Finance

by Gary Foreman

Dear Dollar Stretcher,
What you would advise as far as getting loans to pay off credit cards. I have
two of them with a minimum payment of over $100 a month. Its very hard to make
that. Should I take a loan out from a bank?

I’ve tried doing balance transfers and I still end up having to use the card to
help pay for the groceries that I can’t cover with cash. It also gets used when
it comes to car repairs and house emergencies. We don’t use it foolishly only as
a lifesaver for necessities. I am scared of having a late mortgage payment. That
is going to happen this month for the first time. It seems things are getting
worse financially. I really hope you can help us out.
Curly

Based on our mail Curly is not alone. In fact The American Bankruptcy
Institute reported that during the second quarter of 2000 there were over
300,000 personal bankruptcy filings. And other sources indicate that there are
over 1.5 million people using credit counseling services to help them dig out of
debt. So Curly has a lot of company.

Her question really has two parts. First, could a consolidation loan relieve the
monthly payment pressure. And second, would that solve her debt problem?

It’s likely, but not certain, that the consolidation loan would reduce the
monthly payments. Without knowing what introductory rates she’s found or how
long they will last, it’s impossible to tell for sure.

She’ll need to know that most bill consolidation loans will want to use her home
as collateral. That means that her home is guaranteeing the repayment of the
loan.

The consolidation loan will probably have a lower monthly payment per $1,000
borrowed. That’s accomplished by spreading the repayment of the loan over a
longer period of time. So Curly needs to ask herself whether she’d rather
struggle to pay $100 per month for 3 years or would she prefer to pay $50 per
month for 9 years. That’s a very rough estimate, but does explain the available
options.

Trying to continue to find credit card ‘teaser rates’ is not likely to work.
Issuers can identify ‘swappers’ from their credit report. It shows accounts that
were open for a short time and then closed.

When potential lenders access her credit file, they’ll also find the late
mortgage payment that Curly says will occur this month. Those two facts combined
make her an undesirable risk for credit card companies. So sooner or later
she’ll be facing a more normal credit card interest rate of about 16%.

Given what’s happening to her payment record Curly could be facing even higher
rates. If she misses her minimum payment she’ll trigger late charges. Her
interest rate will also go up. Rates of over 20% are not uncommon. And that will
mean even larger minimums each month.

Curly will probably do best if she does try to consolidate her credit card
debts. She’ll need to shop for a lender that won’t add a large ‘origination fee’
to the loan amount. She’ll also want to see if the lender can demand immediate
and full repayment. And, if so, under what circumstances. She doesn’t want to be
a few days late with a payment and have them demand repayment of the whole loan.

Consolidating the credit card debts is only half of the battle. She needs to
understand how the balances were accumulated. To do that she will need to
compare income to expenses. The bottom line is simple. If you spend more than
you make on a regular basis, you’re going to accumulate debt.

It’s easy to pull out the credit card when cash is low. Millions of consumers do
it every month. But Curly needs to consider what happens when she charges
groceries. Suppose she can’t afford to pay cash for the $100 worth of groceries
in the cart today. When she uses her credit card she’s agreeing to pay $115 for
those same groceries over the next year or so. That’s because she’ll be paying
for the groceries plus the interest on the money that she’s borrowed. Each time
she does that she digs the hole just a little deeper.

Curly says that they don’t use the cards ‘foolishly’. And that’s good. But if
they’re spending more than their income, Curly will heed to redefine
‘necessities’. What exactly is a ‘lifesaver’? Is that buying enough food to
survive? Or does that include prepackaged convenience foods. It’s easy for
non-essentials to slip in with the really important expenses.

It’s important to note that consolidating the debts will not solve the problem
unless Curly’s income is larger than her expenses each month. That’s not meant
to lecture Curly. Just to warn her that most people only get to consolidate
their debts once. If they go back and do it a second time they’re much more
likely to be heading for bankruptcy.

Hopefully Curly will find a consolidation loan to help her out of the current
payment problem. And then she’ll find a way to make sure that they make more
than they spend on a regular basis.

Gary Foreman is a former Certified Financial Planner who currently edit’s The
Dollar Stretcher website www.stretcher.com
You’ll find hundreds of free articles to help you save time and money. Visit
today!

