Debt, Credit Card & Consolidation Current News Digest

Good news from the Federal Reserve this week. The interest rates on your home equity loans should remain low for a while longer.

How The Rates On Your Home Equity Loans Work

The interest rates on your home equity loans are most likely based on Prime Rate. Prime Rate usually tracks the Fed Funds Rate plus 3%. The Federal Reserve’s Federal Open Market Committee (FOMC) is the body that decides when to raise or lower the Fed Funds Rate. The FOMC decided this week to leave the Fed Funds Rate unchanged, signaling several more weeks of cheap home equity loans.

The Current Fed Funds Rate

Currently the Fed Funds Rate has been at 0.000% - 0.250% for over a year. The Feds have been keeping interest rates low in order to stimulate the economy. As the economy shows signs of slow growth, the FOMC has been considering when to start raising their key interest rate. Interest rates will have to go up as a tighter monetary policy becomes appropriate, primarily to fight inflation.

What The FOMC Said This Week

The committee’s press release reiterated that interest rates on loansshould remain low for an “extended period.” While it may feel like you’re hearing the same old news, there was something different this time. One of the Fed Governor’s dissented, making the vote to keep interest rates unchanged at 9-1. Kansas City Fed President Thomas Hoenig commented that the economy was doing much better and that low interest rates should not be expected to continue. This may not seem like big news, but it is a change. If the next time the FOMC meets, another Governor dissents, it will surely mean that the FOMC is nearer to raising interest rates.

Find A New Home Equity Loan

Because home equity loans are so cheap, now is an excellent time to use the equity in your home for college tuition, home improvements, or credit card debt consolidation. The equity in your home might be the answer to solving any number of problems you may be having. Use the equity to start a business or meet other life goals. A new home equity loan can make a big difference in your life. Speak to a lender about home equity loans today.

Parents often bribe, plead and even threaten their kids to get them to eat their veggies. And while this feeding strategy may get kids to reluctantly ingest their greens, studies show it makes healthful foods less attractive to children over the long haul. It’s like kids take that pressure and translate it to mean “that food can’t possibly taste good.”

So what’s a parent to do?

There’s another way but the results won’t become evident today, tomorrow or even next week. But if used consistently, the action plan below has a huge pay off. That’s because it will not only get your kids to eat more healthy foods while they are young, it will increase the likelihood they’ll become adults who prefer nutritious fare. Let’s take a look…

1. Make mealtime the no-pressure zone
   Early in her career, internationally recognized feeding expert and dietitian, Ellyn Satter, was counseling a mother distraught about her ultra-picky-eating child. In that moment Satter realized that parents can’t possibly be responsible for what their children eat. Their only responsibility, she explained to the mom, is to provide children with a variety of food.

   Ever since her revelation, Ellyn Satter has refined what she calls the Division of Responsibility, a simple and ingenious feeding strategy. Basically parents decide the “when,” “what,” and “where” of feeding and children decide the “whether” and “how much” of eating.

   So let your child know that you are in charge of what is served but that it’s up to them whether or not to eat. This no-pressure atmosphere increases the likelihood that kids will eat a wider variety of foods.

2. Give them structure
   Once parents stop pouring all their energy into trying to get their kids to eat, they can focus on providing balanced meals and snacks.

   Providing structure for meals and snacks has a number of advantages. First, it gives children plenty of opportunities to eat and be exposed to different foods. It also helps them to manage their hunger so they show up to the next meal hungry but not famished. And lastly, it keeps them from grazing on food between meals which can cause a low desire to eat at meal time.

   So provide structured meals including 3 meals and 2-3 in-between-meal snacks in a designated area like the kitchen table.

3. Make food familiar and eat it yourself
   According to a 2007 review published in Current Nutrition Food Science, a good way to encourage children to try new foods is repeated exposure and role modeling. That means the more often kids see a food, the more likely it is they’ll eventually eat it. And when they see a parent eating it, the odds they’ll eat it go up even more.

