you need to be especially vigilant at this time of year.

That’s because January is when you start receiving sensitive personal documents, such as year-end credit card summaries, your W-2 and 1099 income tax forms, and brokerage statements.

Those have critical information, such as your full name, address, Social Security number and account numbers that identity thieves treasure.

“People don’t understand that ‘walkers’ follow mail carriers and look through your mail for any bonanza they can find,” said Linda Foley, chairman of the Identity Theft Resource Center, a nonprofit organization in San Diego.

“Mail thieves know the prime time is between 9 a.m. and 3 p.m. Others take advantage of the dark of night and/or consumers’ tendencies of not checking mailboxes each day.”

Some thieves even open the envelopes, copy the documents, then reseal your mail and place it back in your mailbox a day later, she said.

“It is one of those times of the year when everyone should be on the lookout, and if you aren’t receiving the appropriate amount of documentation you’re expecting, you need to act quickly,” said U.S. Postal Inspector Amanda McMurrey.

Keep a monthly calendar of when items arrive and if they seem delayed, call the sender to find out why.

Then contact the post office. The toll-free number for the U.S. Postal Service is 800-275-8777.

“You may have a new carrier on the route,” McMurrey said.

In a worst-case scenario, someone may have submitted a change-of-address form without your knowledge to have your mail forwarded to them.

To protect consumers, the postal service will automatically send letters to your old address and new address “to verify that indeed that was a legitimate change-of-address-order,” McMurrey said.

If you feel your mail’s been stolen, contact your creditors or bank about your bills and notify the U.S. Postal Inspection Service, the federal law enforcement agency that protects the nation’s mail system.

The toll-free number for the postal inspection service is 1-877-876-2455. You may also file a mail theft complaint online at https://postal inspectors.uspis.gov/contact Us/filecomplaint.aspx

Your local post office doesn’t handle criminal matters concerning the mail.

To expedite the investigation of your case, gather any documents that demonstrate that thieves may have hijacked your sensitive personal information, such as credit card statements or bad checks and submit copies with your mail theft complaint.

Here are other things you can do to protect your mail:

•Get a secure locked mailbox for your home or a post office box.

•Don’t leave your mail in your mailbox for long.

•If you’re going on vacation, have your mail held at the post office until you return to retrieve it.

“Don’t use the excuse that you always get the mail when it arrives,” Foley said. “Postal deliveries are not always at the same time, and you can’t make sure you are standing next to your box at the right moment. That 30-second window is all a thief needs.”

Can Money Buy Happiness?

2011-01-27T05:52:00.000-08:00

In the 2010 flick Wall Street: Money Never Sleeps, Shia LaBeouf’s character (Jake Moore) asks Josh Brolin (Bretton James), “What’s your number? …the amount of money you would need to just walk away from it and live?”

Without hesitation, Brolin responds, “More”.

Yes, that was a fictional movie but we all know people who have that same you-can’t-be too-rich-or-too-thin mentality. And let’s face it, who hasn’t played “What I would do if I won the lottery” in their minds? I have, several times in fact.

My visions – as cliché as they may seem – include luxurious vacations in exotic locales, a to-die-for wardrobe, and my very own ‘Team Susan’: a masseuse, chauffer, personal trainer, maid and chef. My parents would have the very best health care. My friends’ children’s college tuitions would be taken care of. The ASPCA would receive a big fat check. But would this accumulation of material goods (and snapshots of goodwill) make me happier? Is being rich overrated? Would I become more of a glass-is-half-full gal?

CAN MONEY BUY LIFE’S NON-TANGIBLES?

Money coach, best-selling author and award-winning financial journalist Jean Chatzky stated, “A Roper study conducted for my book The Ten Commandments of Financial Happiness revealed that what you need to feel happy is enough cash to live comfortably – not lavishly, just comfortably.” More money than that won’t buy happiness.” (November 2010 issue of Women’s Health magazine.)

Why not? Personal Finance Expert Andrea Travillian (takeasmartstep.com) explains that self-esteem can’t be bought. “If you don’t like yourself, you still won’t be happy regardless of how much is in your bank account. Money can buy new clothes and “toys” which provide you with a temporary boost, but eventually these items lose their impact. The gadget is no longer new, the car is old and you need to get more so you look for the next boost.

Bottom line: you can not buy self-esteem.

Adds Matt Wallaert, a behavioral psychologist and lead scientist at GetRaised.com (a web service that helps people earn what’s fair), “It’s probably true that a big screen TV won’t automatically make you happy in any long-term sort of way. But if you hook up a Wii and start playing with your kids more often, that probably will. In other words, happiness isn’t about stuff: it’s about what you do with the stuff.”

In the same movie I referred to earlier, Michael Douglas tells his future son-n-law, “Money is not the prime asset of life. Time is.” Quite a turn around for a guy who coined the infamous phrase, “Greed is good”.

THE 3 P’S

Pop quiz – which of these brings us genuine inner peace and drive happiness?

1.Purpose (Where do you want to serve? In what area do you want to make a contribution?)

2.Passion (What are you truly passionate about? What is your ultimate dream?)

3.Paycheck

Wallaert explains, “Part of happiness is a sense of purpose, a feeling that your life matter and that you are doing something meaningful with it. Philanthropy can certainly provide part of that sense of meaning. It is one of many things that one can do to feel like they matter. But so is building an empire, or teaching, or spending time with your family – people have many ways of providing meaning for their lives.”

We hear about people who have left high paying jobs to start nonprofits or pursue a long-awaited dream job – pay cut included – and are more fulfilled than they’ve ever been in their lives. People who chose ‘a’ and ‘b’.

BUT NO MATTER WHAT, WE STILL WANT IT…

If, in the end, riches do not make people happier, why do so many people go to such extremes to get their hands on the green stuff?

New York City bankruptcy attorney Daniel Gershburg, ESQ has a roster of clients who once “had it all” and then lost everything. “Everyone strives for it because they think it’s going to change their lives. They think they are going to wake up in a different world thanks to this financial cushion. Their expectations didn’t come to fruition and they feel empty. …disappointed that nothing has changed. They thought money would be the crutch to bail them out of their misery and are now left feeling like, ‘Now what do I do’?”

Adds Gershburg, “Surprisingly, my (formerly wealthy) clients who decided to claim bankruptcy are almost always relieved afterwards. There’s no need to maintain silly appearances anymore. That ‘hamster on a wheel’ feeling because is gone. They’ve been relieved of $3-$4,000 minimum monthly credit card payments and are completely fine with relinquishing the Mercedes and getting a Honda. It’s as if they have cut ties with an addiction.”

If you’re not happy without it, you won’t be happy – or any happier – with it.

So, back to my lottery fantasy. Yup, I had it all figured out – the trips, the clothes, the donations. And then I returned to reality, which to be honest, isn’t such a bad place to be.

Source

How to dispute credit report errors

2010-11-05T12:34:00.000-07:00

By Ben Woolsey

Your credit report contains information about where you work and live and how you pay your bills -- especially credit card bills. Credit reporting agencies -- also known as credit bureaus -- compile and sell your credit information to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment and other purposes allowed by the Fair Credit Reporting Act, it's important that the information in your report is complete and accurate.

Financial advisers suggest that you periodically review your credit report for inaccuracies or omissions. This is especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process and get you a loan at the rate you deserve.

Getting your credit report

Under a 2005 amendment to the FCRA, every American is entitled to a free credit report from each of the three major credit bureaus once a year. Go to AnnualCreditReport.com to get yours for free. (And despite other well-known credit report-providing sites, this is the only one that is truly free, with no strings attached.)

In addition, if you've been denied credit, insurance, or employment because of information supplied by a credit bureau, the FCRA says the company you applied to must give you the bureau's name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition. Otherwise, the bureau may charge you for a copy of your report.

If you simply want a copy of your report, call the bureau listed in the Yellow Pages under "credit" or "credit rating and reporting." Call each credit bureau listed since more than one bureau may have a file on you, some with different information. The three major national credit bureaus are:

Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.

Experian, P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).

TransUnion, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.

Correcting credit report errors

Under the FCRA, both the credit bureau and the organization that provided the information to the bureau -- such as a bank or credit card issuer -- have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the credit bureau and the information provider.

First, tell the credit bureau in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the sample below. Send your letter by certified mail, return receipt requested, so you can document what the credit bureau received. Keep copies of your dispute letter and enclosures.

Credit bureaus must re-investigate the items in question -- usually within 30 days -- unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the credit bureau, it must investigate, review all relevant information provided by the credit bureau and report the results to the bureau. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide credit bureaus so they can take the appropriate actions. For example:

* Disputed information that cannot be verified must be deleted from your file.

* Erroneous information must be corrected.

* Incomplete items must be completed. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the credit bureau must show that you're current.

* An account that is shown to belong only to another person, it must be deleted.

When the reinvestigation is complete, the credit bureau must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the credit bureau cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness and the credit bureau gives you a written notice that includes the name, address, and phone number of the provider.

Also, if you request, the credit bureau must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the credit bureau to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the credit bureau, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit bureau, it must include a notice of your dispute. In addition, if you are correct -- that is, if the disputed information is inaccurate -- the information provider may not use it again.

You can't remove accurate negative information

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for seven years. There are certain exceptions:

* Information about criminal convictions may be reported without any time limit.

* Bankruptcy information may be reported for 10 years.

* Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

* Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

* Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.

Adding accounts to your file

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to credit bureaus: Some travel, entertainment, gas card companies, local retailers and credit unions are among those creditors that don't. If you've been told you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the credit bureau to add this information to future reports. Although they are not required to do so, many credit bureaus will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the credit bureau on a regular basis, these added items will not be updated in your file.

Following is a sample letter that could be used to dispute an inaccurate credit report:

Date

Your name
Your address
Your city, state, ZIP code

Complaint department
Name of credit bureau
Address
City, state, ZIP code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received.

(Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please re-investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

Source

Farmer's Divorce

2010-09-04T12:00:00.000-07:00

A farmer walked into an attorney's office wanting to file for a divorce. The attorney asked, "May I help you?"

The farmer said, "Yea, I want to get one of those dayvorces."

The attorney said, "Well do you have any grounds?"

The farmer said, "Yea, I got about 140 acres." The attorney said, "No, you don't understand, do you have a case?"

The farmer said, "No, I don't have a Case, but I have a John Deere."

The attorney said, "No you don't understand, I mean do you have a grudge?"

The farmer said, "Yea I got a grudge, that's where I park my John Deere."

The attorney said, "No sir, I mean do you have a suit?"

The farmer said, "Yes sir, I got a suit. I wear it to church on Sundays."

The exasperated attorney said, "Well sir, does your wife beat you up or anything?"

The farmer said, "No sir, we both get up about 4:30."

Finally, the attorney says, "Okay, let me put it this way. WHY DO YOU WANT A DIVORCE?"

And the farmer says, "Well, I can never have a meaningful conversation with her."

2010-09-03T12:00:00.000-07:00

Lawyer: "Are you married?"
Witness: "No, I'm divorced."
Lawyer: "And what did your husband do before you divorced him?"
Witness: "A lot of things I didn't know about."

Treat Your Money Like Your Marriage

2010-08-26T13:03:00.000-07:00

As readers of DINKS Finance we are generally interested in 2 things….our relationships and our finances. Today we are going to discuss how to grow and preserve both of them. Here are some quick tips about how to treat our money like our marriages, or in my case, our relationships.

Hopefully our marriage is the priority in our lives and our money is the second. I don’t feel that we need to separate the two most important things in our lives. We want our money to last just as long as our marriages, so why not treat them equally…and the same.

Here are 5 pieces of advice for saving our money and our marriages (or relationships).

1. Let The Love Grow. Most relationships don’t start with love at first sight. We slowly fall in love with the person over time. Eventually, our boyfriend becomes our husband, or our girlfriend becomes our wife. The same thing is true for our finances. We won’t become rich over night. We have to preserve our income and eventually our money becomes our wealth.

2. Cherish The Relationship. We don’t take our spouses for granted, and we shouldn’t take our money for granted either. Our money may not always be there if we don’t spend it wisely and our spouses may not always be there if we don’t treat them with respect. Cherish both your money and your relationship because in the blink of an eye, we could make a wrong move and loose them both.

3. It takes hard work. No one said that relationships are easy. It takes a lot of hard work for a successful relationship to sustain over the long term. It also takes a lot of hard work to become successful and grow a financial empire.

4. The secret is compromise. If you spend a little too much one day, then save a little more the next day. Everyone tells me that the secret to a happy relationship is compromise. I believe that this is true for any relationship, whether it is with our loved ones or with our love of money.

5. Pick your Battles. We can’t win them all. We should accept defeat gracefully when things don’t as we plan. I for one was extremely disappointed when the value of my retirement savings plan dropped by approximately 27% from 2008 to 2009. However, getting upset about it was not going to help the situation. So I just kept my investments as they were and moved on. I have the same strategy with my boyfriend Nick. Not everything is worth the fight so sometimes I just don’t put on my boxing gloves.

We should enjoy our money and our marriages or relationships. We are very blessed, and very lucky to have both.

Source

Should you say "I do" to Divorce Insurance?

2010-08-13T13:41:00.000-07:00

A North Carolina company has a new product called WedLock, which aims to defray the costs of a breakup.

Posted by Stacy Johnson on Friday, August 13, 2010 10:15 AM
This post comes from Stacy Johnson at partner site Money Talks News.

First there was wedding insurance, which reimburses you for lost deposits and other expenses in the event your wedding is canceled because of a death in the family, dangerous weather or other unforeseen circumstances. (We've explained it several times in the past, most recently a couple of months ago.)

Now there's divorce insurance. A North Carolina insurance startup called SafeGuard Guaranty Corp. has begun selling policies under the name WedLock. (Clever, but shouldn't that be wed-unlock?)

It charges $16 a month for a single "unit" of coverage, which equals $1,250 in benefits. You can buy additional units at the same price -- and keep going right up to 200 units, or $250,000 of coverage. As long as you continue paying the premiums, the company adds $250 of coverage every year per unit.

What do you get for that? A cash benefit that will ease the financial burden of your divorce. According to divorce360, legal fees alone can run as high as $45,000 for contentious divorces in urban areas like Los Angeles. With the divorce rate between 40% and 50%, SafeGuard might feel like a safe bet.

Cashing in your policy is as simple as mailing your divorce documents to SafeGuard. But lest you think you can quickly take out a policy as your marriage is hitting the rocks, note this huge caveat: Policies don't mature until 48 months after their effective date. If you want to include a rider for what's called an accelerated maturity, you can reduce that period to 36 months, but that will hike your monthly premium from $16 to $30 per unit.
Need a home equity loan?
The policies aren't backed by any state insurance or other government fund, only by the company that's doing the underwriting for Safeguard. If that company, Prime Insurance, goes down the tubes, your premiums go with it.

Wedding insurance vs. divorce insurance
While wedding insurance may seem like overkill in terms of cost vs. benefit, it could be justified. It costs only a couple hundred bucks and protects what could add up to thousands in lost deposits if a hurricane or other calamity destroys your wedding day.

Bing: Do you need wedding insurance?
I'm less sanguine about divorce insurance. This type of insurance seems fundamentally flawed both financially and emotionally.

Video: 3 ways to raise your credit score fast
Financially, you're paying $192 every year for $1,250 in benefits -- and you have to pay four years' worth, or $768, before you're even eligible to collect. Would investing that money be more rewarding? Let's do a comparison.

According to this financial calculator, if you invest $192 every year for five years and earn 10% compounded monthly, you'll end up with -- surprise! -- about $1,250. That's the same amount WedLock promises as your starting benefit. Granted, earning 10% is no simple feat. But it's certainly possible. Witness our online stock portfolio.

Now let's consider a WedLock policy. If you paid WedLock $192 every year for five years, upon divorce you'd get $2,250 ($1,250 plus four years of the extra $250). That's a lot more than the $1,250 you'd get saving on your own. But you have to get divorced to get it.

If you're saving on your own, you can stop whenever you want. If you're paying for a WedLock policy, best you keep the premiums up, or your policy will lapse and you'll end up with nothing.

What if you get divorced in, say, two years? According to company CEO John Logan, you can purchase a "return of premium rider" for an extra $2 monthly per unit that will refund any premiums you've paid -- less the state tax paid by the underwriter -- if you get divorced in less than four years.

Now let's consider the emotional angle of this type of insurance. When I talked to Logan, here's what he said:

We know we can't build a dam and stop divorce from happening. But we'd at least like to put our finger in the dike to stop the crack in the foundation of marriage from getting bigger.

Mixed metaphors aside, this seems like exceedingly odd language from a company selling a product whose only value springs from divorce. This product doesn't prevent divorce -- it encourages it.

You may not be willing to kill your spouse for a $100,000 life insurance benefit, but how much of a benefit would it take for you to divorce your spouse: $50,000, $100,000, $200,000? Every couple would have their price. After all, you could always collect the dough and get remarried.

Do you have enough life insurance?
Of course, we suspect most people probably won't get close to facing that kind of decision. Think about approaching your spouse with, "Say, sweetheart, take a look at this website.

Doesn't this look like a good idea?" Nobody suggesting divorce insurance to a spouse is going to be married for four more years. Nor is anyone who keeps that kind of financial secret from his or her spouse.

I asked Logan whether he's ever been divorced. He has -- once. He added, however, that he's currently engaged and looking forward to his second time out. Is he buying divorce insurance? Nope.

As it happens, in North Carolina, where both Logan and WedLock reside, state insurance regulations make his product prohibitively expensive.

Despite progress, women still make these 3 crucial financial mistakes

2010-07-30T06:54:00.000-07:00

Move over men of America: There's a woman running the family finances.

A landmark study released today by Prudential Financial concludes that a record number of women in the U.S. - 95%, to be exact - are financial decision-makers.