When asked, "What do you consider mankind’s greatest invention?", Einstein replied, "Compound interest!" To this bit of wisdom I’d like to add, "If and only if it’s working FOR you." When it’s working against you, it’s a beast!

If we take the time to understand the compound interest formula, we can see how to defeat the beast and release the enormous power of compound interest for OUR good.

I promise not to get too abstract or mathematical in this discussion, so, follow along. It will be worth the effort.

P{t} = P{0} x (1 + I) ** t

This is the compound interest formula. It says:

P{t} – The Principal value at some time in the future, lets call it, "t" years, is equal to
P{0} – The starting principal value times (1 + I) raised to the power of "t" where
I – is the growth factor and it’s expressed as the interest rate, "i" divided by 100, or i/100.

In English, if I have $100 today, that’s "P{0}", and I want it to grow for 10, that’s "t", years at 5%, that’s little "i" then the substitution looks like:

P{10} = $100 x (1 + 5/100) ** 10

When this formula is working AGAINST you, i.e., when you are in debt, P{0} is the amount you borrowed and P{t} is what the bank gets — from you, after time "t". To the bank, you look like an investment with a future return.

When this formula is working FOR you, P{0} is the amount you invest and P{t} is what you get after "t" years of compounding.

Look closely at this formula then think about what conventional financial wisdom encourages us to do regarding investing and borrowing money. Conventional wisdom would have us believe that we should try to be both borrowers and investors at the same time. It says, start investing early to take advantage of "t", time in the compound interest formula. However, this neglects P{0}, the amount you have to invest. If you have debts, you can’t take full advantage of P{0} because you’re paying part of what you could be investing to the bank. Remember, to the bank, you look like an investment that pays a future return.

If we are to defeat the beast, we either have to avoid it altogether, i.e., borrow ZERO dollars (in which case P(0) is ZERO) and therefore the bank gets ZERO; or if we’re already in debt, we have to drive time "t", the time we spend paying off a debt, to zero (or as short as possible). If we are successful at driving the time spent in debt to ZERO, then any number raised to the power of zero is 1, which means that at worst, we’ll owe the bank what we borrowed and nothing more (i.e., no interest). Of course, there’s no incentive for the bank to loan you money for zero time, but it doesn’t matter. They can "think" they’re loaning you money for 30 years, and you can still work to reduce time "t" to as short as possible, thereby defeating the beast.

Now, unleash the power. When you have defeated the beast, you have done so by reducing the time spent in debt, "t", to as short as possible. The average American can hack 25 years off their 30 year mortgage. When you do this, you have also increased the amount of P{0} – the money you can invest, by an enormous amount. Think of your monthly mortgage payments becoming monthly investments and you get the picture.

You now have a big chunk of money each month, P{0}, and ample time for it to compound, t, for the power of compound interest to really change your life.

__________________

Greg Moore is a Certified Financial Independence Seminar Leader and teaches The Debt-FREE & Prosperous Living(tm) system for debt elimination and wealth building.

In much the same way that a resume displays your work experience to a prospective employer, a credit report provides prospective creditors (and in some cases employers and insurers too) with a detailed picture of your credit history. And like a resume, your credit report can influence whether you will receive what you are applying for.

Ideally, your credit report is an accurate, up-to-date reflection of your credit history. However, since we don’t live in an ideal world, there are many reasons that your credit report could contain inaccuracies that might prevent you from receiving the credit you deserve. The good news is you can take action to keep your report accurate. Here are the top five reasons why you should make a practice of regularly reviewing your credit report:

Inaccuracies & Mixed Credit Files
Many inaccuracies on a credit report can be the result of simple human error, and are therefore are not difficult to dispute. Of course, if you don’t order your credit report, you might never know about it. Whether the inaccuracies relate to payments not credited, late payments, or data mixed in from the credit file of someone else with a name similar to yours, you will want to contact the credit bureau to dispute inaccurate information promptly. If you would like to get a free copy of your credit report right now, click here.

Tracking Payments
One of the most important elements of credit is a demonstrated history of on time payments. Once you send the check though, anything can happen–a delay in the payment being received can kick you over to a 30-day delinquency. If you call your creditor and explain the situation, they might adjust the information. Of course, if you don’t read your credit report, you won’t necessarily know which payments are being received and reported properly. If you would like to get a free copy of your credit report right now, click here.