   The review also reveals that kids are more willing to try new foods when they are paired with other liked items. So at mealtime include your kid’s favorites along with plenty of whole grains, fruits, vegetables, lean meats, fish and nuts and seeds. And eat together as a family as often as you can.




4. Get them involved
   You’ve probably heard that having children help prepare meals is a good way to encourage eating. But there’s one caveat. Don’t make it all about getting them to eat. Why? Kids can smell an agenda from a mile away.

   Instead, have them help with meals to teach them something incredibly valuable: how to cook. When 18-year olds leave the house they should know how to prepare meals for themselves. If they can learn to make feeding themselves a priority, it will be easier for them to manage their weight and health.

   So have them help you pick out produce, get involved with food preparation and talk about how the food tastes. Older kids can even help plan weekly menus. And who knows? They could eventually end up making you dinner!

5. Be patient
   Getting your kids to try and accept a wide variety of foods does not happen overnight. But when you give children time and plenty of opportunities to learn (the same way you do with reading and writing) there will come a day when it all clicks. And everyone will ask you how your kid got to be such an adventurous eater.

   But the answer is never what parents think it will be. Structure, no pressure, repeated exposure, family meals, time and most of all trust.

Reference
Tanofsky-Kraff M, Haynos AF, Kottler LA, Yanovski SZ, Yanovski JA. Laboratory-based studies of eating among children and adolescents. Curr Nutr Food Sci. 2007;3(1):55-74.

Written on 1/31/2010 by Maryann Tomovich Jacobsen. Maryann is a registered dietitian, mother of two and creator of www.RaiseHealthyEaters.com, a blog dedicated to providing parents with the most credible nutrition advice.

Photo Credit: Jimmcclarty

One of the hardest changes for people with debt is changing their spending habits. We all get used to buying what we want, and that becomes part of our “lifestyle”. I’m not even a big spender, but I know it’s hard for me to give up those things I’ve grown to enjoy. But when times get tough, you need to make some changes. Otherwise, there’s no sense in looking for help with your debt if your main problem is outspending your income.

How To Identify A Shopping Addiction & Poor Spending Habits

So here are some questions to ask yourself to determine if your spending is out of control (some of them are tough, so be honest with yourself):

Image from dailymail.co.uk.

1) Do you constantly need more credit?
Credit cards are not supposed to be your source of income. So if you need to keep getting more cards so you can buy what you need, your spending is way over the top. And it’s time to stop using credit cards!

2) Are you afraid to even look at your credit card bills?
Sometimes the truth hurts. But until you know the truth, you can’t fix the problem. So take a look at your credit card bills. And look carefully. Do you really need everything you’ve bought? If not, stop buying anything you don’t need to survive. Are your interest rates over 10%? 20%? Higher? If so, call the bank to see if they’ll lower your credit card interest rates.

3) Have you been turned down for credit?
Big warning sign here. If you’re getting turned down for credit, you’re in the “red zone” for financial problems. So stop using credit, and focus on paying off credit card debt and paying on time. Before long, your credit score will improve and you’ll get back on track.

4) Do you have an adequate emergency fund?
Without an emergency fund, you’ll struggle every time you need to fix your car, pay your medical bills, or buy food when money is tight. And where will you find the money to pay for these things? Your credit cards, right? So do yourself a favor, and set up a high interest savings account for an emergency fund. Put in $10 or $20 or $50 a week, or whatever you can afford, until you have $1,000 saved up.

5) Is your wallet as thick as an encyclopedia?
OK, we’re not talking about family pictures or business calling cards here, that you’ll find in many stuffed wallets. If you’ve got enough plastic to build a house of credit cards, then you need to pick one card to use for emergencies, and put the rest in a drawer somewhere, where you won’t see them all the time. Not to mention what would happen if your wallet was lost or stolen, and some thief got their hands on all of your cards!

So, how many times did you answer “yes” to these questions? The only good “yes” is for the fourth question, the one referencing your emergency fund. Otherwise, it’s official: your spending is out of control. But knowledge is power, as they say, right? So now that you’re aware of your situation, what are you going to do about it?