What's more, 84% of married women are either solely or jointly responsible for managing their household finances, according to Prudential's 2010 study on the Financial Experience & Behaviors Among Women.

The study, administered by Harris Interactive, is significant for several reasons.

First, it's the 10th anniversary of this survey; Prudential has updated the survey every two years. So this long-range perspective offers a more in-depth glimpse into how U.S. women have handled their finances in boom and bust periods.

Additionally, the survey highlights some interesting trends over the past 10 years and shows – in the wake of the Great Recession – how much work remains to be done to truly empower women economically.

Despite a decade of progress, with women becoming more aware, engaged and actively involved in their finances, the study also concludes that women lack confidence about providing for their families' future, are behind in saving for retirement and admit being mystified by various financial products, such as stocks, mutual funds and annuities.

Among the survey's other findings:

Less than 20% of women polled feel "very prepared" to make wise financial decisions; Half said they "need some help," and one-third feel they "need a lot of help"

64% said they either need to "catch up" (39%) or are "way behind" (25%) in their retirement savings

76% of those polled either plan to work longer (56%) or worry if they will be able to retire on time (20%), due to the recession

Are You Guilty of These Financial Mistakes?

As a Money Coach, I often hear from women who tell me their economic problems and the financial mistakes they've made.

While some women complain about fiscally irresponsible husbands who don't to pay bills on time or boyfriends who ruined their credit, others lament having "loaned" money to relatives or friends, only to see that money vanish forever.

Mostly, though, the women I hear from aren't placing the blame elsewhere. Instead, these women are remarkably honest in confessing their own shortcomings.

They admit overspending. They acknowledge using the credit cards way too much. And they know they've failed to save sufficiently.

So it is with the Prudential Women's Study: the 1,250 women polled this year (aged 25 to 68) candidly acknowledge their strengths, as well as their own economic failings. And the chief financial mistake women are making is that they are failing to properly plan for the future.

Only 33% of the women surveyed said they had a concrete plan to help reach their personal and financial objectives. Among younger women, aged 25 to 34, just 10% had a financial plan.

Whether your goal is to have a comfortable retirement, pay for your child's education, or start your own business, it all starts with a plan.

So if you're a woman who hasn't been planning, stop making the following three mistakes in order to start enjoying a richer, more rewarding life.

Stop Procrastinating

Failing to plan for the future is perhaps the biggest financial mistake you can make. Yet many of us neglect to do smart financial planning because we're procrastinators.

How many times have you told yourself that you'll get around to creating a will, buying life insurance or hiring a financial advisor – only to let yet another year slip by while those tasks remain unaccomplished?

Until you stop procrastinating on handling basic money chores – yes, even those things you might initially find "boring" or "complicated" – you won't achieve your full economic potential.

Stop Multitasking

Women's lives tend to be packed with too many things to do. We work. We take care of children and spouses. We fret over our siblings, parents, friends and partners. We tend to a host of family, social and civic obligations.

And then we try to "squeeze in" time for reviewing our budgets or monitoring our investments – while we're checking the kids' homework or walking on the treadmill, of course.

Although we can (and do) juggle a dozen things simultaneously at work or home, that's not the way to become more financially savvy. Enough already with the multitasking, Superwoman heroics.

Plug your knowledge gaps about personal finances by being willing to S-L-O-W down and focus. Take uninterrupted time to read a good money management book. Register to attend a financial conference or investment seminar. Or simply spend an hour with a financial planner.

By concentrating on one specific thing, your financial affairs, you'll learn and retain a lot more. Boosting your financial acumen will also go a long way toward increasing your confidence in your ability to make good financial decisions.

Stop Assuming

One other finding of the Prudential survey revealed a serious disconnect between women's expectations and reality.

An astounding 75% of women polled believed they could rely on Social Security for their retirement. Most financial experts agree, however, that women (and men) should be actively saving and investing for their Golden Years, not counting on Social Security to meet their retirement needs.

Another assumption women make: that friends and family can give them good financial advice. Over 60% of women surveyed said they rely on relatives and friends – not qualified professionals – for investment information.

People in your inner circle may be good sounding boards, but your social network is no substitute for a trusted, reputable professional when you're trying to fix your ailing 401(k) investments or create a long-term financial plan.

If we women can stop procrastinating, multitasking and assuming so much, we'll reap a host of benefits, including improved financial planning, heightened financial knowledge, and more self-confidence in our money-management skills and abilities.

If you asked me, those are worthwhile goals for women of all ages.

Source

Coping Mechanisms for a Spender-Saver Relationship

2010-07-26T08:14:00.000-07:00

Recently, my sister announced her engagement. She's the last of my siblings to marry and the youngest in our family. Her announcement, and her particular circumstances, made me think more and more about how important it is to discuss finances early on in a relationship. It also sparked my interest in how a spender and a saver can create an everlasting and healthy relationship.
I don't necessarily think a relationship where each person views money differently is ultimately destined to fail. However, if the people in a relationship have drastically different outlooks on budgeting and finances, then they might need to work a little harder at communicating about personal finance. I've set out on a mission, listing a few helpful tips, to help young couples openly discuss finances no matter what their spending habits may be.

Budgeting Basics

Today, there are more resources available than ever before to help couples budget and track their expenses. Whether a couple is web savvy, or likes sticking to pencil and paper, tracking everyday expenses is the first priority to figuring out a budget. Keeping track of where your money goes for one month is a good rule of thumb for nailing down expenses. One great online expense tracker is Mint. Everyday expenses can be entered and tracked and Mint also offers colorful charts to help those visual learners.

Quicken and Quickbooks are two software programs that I use. I enter my expenses on the checkbook register digitally, categorize each expense (I set up the categories when I first loaded the program), then at the end of the month I can pull a report that shows where my money is going. Seeing where most of my money goes (rent and utilities) allows me to decide if I'm paying too much for electricity, water, or phone service. I usually delegate the task of calling companies for better rates to my husband. He gladly takes on the challenge and often can reduce our rates.

Tracking my expenses also helps me see where I can trim down my budget and save money. For instance, my Starbucks portion of the pie chart has gotten a little out of control. Using this as a guide, I can reevaluate my budget and decide if I need to cut back on certain expenses and opt out of that second daily drink. Tracking expenses and forming a budget can help guide a spender into reducing their spending habits, allowing the saver to feel a bit more in control.

Once a couple has a handle on their expenses and has a rough budget outlined, it's time to discuss purchasing habits. Discussing purchasing habits is extremely important when a couple is on opposite ends of the spender/saver spectrum. If the spender is secretly spending more than what the couple can afford, the saver will be beside themselves and may not be able to amicably resolve the issue. Open discussion is a must and can be done through various ways including:

Deciding how much of the combined income will be set aside for frivolous or splurge purchases. Once that monthly limit has been met, the spender is asked to give up their credit or debit cards.

On a white board or other visual aid, keep track of last minute purchases. This way, instead of having to verbalize what was spent, it is written down allowing the saver to vent a bit before an argument takes place.

Put the spender on a cash-only diet. This tactic may help if the spender is out of control and cannot be trusted with credit.

Early on in our relationship my husband and I sat down and went through all our credit card expenses and monthly expenses, and came up with a system so there were no surprise purchases. Since I deem myself more of a saver than spender, I took control of all purchases through online banking. Our monthly budget is flexible enough to handle a little extra spending, but overall it keeps our purchases within the boundaries we initially set.

A No-Argument Approach

Most relationships find a happy medium between spending and saving their pennies. However, personal finance is one topic that can cause distress if either party is unwilling to compromise. Recently, I began creating a personal finance engagement gift that I though might help my newly-engaged sister, including how to start a budget and a list of topics that should be discussed. One reader, FinEngr from Engineer Your Finances, had a terrific addition: Financial Love Notes. An example of a Financial Love Note would be "I'm taking my lunch to work all this week. I'm saving $40 so that I can take you out to dinner!" The idea behind the notes is to encourage each other to save money towards a common goal and to open up conversations about money without being confrontational. Some ways the Love Notes can be useful:

Curbing a spender's habit on particular purchases: "Today I walked right past Starbucks without entering. I saved $4.50 towards our emergency fund."

Discussing a touchy subject: "I noticed Macy's was having a sale today. I'm so proud you didn't enter the mall. You saved us $60!"

Working towards a common goal: "I saved $15 today by purchasing only soda instead of drinks with the guys. That's $15 that is going towards our house fund."

FinEngr's idea is a wonderful way to let your loved one know you're thinking about them all the time. He compared it to a mom putting a little love note in your lunchbox — a nostalgic feeling of love.

As my sister progresses with her wedding arrangements, I hope she and her fiancee take some time to talk about personal finances openly. A healthy relationship begins with open communication, including the topic of personal finance.

Source

Children of the Recession: How to Insulate Kids From Financial Fears

2010-07-20T05:51:00.000-07:00

With unemployment and foreclosure numbers climbing, chances are high that you have friends or family members affected by this recession. When a close friend or family member loses their home, or their job (or both), it is frightening on several levels. You begin to wonder if the same could happen to you. This fear of economic uncertainty causes anxiety in many children, too.

My parents divorced when I was very young, and I don’t have many specific memories of them arguing, except over money. Unfortunately, that’s a common memory for many kids, especially when economic times are tough. While it is impossible to shield kids from all that goes on around them, I happen to believe money worries are one of those things we should not share with kids. There are a number of ways to do that – some very specific, and some more subtle.

Don’t Fight About Money in Front of Kids
This one seems the most obvious. When it comes to transferring anxiety over money to your children, there is no faster way than to fight over it with your partner. Asking couples not to argue over money at all is a little unrealistic, so when differences arise, at least try to do it in private and out of earshot of your kids.

Spenders and savers are bound to clash, but when they fight in front of kids they give kids something to worry about beyond Mom and Dad fighting. Will we run out of money? Is Dad losing his job? Will we have to move? Will we have money for food? Even if parents are unsure about the answers themselves, they owe it to their kids to exude confidence when it comes to money. If things really do get bad, emphasize that no matter what, you’ll all be together and that home is where you make it – wherever that may be.

Avoid Language Like “We Can’t Afford That” or “We’re Poor”
This is one I’ve had to relearn myself. When kids ask to buy things, and money is tight, I try to rationalize with them instead of simply saying, “we can’t afford it.” Tell kids that instead of spending money on toys this week, you need to focus on buying some basic things like food and gasoline for the car. Ask them to come along to the grocery store to help pick out a few favorites. If you simply say you can’t afford something, kids will begin to wonder what else you can’t afford, and this could cause worry.

I will not allow anyone in our house to use the word “poor” when describing our economic situation – even when times were pretty lean in our own household. We might have been broke, but we certainly weren’t poor. It’s more than semantics. The word poor seems to connote inferiority, or having some unfortunate circumstance. We suffered from neither. We simply spent more money than we earned and had to live on far less to turn things around. We may have been stupid, but we weren’t poor!

Now, let’s shift away from things not to do around kids, and focus on some positive things to teach kids to help them with their own financial futures.

Start Teaching Kids About Money
When I was growing up, money was taboo. Parents would no more rather talk about money with their children than their love life. While this is still true to an extent, I think most of us have recognized that kids need to be more aware about the potential financial pitfalls out there than we were.

Start giving kids an allowance to budget their savings, spending and giving. Help them open a savings account and begin to teach the mechanics of a bank account – completing deposit slips, balancing a checkbook and explaining how compound interest works.

As kids get older introduce them to increasingly more complicated topics like investing, borrowing money, insurance, etc. By the time they are teenagers they should have a good grasp on Personal Finance 101 topics to better prepare them for life.

Encourage Saving Over Spending
As adults, we know it is prudent to put back a sizable emergency fund of several months (I actually recommend a full year) of basic, household expenses. Because kids are not responsible for everyday expenses, it is hard to get this message across to them. Instead of focusing on saving money for emergencies, teach kids to save money for opportunities.

Here is a very subtle example. Saturday night I took my son to Toys R Us. He had accumulated allowance money, along with a birthday gift card or two. I helped him find a few things in his price range, and naturally, he wanted it all, which would have wiped out his savings.

I gently reminded him of events coming up where he might like to have some money, and explained if he spent all his money today he would get no more until he received his next allowance. He came to the conclusion on his own that saving some back for a future opportunity was a good idea. He put back all but one toy and we left with cash in hand – I was a proud frugal dad!

Foster Entrepreneurialism in Your Kids
My parents and grandparents were probably a lot like yours – they worked 40-50 hours a week, punched a clock and recharged over the weekends. After doing this for several decades they were given a cheap retirement gift, maybe a small pension, and a retirement send-off. Well, times have changed.

The recession has underscored the importance of developing an entrepreneurial streak at a young age. Chances are very slim that your child will graduate college, pick one job and stay there for 40 years. More likely, there will be many jobs with many employers, and many periods of being “between jobs” in their lifetime. Wouldn’t it be great if they developed a “side hustle” to get them through those periods of unemployment, or to supplement their full-time income all along?

Perhaps you enjoy building things and have turned your one-time hobby into a side hustle building decks and fences on the weekends. Get your kids involved in the process as they grow older, and perhaps you can pass along a valuable trade. Even if they become accountants or fire fighters, having the knowledge and experience of a trade to fall back on could be incredibly valuable to them over a lifetime.

The point is not to stifle your kids ideas by forcing them into some ideal career path you have selected for them. Allow them to cultivate their own ideas. Over the next few decades, personal branding, and the branding of individual ideas will likely be hotter than any particular industry. Think about it – iPhone apps may be the next lemonade stand!

In a way, social media, and new media, have greatly expanded the opportunities for kids to create new products, explore new ideas and push new content into the mainstream. It’s never been a better time to have an entrepreneurial mindset, and fostering that in your children at an early age is invaluable.

Source

$5 Million in Scholarships

2010-06-30T07:12:00.000-07:00

Okay, moms or dads,

Fill in the blanks: I'd like to go back to school, but I don't have enough _____.

Time

Between your kids’ needs and your work headaches, the last thing you need is another time commitment, right? Wrong! Education is the first thing you need. A college degree is the clearest route to self-fulfillment and financial security. Learn how online education can fit in to your busy schedule, and see how other working moms have achieved their educational goals.

Money

If you’re putting off college because it’s too expensive, you might be in for a long wait. College costs continue to rise, and you’re still shut out from the higher-paying career you deserve. Instead of waiting, apply for a Project Working Mom full-tuition scholarship, plus learn more about financial aid options & personal budgeting.

Confidence

Every day, you teach your kids to grow and explore. Now is your chance to teach by example. Don’t let fears and insecurities hold you back. Besides, online colleges and universities provide comprehensive support services for their students – everything from academic advising to career counseling. You can be a good student and a good mom.

www.debthelper.com

Taxes and Dependant Care

2010-06-30T06:54:00.000-07:00

No school, no books, no teacher's dirty looks!

Remember when you looked forward eagerly to summer? When you were finally released in June, you flew out those schoolhouse doors and didn't look back! You didn't realize how much your parents dreaded those months, with you at loose ends while they had to work.

Now you're a parent. You have a job. While you wish you could spend all day with your child, someone has to make a living. What's your best alternative?

Summer camp!

Not only is it a great way to keep your child occupied, distracted, educated or entertained-but you just might be able to get a tax benefit from summer camp, too.

Yup!

The cost of summer camp can be used toward the Child and Dependent Care Credit, taken on Form 2441. The purpose of the credit is to provide before-school, after-school or day care for dependents so parents can go to work or get an education.

First, the good news!

The credit can be worth 20 to 35 percent of $3,000 of expenses per year, per dependent, for up to two dependents. The percentage depends on your income.

Children must be under age 13 at the time they went to summer camp or received any qualifying care. The camp may provide a specialized activity, like soccer, chess or computer training-so you can toss in some focus along with the care.

Finally, this credit applies not just for children, but also for the cost of care for adults who are elderly or disabled.

Now the bad news:

1) There is no tax benefit for sending your child off to overnight camp for the summer. Why get a credit for summer day care and not overnight camp? Who knows? Logically, it should make no difference. Thank your D.C. legislators who've never had to pack lunches, wash muddy jeans or deal with stacks of wet towels all over the house. Or children tugging on your shirttails, yelling, "Mommy, Mommy, look at me!"

2) If you're already paying for day care, after-school care, or private school, you've probably used up your cost allotment for Form 2441.

A word of caution: You must request the taxpayer ID number of the summer camp or care provider to put on the Form 2441, along with its name, address and telephone number (in some states). Get this information before placing your child in the camp's care. We've heard from parents that some people get downright rude when asked for that ID number at tax time the next year. Turns out those care providers weren't planning on reporting the income. Oops.

Summer is also a good time for remedial courses, or for special training for children with learning disorders or other physical or nervous issues that can be identified by a doctor. Those costs may be applied toward your medical expenses. If you have a flexible spending account at work, build these costs into your plan for next year. You could pay for up to $5,000 worth of "medical" expenses with pre-tax dollars. That could put about $1,500 right back into your pocket.

Source

Grandpa dumped Grandma

2010-06-05T06:14:00.000-07:00

I heard a pitiful story yesterday about a woman who spent her entire life cleaning up after some man's crap and now he's dumping her without an education and with about two pennies to scrap together to consider getting a reverse mortgage to make it through the rest of it. ... Well at least from her point of view...

From his point of view... the nagging hag of a crazy woman he was tricked into marrying before he joined the service is finally being deployed and not in no damn box ... he's freeing himself before he spends eternity laying directly next to her... ugh.

Hey there are two sides to every story. Here's some of Liz's tips for those of you old farts that might be considering divorce in your medicare medicaid social security years...