Identity Theft
This issue alone is reason to order your credit report immediately. Identity theft is an insidious crime, involving a thief who assumes your name to open new accounts, divert your card statements to another address, and run up all sorts of bad debt without you ever knowing about it until collectors come calling. Over time, identity theft could jeopardize your ability to obtain further credit. The best way to catch a thief who is using your name is by getting a copy of your credit report, which will show you if there are accounts listed you know you haven’t opened. For example, if a thief has intercepted a pre-approved credit card offer in your name and sent it in with a change of address, your credit report will include the account. If you would like to get a free copy of your credit report right now, click here.

Inquiries
If you’re shopping around for a loan or more credit, you should know that when creditors check your credit, it places an inquiry on your credit report. Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can actually make getting credit more difficult. Moreover, if you didn’t authorize someone to look at your credit report and they did, they may have broken the law. IIf you would like to get a free copy of your credit report right now, click here.

Credit Fraud–Unauthorized Charges
Credit fraud involves the theft of your credit card or account number to make unauthorized charges to your account. Though consumers are protected financially from this abuse, other creditors may take note of all this activity and decide to raise your interest rates or refuse to grant you a loan. Ordering your credit report will help you catch new activity on accounts that you haven’t been using, or may have closed. If you would like to get a free copy of your credit report right now, click here.

When it comes to managing your credit worthiness, your credit report is your best resource. Ordering your credit report gives you the opportunity to manage your credit wisely today, while planning your credit strategy for achieving future goals–a credit-savvy move every consumer should make! To get a free copy of your credit report right now, click here.

What I’m about to say will be counter intuitive to most, I know.
I hope to prove in a series of brief articles that making budgeting a way of life is not
the torture mechanism we’ve been trained to think it is!  Together, let’s explode
some of the myths associated with budgeting-myths that prevent many people from getting
the many benefits of a money plan.  With all of the information we have today about
handling finances, why do the headlines still broadcast that "Bankruptcy is Up,"
"Saving is Down," and "Spending is Out of Control?"

My experience is that most of us go through our school years focused on job or career
training that teaches us how to earn money, yet leaves us with no foundation for how to
spend money-spend it wisely, that is. After years of waiting to get out of school, how
quickly things can happen. Before we know it, we are out in the "real" world
with a rent or mortgage, groceries, kids, and bills of every description.  I like to
use the analogy in my seminars that this scenario is much akin to learning all the skills
to build a house-the carpentry, plumbing, electrical, etc.-without ever learning how to
read or draw a blueprint! Well, I was there. My husband was there. Taking the bull by the
horns, we did a lot of research and investigation and over the last 15 years have earned
the dubious moniker of budgeting "gurus" in our own inner circle. Expanding that
circle about 6 years ago, we began teaching seminars in our community. Today our circle
continues to enlarge, and I hope I can share some good information with you too!

For those of us dedicated to the frugal life, the message has come through loud and clear:
how a person spends money is far more important than how he or she invests it!

Let’s learn to spend our money right by exploring the topic of budgeting in more depth.
Let me show you how to find extra money in your paycheck every month, without having to
"give up" or "deprive" yourself-things normally associated with
"going on a budget!" Deprivation is ancient thinking. I’ll share the secrets of
this new attitude!

Jane Chidester is the author of Budget Yes! 21st Century Solutions for Taking Control of Your Money Now! – TulipTreePressPub.com

The Dollar Stretcher
by Gary Foreman

Dear Dollar Stretcher,

Would you please check out ChexSystems? I’d like to know if anyone else has had an experience with them and what they have done about it.
JS

JS doesn’t say it, but he’s probably had trouble trying to open a checking or
savings account. And more and more people are running into the same problem. So
let’s take some time to learn about ChexSystems and the screening that banks do
before they agree to open an account for you.

First, some background on ChexSystems. It’s owned by Deluxe Corp. the world’s
largest check printer. They keep track of bounced checks, ATM overdrafts,
‘closed for cause’ accounts and the number of times that banks ask about your
financial history.

According to ChexSystems, banks lose $15 billion a year to check fraud and
abuse. Banks use the service in an attempt to avoid problem customers. Deluxe
claims that over 80% of all banks use ChexSystems. Although they’re the largest,
ChexSystems isn’t the only agency offering this type of service. Telecheck is
also in the same business.