I would suggest that you sit down, grab a piece of paper, and write down a plan for getting your spending back under control.

Need help getting out of debt? This guest post is by Kris Bickell, who created www.debt-tips.com to help you learn how to find the right debt reduction program for your situation. If you’re considering bankruptcy, then learn the truth about debt settlement programs and find out if any of these is the right solution for your financial problems.

How To Identify A Shopping Addiction, Poor Spending Habits

This guest post from Amanda is part of a new feature here at Get Rich Slowly. Every Sunday will include a reader story (in the new “reader stories” category). Some will be general “how I did X” stories, and others will be examples of how a GRS reader achieved financial success.

In May of 2008, I graduated with my MBA from a great school. I went straight from my undergraduate career into an MBA program, so despite numerous internships, I didn’t have a great deal of work experience, nor did I have a nest egg of any kind. Luckily, what I did have was a CPA for a mother who taught me the value of saving a buck when I was very young.

I also was able to go to school on a partial scholarship and applied for numerous others while in the program. With all this said, I went to four years of college and two years of an MBA program and came out with around $37,000 in debt.  That’s a large number to swallow; however, as far as education goes, I still look at that as quite a bargain.

Back in May 2008, I was 24 years old with $37,000 owed to good old Sallie Mae. I was starting my first full-time job in June, with a salary of $65,000 plus bonus potential. It wasn’t the $90,000 others from my class were making, but I thought I was doing very well considering I wasn’t yet 35 and I wasn’t moving to a big city (like NYC or DC).

Fast forward to today, roughly a year and a half later: I have $8000 left to pay on my student loans. I also have an emergency fund of around $17,000 and have over $15,000 in my retirement accounts. I’ve gone from having about $1000 to my name (net worth of about negative $36,000) to today where my net worth (emergency fund plus retirement accounts minus remaining student loans) is approximately $24,000. I’ve paid off $29,000 and saved $32,000 in a year-and-a-half: a total of $61,000.
 
How did I do it? I didn’t live like a pauper, but I did and do live frugally. I didn’t do anything that any of you haven’t heard before. I have no secret that hasn’t been revealed on personal finance blogs, but nonetheless, here’s the laundry list of how I’ve tackled my debt and built my savings:

I set goals! Before I began working, I set up my budget and set stretch goals for each month on what I could save/pay off.

I paid myself first and automated my finances. I immediately set up my 401(k) with my company. I set my contribution rate to 10% and didn’t concern myself with company match whatsoever. I figured if I never knew what it was like to have that 10% in my paycheck, I’d never miss it.

I also took a couple hundred bucks (it adjusted over time so there isn’t an exact figure to put here) from each paycheck and immediately moved it over to an ING Savings Account that I set up to build my Emergency Fund. Finally, I set up a Roth IRA where any excess cash could go at the end of each month.

I got a roommate. I wanted to live in a nice, safe area with a pool and a gym. It didn’t have to be the Ritz but I wanted it to be a place I was happy to call home. After looking at the prices of such places, I knew to accomplish my financial goals, I was going to need to get a two-bedroom and split the rent. I found a great roommate and split everything down the middle with them. This kept my rent and utility bills far under the 33% suggested rate. (I paid approximately $650 in rent for those of you who like exact numbers.)

I negotiated on all utilities and kept them to a minimum. I didn’t get a home phone number; my cell phone was all I needed. I had regular cable (no fancy movie channels) and regular internet through a bundle package. I negotiated these rates to the absolute minimum offered and when they tried to raise them, I called the cable company and told them their services were not worth that amount and that I would like to cancel. It was easy and fast and worked like a charm.

I kept the heat and A/C on at limited levels. If it was hot, I used a ceiling fan rather than pump A/C through the whole house. I opened the windows and let the breeze cool off the house. When it was cold, I used heat but also wore socks, sweatpants and a sweatshirt so that I could be warm without making my house a sauna. I used a drying rack as much as possible to save on dryer costs. It also helps keep your clothes from wearing out — an added bonus!