Talk about it. If you're married, discuss with your partner how you'll pay for long-term care. Home care and nursing homes can run $50,000 to $150,000 a year. Where would the money come from? How do you feel about using government assistance to pay for it?
Evaluate long-term-care insurance. This coverage pays for nursing-home and (often) in-home care and can help you preserve your assets. But you need to purchase it before one of you becomes ill, and the older you are when you buy it, the more it costs. AARP has more information on how to evaluate coverage and costs.
Consult an elder-law attorney about your options. If it's too late for long-term-care insurance or you can't afford it, you should know about your alternatives, whether or not you decide divorce is among them.
If you do divorce, do it right. This is not a do-it-yourself project, particularly if you want to keep Medicaid from going after your assets after an ill spouse dies. Both partners need to be represented by attorneys, and a court-appointed guardian may be needed for a spouse who's incapacitated.

Brokers

2010-05-14T08:24:00.000-07:00

Investigate your broker
See whether your broker is telling the truth about his or her past.
Ingredients:
• Internet access.
• Name of broker or brokerage firm.
Instructions:
The Financial Industry Regulatory Authority offers a free service that lets you see the disciplinary record of more than 850,000 brokers and their firms.
• Go to FINRA.org's BrokerCheck, and click the "Start Search" button.
• Type a name into the search bar, making sure to indicate whether it is a broker or brokerage firm, and click the "Start Search" button again.
• The site will prompt you to type in a code to continue.
• Click on the name of the broker or firm, and a snapshot report will appear.
• Select the "Get Detailed Report" link in the right-hand column for the juicy tidbits.
Total time: four minutes.

Vote your proxy as an investor
Weigh in on executive pay and other corporate-governance issues.
Ingredients:
• Internet access.
• Your 12-digit proxy control number (it's in a box or next to an arrow on your proxy notification).
Instructions:
• Register at MoxyVote.com.
• Once registered, you can click on the red "Vote Now" box on the home page.
• Keying in your proxy control number brings up a ballot, which shows management's suggested vote as well as suggestions from shareholder advocates who have registered on the site.
• Mark the ballot, hit the "Submit" button, and you're done.
Total time: five minutes, including registration time.

Buy Treasuries straight from the source
You can buy U.S. Treasury bills, bonds and inflation-protected securities without paying a commission by establishing an account with the Treasury.
Ingredients:
• Internet access.
• Driver's license.
• Social Security number.
• Bank account.
Instructions:
• Follow the instructions to open an account at TreasuryDirect.gov.
• You'll need to enter your driver's-license number, Social Security number and bank-account routing information, which you can find on your checks.
• The Treasury will send you an e-mail confirming your registration.
• Shortly after, the Treasury will send you an access card via regular mail.
• Return to the site to start buying Treasury securities.
Total time: five minutes, plus waiting time for your access card to arrive.
Source

Spouse's Bad Credit Creates Mortgage Mess

2010-05-14T07:29:00.001-07:00

Forget "Hey, baby, what's your sign?" For anyone looking to buy a house with a spouse someday, "What's your credit score?" may be a better pickup line.

The lower a person's credit score is, the higher the conventional mortgage loan rate. In the case of couples who apply for a mortgage together, one spouse's stellar score won't make up for the other's lousy one. The lender bases the rates only on the lower of the two credit scores.

"Current underwriting guidelines require that the lender default to the lower score to make a credit risk determination," says Robert McDonald, principal at Mass Mortgage Group in Medford, Mass. With a score-based system, "a real-life review of a couple's credit profile-slash-history is not allowed, thereby possibly disqualifying the couple from obtaining a mortgage."

Rates on 30-year fixed-rate mortgages are at their low for the year. But requirements and penalties associated with credit scores are at epic highs, and only borrowers with the highest credit scores can reap the benefits of the low rates.

Recommended: Apply alone
FICO's credit scale ranges from 300 to 850, and most lenders won't consider lending to anyone with a score below 620 these days. Leaving one spouse off the loan also is becoming more common among long-married couples who are in the process of refinancing a home, says Don Frommeyer, treasurer of the National Mortgage Brokers Association and a senior vice president at Amtrust Funding, a mortgage brokerage in Carmel, Ind. Frommeyer recently assisted a couple in which the husband had a deal-breaking score of 580, while the wife had a score of 800. "They ended up refinancing in her name only," he says.
The main problem with only one person signing the loan is that the bank considers only one income, which is a problem if the higher credit score doesn't match the higher income. Debt-to-income ratio is a major consideration in issuing mortgage loans. Couples may be able to persuade lenders to soften on the debt-to-income ratio issue if they have significant savings, and by transferring savings from the account of a bad-credit spouse into the account of a good-credit spouse.
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Downsize to one income without going broke

2010-05-13T07:31:00.000-07:00

Some families choose to live on one income to pay down debt or boost savings. Many opt for single incomes so that one partner can stay home with the kids, start a business or pursue some other passion. For others, including single parents and those who've lost jobs, living on one income is simple necessity.

But less income can mean more economic vulnerability. Divorced mothers, for example, are three times more likely to file for bankruptcy than single women without children, according to research by Harvard University's Elizabeth Warren.

If you have time to prepare for your single-income status, you can do a lot to reduce your risk, such as:

Track where your money is going. If you're used to two incomes, it's easier to be sloppy about what you're spending "because you've got that other check coming,"

Pay off toxic debt. Credit card balances, payday loans and bounced check fees are expensive debts that erode your financial well-being. They're also a sign that you're living beyond your means. Paying off this debt can help teach you the financial discipline you'll need to function on one income.

Build up savings. With credit tight and unemployment high, you have fewer options when something goes wrong. Having a fat emergency fund can help you sleep better at night. Most families should shoot for an emergency fund equal to three months of expenses, but one-income families might want to have twice that.

Live on one income while you still have two. Many families that have successfully transitioned to one income say they started living on one partner's paycheck before it became necessary. That freed up money to pay down debt and boost savings while giving them time to adjust to a more-frugal lifestyle.
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Financial Infidelity Is the New Adultery

2010-05-12T09:07:00.000-07:00

Married couples, take note: Infidelity isn’t limited to just sex. Secrets about money can cheat you or your spouse out of household harmony.

According to research conducted by Jeffrey Dew, Ph.D., an assistant professor of Family, Consumer, and Human Development at Utah State University, couples who argue about finances at least once a week were 30% more likely to divorce than couples who argue about money less often. In addition, he says that the more consumer debt a couple has, the more often they will fight about both money and non-money related topics.

Add to that the possibility of one party’s indiscretions dragging down their significant other’s credit score, and you’ve got a complicated credit love triangle.

Lying and keeping secrets about cash flow is, in fact, disloyal behavior. In fact, say many, financial infidelity is the new adultery. Here, experts warn about how money can make a marriage go very, very wrong.

Price-tag fibs
Lying about purchase prices – though common – can be a major marriage no-no. “The main reason people do this is to avoid fighting about it. It’s short-term avoiding the hassle traded for long-term destroying the marriage,” says Tina B. Tessina, Ph.D., a psychotherapist and author of “Money, Sex and Kids: Stop Fighting About the Three Things That Can Ruin Your Marriage.”

Socking funds away
You may say it’s for a “rainy day,” but maintaining money that your spouse doesn’t know about is – say it together now – sneaky. Hiding things like a bonus you received at work, a savings account, or risky investments may cause your spouse to lose trust in you once it all comes out in the open (and it usually does). “This leaves your spouse to wonder what other secrets you’re keeping from them,” says Brad Klontz, Psy.D., co-author of “Mind Over Money: Overcoming the Money Disorders that Threaten Our Financial Health.”

Hiding purchases
To avoid telling your spouse that you spent a big wad of cash – or more likely maxed out a credit card — on a luxury, or to purchase an item and hide it is an epic fail. That’s because your credit mishaps can damage your credit score, which in turn can affect your future (and your spouse’s!). And don’t think that buying something new and making it look old to fool your spouse isn’t just as bad, Klontz says.

Spending marital funds on addictions
Using your money to support an addiction, be it to drugs, expensive clothes, gambling, shoes or toys — you name it – is harmful to a marriage in more ways than one. Often, people with such addictions will even take cash advances on credit cards or forge a spouse’s signature on a credit application, a surefire recipe for marital and credit score disaster.

Racking up credit card or loan debt
Irresponsible spending is untrustworthy toward your spouse whether the account is joint or single – even if you didn’t open the account behind his or her back. Your indiscretions can wreak havoc on your credit score, which in turn can cause you to be denied for a mortgage or car loan application, and more.

Loaning or giving money to friends or family
Tessina warns against giving sizeable amounts of marital money – more than $50 – to a child, relative, or friend without discussing it beforehand with your spouse.

Thinking money can be a substitute for love
A study co-authored by Jason Carroll, Ph.D., an assistant professor at Brigham Young University in Provo, Utah, concludes that materialistic spouses are about 40% more likely than non-materialistic spouses to believe that there are problems in the marriage. “They start to see their marriage as a means for having that kind of lifestyle and providing that kind of materialistic living; if that’s not what’s happening, sometimes that can be interpreted as a flaw in the marriage,” says Carroll.

The Solution: Money Talks
No matter which of the above sins is the culprit, the pricey fact remains: Disagreements about money are the number one cause of marital conflict and the top reason for divorce during the first three years of marriage, according to Klontz. “Money is taboo to many people and rarely do couples talk about it,” he says. “Each partner has his or her own set of values about money and [chances are] slim that both have the same beliefs.”

What’s more, many couples often learn about money misdeeds after being denied credit or receiving correspondence from debt collectors. To keep things honest, it’s good for your finances – and for your relationship – to request a copy of your credit reports and share them with each other at least once a year. That way there are no surprises and you can work together to overcome financial struggles.

Although financial infidelities can be damaging to a marriage, there are ways to regain trust. Tessina recommends regular financial meetings. “Don’t expect to be able to discuss finances successfully while you’re on the run, when it’s late at night, or while watching TV,” she says. Make a date for discussing finances and take the time to sit down together and discuss your needs, wants and means.

If one spouse is materialistic or likes to spend like there’s no tomorrow, a mutual agreement can help get finances on track – and a credit report will keep everyone honest. “They might work toward determining what their fixed expenses are and set up a separate account for that amount of money to be deposited monthly,” says Colleen O’Donnell, a Certified Financial Planner for Lincoln Financial Advisors in Dallas, Texas.

After agreeing to a percentage of the excess that should be devoted to savings, the remainder may be used as discretionary income. Or, specify a dollar amount that either can spend without answering to the other each month. One spouse may choose to spend a little each week while the other makes one bigger purchase each month.

“You may not think of your marriage as a business deal, but a huge part of it is just that,” says Tessina. Marriages — like some businesses — are called partnerships, and there is a reason for this. “Just like a business, a marriage takes in income, pays expenses, and is supposed to have a little profit (savings) left over.” Couples can avoid financial blowouts with regular sit-downs about money, and putting all their credit score cards on the table face-up for the other spouse to see.

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Financial steps to take after a divorce

2010-04-30T06:46:00.000-07:00

Divorce is an event which causes a slump in the finances for both the spouses. After divorce one fails to realise where the money was spent and how much went for the legal battle which is over. Being a father, it would be required by you to pay for child support.

In order to make your finances stable after divorce, you must be prepared for the worst. Divorce changes everything for an individual from the thinking pattern to the finances.

Financial steps to take after a divorce-
Change your lifestyle: You can bring about a change in your finances when you change or alter your lifestyle. You can begin by cutting your expenses, paying down debts and limit your credit card usage. The manner by which you can cut your credit card expenses is by selling the house or the car. Begin to cope with realities in a matured manner.

Refrain from legal battles: Long drawn legal battles, would make you spend much more than required. After divorce avoid costly litigations and settle on issues in an amicable manner.

Right after divorce: It would essential to know about your rights after divorce. You should know about your possessions, child support issues and child custody issues. Be certain about your rights as a father.

Retirement plans: You should be able to handle your retirement plans after divorce. Keep the interest of child in mind always; don’t bother about your ex during this time, since you care about your children. With a good retirement plan, you would benefit yourself and your children. The amount of money you save, you would always come in use at some time.

Credit issues: Avoid buying things which you really don’t require. Be more responsible towards- medical insurance, home or renters insurance, life insurance, car insurance and save where you can to avoid spoiling your credit report. Ensure that your credit is only in your name. You should review your credit report on a regular basis. If you find any mistakes in your credit report, take note of the mistakes and report it to credit bureaus. Make sure that your wife’s name is not mentioned in the credit report. Keeping track of your expenses during divorce, would help you curtail the same after divorce.

Keep a note of the following-
Know where and on what you were spending money.
Under what circumstance did you spend more money and under which circumstance were you able to curtail your expenses.
After your divorce, you would have to be aware that life would change. Things which would change are as follows-

If you do have custody of your children, you would have to hire baby sitters more often and also pay for child care.
There would be increase in eating out and laundry expenses.
You would have to curtail your holiday expenditure.
May have to alter your expenses at the grocery store
After divorce its time to move forward with a positive attitude and new frame of mind. Forget about your past and look forward to your new future.

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Credit Histories Can Stay Married Long After Divorce

2010-04-22T10:06:00.000-07:00

IN RETROSPECT, Sandra Scott shouldn't have let her ex-husband keep the house. When the two divorced in June 2005, they decided he would continue living there with their daughter. The plan? For him to refinance the property within 90 days of the divorce and become the sole debtor on the mortgage.

That never happened. Now mortgage payments have been late or not sent at all, and the house is in foreclosure.

The result: Scott's credit is in shambles. "I'm pretty strapped," says the 43-year-old, whose name we've changed due to privacy concerns. She now lives with a friend and can't take on a mortgage of her own, as she is still the primary holder on the old one. "My credit — what I'm responsible for — is impeccable. What he is responsible for, still in my name, has ruined everything good that I've done."

It's a predicament faced by many former couples today. The marriage may be over and the divorce papers long signed, but one strong bond remains: the credit they once took on together. That can cause trouble for either spouse if the other handles a joint account irresponsibly. Late payments on an account can drag down your credit score, even if your divorce decree says you're no longer responsible for the debt, says Gerri Detweiler, a credit educator and author of "The Ultimate Credit Handbook."

And should one ex-spouse stop paying altogether, the creditor can go after the other for the balance. Fact is, even if the divorce decree spells out clearly who is responsible for what after the divorce, the lender doesn't really care about it, says John Ulzheimer, president of Credit.com Educational Services, a consumer-education web site. "The divorce decree doesn't override the original contract with the creditor," he says. "They'll go after both parties, with equal vigor, just as if they weren't divorced."

That's exactly why 60-year-old Eva Cornell (not her real name) of Charlotte, N.C., is paying off two of her ex-husband's credit cards. "There were court orders for him to pay them, but they're still in my name," she says. Because her ex is an air force pilot who spends a lot of time overseas and, as a result, is frequently late with bill payments, Cornell's credit score with one of the bureaus has plummeted down to 540, a subprime level that could disqualify her from getting loans altogether.

To remedy her credit, Cornell recently called the issuers and asked that the statements be sent to her address. "If the scoring system does not allow for something that's actually a legal court order, what the heck do you do?" she asks. She is now paying off $10,000 in balances.

And then there are puzzling credit mix-up cases like Suzanne Lewis, 57, of Elmwood Park, N.J. Separated since 1991 and divorced since 1995, she and her ex don't speak, save for an obligatory "hello" at the occasional family function. But when several months ago, Lewis pulled her credit report for the first time, she was shocked to find her ex was still very much present in her credit file: His address — where she's never lived — was listed as her own, as were two of his individual credit-card accounts.

Because the accounts weren't hers — the credit bureau confirmed they were her ex's — Lewis had the errors removed with no harm done to her credit. "Luckily, he's a very good payer, so I've never had problems," she says. But if his accounts are on her report, she asks, what are the chances hers are on his report? "I just don't like him seeing how much my mortgage is, that's none of his business," she says. "And I don't want to see his personal business. I don't care about him."

It's a situation that Bob Brennin, a consumer-credit-protection attorney in Los Angeles, has seen at least half a dozen times over the past couple of years. Because the spouses previously had credit cards with these same creditors, it's possible their information was still mixed together, he says. For example, if either spouse ever listed the other on a credit application while they were married, their names could remain on record as spouses so that whenever one applied for credit, the other's information is added onto that new file, as well.

Then again, it's not uncommon that people intentionally add their ex-wife's or ex-husband's information on the application because they can't qualify for a loan on their own, Detweiler says. "I hear this very frequently," she says. "If you think of it, most spouses have their ex's information." It's a tricky situation, she adds, because the person who does this is in effect committing fraud.

If you're divorced or going through a divorce, chances are you'll be faced with some kind of credit-related situation. Here's how divorcing couples can divorce their credit histories.

1. Know your rights
If you're simply an authorized user on an account, the lender should agree to take your name off the account, Ulzheimer says. As an authorized user you are not liable for the debt. If your ex is the account holder, you may have to ask him or her to request the change, though. According to Detweiler, some credit-card issuers may require that the account holder make the call. Others may agree to take the name off the account regardless of who requests it.

If you're a co-signer or the account is held jointly, though, things may not be that easy. (See the advice below on what to do if that's the case.) And if a former spouse's individual account pops up in your credit report, dispute it with the bureaus. This may be a credit mix-up or even intentional fraud on part of your ex.

2. Refinance all joint debts
If you have joint debt — whether it's credit cards, auto loans or a mortgage — each spouse should refinance the debts they'll be responsible for as soon as possible, says Ulzheimer. That means closing all joint credit cards and transferring the balance to a new card in your name, for example, and refinancing the mortgage or auto loan.

Problem is, that's often easier said than done. With auto loans, for example, the spouse who's supposed to pay it off may find the vehicle has depreciated so much that the balance owed is more than what it's worth. (This is what the industry calls "upside down" on the loan.) With mortgages, one spouse alone may not have the income or required credit score to refinance in their name alone. If that's the case, Ulzheimer recommends, consider selling the property and splitting the proceeds, if any. Better yet, use these proceeds to pay off other joint debts.