It’s important to note that ChexSystems does not approve or deny your
application for a new account. All they do is provide information to the bank.
The bank makes the final decision.

Next let’s take a look at the files. Your file will include your name, address
and social security number. It will list factual information that the banks can
use to screen prospective customers.

One such record is that another bank has closed your account ‘for cause’. That
means that you wrote too many bad checks or had too many overdrafts. If
ChexSystems shows that a prior account was ‘closed for cause’ then it’s highly
unlikely that a new bank will open an account for you. Currently over 19 million
accounts are listed as ‘closed for cause’.

If you owe the bank money when your account is closed that will show in your
report. Paying the bank the monies owed will not remove you from ChexSystems’
list. They are only obligated to include a note in your file that you repaid the
debt.

The file will also show any non-sufficient funds (NSF) funds checks. They’ll
note whether you’ve made the check good or not. Some prospective banks will
overlook one or two NSF checks. Others will not.

ChexSystems also lists how many times you’ve tried to open a new account. If
you’ve tried repeatedly (and unsuccessfully) that will be listed. The more times
you try the harder it will get.

The files are governed by the Fair Credit Reporting Act. But that provides
limited help for frustrated consumers. Accurate negative information will
legally be kept on file for five years.

What should you do if you’re already on file? First, don’t close any open
accounts. It may be hard to replace them. You might not like your bank’s
charges, but don’t close your current account until you’ve opened a new one.

Find out what is actually in your report. You can order one from ChexSystems.

ChexSystems is obligated to remove inaccurate information. So if the report
contains errors, you can have them corrected. But you have no right to have
accurate information removed.

You can contact ChexSystems here.

Pay any NSF checks and outstanding fees that are listed on the report. Even if
you’ve already closed the account and don’t deal with that bank any more. After
payment has been made, send a written request to the bank asking that they send
a note for your file detailing the payment.

Look for entries that aren’t accurate. You can have a statement explaining your
side of any disputes entered into your file.

It’s almost impossible to have factually accurate information deleted until the
five years have passed. And filing for bankruptcy will not erase your
ChexSystems file.

If you need to open a new account, tell the prospective bank that you have some
problems in your ChexSystems file. Show them your report. If they’re going to
turn you down it’s better if they do it before accessing the file themselves and
adding another entry that shows you’ve been refused.

It’s also possible that you can find a bank that doesn’t use ChexSystems.
Currently some internet banks are more forgiving than their traditional
brethren.

Suppose you don’t have problems now and want to avoid them. Generally three
things cause negative entries in your file. The first is obvious. Don’t write
checks until you’re sure that the money to pay them has cleared your account.
Just because you deposited a check yesterday doesn’t mean that money is
available for use today. Find out how long it will be before you can count on
that money to pay the checks you write.

Second, keep track of your account balance and reconcile your bank statement as
soon as you get it. Even with a calculator it’s easy to make mistakes in your
checkbook. It’s important to know how much you have in the account at all times.

Finally, make sure that all checks have cleared and all fees are paid before you
close an account. One possible source of potential problems are automatic
withdrawals. You must stop all automatic withdrawals before you close an
account. Otherwise they’ll create a ‘bounced check’ when they try to access your
closed account.

Recently there has been more public awareness of ChexSystems and the bank
approval process. The NAACP has complained that the poor are hardest hit. Banks
have met with government representatives and will consider using a more flexible
system to evaluate potential customers. Additional legislation is possible, but
it’s hard to tell banks that they must do business with people who could prove
unprofitable.

We hope that JS isn’t currently having a problem with ChexSystems and enjoys the
benefits of a clean file.

Gary Foreman is a former Certified Financial Planner who currently edits The
Dollar Stretcher website www.stretcher.com
You’ll find hundreds of free articles to stretch your budget and your day.
There’s even a free weekly ezine. Visit Today!

If you are considering applying for a loan, ordering a copy of your credit report may well be the best place to start. Why? Because it’s also the first thing a potential creditor will be looking at, and even if you pay your bills on time, you will want to ensure that all the information in your credit file is up-to-date and accurate.

Studies have shown that many credit files contain inaccuracies that could affect your credit rating, and even lead to the rejection of a loan application. That’s why reviewing your credit report beforehand may be a good idea, giving you time to dispute any items that may be the result of simple human error or a technical glitch.