I learned the art of couponing at the grocery store and taught myself how to cook. Every Sunday, I faithfully clipped coupons and used sites like Coupon Mom or Frugal in Virginia to help me match coupons to sales to get the lowest prices possible.  This seemed daunting at first but quickly became a ten to fifteen minute routine which often saved great deals of money

I didn’t buy pre-made food: I cooked from scratch. I found this was cheaper and far healthier! All Recipes was a great and free resource so that I didn’t get bored with the same old meals.

I bought produce that was in season so I could still get fresh fruits and veggies.  I also stuck with apples, bananas, and pears instead of their more expensive berry counterparts. I ate vegetarian a few meals each week.  I didn’t completely take meat out of the equation but did limit my intake of it. I also grew my own. I couldn’t have a full garden but I did grow tomatoes on the back terrace. 

I didn’t eat out often! I probably ate out once to twice a week to keep up with my social calendar.  Instead of eating out, I invited friends to my house or met them for a pot-luck. Finally, I brought my lunch to work almost every day.

I didn’t buy Stuff. Don’t get me wrong: If I wanted something, I bought it. I just evaluated whether it was something I really needed or if that want was only temporary. Usually, I’d wait a week to see if I was still thinking about the item. When I did shop, I used coupons at the stores and Retail Me Not when shopping online. I also shopped the sale section first.

I used the library and swapped books/DVDs with friends. Instead of hitting Barnes and Nobles, I went to the library or did PaperBackSwap. I’ve never been left wanting for something good to read or watch.

I worked out and spent a lot of time hiking outside. Hiking and enjoying the great outdoors is healthy, fun and free! I also did live in a beautiful area for hiking so was very lucky in that regard.

I worked hard at my job. I busted booty to get bonuses and raises at work. I made sure that I gave 110% and that my bosses were happy with my work. Any extra money (bonuses, tax returns etc) went straight into loan repayment after a small celebratory dinner of some kind.

I made side money.  This also went straight into loan repayment. I used eBay to sell items I didn’t want/need anymore. I sold books and DVDs that I no longer wanted on Amazon. I did Swagbucks. It’s amazing how easy it is to get those $5 Amazon gift cards. It’s essentially free money!

Basically, I just didn’t let myself fall victim to lifestyle inflation. I didn’t need to have the latest Coach purse or a brand new car. I took good care of what I did have and bought nice things without the ridiculous price tags. I didn’t blow money at the bar, and I built my social calendar on less expensive outings with friends (picnics, free concerts, dinner parties etc).  

I turned my debt repayment into a game where it was fun to send in that big payment and I turned any shopping into a quest for a great deal. It won’t work for everyone, but it worked for me!

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Photo by fotographix.ca.

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Related Articles at Get Rich Slowly:

• The Turning Point
• Reader Story: Tackling Debt Through Volunteer Work
• links for 2007-01-06
• Save or Spend? The Tax Refund Dilemma
• Reader Success Story: Debt Free on $2,000 a Month

Auto Loans and Dealer Kickbacks

Dealerships employ some of the slickest salespeople in the country. And, once they’ve persuaded you to buy a vehicle, they’ll normally apply all their persuasive skills to selling you finance. And that’s the time to pay most attention, and to be most skeptical.

Even if you qualify for a lower rate from the lender who buys your loan from the dealership, some dealers will charge you much more. The Center for Responsible Lending (CRL) calculates that, across the country, dealerships make $20 billion a year from these kickbacks on auto loans.

Meanwhile, those used car lots that finance purchases themselves (rather than selling them on to big lenders) tend to charge very high rates. This can mean that the buyer ends up paying much more than the vehicle is worth, and that the lot operator makes more profit from interest payments than car sales.

Cheap Loans that Become Expensive

Sometimes a dealer claims that it will take a long time to complete all the finance paperwork, and persuades the customer to drive home in the new car having signed a “spot delivery” or “conditional sale” agreement. This agreement may show an attractive loan rate, but it’s not binding.