3. Pay the debt off
If you've been married a long time, chances are you've accumulated assets: property, stock holdings or even retirement accounts. If you're unable to refinance your debts in your individual names, consider using those assets to pay the debt off. But be sure to discuss the financial and tax-related consequences with your accountant or financial advisor. (Selling a house that has appreciated too much, for example, may generate a tax bill. For more on this, read our story "Who Gets the Home?")

4. Monitor the accounts
If refinancing or paying off the debts isn't possible, make sure you monitor the accounts, Detweiler says. "That would be the one time when I'd sign up for a credit-monitoring service, preferably with all three agencies," she notes. If you notice the payments are late, consider stepping in — even if your attorney or divorce decree says otherwise. "The credit damage stays with you for seven years," she says. "Do you really want to be reminded of your ex's poor credit habits for seven years?"

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Divorce, Dollars & Debt: Financial Asset and Property Checklist:

2010-04-06T08:02:00.000-07:00

To follow is a list of all relevant documents that you will want to collect and maintain for use in comprehending and preparing for the impending distribution of marital assets and property. You should also prepare a list of all personal property, including that acquired prior to and during the marriage. Contingent upon your particular situation, not all of the items to be listed will be required. It is recommended that next to each item, note who has actual possession and where it is physically located. If your spouse proves uncooperative in the compilation of such documentation, you may need to enlist the assistance of an attorney-at-law in order to thoroughly protect any and all rights you may have to any asset or property that your spouse may be attempting to withhold for their individual purposes.

TAX RETURNS
• Federal (past five years)
• State (past five years)
• Local (past five years)

PAYROLL STUBS and FEDERAL W-2 FORMS (past five years)

BUSINESS TAX RETURNS (Corporate, partnership, or sole proprietorship)

BUSINESS FINANCIAL STATEMENTS
• Net worth - balance sheet or list of assets and liabilities
• Cash flow or income and expense statement

RECORDS REGARDING ANY OTHER RECEIVED INCOME (i.e., investment property, rental/lease agreements, stock dividends, profit sharing plans, pension benefit payments, etc.)

RECORDS REGARDING MONTHLY LIVING EXPENSES (i.e., monthly billing statements, grocery receipts, etc.)

PRE- and POST-MARITAL (NUPTIAL) AGREEMENTS

ALL DOCUMENTS RELATING TO PREVIOUS DIVORCE SETTLEMENTS (including property ownership documents)

WILLS AND/OR TRUST DOCUMENTS

STATEMENTS OR DOCUMENTS PERTAINING TO:
• Savings accounts
• Checking accounts
• Certificates of Deposit
• Mutual Funds
• Cash Management accounts
• Stock Certificates
• Safe Deposit Box inventory
• Brokerage firm accounts
• Credit Union accounts
• Credit Card accounts
• Equity Credit Line accounts
• Commodities
• Collections (gold, coins, stamps, etc.)
• Titles (cars, trucks, motorcycles, boats, etc.)

INSURANCE POLICIES
• Life
• Automobile
• Homeowner's (Fire, Hazard, Earthquake, Flood)
• Personal Umbrella
• Liability
• Disability
• Renter's
• Health (parents + children)

EMPLOYEE / GROUP INSURANCE BENEFITS (for both spouses)
• Medical
• Life
• Disability

BENEFITS
• Expense accounts
• Automobile allowances
• Cafeteria plans
• Sick pay
• Stock options
• Travel allowances
• Bonuses
• Deferred compensation
• Military
• Severance pay
• Vacation pay

RETIREMENT PLANS
• 401 K plans
• Money purchase plans
• Employee Stock Option plans
• Tax Sheltered Annuities
• Keoghs
• Profit sharing plans
• Thrift plans
• Defined benefit plans
• IRA or SEP-IRAs
• Roth IRAs

STATEMENTS OR DOCUMENTS RELATING TO:
• Inheritances, gifts, etc.
• Personal Injury Awards

REAL ESTATE RECORDS (for all properties owned: Principal residence, Second home, Investment property)
• Original Mortgage / Deed of Trust
• Copy of Note
• Purchase Agreement
• Uniform Residential / Commercial Appraisal
• Reports Rental / Lease Agreements

INFORMATION ON DEBTS AND LIABILITIES
• Promissory notes (mortgage, etc.)
• Personal loan documents
• Secured loan documents
• Insurance payments
• Medical and Dental expenses
• Utility, telephone, television cable bills
• Grocery receipts
• Laundry and Cleaning
• Miscellaneous Household items
• Clothes
• Incidentals
• Dues (union, club, etc.)
• Entertainment expenses
• Attorney fees

HOUSEHOLD FURNITURE AND ANTIQUES (be very detailed and specific)

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Divorce and Children

2010-04-05T13:58:00.000-07:00

Children, as well as parents, feel the stress and confusion of separation and divorce. Many kids feel angry, sad and frustrated about the prospect of their parents splitting up for good and are uncertain about what life will be like after divorce. Your ability to communicate successfully with your child, meet their needs, for safety and support take care of yourself, and maintain a civil relationship with your ex will have a positive effect on your child. Given the right support, your child will be able express their feelings, grieve their loss, and emerge from this unsettling time a stronger more resilient person.
You may be concerned about how your separation or divorce will affect your kids. Children are likely to feel unsure about what their life will look like after their parents split up, but be confident that you and your children can successfully navigate this transition. It is your job to reassure them and show them that they can continue to count on their parents to provide stability and love throughout their lives.

• Verbal communication: Beyond reminders that they will be loved and cared for, verbal reassurance should address the reasons for fear, worry, sadness or anger. For example, “I know you are upset about moving, but we will make sure you can stay in the same school.”

• Non-verbal actions: Children pick up on your manner, expressions and actions almost more than your words. Offer your physical presence and support by hugging your kids, taking a walk, or just sitting down together.

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Spousal Support

2010-03-23T07:40:00.000-07:00

Not all cases involve support from one spouse to the other. The obligation of one spouse to support the other financially for a temporary or permanent basis is decided on a case-by-case basis as agreed to by the parties or at the court's discretion.
In a proceeding for dissolution of marriage, the court may grant alimony to either party, which alimony may be rehabilitative or permanent in nature. In any award of alimony, the court may order periodic payments or payments in lump sum or both. The court may consider the adultery of either spouse or the circumstances thereof in determining the amount of alimony, if any, to be awarded.

In determining a proper award of alimony or maintenance, the court shall consider all relevant economic factors, including but not limited to: (a) the standard of living established during the marriage. (b) The duration of the marriage. (c) The age and the physical and emotional condition of each party. (d) The financial resources of each party, the no marital and the marital assets and liabilities distributed to each. (e) When applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate employment. (f) The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child care, education, and career building of the other party. (g) All sources of income available to either party. The court may consider any other factor necessary to do equity and justice between the parties.

To the extent necessary to protect an award of alimony, the court may order any party who is ordered to pay alimony to purchase or maintain a life insurance policy or a bond, or to otherwise secure such alimony award with any other assets which may be suitable for that purpose. (Florida Statutes - Chapters: 61.08)

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Florida Divorce Filing Laws

2010-03-23T07:35:00.000-07:00

Residency and Filing Requirements:
In order to file for a dissolution of marriage in Florida, residency requirements must be met for the court to accept the case. If the court discovers it does not have jurisdictional rights to hear the case it will not be accepted or it will eventually be dismissed. The requirements are as follows:

To obtain a dissolution of marriage, one of the parties to the marriage must reside 6 months in the state before the filing of the petition. The dissolution of marriage can be filed in the county in which either or both spouses reside. (Florida Statutes - Chapters: 61.021)

Grounds for Filing:
The Petition for Dissolution of Marriage must declare the appropriate Florida grounds upon which the dissolution of marriage is being sought. The appropriate lawful ground will be that which the parties agree upon and can substantiate, or that which the filing spouse desires to prove to the court. The dissolution of marriage grounds are as follows:

No judgment of dissolution of marriage shall be granted unless one of the following facts appears, which shall be pleaded generally:

(a) The marriage is irretrievably broken.

(b) Mental incapacity of one of the parties. However, no dissolution shall be allowed unless the party alleged to be incapacitated shall have been adjudged incapacitated according to the provisions of S. 744.331 for a preceding period of at least 3 years. (Florida Statutes - Chapters: 61.052)

Primary Documents:
Petition for Dissolution of Marriage and Final Judgment of Dissolution of Marriage. These are the essential documents needed to start and finalize a dissolution of marriage according to Florida law. There are anywhere from ten to twenty other documents that may be required throughout the filing process. A few other documents that are typically filed during the process are: Affidavit of Corroborating Witness, Marital Settlement Agreement, Family Law Financial Affidavit, Answer, Waiver, and Final Disposition Form.
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Common Divorce Questions

2010-03-22T08:09:00.000-07:00

If I leave the house can my spouse charge me with desertion? If your spouse's conduct does not warrant you’re leaving, he or she may be able to sue you for actual desertion. Therefore, absent physical abuse, it would be wise to consult your lawyer before leaving home. Your own conduct is very important if you wish to succeed in getting a divorce on fault grounds of adultery and actual or constructive desertion. You must not be guilty of any misconduct which would justify the desertion. You must not consent to the desertion. If you consent, it would constitute a voluntary separation. There is a difference, however, between consenting and giving in to something you cannot avoid.
If I leave my spouse because of abuse, can I be charged with desertion?
Desertion is not a crime, so if you leave your spouse you cannot be criminally prosecuted for it. If your spouse sues you for divorce on the ground of desertion, you can respond by claiming and proving that it was actually his or her abusive behavior which forced you to leave. In fact, if you have left your home in immediate response to a pattern of abuse, you have your own ground for a limited divorce called "constructive desertion." "Constructive desertion" occurs when a party is forced to leave the home as a result of abuse.
How long will the divorce take?
The length of time it takes to get a divorce varies from county to county, and is dependent upon the type of relief sought and type of hearing that is necessary. An uncontested divorce will take the least amount of time and will be expedited by the court system under the new differentiated case management system. At the end of a year of uninterrupted non-cohabitation and no sexual relations, either party is eligible to file for divorce. After the defendant is served, and he or she files an Answer or the time for an Answer expires, the Plaintiff may request a hearing in front of a master (in counties which operate with a master system) as soon as the Master's calendar permits.
Can I date while we are separated?
Parties can charge one another with adultery at any time and the existence of a separation agreement does not protect a party from being so charged. Any behavior on your part which would indicate "inclination" or "opportunity" could be used against you to establish adultery.
Can my spouse's lawyer represent both of us?
Generally, it is a conflict of interest for an attorney to represent and advise parties to a divorce.
What health insurance rights do spouses and dependent children have after divorce?
After October 1, 1994, a court has the authority to require either parent to name a child in the parent's health insurance coverage if the parent can obtain health insurance coverage through an employer or any form of group health insurance coverage, and the child can be included at a reasonable cost to the parent.
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How to Move On Financially After Divorce

2010-03-08T11:06:00.000-08:00

No doubt divorce is one of life’s toughest times, but it is also a unique opportunity to revisit your financial plan.

“Making sure your finances are on track will help you put the past behind you, and provide a foundation for the future,” says Kathy Williams, president, Advanced Financial Solutions.

Here’s how to move forward financially after a divorce.

Where to start

When you’re single, your financial needs are often very different than when you’re married. As you adjust to life after divorce, you may naturally focus on your family’s day-to-day needs, but don’t neglect your long-term finances, says Williams.

Gather information about your savings and investments, including retirement accounts so that you know exactly where you stand. Then draft a realistic monthly budget so that you have a plan that reflects your current income and expenses, not your former lifestyle.

Now, more than ever, maintain accurate financial records. “You have a new cash flow, new budget, and new tax implications. It is important to understand what your income and expenses are. Review debit and credit purchases weekly, save receipts and keep a written report of any cash transactions,” says Susan Elliott, author of Getting Past Your Breakup: How to Turn A Devastating Loss Into the Best Thing That Ever Happened to You.

Do take a look at your tax situation. Your income sources, tax filing status, and the credits and deductions for which you qualify will likely change as a result of a divorce, so review your tax situation as soon as possible with your tax or financial professional.

Reevaluate your financial goals. Do you have new goals, like going back to school? Given your new circumstances, is your retirement planning still on track?

Exercise control

“Divorce has a way of wrecking your credit,” points out Jimmy Williamson, a certified public accountant with MDA Professional Group. Why? After divorce, spending patterns and habits will likely change. “You may feel freer to spend money now that you’re in charge of all financial decisions, or you may have trouble adjusting to a new budget. If divorce has affected your credit rating, you’ll need to take steps to rebuild your record,” explains Williams.

In fact, says Scott Gramm, founder of www.HelpSaveMyDollars.com, most married couples don’t understand that any debt accumulated during the marriage is the responsibility of both parties, and not the sole responsibility of the one who caused that debt to arise. “Pay off all debt upon a divorce,” he says.

When you’re beginning anew, the last thing you need is to start shopping to make you feel better and running up debt. “Frivolous spending can cause huge financial problems. Be sure to save money and limit credit card use as much as possible,” says Gramm. Do not feel pressured to immediately buy a home. “It’s okay to rent,” he adds.

Know too, that it’s okay to say no. “One of the biggest problems is divorcees spending too much of their limited dollars on their children, at the expense of properly funding their own retirement. Guilt giving, as we call it, may provide the single parent some temporary relief, but if repeated too often, that parent may find themselves in a terrible situation with little or no time to adequately save for their own retirement,” says Craig Hyldahl, a certified financial planner with Axa Advisors.

Avoid nasty surprises

Those recently divorced should be careful about having a car titled in one spouse’s name when the other spouse is the main driver, because in many states, if there is an at fault accident, then not only is the driver liable, but also the owner of the vehicle as well, cautions Joel Ohman, a certified financial planner.

Pay attention too, to account holder status on all credit cards, as it is easy to forget that while one spouse may have been the primary cardholder, the other spouse had full cardholder access to the account to make changes or take out cash advances, for example.

Check your credit report. “Examine your credit report and determine whether any negative reporting is due to your former spouse. If it is, contact the creditor to explain that you are divorced and that the debt is not yours. Then request any illegitimate, negative comments under your name be removed,” says attorney Sandra Radna of Radna & Androsiglio.

Depending on your divorce decree, you may find yourself without employer-sponsored health insurance after a split. If you were previously covered on a spouse’s employer-sponsored health insurance plan, you may be eligible to continue your coverage under COBRA for up to 18 months, says Carrie McLean, a consumer specialist for eHealthInsurance.com. If you have a pre-existing medical condition, COBRA is a good option, since you can’t be declined for coverage.

However, COBRA can be expensive. If your own employer doesn’t provide medical benefits, you should consider purchasing your own individual health insurance plan. On average, monthly premiums for individual health insurance plans run 58 percent lower than COBRA premiums, says McLean. “We talk to a lot of people going through a divorce and health insurance is not always something they think about initially. It can catch them off guard when they finally realize they have to make changes to that as well.”

Know too, that while you might not have thought about it at the time, those assets you split can have long term tax affects, explains certified financial planner Rick Fingerman,

Often divorce agreements don’t address how unusual medical bills such as the dental or therapy will be handled between the spouses, or ballet, piano or baseball. “Typically we see the spouse that has the most custody or is most passionate about that expense having to burden the entire cost,” explains Lynn Ballou, principal with Ballou Plum Wealth Advisors.

The number one thing a divorcee should do is change the beneficiary designations of life insurance and retirement accounts, says Jonathan Bergman, a certified financial planner with Palisades Hudson Asset Management.

”Following divorce, most people change their wills, but retirement plans and insurance plan distribution provisions are not governed by provisions of a will,” he adds.

You’ll also want to update documents like a health care directive, power of attorney, trusts, emergency numbers, and more, advises Elaine King, director of Gibraltar Private Bank and Trust’s Wealth & Well-Being Center.

Taking smart steps after a divorce is critical. Do the right thing now and reap huge rewards later.

Source

Case of the Week: Marital Credit Card Debt- What If It's Not In My Name?

2010-02-22T12:45:00.000-08:00

As a divorce attorney, I suppose this is probably the third most common question I get from clients or prospective clients (right behind "how much will this divorce cost" and "how long will this divorce take"), which simply stated is, "do I have to take the credit card debt of my spouse if I didn't run up the bill." The answer to that question generally results in the spouse who did not run up the bills feeling "duped" and the divorce process being "unfair."

Under Florida Statute 61.075, marital debts and liabilities will be equitably between spouses during a divorce. This means that generally any debt or liability acquired during the marriage will be divided between the divorcing spouses, regardless of whose name is on the debt or liability. This means credit cards too. It's important to remember, however, that the Statute requires the division of debts/liabilities be equitable, not necessarily equal. For the court to determine what is an equitable distribution of marital debt, it can consider many statutory factors, including: each person's contribution to the marriage, any contributions one party has made to other person's education or career, whether either party has intentionally depleted or destroyed marital assets and other equitable factors. As an aside, this process generally does not include "pre-marital debt." So if one spouse can show that the debt (or a portion of the debt) existed before the marriage, then it may not be treated as a marital debt for the purposes of equitable distribution.

However, I must point out that credit card companies to not have to and generally won't agree to abide by a Divorce Decree or Final Judgment of Dissolution of Marriage. So while you and your spouse have agreed to divide up the debt a particular way or the Court has ordered it divided a particular way, the credit card company is not obligated to follow that agreement or Order. Instead, the credit company will hold whomever is listed on the account responsible for the debt. This may be problematic if say the Husband has agreed to take a credit card debit listed in the Wife's name. He may fail to pay it and the credit card company will still demand payment from the Wife, regardless of the court order.