And depending on whether you are applying for an auto loan, a mortgage loan, or a loan for business or personal use, different lenders may apply different standards in rating your credit worthiness. For this reason, reading your credit report and understanding how your credit data might be interpreted may give you a chance to improve your credit worthiness from the point of view of a lender.

Before you begin the application process, check your credit report for the following items:

Clerical Inaccuracies

Sometimes credit reports contain inaccuracies that are the result of a computer glitch or a clerical error. These may include payments not credited, late payments, or data mixed in from a credit file of someone with a name similar to yours. Ordering your credit report will quickly show you what the lender will see–then it’s up to you to dispute any information that you consider inaccurate.

Excess Unused Credit

To make your credit more attractive to a potential lender, you may wish to consider reducing the number of revolving charge accounts that are listed as active on your credit report. Lenders will sometimes view too much revolving debt as a negative when considering a loan application.

In situations where you have stopped using a credit account, it is often a good idea to close the account if you don’t plan to use it anymore. Make sure your creditor notates the account “closed at consumer’s request”– otherwise, a prospective lender might assume the creditor closed the account for other reasons.

A few credit cards managed well may improve your chances for a loan–particularly a mortgage loan, where lenders use stricter qualifying guidelines. Another rule of thumb is to keep balances on credit cards around 75% of the available credit limit. Ironically, credit cards that have lots of room on them may be viewed as potential debt, while maxed-out cards make you a less desirable credit risk–both of these situations could compromise your ability to obtain a loan.

30-day and 60-day Late Payments

Even if your credit report contains a couple of 30-day late payment entries that are accurate, many lenders will overlook the occasional late payment if you explain the situation and your credit is otherwise good. Try to avoid any payment being 60 days late however, as this may be a red flag for some lenders–even if they do grant you the loan, it may come at a higher rate of interest and with less favorable terms.

The primary period lenders are interested in on a credit report is the last two years, so try to maintain on time payments, and verify that the payments are being credited properly by checking your credit report regularly.

Avoid Unnecessary Inquiries

Each time a prospective creditor looks at your credit report, an inquiry notation is added to your file, and most inquiries stay on your credit report for up to two years. Inquiries you make yourself, inquiries made during screening for a pre-approved offer of credit, or an inquiry that is part of a background check for employment purposes are not reported to potential credit grantors.)

It is best to avoid over-applying for credit and running up excessive inquiries, for the simple reason that lenders of creditors may think you’re trying to get credit due to financial difficulty, or taking on more debt than you can repay.

Lenders do of course realize that some inquiries are a result of shopping around for the best rates on a loan, and so they will often overlook a block of inquiries within a very recent period. It may help if you explain the inquiries in the application process.

Understanding how your credit report affects your financial future is the key to smart credit management. Incorporating a review of your credit report into your financial planning is also one of the best ways to make sure you meet your goals–especially when those goals involve major purchases, and you’re shopping for a loan with the most favorable terms possible.

(c) 2000 iPlace.com. This article is the copyright of iPlace.com and is reprinted with their permission. iPlace.com is a registered trademark of iPlace.com, Inc. All other names are trademarks and/or registered trademarks of their respective owners.

Information provided by iPlace.com is for informational purposes only and is not a substitute for professional financial or credit advice.

Read an enlightening article on TheHerbsPlace.com about Security – Is it in The Stuff?

Don’t worry you won’t lose your place.

Groceries – The Check Out Check Up

The Dollar Stretcher
by Gary Foreman

Dear Dollar Stretcher,
My family is really struggling with our budget.  We are a family of five spending approximately $500 per month on groceries and household items.  Do you think we could do better?  I use coupons, buy only generic and sale items at the local grocery store.  What else can I do?!  Would I save more money or get more for my money if I shopped at the big warehouses like Priceclub? –Pam

According to the U.S. Statistical Abstract the average large family (five or more) spent $405 per month on food eaten at home. Pam and her family probably are a bit on the high side. So what can she do to reduce the amount she contributes to her local grocery store?

The first thing to consider is the non-food items that end up our grocery carts. Most of us are in the habit of picking up cleaning supplies and paper products when we grocery shop. And that’s a good way to boost your bill.

At your grocer you’ll find shelf after shelf of specialty cleaning products. Check the ingredients. They’re all pretty similar. Most cleaners contain a combination of ammonia, vinegar, baking soda, bleach and a generous helping of good old-fashioned water. They also add a fragrance so that things smell clean after you’ve done your work.

