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Week of May 31, 2010

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Grandpa Terry's Update

Grandpa Terry's Tip of the Week

Grandpa Terry's Email

Featured Author's Article

Grandpa Terry's Update

Welcome to The Budget Stretcher!

True Credit Special Edition - Kids & Money

This is a topic that I believe is very important. If we are to ever get control of the financial literacy we need to educate our kids about the proper way to manage their finances.

Janet Bodnar is deputy editor of Kiplinger's Personal Finance magazine, for which she has written articles on a wide range of topics, including investing, money management and the economy.

Please take the time to read her article whether you have kids or not. Here is the link:

Kids & Money

I Got A Discount On My Medical Bill?

I had some tests done in late March and just recently received the bill. The total bill was $2081.87. After my insurance adjustment and their payment I owed $215.94.

The Bill contained the following statement: "Please contact our office within 30 days to be eligible for our Prompt Pay Discount." and gave their contact number. I really didn't believe this would be worthwhile but I called anyway.

A very nice lady told me at the billing office that if I paid by Jun 27, 2010 I would only have to pay $183.55. That is a $32.39 savings.

I was wondering if anyone has had a simlar experience. If so please email me and I will pass it along to the other subscribers.

Gas In Fredericktown MO - $2.42 a Gallon!!!
Tofield, AB Canada .98 per litre (A little less than $4 per gallon)
Buffalo, NY and surrounding suburbs : $2.95.9 - $3.02.9
Gas in Pembroke Pines Florida - $2.89 per gallon
St Helens Oregon - $2.98 gallon for gas
Ramsey MN - $2.84 per gallon

That's all for now. Remember, I really enjoy hearing from you folks. If you have any comments, complaints, suggestions or just want to say Hi, please send me an email to tre2000@midwest.net

If you know someone that may be interested in subscribing to our newsletter just copy and paste the below link into an email to them and have them subscribe:

http://www.homemoneyhelp.com/confirmsubs.html

Have a great week,
Grandpa Terry

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Grandpa Terry's Tip of the Week

Is Your Second Income Worth It?

It seems like these days one income just isn't enough for many people. They either try to work two jobs or both Mom and Dad have a full or part time job.

But, are they really making any money from that second income?

There are so many expense factors involved in a job that you could actually be working for almost nothing.

Some of the expenses involved are:
Transportation
Taxes
Child Care
Clothing
Food

Of course there could be many others but the above list covers almost all jobs.

If you are wondering why your second income isn't providing much help to your family's finances please the below calculating worksheet to see exactly what your after expenses income really is:

Excel Spreadsheets
http://www.homemoneyhelp.com/secondincomecalc.xls

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Grandpa Terry's Email

MORE NEW IDEAS ON SAVING MONEY ON ENERGY

This is my response to Tawra and her outstanding tips on saving money.

These ideas were very well thought out and certainly would save.

I have been doing most of these already and do find some savings

I would like to offer some additional ideas I am implementing today.

There have been some great improvements in smart bulb technology I discovered at Walmart.

Let me give you a couple of examples.

You can replace any of your standard bulbs with the new energy saving bulbs.....

Replace 100 Watt with a 23 watt guaranteed to last 10,000 hours at a cost of $2.97 a 3 pack.

Annual savings of $77 per bulb and it actually is brighter than the old bulb. This assumes actual usage of 10,000 hours, of course and savings vary depending on usage. There is little doubt, however that considerable money can be saved.

You can also save money on phone costs with Magik Jack.

This is available almost anywhere such as Walmart or Walgreen's for about $20 per year. Unconditionally guaranteed with the first month free.

For a long time I thought it was just another gimmick but a friend of mine in Texas said she had been using it for over a year and said the voice quality was excellent and I can attest to that.

Basically it uses VOIP technology (Voice over internet protocol) the same as Vonage and has all the features you could want.

All you need do is plug it in to a USB port.

A possible disadvantage is you have to get a new phone No. so you would need to advise your contacts a little early before you make the actual switch.

ADDITIONAL SAVINGS ON ENERGY.

Another way of saving on energy using fans is to blow the fan over a block of ice- this will absorb heat as it converts from the solid state to the gas state.

Also check with your service provider. Most utility companies offer a way of saving by just signing up for a better rate on off-peak hours.

Ken from Lakewood

<><><><><><><><><><>

Good Day Grandpa Terry;

I would like to know if this is a reputtable business for me to join. It is the support@debtfreesolution.org that helps do settlement with the creditors. I am really going thru a major financial problem. I have a lot of dilinquent loan, charge offs, etc. This other company my friend told me about and I called them is CareOne. So, please let me know what you think I should do.