But what about credit card debt when one spouse didn't know a thing about? This is the most heartbreaking answer: if it was acquired during the marriage, regardless if you knew about it or not, or it was it your name or not, it is still a marital debt that it going to be divided. I had a client whose Wife had charged up about $30,000 of debt he knew nothing about. He generally handed her his paycheck and let her handle the martial bills and finances. When she filed for divorce, it was only then did he find out about the debt. She had not engaged in any "martial waste," as in spending money on a paramour or anything. So, even though the didn't know about the debt, he was still required to take on half of it. Not knowing about the debt does not relieve the other spouse from being responsible for it. This is a caveat emptor - KNOW, LEARN, BE INVOLVED in what is happening with your finances! Don't let someone else just manage the household finances unchecked.

If you are thinking about Divorce, an experienced divorce lawyer can help you protect yourself as much as possible from the financial hazards involved in credit card debt. For more information on how we can help you, please contact the Law Office of Anne E. Raduns, PA for a free initial consultation.

Source

Money and Marriage the Second Time Around

2010-02-05T13:37:00.000-08:00

Are you getting ready to walk down the aisle again? Congratulations! But before you book a DJ or order flowers, talk with your future spouse about money. While there's no "right" way to blend finances, experts agree on one thing: Communication is critical!
Couples should openly discuss how they will handle financial obligations, such as child support and alimony that stem from previous marriages. Then, work together to determine how they will move forward with shared investments, bank accounts, estate planning and more.

1. Start Talking
2. Make a Plan
3. Measure Progress

• Will we have joint or separate bank accounts?

• Who is responsible for paying down pre-existing debt?

• How will we handle recurring bills like utilities, rent and insurance?

• If there are children from previous relationships, how should benefits from life insurance policies, retirement plans and other financial assets be distributed?

• What are our financial goals, e.g. buying a home, saving for the kids' higher education, retirement and so on?

• For active military members, how will things change if one spouse is deployed?

"When you've worked through all of that, put it in writing," Couples schedule monthly money dates to review the budget, measure progress toward goals and discuss any issues that have come up. "It's easier to adjust the budget on a month-by-month basis if tweaking is needed or to update your goals as things change. But if you wait too long, you could find yourself in a hole that's too big to climb out of, and that's when money problems become marriage problems,"
Source

Divorce in Florida

2010-02-02T12:20:00.001-08:00

Florida Divorce Residency Requirements

In order to file a Petition for Dissolution of Marriage in Florida, (file for divorce) you must make sure the Circuit Court has jurisdiction over your case. Meeting the Florida residency requirements is typically only a concern for a spouse who has recently moved or is planning to move in the near future. The filing requirements are as follows:

• To obtain a divorce one of the parties to the marriage must reside 6 months in the state before the filing of the petition.
• The dissolution of marriage can be filed in the county in which either or both spouses reside. (Florida Statutes - Chapters: 61.021)

Military Residency and Filing Requirements

• You or your spouse must reside in Florida
• You or your spouse must be stationed in Florida

Florida Grounds for Divorce

One of the following facts must have occurred for a final judgment to be granted:

• Irretrievably breakdown of the marriage.
• Mental incapacity of one of the spouses. (Florida Statutes - Chapters: 61.052)
The grounds for dissolution of marriage must be substantiated with evidence or testimony otherwise the court may dismiss the case.

Florida Property Division Factors

Florida is referred to as an "equitable distribution" state. When the parties are unable to reach a settlement, the Circuit Court will take the following approach to dividing the assets.

• It will go through a discovery process to classify which property and debt is to be considered marital.
• It will assign a monetary value on the marital property and debt.
• It will distribute the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, but rather what is deemed by the Circuit Court to be fair.

Source

Merging Finances After Getting Married

2010-01-21T12:33:00.000-08:00

Conventional wisdom has held that money issues are the most common root cause of divorce. Whether that's factually accurate, or just the prevailing public opinion, money problems are a huge stressor even for an individual, and that stress can become exacerbated when it involves two people in a relationship.

Merging finances after a couple gets married is often the first step in that couple's financial lives together. Like many couples, my wife and I eased into that transition when we were dating by living together. While the choice to live together before we were married was in no way made with finances in mind, it did help start up that transition. While at that time we still had all of our own accounts, there were still a number of issues that we had to work out together.

When we became engaged, those issues became more pronounced. For some, the engagement period can be a pressure-cooker, and while ours wasn't nearly as stressful as the experience is for some, it did teach us a lot about how to talk to each other about money and our personal financial management habits when it came time to pay for the wedding. And it was at this time that we set up our first joint account together, a checking account that we would each automatically deposit money into each month as a means of saving up for the heavily back-loaded wedding expenses.

After our wedding and honeymoon was over the real work began. In addition to merging our cell phone and insurance plans to save money, we had to come up with a comprehensive strategy for how we as a couple were going to manage our money from that point forward. Involved with that strategy development was an honest assessment of where we each stood financially as individuals, and how that affects the both of us as a couple. Some of those issues included:

* Debt - Outside of staggering student loan balances, the only debt either one of us had was a balance on a 0% interest credit card. While we could have let that debt sit there for a while, we both made it a priority to pay it off as soon as possible, which we were able to do shortly after the wedding (it wasn't a very high balance). But the student loans were an issue of their own. Some experts recommend paying it off as soon as possible, while others suggest that due to the relatively low interest rates, just pay it off in installments and put that extra money to some other use. Either way, your views towards debt of all kinds needs to be discussed.

* Tax Strategy - This year will be the first that we'll be able to file our taxes as a couple. But should our status be Married Filing Jointly or Married Filing Separately? That question is something we'll have to evaluate as a couple pretty soon.

* Budgeting - No two people have the same budgeting strategy. And in many cases, those budgeting strategies (or lack thereof) can run in direct opposition to each other. Living together before we were married exposed each of us to each other's budgeting strategy, but the issue becomes a bit more important when you're actually married.

* Financial Expectations - What should be done with the extra money earned each month? What are the savings priorities of the family? These are also important questions to answer. For my wife and I, we've decided to use my salary to pay nearly every bill and then save her salary. In the year that we've been married, we've discussed buying a house, having children, taking vacations, etc... and it's helped give us a clear vision for our savings.

* Financial Management Responsibilities - I enjoy managing our finances. I like researching companies for investing purposes, and I also enjoy playing around with Quicken and making those cool, colorful graphs. My wife, however, does not enjoy that at all. So while I readily accept that responsibility, we still have to work out a way for us to talk about our finances so that we're on the same page.

Of course that's just some of the issues that have to be taken into consideration. And it seems as if communication is the more important tool of all. The ability to effectively communication ideas and expectations can help alleviate stress down the road. For our married readers, what was the financial transition like for you?

Source

Five Spending Habits that Lead to Debt

2010-01-20T06:23:00.000-08:00

Debt isn't something that just happens as you go about your daily routines. There are certain spending habits that lead to debt. Recognizing these habits now could save a lot of money and stress later.

1. Spending more money than you make.
This doesn't sound logically possible. If you only make $1,000 a month, how could you possibly spend $1,200 in a month? It's easier than you think. So easy, you might be doing it. Dipping into savings, borrowing from others, and using credit are the primary ways of spending more money than you bring in. You might be able to get away with doing this for a few weeks or months, but soon, your hole-digging spending habits will catch up with you. Before you know it, your savings is depleted, your credit cards are maxed out, and you can't borrow any more money..

2. Spending money you don't have.
Usually, spending more money than you make is enabled by spending money you don't have. You spend money you don't have by using credit cards and taking out loans. When you use these instruments to pay bills and make purchases, you're creating debt. If you can't repay the debt each month, it will continue to grow..

3. Using credit for ordinary purchases.
You should use cash to make everyday purchases like groceries, gas, clothes, and entertainment. The appeal of credit cards is the ability to pay later for items that you buy now. The caveat is that you're less to pay your credit card bill for items that you've already consumed, which most "ordinary" purchases are. Using credit instead of cash is a bad habit, especially when you don't pay your credit card bills in full each month..

4. Using credit when you have cash.
One of the quickest ways to get into debt is to choose to use credit when you have the cash to make a purchase. People do this with a "something for nothing" type of mindset. They want to receive the goods (or services) but they don't want to pay for them. The convenience of leaving your money in your wallet comes at a cost. Chances are, if you don't want to pay for it today, you're not going to want to pay for it tomorrow..

5. Using debt to pay off debt.
When you use credit cards to pay off other cards and loans to pay off other loans you're not paying off anything. You're just shuffling your debt around and incurring more debt each time you do so. Balance transfers have transaction fees and most loans have some kind of down payment or origination fee. So when you use debt to pay off debt, you end up worse off than when you began.

Source

Earthquake Relief in Haiti

2010-01-14T07:02:00.001-08:00

In an effort to help those who have been affected by the earthquake in Haiti, and their continuing tragedies, Credit Card Management Services, Inc. d.b.a Debthelper.com is now a collection center to help those in need.

Your gift will help distribute relief supplies to children and families impacted by the earthquake and aftershocks in Haiti.

Anything you are willing to provide will be greatly appreciated and invaluable to the families you will be helping. The immediate need is dry foods such as rice, beans; can foods, tents and army type cots, blankets and medical supplies.

Where: 4611 Okeechobee Blvd. Suite 114 WPB, FL 33417

Time: Mon – Fri: 9:00am – 8pm; Sat: 12:00pm – 5:00pm

Information: (561) 472-8000

Debthelper.com

Credit Card Nation: The Financial Pain of Middle Class Women

2010-01-07T06:25:00.000-08:00

The unrelenting expansion in bankruptcies does not discriminate on gender –you either have the money or you do not. Naomi Wolf, author of Give Me Liberty: A Handbook for American Revolutionaries, recently shed light on the underbelly of those suffering severe financial pain in this economic crisis…middle-class women.

How bad is it for middle class women?

A new report shows that a million American middle-class women will find themselves in bankruptcy court this year. This is more women than will ‘graduate from college, receive a diagnosis of cancer, or file for divorce,’ according to the economist Elizabeth Warren.

Wolf explores multiple factors in trying to explain this phenomenon. Surprisingly, higher education levels does not appear to prevent a higher percentage of bankruptcies in this large demographic.

If education levels are not a contributing factor, then what is? Here are some Wolf’s findings:

1) Awash in Debt: One explanation for the extra debt reliance is many of the employed positions occupied by this class of women require them to tap credit lines more frequently. Also, many of these women have been targeted by luxury-goods manufacturers and credit-card companies. Repeated contacts by the marketers have led to more women succumbing to the consumerism messages shoveled to them.

2) Credit Card Legislation: Wolf makes the case that financial credit card legislation introduced in 2005 disproportionately negatively impacts divorced wives because credit card companies get priority in the repayment line over critical child support payments. In other words, child support payments go to the credit card company rather than to the child, thereby creating an undue financial burden on the female caregiver.

3) Skewed Emotional Beliefs about Money: The biggest issue regarding the emotional connection to finances is working-women “find it embarrassing to talk about money.” The article even acknowledges that many current generation women earn more than previous generations, but financial security has largely not improved because of the “money taboo.” I discover this taboo dynamic in my practice all the time. Part of the blame should be placed on the financial industry for using smoke and mirrors to confuse and intimidate clients on the subject of money. My goal is to empower clients through education and understanding.

Wolf goes onto explain some of the confused financial thought processes held by them:

Negotiating salary increases is difficult for these women because it makes them feel “unfeminine.”

This class often fails to save because they falsely assume marriage will save them financially.

Unfortunately, the lack of financial literacy and dependence on the spouse leaves these women vulnerable to divorce and widowhood.

Working Class Women Better Prepared

Interestingly, Wolf’s findings point to working class women being much more financially literate and prepared in part because they have erased the notion of a knight in shining armor saving the day from their financial responsibilities. Bolstering her argument, Wolf references the success of the micro-finance programs being instituted to lower-class, working women in developing countries.

Wolf’s Solution

How do middle-class working women break this negative financial cycle? Wolf delivers the medicine directly by directing these women to break the “social role that casts middle-class women as polite, economically vague, underpaid, shopping-dazed dependents.” Opening their eyes to these issues will not erase all of the contributing factors, but women will be better equipped to deal with their financial problems.

From my perspective, there is no quick fix for immediate financial literacy. For those interested in learning more, I encourage you to read my article on personal finance, What to Do Now? Time to Get Your House in Order.

Regardless of your financial knowledge maturity, like any discipline, the more you put in to it, the more you will get out.

Source

Post Divorce Finances: 7 Steps to Rebuilding Your Financial House

2009-12-31T11:20:00.000-08:00

My, how life changes when you close one chapter of your life and open a new one. Severing a conjoined life and combined finances as a result of divorce is painful through and through. The jump to a single income lifestyle paves the way to feeling the cash crunch, and if children are involved it is even more pronounced. Even if the breakup is liberating, there is still some mopping up to do after the storm.

Here are seven things you can do to set your new life up on the right foot:

Joint Banking Be Gone
Close all joint bank accounts, joint non-registered investment accounts, and credit cards. Not only is this a tangible form of evidence to demonstrate a date of separation (in locales where you need to be separated for a time prior to applying for divorce), but it also protects each party from destructive actions the other may take in anger or apathy.

Remove all Beneficiary Designations
Here is a list of items you may need to look at in terms of removing joint or beneficiary designations:

■life insurance policies
■retirement funds
■auto insurance
■credit card insurance
■pension funds through work
■health care plans through work

If you are required to designate a new beneficiary and are not sure who to choose just yet, simply choose your estate for now, or until you hear otherwise from your lawyer/accountant/financial planner. Although an estate designation may not be the most tax-efficient option, it will keep things simpler until all the divorce paperwork is properly nailed down and you get on your feet again.

Create a New Budget
Flying solo means creating a whole new budget – a crucial step of the process. You may or may not have been actively involved in the finances while married, so creating a new budget could be an exercise in learning how much things cost, or simply reallocating income streams accordingly.

Update Your Will
Updating a will doesn’t have to be a laborious process. If it is simply a matter of changing beneficiaries, a codicil (a one page addendum that attaches to the will) can suffice.

Review Your Estate Plan
Although you will have covered most of the bases with reassigning beneficiaries and updating your will, your estate plan may incorporate some larger issues or opportunities given the new financial structure of your life.

For example, your previous estate plan may have been mindful of your ex-partner’s parents who are – or will become – financially or physically dependant. Or maybe children from a first marriage have been incorporated into the estate plan and now the structure of trusts or income streams needs to change.

Don’t Blow the Financial Settlement!
Just in case you had eyes for a new stereo system or a bigger house, you may want to seek counsel before spending any financial settlement that arises as a result of your divorce. From tax efficiency, to your overall financial plan, there could be ways to greatly help or detrimentally cripple your finances by virtue of what you do with the settlement.

If you are the one doling out the settlement, then refer to the following point to help you sort through the noise:

See a Financial Planner
Your financial planner will be instrumental in helping you with many of the above chores. Many financial planners can help with the transition and separation of accounts, but if you are uncomfortable meeting with the same planner you used as a couple, then ask around for a referral to a new planner who you can trust and establish a new relationship with.

You face lifestyle changes (in some cases drastic ones), income differentials, emotional transitions, tax plan modifications, and investment time frame readjustments. Your asset allocation plan may change, either because your investment personality is different from your ex-partner’s, or because you plan to utilize your investments differently (ie: your time horizon is longer, or you need to draw down on some investments now).

As crushing and stressful the trauma of severing your life from a loved one can be, you must try to maintain a level head throughout the process. By covering off the bases above, and keeping your eyes on the road ahead, you can survive the ordeal and move forward without falling into so many of the traps that lurk along the way. Life will go on, and in some cases, may even improve.

Source

What We Can Learn From the Divorce of 'Jon and Kate Pluse 8'

2009-12-22T10:33:00.000-08:00

In an article concerning the financial problems often involved when the parents of large families get a divorce, the Wall Street Journals 'SmartMoney' blog examined the developing situation of television show stars Jon & Kate Gosselin. It serves as an interesting example of what can happen when the parents of a large family decide to get a divorce while the children are still underage. I'm posting the dialogue down below and have included a link to the articles webpage.

"'Jon and Kate' Divorce? The Money Traps Ahead

On television, “Jon & Kate Plus 8” has been a ratings bonanza. But as any divorce lawyer will tell you, “Jon Minus Kate” could be a complex financial maze — with college tuition alone posing a million-dollar dilemma.

As the media spectacle of Jon and Kate Gosselin’s separation — disclosed in Monday night’s episode of their reality show – unfolds, much of the focus will be on what went awry in their marriage, the emotional impact on the couple’s eight kids and how their divorce procedings unfold.

But as with any divorce, financial questions can present complications. In the case of an unusually large family, such as the Gosselins, those complications can be particularly tricky. College costs alone for the eight Gosselin kids could amount to upwards of $1 million, for instance. Though divorcing parents could agree simply to split the future costs of education, for a couple with many children, agreeing now how both spouses contribute to an ongoing savings plan could avoid future strife.

For now, the Gosselins are separating, and no one knows what plot twists might be in store – reconciliation or eventual divorce. In terms of their arrangements, so far the Gosselins have divulged only that their children will remain in their house and that Jon and Kate will take turns with them.

Among the big money questions for a big family splitting up:

(1) How Are Child Support Payments Determined?

Generally, child support includes monthly payments for food, shelter, clothing and education. Most states use a model based on “income shares,” in which children receive the same financial support before and after their parents are divorced. The noncustodial parent’s contribution is based in part on the number of children in the family and the gross household income. However, in Pennsylvania, which is where the Gosselins are based, in cases in which both parties' net income exceeds $20,000 a month or the family has more than six children, the courts determine child support payments based on their expenses, says Julia Swain, an attorney at Philadelphia-based Fox Rothschild, which practices family law.