You can save some money by making your own cleaners. Recipes are available in books, magazines and on the web. Most are simple and just as effective as what you’d buy in the store. If you really don’t want to mix your own, then at least locate a janitorial supply store. Most will sell to the public. They carry industrial strength and concentrated cleaners. You won’t get pretty packaging, but you will get more cleaner per buck.

Now on to the food in Pam’s grocery cart. Next time you return from the grocery store take a look at what you bought. Pay specific attention to ‘convenience’ items.

You won’t find this definition in Webster’s Dictionary, but it’s the one that the food conglomerates use. When they call something a ‘convenience’ food, it means that they’re going to charge big bucks and the consumer won’t complain. In fact, we’ll thank them for saving us some time!

Examine your purchases. How much of your money is really buying something that you’re going to put in your mouth and swallow? And how much is going to packaging, individual serving sizes and ‘convenience’?      I don’t ever recall seeing convenience on a nutrition chart!

If you want a shock compare the price per pound of a whole ham and the sliced ham at the deli counter. Sure, for some people being able to buy just a few slices justifies the higher price. But a little thought here could open up a whole new way to look at shopping.

Pam mentions that she’s using coupons. Depending on where you live coupons may be helpful. In some areas stores still double coupons or allow you to use both a manufacturer’s and a store coupon on the same item. That can make a big difference and is well worth the time spent.

But, even without doubled savings, coupons can help. Some families insist on nationally advertised brands. Coupons can reduce the name brand cost to the price of the generic equivalent.

Warehouse clubs can be a help, too, but you need to be careful in how you use them. First, and this is obvious, don’t buy food that you’re not going to use. Buying more than your family needs is wasteful no matter how cheap the item is. We almost instinctively think that bigger is better. That’s not always true.

Secondly, do not assume that buying a large size will reduce your per unit cost. Sometimes it’s true and sometimes it isn’t. Manufacturers know that we assume that the ‘large economy size’ is the best value. And sometimes they take advantage of that. Always compare the per unit costs. Not only between the large and small package sizes, but between your local grocer and the big warehouse stores.

Finally, Pam can take advantage of something that no professional buyer would be without. That’s a price book. When a buyer gets ready to place an order they know when they’ve bought in the past, who they purchased from and how much they paid. That information is priceless.

Pam doesn’t need a fancy system to take advantage of the same information. A simple three-ring binder will do. Use one page for each item that you buy on a regular basis. As you shop compare the prices you see to the appropriate page in your price book. If the price you find is low, add a new line showing the date, store and unit price. And stock up on the item. You’ve found a bargain.

But, often you’ll find an item with a big ‘sale’ sign that’s still more expensive than the low prices in your book. That’s the time to buy only enough for current needs. It’s not uncommon for people to save up to 20% on their grocery bills by using a price book.

It sounds as if Pam is already starting to take control of her food spending. Here’s to healthy diet and a healthy budget for her family.

Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website http://www.stretcher.com/save.htm You’ll find hundreds of free articles to stretch your day and your budget.

Make Money This Holiday Season; Don’t Just Spend It

By Liz Folger

What if you could make more money than you spend this holiday season? Sounds like a pretty good idea, you say? If you’d like to be on the making money end during the holidays, now is the time to start preparing. Below I’m going to give you several money-making ideas. Pick the one or two that interest you the most and have fun!

CRAFTS
It doesn’t matter if you’re into woodworking, sewing, painting, pottery, or creating handmade paper. More than ever, people enjoy giving that one-of-a-kind special gift. You can sell your wares via the Net, at holiday bazaars or craft shows, or even consignment style. Once you become known for your crafts, word-of-mouth will keep you very busy.

RUBBER STAMPING
One idea is to create your own line of holiday cards with rubber stamps. Melissa Duquette has found this to be a profitable business. She explains, �The card season is upon us and everyone will soon be searching for the perfect holiday card to send to family and friends. This is your opportunity to break out into business and create unique hand-stamped holiday cards. Or why not offer a class teaching this great hobby? Rubber stamping can be worked into so many different businesses.�

I’ve been to a rubber-stamping party where we were able to create our own cards. I had a great time hanging out with my friends and making my own unique cards. If you are into rubber stamping, seriously consider having a rubber stamping card party. You would supply everything needed, and could charge either a flat fee or charge per card made.