The customer is then called back–sometimes weeks later–and told that it wasn’t possible to complete the sale on the original terms, and that he or she must immediately pay the full balance, return the vehicle, or agree to a higher rate on a reworked auto loan. On occasion, the dealer will claim already to have sold the trade-in vehicle, ratcheting up the pressure on the buyer to agree to higher-rate finance.

This practice is known in the trade as the “Yo-Yo” scam. It occurs surprisingly often. And those who are less well off are its most frequent victims. When the CRL conducted a survey in North Carolina last year, 12 percent of respondents who earned less than $40,000 a year, and a quarter of those with an income below $25,000 p.a., reported having been “yo-yoed”.

Loan Packing

It’s after you’ve decided to buy the vehicle that the hard sell really starts. As the CRL puts it, you’ll be pressurized into buying: “Overpriced and underused add-on products including GAP insurance, vehicle service contracts, credit life and disability insurance, and theft deterrent packages.” All of which go to inflate your purchase price, and hence your finance payments.

Loan Conditions That Are Unfair

Many dealer auto loans contain binding mandatory arbitration clauses. These mean that you lose the right to sue the dealer or lender in court, and have to submit any disputes to an arbitration process instead.

This may not sound unfair, but the CRL says that the arbitration system “is potentially more expensive, and biased toward the dealer.”

Shop Around for Auto Loans

Of course, not all dealerships are the same, and you may find one that offers honest, cheap auto loans without strings. But it’s always wise to negotiate from a position of strength, and you’re likely to get the best deal if you already have a loan offer in your pocket before you arrive at the lot.

As with all finance deals, the trick is to shop around. So get a cheap auto loan quote now.

It’s been a l-o-n-g time since Kris and I gave an update on our garden project. I’ve been too wrapped up in writing a book to pay attention to anything else. Now that I’ve pulled my head out of the sand, I can finally devote some time to other projects — like the garden.

To be honest, we’ve done nearly nothing in the yard since October. Literally. We haven’t found time to cut back the grapes, prune the fruit trees, or train the berry vines. I’m not sure that Kris even plans to place a seed order, although the seed catalogs have been pouring in.

Fans of our garden project have been e-mailing us to ask for updates. I’m afraid y’all will be a bit disappointed in 2010. We’ll still be growing a garden, but we’ve made a conscious decision to make it simpler and smaller, and we’re going to take a year off from tracking our “income” and expenses. We have a lot of travel planned, which would make things difficult. (Though I guess we could teach our house-sitter how to track the harvest.)

The berries and fruit trees will do their own things with little effort from us, and instead of starting most of our seeds inside this year, Kris will be buying potted starts at the Master Gardener show. Last year, she noticed growers are now carrying many of the heirloom tomato varieties she prefers. This year’s garden will focus on fresh salsa and salad ingredients (tomatoes, basil, jalapenos, basil, onions, a few cukes, zucchini, peas, green beans and beets).

But while we won’t be tracking the financial side of things in 2010, we do intend to give brief updates throughout the year. We’ll give you photos of our young and maturing garden, crow about our first berry harvest, and share recipes to go along with our late summer bounty of vegetables.

And, as always, we love to hear what you are doing in your own gardens. If any of you are tracking your profits and losses, feel free to share throughout the growing season.

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Related Articles at Get Rich Slowly:

• The Year-Long GRS Project: How Much Does a Garden Really Save?
• The GRS Garden Project: June 2009 Update
• The GRS Garden Project: September 2009 Update
• The GRS Garden Project: March Update
• The GRS Garden Project: November Update

If you’re looking to get a Citibank credit card, you’ve got quite a few good choices. If you happen to pay your credit card in full each month, you’ll be able to benefit from the rewards offered by the Citi ThankYou Points Network, which is Citi’s credit card rewards program. Your credit history will determine whether you’ll be approved for a card, and will also have an influence on your credit limit and interest rates. Here’s a look at some of the popular cards available from Citibank.