(2) Who Pays Out-of-Pocket Health-Care Expenses?

In most cases, children will remain covered under the health plan of the same parent who covered them prior to the divorce. However, parents may need to split unreimbursed medical expenses or out-of-pocket costs, depending on their income, says Daniel Clement, a family law and matrimonial attorney with offices in New York and New Jersey.

In Pennsylvania, where the Gosselins live, the custodial parent must pay the first $250 of out-of-pocket health expenses per year per child, says Swain. After that, the parents will split the costs in proportion to their income. Those expenses can pile up quickly in big families. For example, the measles vaccine ProQuad costs $128.90 per dose in the private sector, according to the Centers for Disease Control. For a family of eight children, that’s $1,031.20 for the first dose. If the family’s health-care plan has a high deductible or doesn’t cover the vaccine, parents could have to pay these costs out-of-pocket.

If parents can’t reach an agreement on these costs, the custodial parent should consider signing up for the health-insurance plan that their employer provides – assuming that they have this option.

Typically, parents don’t set up an account for these expenses, says Clement. Instead the agreement is laid out in the divorce paperwork. And often, the parent who receives the bill will send their ex an invoice for reimbursement.

(3) Do the Kids Need Two of Everything?

Toys, cribs and other items that the couple purchased for their children while married are technically up for grabs in equitable distribution, says Clement. (These items can include the crooked houses that the Gosselins ordered for their children last winter and arrived during Monday’s show.) The argument on each parent’s side is that they’ll need these items when they spend time with their children, says Clement. Big-ticket items, like the Gosselins’ family car – a 2004 Dodge Sprinter 2500 passenger van – are also on the block, but in most cases the custodial parent ends up with most of these items since he or she will be the one spending the most time with the children, says Clement.

Of course, arrangements can be made for each of the parents to use these items when they’re with the children, says Clement. This could be a likely outcome in Jon and Kate’s case, as the children will remain in their home and each parent will be staying there during their designated time with the kids. The Gosselins would be a unique case, but in most states, including Pennsylvania, figuring out which parent gets what falls under equitable distribution laws.

(4) Pay for College Now or Later?

As part of a divorce, ex-spouses should agree to continue contributing to their child’s college education fund even if the child is a decade away from graduating high school, says Clement.
The average cost of college tuition, including room and board, is $14,333 per year for in-state students at public four-year colleges and $25,200 for out-of-state students as of 2007-08, according to the College Board’s latest data. The average cost at a private university is $34,132 for 2008-09. That means that the Gosselins could pay as much as $1.1 million for all eight of their children to attend college (not including the annual inflation on tuition).

What’s more, the Gosselins will probably encounter these astronomical expenses over a relatively short period; their eldest twins Cara and Madelyn are 8 years old and their sextuplets are five.

“This behooves them to deal with the ticking time bomb,” Clement says. “That is, sooner or later, your kids will go to college, and the cost will be apportioned in some way between the two parties.”

In the case in which an ex refuses to contribute but has the means to do so, the other parent can drag them into court. With 529 plans, both exes can contribute to a single plan for each child or separately if need be, says Rick Kahler, a fee-only certified financial planner in Rapid City, S.D.
The riskiest thing to do, however, is to agree to split Junior’s costs evenly once they start college, Kahler says. There’s no guarantee that both parents will be financially sound that far down the road, he says.

(5) How Much Allowance to Give?

Deciding how much allowance to give your child each week may seem insignificant, but it should be laid out in the divorce paperwork, says Kahler. Parents need to decide how often and how much they’ll give their kids and whether the kids will have to work to earn their allowance or not.

“You don’t want it to be where one parent has a more strict view of allowance and the other one has a liberal view, and the kid starts playing that against each parent,” says Kahler.""

Source: SmartMoney

4 Money Habits to Change

2009-12-07T12:59:00.000-08:00

My mind is so full of everything that I have to do, but over the last week I have reached a few conclusions. Hopefully it will make a difference in how I control my financial future.

I am a BAD budgeter. I am aware of how much money will be coming in each month, how much I will have in any given week, and how much the bills are each month. With all that, you would think that I had a clue how much I can really spend -- but I don't. Regardless of the fact that I have been out of work and my husband has taken a pay cut, we have still manage to pay our bills.

I rely on the credit card. We never take money out of the ATM, and I use my debit card for the majority of my purchases. But I also still use a credit card, and I justify it by telling myself that I will get rewarded with Dollar Amount Store Coupons that I can use for clothes and gifts. I pay this bill in full every month (only twice in two years have I not). I rely on the credit card if I want something, and I pay it off, but the problem is that I don't pay anything extra toward my other consolidated credit cards which I could be paying down if I weren't spending so much with that one credit card.

I never account for unexpected expenses, probably because I am used to depending on the credit card. My husband and I are going to a (mandatory) military ball in less than two weeks and he has to wear a Class A uniform, which just cost us $425.00. If you were behind us in line, you would have chuckled. We were going back and forth about whose card to put it on. My husband was afraid his card would get declined and I didn't want to put the large purchase on mine. Truth be told no matter what I will still have to look at the bill at the end of the month but just thinking about it was making me sick. Thank God I just so happen to have a brand new ball gown hanging in my closet (because I'm a binge shopper) so I am all set.
Imagine if we had to spring on that as well?

I am not a savvy shopper. We make way too many trips to the market in one week. Over the last week we took 5 trips to 3 different markets! I loathe food shopping, which is probably why we end up going so many times. I thought that the number I gave Karen for my food totals was a bit ridiculous but she didn't say anything. I know diapers can be pricey, but I think we can trim down what we spend on food. I can save 30% by shopping at the commissary, but it seems to be so difficult for me to get everything in one shopping trip. It's a 30 minute drive and at least a 2 hour project. This is how we end up going to the closer markets, which I swear are 45% more expensive.

I wonder how many people have these same issues. Do you take the time to think about where your money is going?

Source

How to cope when spouse's secret debts come to light

2009-12-03T06:46:00.000-08:00

by Erica Sandberg

Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families."
Ask a question.

Dear Opening Credits,
After a couple of years, I just checked my credit report and found out that my husband has been charging on our credit cards and even on cards I didn't know existed. We are $18,000 in debt when I thought we only had a balance of $400. How is this possible? I'm so upset I'm shaking. What can I do? -- Jennifer

Dear Jennifer,
I'm truly sorry. It sounds like you've been a victim of financial infidelity. Your husband may be a great guy in every other way, but he's cheated on you in the money department, and that's an extremely painful revelation.

As part of a married couple, it is your responsibility to treat the other person with respect. This means telling the truth, however hard it may be. So if your husband was having financial problems, he should have revealed them long before running up such a balance. And opening accounts in secret? The moment he considered applying for new lines of credit without your knowledge or consent should have been his cue to initiate a heart-to-heart with you about his money issues. But even after accumulating those bills, he still should have eventually come clean, instead of leaving you to discover his indiscretions the hard way.

These are just a few of the "should haves" in this situation, and though it's easy to dwell on them, it's not productive. So what do you do now? Well, you and your husband must first dissect the past, and then you can work toward building a better future. Here's my recommended plan:

1.Access and review all credit card statements. Of course, you could just ask your husband what he spent all that money on, but as he hasn't been truthful in the past, there is no guarantee that he will be now. Therefore, either pull up the statements online or get on the phone with each credit card company and request they be sent or emailed to you. Then the two of you need to sit down and evaluate the statements carefully. What you discover may be hard to take, but it's vital that you get to the bottom of those charges. This is his chance to come clean by explaining what's been going on.

2.Get professional help. If you're angry, it's justified. If he's uncomfortable or resistant, it's normal. To get to the root of the matter and stay on track, consider scheduling an appointment with a professional. Whether you see a marriage therapist (for all issues, though they can be expensive) or a credit counselor (for budgeting and debt resolution, but free), an objective third party can be extremely helpful.

3.Concentrate on debt repayment. As a duo, you need to develop a plan to repay the balance in full, in as short a time as possible. Contact the credit card companies and explain that you want to pay them off ASAP. Develop a budget, reduce spending, apply all excess funds to the debt and suspend charging privileges until the balance is at zero. Also, I don't think it's out of line to have your husband relinquish and sell whatever stuff he bought on the cards and apply the proceeds to the balance. While you're at it, propose he work overtime or get a part-time job to expedite the process.

4.Take the reins of money and credit management routine. You said you hadn't checked your credit reports in years, and that's way too long to wait. For most people, an annual check-up is suggested, but because you want to be sure he doesn't fall into the same pattern of charging on the sly or opening up accounts behind your back, stagger your reports. Get one in January, one in May, and one in September. This way, you can monitor what's going on throughout the year and still get your reports for free. Take on bill paying as well. While you may not be eager to add this task to your life, it's the best way to know how much, and in what ways, both of you are using the credit cards.

5.Communicate regularly. Finally, begin to talk about money on a regular basis. What he does with his financial affairs affects you and vice-versa. Make time in your marriage for consistent and frank financial discussions.
Neither of you can afford to be passive about your credit, Jennifer. As the great Russian writer and philosopher Leo Tolstoy once wrote, "What counts in making a happy marriage is not so much how compatible you are, but how you deal with incompatibility." Or as "Project Runway" star and American fashion guru Tim Gunn always says, "Make it work!"

Source: Creditcards.com

When your credit's still married and you're not

2009-12-01T06:26:00.000-08:00

Make sure all your financial ties have been severed
By Todd Ossenfort

The Credit Guy

The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues.

Dear Credit Guy,
Help! I just reviewed my credit report. I was divorced in 1999 and just found out my ex has a credit card bill of almost $30,000. This was charged AFTER the divorce. On my credit report, it states that the account owner is the authorized user. Can I be liable for this debt? Who is the authorized user, myself or my ex? I'm scared to death! -- Rick

Dear Rick,
Don't panic. The first thing you need to do is determine what is going on with this account. Is it an account that you had when you were married that you forgot about, a new account opened after you divorced or something else?

Without seeing your credit report, it is difficult to say, but if you are the authorized user on the account, you would not be responsible for the debt. However, you need to be sure. The account listing on your credit report should include contact information for the card issuer. Call the issuer and ask if you are an authorized user on the account or if you are the primary account holder. If the issuer says you are an authorized user, they cannot discuss the account with you further because you are not the cardholder.

If you are the authorized user, you need to have your name removed from the account. The main reason being that the account could negatively affect your credit if mishandled by your ex. Unfortunately, a divorce does not separate credit accounts shared jointly by two spouses. The only way to be relieved of responsibility on a credit contract that you jointly signed as a married couple is to close the account, alter the terms of the loan or, in the case of an authorized user account, have the authorized user's name removed from the account.

To have your authorized user status removed, contact the card issuer and request that your name be removed from the account. You will need to have the security information for the account to request the change. The security information for many card issuers is the cardholder's account number, billing address and the last four digits of the cardholder's Social Security number. If you cannot provide this information, you will need to have the primary cardholder, your ex-spouse, make the request.

Should you learn from the card issuer that you are the person responsible for the account and your ex-spouse is the authorized user, ask the issuer to send you verification that you are indeed the primary account holder. Because you were not aware of the account and the charges were made after the divorce, she may have opened a new account in your name and named herself the authorized user. If that is the case, your ex-spouse stole your identity, and you could report the account as such. Doing so would legally implicate your ex-spouse in a crime.

Before you take such drastic steps, however, you might let her know that you are aware that she opened an account in your name without your permission and that if she moves the balance to a card in her own name and closes the account, you will not report the identity theft. Keep in mind that until the balance is moved to an account in her name or you report the account as identity theft, you are financially responsible for the balance on the account.

One last thing: To avoid unpleasant surprises like this one, it is an excellent idea to check your credit reports once each year. You can do so for free at www.annualcreditreport.com.

Take care of your credit!

Source: Creditcards.com

Four-Letter Words You Should Be Using in Personal Finance

2009-11-25T08:30:00.000-08:00

This is a post from Jason over at Redeeming Riches. Jason is a financial planner by day and a personal finance blogger by night. Be sure to subscribe to his posts in a reader or by email.

No, I’m not going to list some new vocabulary words for you to use when your account goes down by 20%. Sorry to disappoint.

Instead, I’m going to share with you five 4-letter words that should be in everyone’s vernacular when it comes to their money and finances.

Take a look at the list and see if you are using these important 4-letter words!

1. Save

This should be a common word used in your household.

How much are we going to save and where are we going to save it are extremely important questions to be asking yourself regularly.

What this recent economic downturn taught us is the importance of having some savings built up in case a major crisis hits (i.e. job loss etc.).

The average savings rate has gone up to about 5% according to the Bureau of Economic Analysis.

This is a good trend especially when you look at the chart to see where the savings rate has been in the last several years – but there’s still major headway that could be made. Make sure that “save” is a regular word you’re using.

2. Give

Giving is a key part of being a good humanitarian.

You’ve heard the old saying, “It’s better to give than to receive”. Why is that? Because when we’re less consumed with ourselves and more concerned for the welfare of others it benefits them and brings us more joy!

The most miserable people in the world are generally the ones who are self-absorbed misers.

There are countless numbers of poor, weak and downtrodden folks who are waiting for us to be a Good Samaritan.

Whether you give money to the homeless, volunteer in a soup kitchen, give to organizations that provide relief for the under-privileged – you should find something that you are actively giving your time and money to.

3. Risk

Risk is a four-letter word that gets used often, but many times in the wrong way. What I mean is that most people often assume they are a riskier investor than they really are.

It seems like people love risk in a bull market and can’t stand it in a bear market.

It’s important to review how much risk you are willing to take so that you can create a well-diversified portfolio that should generate more consistent returns with less volatility.

4. Roth

If you qualify for a Roth IRA, this is one four-letter word you don’t want to ignore.

What exactly is a Roth IRA? Basically it’s an Individual Retirement Account with after-tax contributions and tax-free withdrawals.

Given where tax rates are currently (low) compared to where they’re going to be in the future (high), it makes sense to check this type of account out now and put it to good use.

5. Debt-Free

OK you got me, that’s two four-letter words put together, but the point is learning to use these words together will help you get on track for your financial goals so much more quickly.

Resolving to be debt-free is a decision you won’t regret. Sure, it’ll take some discipline, hard work and a lot of sacrifice, but it’ll be so worth it in the end.

How do you become debt-free? First you need to make a decision to go for it. Secondly, put a plan in place to cut back on expenses, increase income if possible and use as much discretionary cash flow as you can to start knocking out your debt!

There you have it. Five four-letter words that are OK to say in front of your kids and even better to implement in your personal finance journey!

10 Ways To Improve Yourself While Broke

2009-11-20T07:59:00.000-08:00

I'm going to start off by being very honest, I'm currently broke. I was expecting to get a scholarship that I didn't get, went on a trip that I probably shouldn't have gone on, and bought a certain someone special a present I couldn't afford. That's $4k in the hole, and no regrets, but a bit of a mess to clean up after.

I'm proactively trying to get myself out of the hole before I start dental school next year (see update). Once I start, I'll be about $70K-$90K in the hole per year, so it won't really matter, but it matters now. My goal is to get my credit card paid off, save up a small emergency fund, and establish a few passive streams of income before school starts and I'm a slave with no spare time.

I'll get into a couple of ways I'm earning money right now, but the general point is that self-improvement doesn't have to stop just because you're broke as a joke. Some ways to improve yourself are free, some are cheap, and some actually earn you money!

1.Talk is cheap.
Actually talk can be worth anywhere from a few cents a minute on skype to free if you're face to face. Being broke is a perfect opportunity to work on your relationships. You don't have to take your friend, or romantic interest on a super expensive date, you can do something simple like get to know what they're really about and what's going on with them. People like nothing more than to talk about themselves, and they're willing to pay professionals a lot of money to just listen to them, so you could be delivering a lot of value to your friends for free!

2.Exercise burns.
Exercise burns your calories, but it doesn't have to burn your wallet. You can invest in a $30 pair of cross-training sneakers, which can last you awhile if you don't run through swamps and they're practical for several sports. I maintain a really good deal at Bally's for $15 a month for life (after paying $60/month for 3 years awhile ago), so I don't see myself canceling that. However, you can create a 30-minute morning routine without any weight, using just kalesthetics, and maintain a healthy lifestyle for nothing.

3.Bottle it.
Invest a couple of bucks towards a large waterbottle, or reuse a plastic one you bought earlier, and fill it up with filter/tap water. Drink nothing but the water, avoiding alcohol and coffees which dehydrate you, make you fat, and add up in cash-money if you're a consistent consumer. It's a great way to keep your organs optimally hydrated while saving a lot of money.

4.Explore.
Find areas around your house, such as local parks and landmarks that you can go to for free. You're out there getting your daily walk, taking in the fresh air, and paying nothing to enjoy mother nature. This is a great way to spend time alone, with a friend, or to get to know a special someone. You'll be surprised how much 30 minutes of walking can improve your overall health, focus, and feelings of well-being. I actually journaled how I felt for 30 straight days of 30 minute walks and it was enlightening to see the full progress after the 30 days.

5.Reading is free.
That's a big statement to make considering I have shelves and shelves worth of self-improvement books in my room that have a combined cost of hundreds of dollars. However, there's always the library that has a large selection of great books and audio tapes that I like to frequent. Return books on time and it doesn't cost you a penny.

6.Work on skills and talents.
Some skills and talents are quite expensive to indulge in. Painting requires expensive utensils, racing requires fuel, singing may require instruments or recording equipment. Other skills can be worked on while saving or earning you money. Want to practice social skills? Work at a nightclub on weekends. Want to improve your cooking skills? Volunteer to cook at an elderly people's home in your spare time. Use your imagination and find a creative outlet that works for you.