T-SHIRTS
Kim Moya runs a T-shirt business and finds this a way to make extra cash during the holidays. She says you can create inexpensive holiday sweatshirts, and long- and short-sleeved T-shirts. And she doesn’t stop at T-shirts, but also includes tote bags, felt and cloth ornaments, advent and traditional calendars, aprons and many other items that you can purchase wholesale and sell at retail prices!

FLEECE BLANKETS
I don’t know about you, but I love fleece blankets. I was really excited when I found out I could make these awesome �Snuggly� blankets without having to sew a stitch. Cinda Louden has been making these types of blankets for a while now and explains, �These blankets are made out of Polar Fleece material. They are soft, warm, cozy, durable, and wonderfully �Snuggly.’ There’s no sewing or needlework involved; all you do is cut and tie. Making Snugglies is a great way to start and create a business, make a little extra cash, or just make them for gifts. It’s all up to you!�

SANTA LETTERS
Tamaira Sandifer, the owner of Fun Mail For Kids, has been creating Santa Letters for a while now. �I thought, what child wouldn’t like to get a letter in the mail full of goodies just for them from Santa Claus. Once I informed family and friends about starting Fun Mail For Kids, the letters practically sold themselves. Last year brought in approximately 680 requests, which is pretty phenomenal since I don’t do much advertising.� Tamaira says that running this type of business is fun because it allows her to do something she really enjoys. �So it doesn’t really seem like work,� she says.

ONLINE AUCTIONS
The hype of eBay has not gone away, but has only grown. When among a group of people, I can usually find someone who has either bought or sold something in an online auction. Colleen Wallace has made it her business to sell merchandise online. �The holiday season is the best time of year for me. People are always looking for unique and interesting gifts to give their loved ones. What better place to find something different than the online auctions,� says Colleen. Start thinking about what you might have that you could sell online. Colleen has found that the items that sell well are those that can be used for stocking stuffers, are limited editions, or are signed items.

BAKING
Then there are the people who cannot stop baking during the holidays. Are you the type of person who finds that at the close of the season, all of your neighbors’ refrigerators and cookie jars are bursting at the seams because baking is just your thing? Believe it or not, this is not the favorite activity of some people.

Stacy Robinson has found that A Holiday Home Boutique is a fun way to network with others who provide a holiday-related product or service. Each vendor displays her product or information about her service, and friends and neighbors are invited to come to shop and share fellowship.

�As a cake decorator, I sell gingerbread houses, as well as display and serve a holiday-themed decorated cake – which the hostesses love because this becomes part of the refreshments! Visitors to the boutique get a chance to taste and see my cakes, and I take orders for holiday party cakes. I also display a few �dummy cakes’ to showcase my designs for birthdays, weddings, etc.�

The niche market that has been Stacy’s holiday bread and butter since 1991 is selling gingerbread houses to real estate agents. She leaves a gingerbread house with order information in large real estate offices for a few days. She also offers free delivery to the real estate office, or delivery for a fee to their home-buying customers and other colleagues, such as mortgage brokers, closing attorneys, etc.

PLAN IT RIGHT
These are just a few ideas you can use to make a little extra cash this holiday season. Use your imagination. Remember, people are more than willing to spend money for that special gift and holiday service. Why can’t you be the one who pockets that money? This is such a great time of year to make your business work.

Another great reason to consider this type of seasonal work: If you plan it right, you shouldn’t be working too close to or on the actual holiday. Being your own boss has never sounded better, now has it?

Start thinking now if you want this to be seasonal work, or if you want to continue your business into the new year. All of the business ideas I listed above can be run throughout the year. This could be the start of something very profitable!

Additional Resources:

Ebooks are available on each of the subjects listed above, and each ebook contains more information on starting that particular business. They include:

* Bizy’s Guide To: Making Snugglies! A Step-by-Step Guide to Making and Starting Your Own Fleece Blanket Business – By Cinda Louden

* Bizy’s Guide To: How to Create a Profitable Cake Decorating Business �From Scratch� – By Stacy Robinson

* Bizy’s Guide To: Making Money With Online Auctions – By Colleen Wallace

* Bizy’s Guide To: Starting Your Own Personalized Letter Service For Kids – By Tamaira Sandifer

* Bizy’s Guide on How to Start and Operate A Home-Based T-Shirt Business – By Kimberly Banfield Moya

* Bizy’s Guide To: Starting a Rubber Stamping Business – By Melissa Duquette

You can purchase any of these ebooks at http://www.bizymoms.com

Trouble Getting a Mortgage?