I try to apply to a local Credit Union for a secured loan, but I wrote letters to each creditors letting them know to give me an extension and what amount I can start paying. No avail. I did this to Pentagon Federal Credit Union. Now I am trying to work with my local Credit Union for the loan to payout these outstanding past loans. The Manager told me that when they pulled up my credit report, they noticed the the Pentagon Credit Union have a charge of and my local credit union Manager want to meet with me in reference to this particular charge of and that I better have a good reason to give her before she comes to the board. The only thing I know that I sent the letter and still email the letter PFCU and I filled out a hardship form from them and this is what they put on my Credit Report. I think my local credit union is having doubts if they should lend me this money, seeing that a showing a charge of on a bigger credit union. What you think I should do. I need some kind of wise advice. Thank you for hearing my cry.

My Response

Hi,

I'm sorry to hear about your current financial situation.

I recommend that you use CareOne. I've had some very positive feedback on their programs. However, you need to make sure you understand and agree to any terms of their program.

There is a standard procedure you must follow to get your finances back on track. First, I would like for you to go through each of the steps recommended on your BSP home page at:

http://www.budgetstretcherpremium.com/paiduser/Index.htm

Pay particular attention to the article titled Big Money Problems. Here is that link:

http://www.budgetstretcherpremium.com/paiduser/bigmoneyproblems.html

It's important that you understand that you can overcome these problems but it will take some time, effort and discipline. Make sure you follow the list of priorities for any money that you do have.

Once you have accomplished the above please email me again with any questions you may have.

All the best,
Grandpa Terry

<><><><><><><><><><>

Hi Grandpa Terry,

I was reading an advertisement that stated charged off debts can be removed from your credit report without you having to pay on them. This sounded too good to be true to me. Is this something that can be done legally or one of the many scams for the desperate?

Lekeysha

My Response

Hi Lekeysha,
To my knowledge information can only be removed from your credit report if it's an error. Otherwise it remains for at lease 7 years.

Here is an excellent ebook published by FICO that explains your credit report in great detail:

Understanding Your FICO Score
http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf

I would shy away from any offer like this.

All the best,
Grandpa Terry

Featured Article

Bi-Monthly Credit Card Payments
The Dollar Stretcher Blog
by Gary Foreman

I have heard that paying on a credit card debt every two weeks, instead of paying it once a month saves on interest and could pay off the debt faster. Is this true? I have been trying to put at least $50 on the debt, every two weeks, plus pay the minimum, once a month, but not seeing much progress. Will this help in the long run, more than the short term? Is there a better way to go about paying credit card debt off than bi-weekly?
Sue M.

Sue asks a good question. Can paying a little extra every two weeks really reduce her credit card balance? And, the answer is (drumroll, please): sometimes...

Sometimes??? What kind of an answer is that? It's a truthful one. But don't worry. We'll show you an easy way to see if your situation is one where bi-weekly payments are a good idea.

The first thing we need to do is to learn a few facts about credit card accounts. Most of us get a monthly bill. We can pay all of it, just the minimum or something between the minimum and all of it. You already knew that.

What you might not have known is that your payment is credited to the account the day that it's received. Not on the due date on your statement. That's important because of the next fact.

If you carry a balance on your account, the amount you owe is racking up interest charges every single day. You may think that you're paying 14.04% (Bankrate.com). That's the annual rate. You're really paying 0.03846% per day.

The bank will calculate your balance daily and also how much interest you owe for that day. Anything that reduces your balance will reduce the amount of interest charged for that day and all days after.

OK, so making an extra payment every two weeks is a good idea, right? Not necessarily. It could be that you have better options.

We're going to do some calculations. But, let's be honest and admit that most of us don't like math. So if you're math-phobic you can just skip the next two paragraphs. You don't need them to get to the right answer.

Sue is putting in an extra $50 two weeks before she sends in the rest of the bill. So how much does that save her? To borrow $50 at 14.04% will cost her $7.02 per year or 1.9 cents per day. So paying $50 14 days early would save Sue 26.6 cents.

But the stamp to mail in the check will cost nearly twice that. Not to mention that her time is worth something. So sending in an early check actually costs her more than she saves.

So how can Sue tell when it makes sense to send in an extra early payment? Actually, that's not hard at all.

It makes sense to pay your credit card bill more than once a month if any of these are true:
- you can make your payments online
- you have the money now, but might spend it before your credit card due date
- the amount that you're sending is $200 or greater
- you feel that you need the discipline/deadline of weekly or bi-weekly goals

If not, just pay your bill once a month.

The most important thing you can do to pay off a debt is to pay more than the minimum amount. Every time you do, you reduce the amount of interest that you'll have to pay for every day in the future. So the biggest effect on Sue's balance is the extra $50. That's true whether it's a separate payment or if she adds it to her regular monthly payment.

Also, remember that you can pay your bill early. If you really want to save that 26 cents, just mail the bill a week before it's due.

Here's hoping that soon Sue won't have to worry about early payments. All she'll need to do is to pay the entire balance when the bill comes each month.

Keep on Stretching those Dollars!
Gary

Gary Foreman is the editor of The Dollar Stretcher.com website and enewsletters including Financial Independence. Financial Independence is designed to walk step-by-step with you as you take control of your finances and achieve financial freedom!