7.Cook your own.
The best way to get healthy food into your system is to cook that food, instead of eating out at a restaurant. Find a cheap place, such as a farmers market, to purchase fruits and vegetables. Make these the cornerstones of your meals, taking up at least 90% of your caloric intake. You'll save money, you'll fill yourself with nutritious food, and you'll be able to impress friends or a date with a frugal meal that you created with your own hands instead of spending money on restaurants.

8.Character development.
Use this opportunity to do some journaling and introspection. Decide what kind of person you want to be, with what kind of virtues and ethics. Decide how you want to be seen by people, and how you would like to treat others. Create a list of rules that you will not budge from which will slowly but surely take you towards your goals.

9.Volunteer.
This can be a very fulfilling way to pass time while meeting some kindhearted and down to earth people. You're actively spending time improving the quality of someone's life while absorbing joy from the experience. Wow, what a great deal. They should start charging to volunteer. In my case I'm volunteering/interning twice a week at one of the dental schools I applied to. There's no doubt that I'm helping them out there but I'm also learning a lot and most importantly networking with great contacts.

10.Writing Pays.
Invest a little bit of money into a personal website. You don't have to pay more than $3-5 per month, and you can find a free theme to use. Either create a blog about something you're passionate about, or use it as a portfolio of your writing. Survey all the websites that write about topics you would be interested in, and start submitting your writing. Unleashing you're creativity through the process of writing is an excellent way to improve your train of thought.

I'm pretty much doing all 10 of these, and more, to the best of my abilities. It might not be the best situation and having to say no when your friends go out somewhere expensive isn't fun, but it's what needs to be done. I might not have always done this, but I know for a fact that the best way to see the big plus on your balance sheet is to live below your means and building positive habits should begin with as little as $1 to our name.

Source: DumbLittleMan

Dealista Tip: Craigslist Shopping 101

2009-11-17T12:34:00.000-08:00

We’ve often joked that Craigslist is a haven for unworthy junk and hopeless cast-offs, but in my experience, it has proven to be a time and money-saving resource that I regularly use for finding amazing deals and solid bartering opportunities. Here are the basic details of how this shopping site works and the tools that can give you the advantage in buying only the best!

What Is Craigslist?
I’m sure most of you already know, but it is essentially the online classified ad service. It is free to use, heavily regulated by its own community, and a go-to destination for things you might not be able to grab easily at a megastore (like an apple picker, 10 pounds of morel mushrooms, or a collection of late 80’s records.)

How Do I Use It?
Broken down by state and then city, Craigslist lets you zone in on items that are as close to your home as you wish. Since the biggest consideration to purchasing a hot item can often be distance, it’s a good idea to set limits to how far your willing to drive in order to pick up a purchase (since most sellers have no interest in delivering or shipping.) I usually prioritize driving distance by how much money I’m saving or how rare a find is. (It’s not worth my time to drive a few hours to pick up a couple of bags of baby clothes. Buying that registered Dexter bull, however, took my husband a day’s drive, and it was well worth it!)

Tools to Give You the Advantage
Like Ebay, Amazon, or any other online retailer, there are some clever tricks to finding outstanding bargains and getting them first. Some worthwhile sites that help you find listing with spelling errors include Typobuddy.com and Misspellr.com. If you think you may have more luck finding an item that is simply mis-categorized, try SearchAllCraigs.com.

Feed junkies (like me) can always use an RSS option to amp your chances of being the first to know of a coveted find. (Wondering what RSS is? I suggest you listen to this podcast by the Digital Marketer.) If you are like me, you usually have a list of search terms that you check frequently. (Lately, I been checking Omaha, NE for “food dehydrator” and “apple baskets”.) Once your search results come up for any particular term, check the bottom of the page for the RSS link. You can use this with your existing reader to get updates to that term almost instantly (and you won’t need to return to Craigslist to do so.)

Shop Smart, Stay Safe
A good thing can’t usually stay untarnished, and Craigslist is no exception. Between the Nigerian scams, flame wars, and serial killers, it’s fast becoming the place that urban legends live for. I usually send my husband to do my bidding, but even if I coordinate a purchase myself, I follow a few tips to ensure my safety:

■Keep your information to yourself. (I don’t give out my full name when doing business, and I try to always email or call the seller. They really don’t need my info to schedule a transaction.)

■I avoid areas that I’m not familiar with, take a friend with me, and don’t pick up purchases at night. (If the seller can’t bring the item out to me in my car, the deal is off.)

■I always pay cash. This is what most sellers want anyway, and it keeps them from getting a hold of my other sensitive financial info. (Always ask for a bill of sale, however. You may need it for taxes or for legal protections down the road.)

For the most part, I’ve had an amazing experience with Craigslist. My husband uses it regularly in the course of his small farming business. (We’ve purchased cattle, a tractor, lumber, drywall, mechanic work, and hauling services from it in just the past year.) The free stuff category has been worth it alone for us. (We’ve managed to score paving stones, a brand new bathroom sink, and lots of cardboard boxes.) If you’ve been avoiding it out of fear or because you weren’t sure it could meet your needs, I suggest you give it a try!

Source: Wise Bread

Hair Care on a Budget: Dermatologist Offers Money-Saving Tips to Keep Hair Looking Good in a Bad Economy

2009-11-12T08:29:00.000-08:00

NEW YORK, Nov. 10 /PRNewswire-USNewswire/ -- These days, saving a little money here and there is all the rage. Even small changes - carpooling to work or making coffee at home - can really add up. But when it comes to cutting back on hair care, many people might be hesitant to make significant changes for fear that it could impact their looks and the health of their hair. That's where a dermatologist can help.

Speaking today at the American Academy of Dermatology's SKIN academy (Academy), dermatologist Paradi Mirmirani, MD, FAAD, assistant clinical professor of dermatology at the University of California, San Francisco, discussed how to have healthy, beautiful hair without breaking the bank.

"There are many ways that we can trim our hair care expenses, from going to the salon less frequently to using fewer products," said Dr. Mirmirani. "But, the ultimate goal with any type of change in our hair care routine should be to maintain healthy hair."

To understand what it means to have healthy hair, Dr. Mirmirani pointed out that hair is a fiber; its structure and integrity must be maintained in order for the hair to stay healthy. The root of the hair, also known as the hair follicle, produces the hair fiber which is made up of hair keratins (fine, fiber-like structures packed very tightly together and wrapped on the outside with a very hard outer cuticle). The cuticle of the hair functions much like the shingles on a roof, by protecting the underlying structure. When the outer cuticle is damaged, then the cuticle breaks apart and the inner fibers are exposed - resulting in frizzy, flyaway or lackluster hair.

Since healthy hair requires an intact cuticle, Dr. Mirmirani advised that any hair care routine or products used to clean or style the hair should be gentle enough to maintain the structure of the hair fiber and cuticle. With this is mind, she offered several tips on how consumers could make small changes to save money on hair care without compromising hair health.

Brush Up on Hair Brushes

While boar bristle brushes often are touted as the best hair brushes, Dr. Mirmirani said that this is actually a myth. "Boar bristle brushes, which are quite expensive, put a lot of friction on the hair because the bristles come into contact with hair against its natural grain," explained Dr. Mirmirani. "This can cause a considerable amount of damage, and consumers can save money and keep hair healthier at the same time by buying inexpensive plastic brushes with wide-spaced needles, which are widely available."

Shampoo - Less is More

Although shampooing the hair is an important part of any hair care routine, Dr. Mirmirani pointed out that most people could save money on shampoos in several ways. By definition, shampoo is a detergent used to remove dirt from the scalp with different scents added to make them more appealing. However, Dr. Mirmirani explained that people could use less shampoo (particularly if they have long hair) by only washing the scalp and not shampooing the lower parts of the hair.

"When we wash our hair, we tend to use too much shampoo by washing the entire length of the hair rather than concentrating on cleaning just the scalp," said Dr. Mirmirani. "In addition, how often you wash your hair should be based on how oily your scalp is - if it's oily, you might need to wash it more frequently than someone with a dry scalp. However, most of us are probably over-washing our hair and can save some money by using less shampoo."

Dr. Mirmirani noted that African Americans should wash their hair no more than once a week, because their hair and scalp tend to be much dryer than lighter-skinned individuals. Over-shampooing can further dry out the hair and scalp of African Americans.

While most shampoo formulas are very similar, people might mistakenly believe that salon formulas (which are considerably more expensive) are better than drugstore brands. Dr. Mirmirani explained that manufacturers of brand name shampoos sold in stores spend quite a bit of time and money on research and development of their formulas, and she finds them just as good as pricier shampoos sold at salons.

"I recommend that you choose a shampoo formulated specifically for your type of hair," said Dr. Mirmirani. "If you color your hair, then select a shampoo designed for color-treated hair, as it is gentler than regular shampoo and can help extend your hair color. But if dandruff is a problem, then try a shampoo formulated to fight dandruff. The key is finding the product that works best for you and avoid the temptation to spend more than you have to."

Conditioners Count

To maintain healthy hair, Dr. Mirmirani advised not to skimp on conditioner. For those with long hair, conditioner plays an important role in helping protect and maintain the structure of the cuticle, especially at the ends. If hair is damaged, it is even more important to make sure the hair is conditioned regularly.

"If your hair is damaged, I would advise using a 2-in-1 shampoo with conditioner followed by extra conditioner to fully protect and help restore the cuticle," said Dr. Mirmirani. "A leave-in conditioner for deep conditioning that can be applied at home also is important for people with long or damaged hair, and these products do not need to be expensive or applied at a salon to work well."

She also cautioned that conditioners can make fine hair look even limper, so they should only be used on the tips of the hair and not the scalp or length of the cuticle.

Heat, Color and Chemicals Can Be Costly

In her practice, Dr. Mirmirani sees many people who try to save money by using ceramic flat irons on a very high heat setting to straighten their hair at home rather than spending money for this hairstyle at a salon. However, many problems can occur with these styling products, and it is important to read the instructions before using them on hair. For example, flat irons should never be used on wet hair, the highest heat setting or on an everyday basis. When using any heat-based styling product (including a flat iron, blow dyer or curling iron), Dr. Mirmirani recommended using a styling product specially designed to protect the hair from heat before styling the hair, such as a leave-in conditioning spray.

For those who color their hair, Dr. Mirmirani said hair dyes applied at the salon are basically the same as those that people can purchase from a store and use at home. She suggested that store-bought hair color be tested by applying a small amount on the skin behind the ear and monitoring the area for 24 hours to make sure a person doesn't have a reaction to it.

"By dyeing their own hair, people can save a considerable amount of money on their hair care routine - especially if they can enlist the help of a friend for quick touch-ups," said Dr. Mirmirani.

Since ultraviolet (UV) radiation will bleach hair, Dr. Mirmirani also recommended avoiding intentional or prolonged sun exposure, and wearing a hat to protect color-treated hair.

Perms, which chemically alter the hair fibers, should be used with caution when applied at home. For example, Dr. Mirmirani explained that if you leave the chemical in your hair too long, it can permanently damage the hair.

"I can't stress enough the importance of reading the instructions before applying a perm at home," said Dr. Mirmirani. "I would recommend leaving the solution on for a shorter duration than the instructions recommend to see how it works the first time you apply it and not to use the product more frequently than once every eight weeks."

Fuller Hair For Less

While full, luxurious hair may not be in the genes for most people, Dr. Mirmirani said there are a few simple tricks that can make limp hair look fuller that won't cost any money. For instance, blow drying hair upside down can add volume and hiding the central part of the hair by restyling it can create the illusion of fuller hair.

Many shampoos are available that claim to add volume to hair, and Dr. Mirmirani said that some of these shampoos can be helpful for people with limp hair. However, she doesn't recommend any products that claim to regrow hair, as the only product that has been shown to do this is minoxidil - a topical solution approved by the U.S. Food and Drug Administration (FDA) to treat hair loss in women and men.

"Even though minoxidil is available over-the-counter, people who are considering using it for thinning hair should see their dermatologist for a full evaluation before starting this therapy," said Dr. Mirmirani. "Informercial and Internet products that claim to improve hair growth for people with fine or thinning hair may not have been scientifically tested, and I strongly advise people not to spend their money on these types of products. They are expensive and they often don't work."

If you have multiple hair care concerns and are unsure what products will work best for your hair type, Dr. Mirmirani recommends that you see a dermatologist for expert advice.

Headquartered in Schaumburg, Ill., the American Academy of Dermatology (Academy), founded in 1938, is the largest, most influential, and most representative of all dermatologic associations. With a membership of more than 16,000 physicians worldwide, the Academy is committed to: advancing the diagnosis and medical, surgical and cosmetic treatment of the skin, hair and nails; advocating high standards in clinical practice, education, and research in dermatology; and supporting and enhancing patient care for a lifetime of healthier skin, hair and nails. For more information, contact the Academy at 1-888-462-DERM (3376) or www.aad.org.

Source: SYS-CON

FICO scores determine who gets what loans

2009-11-09T06:18:00.000-08:00

Twitter Question: What is a FICO credit score and how does it affect my ability to get a loan?

Answer: Credit bureau scores are often called "FICO scores" because most credit bureau scores are produced from software developed by Fair Isaac and Company.

FICO scores provide a guide to future risk based on credit report data. The higher a person's credit score, the lower the risk. A credit score is based on an analysis of a person's credit report information, typically from the three major credit bureaus -- Equifax, Experian and TransUnion. Credit scores help determine who qualifies for a loan, at what interest rate, and to what credit limits.

While many banks use FICO scores to help them make lending decisions, each bank will determine the amount of risk it finds acceptable for a given credit product. There is no single "cutoff score" used by all lenders and there are many additional factors that lenders use to determine actual interest rates.

Generally, FICO credit scores above 700 are very good and a sign of good financial health. FICO scores below 600 indicate high risk to lenders and could lead to higher rates or a lender could turn down your credit application.

Five categories determine a credit score:
Payment history accounts for about 35 percent of a FICO score. Late payments, bankruptcies, and other negative items can hurt your credit score. A solid record of on-time payments helps your score.

How much you owe makes up about 30 percent. FICO scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be.

The length of your credit history is about 15 percent of a FICO score. A longer credit history increases your score. You can, however, have a higher score with a short credit history if your report shows responsible credit management.

The amount of new credit on your account makes up about 10 percent of a FICO score. If you have recently applied for or opened new credit accounts, your credit score will weigh this against your credit history. FICO scores distinguish between a search for a single loan and a search for many new credit lines so if you need a loan, do your rate shopping within a concentrated period of time.

Other factors and types of credit account for about 10 percent of a FICO score. Several minor factors can influence your score. For example, having different credit types on your credit report -- credit cards, installment loans such as a mortgage or car loan and lines of credit -- can add slightly to the score.

FICO scores consider a wide range of information on your credit report but by law, credit scores may not consider your race, color, religion, national origin, sex and marital status, and whether you receive public assistance or exercise any consumer right under the federal Equal Credit Opportunity Act or the Fair Credit Reporting Act.

FICO scores are given to lenders by the major credit reporting agencies. Many lenders use their own credit scores, which can include the FICO score.

It is important to periodically check your credit report to make sure there are no errors that could hurt your score. The three bureaus have procedures to follow if you suspect errors.

Source: Courier Post

Financial Challenges of a Single Parent

2009-11-03T07:22:00.000-08:00

Source: Parenting.com

I’ve stolen a tip or two from Jason White’s addictive money blog, Frugal Dad (follow him on Twitter @frugaldad), in the past. And I’m not the only one: Frugal Dad, which Jason started in 2007, partly to document his family’s long slog out of debt, has grown into one of the largest personal finance communities on the web. So of course we invited him to do a guest post weighing in on our three Boot Camp families.
Jason keyed in on single mom Lori, and gives this blockbuster advice: She should hold off on her dream of going back to school.
Here’s what he says:
_____
The Financial Challenges of a Single Parent

I have enjoyed following the posts by all Family Budget Boot Camp participants. While I can relate to each of them, I have to say that Lori's story touched me the most, because I was raised by a single mom and I am familiar with the financial struggles that role entails. Even with financial support from her ex-husband, it means Lori will be the main provider for both children's needs, from childhood through college.
While I don't know Lori personally, from her posts here I can already see she has the ambition to make the most out of her circumstances. But, she is also a little like me -- easily bored at work and looking for a creative outlet. This is, in fact, a good problem.

As a single mother, Lori can ill-afford to be choosy about job opportunities that pay relatively well, provide a stable environment, and some level of benefits for her and her kids. That said, she also can't afford to sell herself short or put her dreams completely aside because she is a single parent.

Administrative work can be painfully boring, but the good news is that frees up plenty of mental energy for freelancing opportunities. A couple years ago, my family was facing financial struggles and I weighed taking on a part-time job in the evenings in addition to my full-time job. Like Lori, I enjoyed writing, and decided to give blogging a try. Two years, and hundreds of long nights later, my blogging business now supplements our household income as a viable business.

Lori mentions in her introduction that while she earns $1,000 a month, she often wonders where it all goes. Sounds familiar. Until we got serious about tracking our expenses we never knew where our money went, regardless of how much, or how little, we earned. We went through a period of very strict budgeting with an envelope system until we got our spending under control.

If you find yourself wondering where your dollars disappeared, I suggest adding these three exercises to your first-of-the-month routine:

1. List all expenditures smallest to largest. Chances are the larger expenses are not negotiable. Things like housing payments, car payments, and utilities are difficult to eliminate. However, those smaller expenses add up to one big one, so whittle, cancel, and slash those expenses wherever possible. Say goodbye to extras such as gym memberships, Netflix, the cable bill, etc. Don't worry -- this is only temporary.