Citi Credit Cards Review

Citi Platinum Select MasterCard is Citibank’s basic, regular credit card. It offers a 0% APR on both new purchases and balance transfers for up to 12 months (based on credit history). Card members will receive the Extra Cash benefit, which provides online discounts for entertainment, travel and merchandise. It also has no annual fee. Here’s where you can apply.

Citi Forward Credit Card is a rewards card that gives you 0% APR for 6 months on purchases AND balance transfers, allows a .25 APR reduction for wise credit use, and helps you earn bonus points when you spend: 6,000 points after your first $250 spent (within 3 months of card receipt), 5,000 points when you go for paperless statements, and additional points per dollar you spend. And there’s no annual fee. We wrote about this card earlier last year, when if first came out: check out our Citi Forward Credit Card Review for additional details. If you’re interested in applying, you can visit this link for more information.

Citi Forward Card for College Students is a great option for college students because it’s one of the few rewards cards that encourages the prudent use of credit cards. It’s the counterpart of the Citi Forward card, and offers 0% APR for 6 months on new purchases, if you’re eligible. It also has a cool rate reduction feature wherein you can get a .25% APR reduction for purchases if you pay your bills on time or stay under your credit limit. In addition, you can rack up the rewards points which you can redeem through the ThankYou Points Network: 3,500 bonus points after your first $250 purchase (within 3 months of getting the card); 2,500 points when you opt for paperless statements, 100 points per month for good card use, 5 points for each dollar spent on select spending categories and 1 point per dollar spent on everything else. Simply use your card and you’ll gain rewards. Also, there’s no annual fee. Here’s where you can apply.

Citi mtvU Platinum Select Visa Card for College Students is another good starter card for students. It’s a rewards card which allows you 0% APR for 6 months on purchases if you qualify; 25 rewards points per month if you have good credit card habits, 5 points earned per $1 spent on books, music, movies and meals and 1 point earned per $1 spent on everything else. An additional bonus of 2,000 ThankYou points twice a year is available if you maintain a good GPA. And no annual fee! Here’s where you can apply.

Citi PremierPass Card-Elite Level is Citi’s rewards card for travelers. Qualifying applicants can look forward to earning 200,000 in bonus points after $600 in purchases within three months. Also, you can earn 2 points for every dollar spent on everyday purchases and one point for other purchases. You can also earn 1 point for every mile you fly on any airline; and if you buy an airline ticket for someone else on your card, their miles will earn you points as well. When you want to redeem those rewards, the Citi ThankYou Points Network even lets you book flights without blackout dates. Or you can opt for rewards such as merchandise, hotel stays, or gift cards. There’s a $75 annual fee though.

Before signing up for any credit card, read through any disclosures or terms and conditions. That way, you’ll be prepared for any rate changes after introductory periods end and you’ll be ready for fees that may go into effect after a period of time.

Also, bear in mind that there are fees for making cash advances and balance transfers. For rewards programs, scour the fine print for exclusions: you don’t want to book tickets to see your relatives only to have your plans fall through because your points aren’t up to par.

For more on top credit cards, check out this list of best credit card rewards programs.

Citi Credit Cards Review: From Citi Platinum Select To Citi Forward

Anyone who’s ever sought mental-health treatment knows how quickly the bills for such care can add up, even with insurance. Just what the doctor didn’t order: money anxiety on top of whatever else you’re facing.

Question: . My wife and I know we should have an emergency savings fund, but with one income we have nothing left to save after paying expenses.

One Sunday afternoon last November, Annette Webber-Townsend, 39, got to see just how golden her opportunities were. Her friend, fellow Brooklyn social worker Stacey Long, was hosting what has become the quintessential substitute for the Tupperware party in this weak, nervous economy: a gold party. A Syosset, N.Y., firm called the Gold Standard had set up shop in Long’s apartment to buy gold from the women she’d invited over.

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