2. Start saving a small amount from every paycheck. Make it a point to save something -- $10, $25, or $50. Don't get caught up on the amount at this point -- just save! You must begin to build a cushion between you and the next financial emergency.

3. Create an envelope budget. Most of us don't have a problem paying regular expenses; it's categories like food, entertainment, and clothing that often blow the budget. Assign an envelope for each category and write the monthly budget on the outside. When you get paid, withdraw enough cash to fill all of your envelopes in equal installments depending on the frequency of your paycheck. For instance, if you get paid twice a month, divide your monthly budget by two and place that amount in your cash envelope. Only spend from this envelope for each category of spending. When the food envelope is empty, don’t borrow from the clothing envelope. It’s time to dig out the macaroni and cheese from the back of the cupboards.

Finally, I believe Lori should consider putting school off for a couple years while she builds both her emergency fund and her budding freelance career. After emotional events such as divorce we often look for ways to reinvent ourselves, when what we really need to do is focus on what's most important at the moment. In Lori’s case, that list includes building savings, reducing expenses, and most importantly, providing a stable environment for her children. Adding thousands of dollars in student loans to the mix does nothing to help her reach those goals. In a couple years, Lori’s financial situation will have improved to the point where she may have the cash flow for classes at a local university, or perhaps even become eligible for tuition reimbursement at her employer, enabling her to attend school without accumulating debt.

Good luck, Lori!,
Jason

After Split, Tips to Protect Personal Credit Rating and Credit Score

2009-10-30T10:01:00.000-07:00

For many, a divorce becomes an all-out battle about splitting up assets and dividing finances. It’s essential that as soon as you know you’ll be getting a divorce, you take steps to protect your personal credit rating and credit score.

Start by obtaining copies of your credit report from the three credit reporting agencies (also known as credit bureaus) – Experian, TransUnion and Equifax. In theory, all three of these credit reports should be identical. However, in reality, you’ll notice subtle differences, based on whether each of your creditors and lenders reports information about you and your payment history to all three bureaus. There are several ways to obtain copies of your credit reports, including:

1. Go to the official Annual Credit Report Web site.
This Web site is operated as a collaboration between the three credit reporting agencies and the Federal Trade Commission. It allows consumers to obtain one free copy of their credit report, from each credit bureau, once every 12 months. (Warning: Beware of imposter Web sites that claim to offer free copies of your credit report, but actually require you to sign up and pay for an ongoing credit monitoring service.)

2. Contact each credit bureau separately to request a free copy of your credit report. You can do this by telephone, online or in writing.
The quickest method is online. The Web sites to visit are: Experian.com, TransUnion.com and Equifax.com. You can purchase a three-in-one credit report from any of the credit bureaus or from a variety of other companies. These reports contain identical information to what’s listed within the single credit reports issued by each credit bureau, but the information from the three credit bureaus is displayed together in an easy-to-read format within a single report. This makes comparing the information on your three credit reports easier. The charge for a three-in-one credit report is anywhere from $19.95 to $39.95, depending on the service you use.

As you review the information on each credit report, create a list of all joint accounts, including credit cards, store charge cards, car loans, mortgages, and any other types of credit or loans that list both you and your former (or soon to be ex) spouse jointly on the account. Once you have identified all of the joint accounts, immediately take steps to either close those accounts and pay them off in full, or have your name (or your ex-spouse’s name) removed from the account(s), based on who is responsible for paying them off, according to your divorce settlement.

Even if a judge has stated that as part of your divorce settlement, your ex-spouse is completely responsible to pay off specific outstanding loans or credit card debt, for example, as far as the credit bureaus, creditors and lenders are concerned, as long as both names are listed on the account, both people are equally responsible for that debt.

If your ex-spouse is late on a payment, or an account goes into a negative standing, it will impact your credit score and credit history as long as the joint accounts remain intact. This could take months, perhaps years to fix, and will hurt your ability to obtain new credit cards or loans in your own name.

One of the biggest mistakes recently divorced individuals make is assuming their former spouse will close the joint accounts, pay them off in full, or separate the accounts legally. Often, this is not the case and both people wind up damaging their credit rating and seeing a dramatic decrease in their credit score.

Source: Divorce 360

12 Financial Tips for Women

2009-10-28T07:45:00.000-07:00

Dana Bratch at Bankrate has created a list of twelve financial tips for women.

While neither gender has an exclusive lock on money management skills, the financial deck is stacked against women. They earn about three-quarters of what men make. In a divorce, they get less of the assets and more of the children. They live longer, and one in eight elderly women lives in poverty, compared to one in 12 men, according to 2003 figures from the U.S. Department of Health and Human Services. Unfortunately, many women view money and money-related tasks as necessary evils, not opportunities to even the odds.

Bratch recommends that women take the following steps:

1.Set a financial goal — be as diligent about money as you are about fitness or your career or about anything else.

2.Train yourself to be financially independent — don’t allow yourself to become reliant upon your partner’s decisions, and become involved in long-term financial planning.

3.Buy your own home — don’t wait for Prince Charming to come along and do it for you.

4.Fund your retirement account — an important step for everyone, not just young women.

5.Opt for long-term planning over crisis management — get serious about money now; don’t wait for trouble to strike.

6.Start investing — do it now, and don’t be afraid to make mistakes.

7.Don’t fear risk — women are especially prone to conservative investments; be willing to seek aggressive growth when appropriate.

8.Don’t go it alone — work with a financial planner or a CPA to educate yourself and to feel more secure in your decisions.

9.Get emotional support, if you need it — join an investment club or, if appropriate, connect with Debtors Anonymous.

10.Be more confident in salary negotiations — be more assertive to demand what you’re worth.

11.Venture out of your financial comfort zone — important financial actions (asking for a raise, buying stock) all produce some level of discomfort.

12.Know that it’s never too late — remember that you can start late and finish rich!

Some of my female friends are actively involved in family finances; one or two are actually wholly responsible for them. Many, however, leave all but the home economics decisions to their husbands. This may work well for the logistics of the relationship, but they should still be sure they are educated and informed about money issues.

(Obviously, most of these tips are good for men, too.)

Source: Get Rich Slowly

Help! My Money Scares Me!: Tips for Educating Yourself Without Feeling Overwhelmed

2009-10-26T05:50:00.000-07:00

Do you feel lost at the very idea of having a budget, let alone a comprehensive financial plan? Does it make your head hurt to think about how much you make and how much you spend? Does keeping track of your finances make you tired?

Relax.

Breathe.

Listen.

It's not as scary as it sounds. it's not as scary as it looks. In fact, planning where your money goes doesn't have to be scary at all.

When you hear someone talking about money in ways that are foreign to you, or read things in a magazine or on the internet that you don't understand, it's natural to feel lost, sick, or tired. The fact that others understand it and it's about money makes you feel like you should know what's going on, and the fact that you don't makes you feel inadequate, stupid, or not good enough. That's the cycle, but it doesn't have to be like that.

Instead of listening to what others say, go out and make your own financial plan. Make one that reflects your lifestyle, values and personality. It's totally possible, and the suggestions below will help.

Relax

Never deal with financial issues when you're feeling negative emotions. Even if your negative emotions are about your money, it's possible to step outside, take a walk or at least a couple of deep breaths, and let those feelings go. Once you've done that, you'll be able to approach a financial plan, whatever that means to you, with a clear head. You'll be able to process the information in front of you and make decisions based on what you see there, not on what you feel.

Learn

If you don't know where to start, look to the Internet or go to the library and ask a Librarian. Money and financial planning isn't any more difficult than high school algebra, and you passed that! You can totally do this. If someone uses a term you don't understand, look it up. If you hear about a new investment, do some research. Even if you don't have a budget and you've realized you need one, you can find easy, detailed instructions for making one in so many places.

The key to learning more about money is realizing that it's not beyond you. Sure, you don't understand it now, but that's because you haven't looked into it. Once you have, you'll be the one tossing words around that other people don't understand. All it takes is a little time focused on learning about money, and you've got it made.

Examine

Once you've gathered information, look at your own money in light of what you've learned. Is that new type of investment appropriate for where you are in life and for your goals? How do you have to adjust your budget if you have an irregular income? This is where your new knowledge and your actual life situation interact. It's not enough to study, you have to figure out if and how the information you learn is relevant to you.

Act

Now that you not only know more information, but you know how it applies to you, you're ready to implement what you've learned. Sometimes, this means doing nothing. Even then, you're still acting. You're choosing not to explore a certain option at the moment because of something that's particular to your current situation. Other times, acting means that you make some changes. Maybe you implement that budget, or reallocate some investments. Maybe you talk to a broker or decide you want even more information. Whatever it is, you do it.

Now, that wasn't so bad, was it?

Dilemma for couples: Merge or split money?

2009-10-19T06:50:00.000-07:00

BY EILEEN AJ CONNELLY
Associated Press
NEW YORK — If you need a legitimate reason to pay attention to the tabloid tribulations of reality show couple Jon and Kate Gosselin, follow the money.

A court last week ordered Jon Gosselin to return $180,000, out of a total $230,000 his estranged wife accused him of looting from their joint bank account.

While the numbers for TV stars may have more zeros, this part of their bitter divorce fight reflects a big concern for couples from all walks of life: Is it better to mingle money or to keep finances separated?

This very practical issue can spark an emotional discussion. For some couples, joining finances is as much a symbol of their commitment as combining households. For others, keeping separate accounts is a way to avoid conflict and maintain a measure of independence.

Financial professionals say there's no system that's right for everyone.

"The important thing is that both people need to be involved in the finances at some level," said Jean Keener, principal of Keener Financial Planning in Keller, Texas. In many relationships one person will take control of the money while the other remains unaware of details about things like bank accounts, investments and even household expenses. That is fraught with potential problems, particularly if something happens to the person in command.

Reasons for concern

Beyond the obvious issue of trusting that a spouse won't drain a joint account, there are several other factors that can complicate deciding how to handle personal finances.

A key issue is each person's attitude toward money. If one is a "spender" and the other a "saver," trying to completely combine finances may create problems. Similarly, if one person is meticulous about recording transactions and the other is not, disagreements or costly mistakes may result.

For some couples, the amount they have to contribute to the relationship can create tension. If one person has more money saved or earns a higher salary, for instance, the couple needs to discuss how much each will contribute. Likewise, there needs to be a discussion about any expectations of helping to pay off each other's debts.

Personal histories also come into play. A prior marriage or children will likely affect how someone wants to handle money entering into a new relationship. If there are children involved, a parent may want to keep a certain amount of money separate and consider a more detailed estate plan.

Liability issues likewise need to be addressed. If one partner is in a profession with a high risk of lawsuits, like health care, or owns a business that could get sued, having only joint assets could endanger the couple's financial stability in a worst-case scenario. Even matters like whether there is adequate insurance on each person's car could put joint assets at risk, if the underinsured has an accident.

On the other hand, holding at least one joint account enables both people to access money that could be frozen in an individual account if the person dies. Since an estate can be held up for months, it's important to make sure at least some funds are available to a surviving spouse.

Couples who decide to share an account must make sure they also share information about when they tap it, or risk problems like overdrafts. An agreement on how much may be spent without consulting the other partner may be one way to avoid disagreements.

It all comes down to honesty and communication. "That is at the heart of whatever system you have," said Kevin Sale, principal of Sailor Financial in Bloomington, Minn. "If you don't have honesty and communication, no system is going to work very well."

Source: The Wichita Eagle

Are You Going From 2 Incomes to 1?

2009-10-14T07:02:00.000-07:00

Finances: Most Don't Confront Financial Reality of Divorce until after Separation

By JOSIE BROWN

When Dee Coleman’s marriage ended, she was confronted with a very tough reality: She couldn’t survive on what she was making. “Strange now that when I look back, the emotional pain has long healed,” says Coleman, “But I still remember shaking in my boots when it dawned on me that to I needed to make some drastic changes, if I wanted to raise my eleven-year old daughter, and at the same time, not lose our home.”

Going from two incomes to one often is often a jarring taste of reality. As Robert Brownstein, a Sausalito, Calif., CPA and personal financial advisor explains, “And most people don’t confront it until after the actual separation.” Brownstein has worked with clients whose $400,000 household incomes plunged to $80,000 and less. “Grieving the loss of a marriage is much like grieving the death of a loved one. On top of all this emotional turmoil, you suddenly find yourself facing financial problems as well.”

Keep reading on divorce360.com

Are You Going To Refi During or After Your Divorce?

2009-10-12T06:11:00.000-07:00

Tips to Help You Refinance your House in your Name after the Divorce

By DIVORCE360.COM STAFF

Are you getting divorced in the middle of a bad real estate market? Do you have to refinance your mortgage in only your name after years of having two incomes to support your mortgage?

"The ability to successfully refinance the loan in your name only will depend on your credit, income, and the amount of equity in the home," said Greg McBride, a senior financial analyst at bankrate.com. "Falling home prices could throw a wrench in those refinancing plans if you owe more than the home is worth or if you possess little equity in the home."

Keep reading here

Will You Consider Divorcing Over Crazy Credit Card Debt?

2009-10-07T06:55:00.000-07:00

First came the mortgage crisis, then the banking crisis and now experts are predicting a credit card crisis is in the making. That crisis could push some couples over the financial edge. And the combination of financial pressures, job loss or high credit card debt may well make for a perfect storm when it comes to a couple’s uncoupling potential.

“This economic crisis is going to hurt everyone, even the well to do — especially those living on investment capital. As far the middle class: there will be no wiggle room financially anymore and the lower class may wind up on the streets. I do not believe anyone will go unscathed in this horrific economic crisis and marriages will suffer, whether a person is trying to make this marriage work or trying to survive a divorce,” said California attorney Stacy Phillips, author of the book "Divorce: It's All About Control How to Win the Emotional, Psychological and Legal Wars."

Phillips is among a growing number of financial and relationship experts from around the country who say they’re seeing more and more couples in financial trouble – and that can turn into emotional trouble and potential divorce in the making. “One or both are often more anxious and worried, which leads to more irritability and less tolerance. Couples are preoccupied and not as emotionally available to work on their issues," said Phyllis Goldberg, a California marriage and family therapist and co-founder of hermentercenter.com, a site that helps divorcing women.

Credit card debt is the “next crisis facing our country. We are in credit card debt in the billions and …there didn’t seem to be an end in sight,” said Andrew Bernstein, a certified credit counselor with the Florida-based debthelper.com. For a couple whose debt has mounted, whatever the reason “Many times the first reactions are fear and a sense of panic, particularly if the collection calls have started. That will be followed by the question, ‘What do we do now?’,” he said.

Credit card debt “produces increased tension on a couple, especially younger ones who have not had a lot of experience in this area,” he said. “Having been in the credit counseling industry for more than 10 years, observations would indicate that financial tensions are a huge factor in separation and divorce.”

Given the current economic crisis and its widening reach, “Those couples who do not know how to talk about money in a productive way will be much more stressed and resentful, which will increase the likelihood of divorce,” said Tina Tessina, a California psychotherapist and author of "Money, Sex and Kids: Stop Fighting about the Three Things that Can Ruin a Marriage."

“If one party is not honest with the other party, it can cause a rift,” Phillips said. “For instance, going into a store or restaurant and having your card declined can be a very humiliating experience. If your mate has this experience because he/she thought the credit card was under its limit and you ran it up without disclosing that information, the fur might fly.”

In addition, “if your mate cancels the card and does not tell you, that embarrassment in the store that could have been avoided will undoubtedly cause significant problems in your relationship,” Phillips said.

Finally, "...if you are outspending your income, and putting additional purchases on credit cards, that can take a real toll on the relationship,” Phillips said.

“Couples need to tackle these credit card issues head on during these upcoming tough economic times. If not, it could cost them what was once seemed to be a perfectly good marriage," she addedd.

Often, Bernstein said, the bill-paying spouse will get blamed for the credit card debt by the other spouse, who may not have known the couple’s financial picture. “…That will tend to lead to one blaming the other for not keeping up with things,” he said.

If one spouse loses a job or a medical issue arises that causes debt to mount, the situation “can exacerbate other problems the couple might be having,” Bernstein said.

“If you've lost your job, you'll need to make an emergency plan, perhaps taking a job that's less than you want, or a second, weekend job to make up the difference. Drastic times call for drastic measures,” Tessina said.

Bernstein cautioned credit card users to pay attention to what they're spending: “What all consumers need to realize is that credit cards are not free money. Most cards are not interest-free, and there are several ways that the interest can increase that consumers are not necessarily aware of, such as when there are late payment- or over-the-limit penalties. Interest can increase dramatically. This can totally throw off a couple’s budget. For example, let’s take a couple that has four cards and are paying the minimum payments of $25. They have budgeted for $100 a month for their credit card bills. If they get a late fee, that would double on average, and if there is an over-the-limit fee, that would triple it. Now instead of $100 per month, there goes to $300 or more because of the increase in interest….”

“This is the time to sit down and talk about money in a serious fashion, and make a plan. If you've been living beyond your means, learn to budget and bring your spending under control. This isn't easy, but you'll feel better knowing the problem is being solved," Tessina suggested.

California financial advisor Ginita Wall, who lectures on the topic "What Women Need to Know about Divorce," said credit card defaults by couples “often lead to bankruptcy."

And that can make divorce more difficult, experts say. New Jersey certified public accountant Noah Rosenfarb, who operates www.FreedomWealthAdvisors.com, said “One of the recently popular seminars for family attorneys is ‘Divorce or Bankruptcy: What should they file first? This is a hot topic among family attorneys, as most are worried about whether clients that want to get divorced can actually afford it. Aside from legal fees, many couples have to clean up their joint credit card debts, sell a house that may not be worth more than the mortgage, and then figure out how to afford to live in separate households when it was tough to pay the bills living together.”

Source and Keep Reading at divorce360.com