The Dollar Stretcher
by Gary Foreman

Dear Dollar Stretcher,
Several years ago I was told that I would have to file for bankruptcy.  I did see an attorney and he suggested I wait until after I got divorced.  I told my creditors that I was planning to file for bankruptcy after my divorce.  I was not happy with the attorney during my divorce and never filed for bankruptcy.  It has been almost five years now and my debt has been written off and no creditors are bothering me.  I’m trying to get my life back in order but I’m still struggling.  I need a place to live. With rents so high I could pay a mortgage on a small condo for the same amount.  This is what I would like to do but I have the debt issues hanging over my head. I’m a 46 year old single parent raising two elementary school age children. I feel like I’m going to end up living my old age in a cardboard box.  I also feel like my life is in limbo and there’s no way out.  Can you offer any advice? Sally

It sure would be nice to tell Sally that there’s an easy solution for her problem. But unless she has a wealthy friend or relative willing to step in she’ll need to have patience, expend some effort and be willing to make some hard decisions.

Only time will clear Sally’s credit history. Generally negative information will remain on your report for seven years. Or 10 years for a bankruptcy. There’s no legitimate way to erase truthful information quickly from her history. Being careful to meet her current payments will help improve her score over time.

But, Sally may still be able to get a mortgage if her credit score is in the low 600 point range. She can expect to pay a higher interest rate. A sizeable down payment will make finding a mortgage easier. In Sally’s case that might not be possible. The only way to find a mortgage company willing to work with her is to search for them. That means making phone calls and telling her story.

Sally needs to be careful in applying for a mortgage. If a large number of potential lenders check her credit history that will make it look like no one is willing to lend her money. She can avoid that problem by explaining her situation before they check her history. Some will turn her down right away. They would have refused her anyway. At least now they haven’t lowered
her credit score.

One way to find the best potential lenders is to work with a mortgage broker. They should be familiar with the institutions that are most likely to work with Sally. Again, she needs to be up front with the broker about her past. Also make sure that he’s going to limit access her credit file.

Other options could work for Sally. The first is renting with an option to buy. A landlord/seller will still want to know about Sally’s finances. But, typically they won’t be quite as critical as a regular mortgage company. It would also allow her to continue to rent while she’s trying to find a mortgage.

Another option would be to find a condo being sold by someone who’s willing to take back the mortgage. Sally is right about condo prices. In many places condos are relatively inexpensive. That also means that she’s more likely to find a seller who has had trouble selling. It might be enough to get one to finance the deal for Sally.

One other possibility would be to see if there are any assistance programs that could help her. Habitat for Humanity is one. There are others. Most are run locally so she’ll need to speak with her community social service agencies and churches to find them.

Just finding a home and qualifying for the mortgage isn’t the only thing that Sally needs to watch. She must be careful to only spend what she can afford.

Between food, auto, medical and insurance Sally will probably have close to 50% of her after-tax income committed. So if she spends an additional 30% on housing that only leaves 20% for clothing, entertainment, savings, debt reduction, after-school programs, unexpected emergencies and savings.

Others may tell Sally that she can afford to spend more. She should ignore them. They won’t be the ones sweating the mortgage payment each month.

There are ways for Sally to reduce her housing costs. One would be to share a house or a larger apartment. In many places it’s difficult to provide for a family on one income. It’s harder still if there’s only one parent because they’re too busy to do some of the time consuming things that can save money.

Taking in a roommate could help solve that problem. Two single moms could blend a family and both would be better off financially. With two adults to share cooking, cleaning and other household chores Sally would also have a little more time to enjoy her children.

Naturally Sally would need to be very careful in finding the right person. They will influence her children at an impressionable age. So she’ll want to know the person well before anyone starts packing and moving their belongings.

Sally’s past will make her future more difficult. Hopefully she’ll find the right combination to allow her to build some equity and keep her housing expenses in line with her income.
__________________


Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website <http://www.stretcher.com/save.htm>. copyright 2001 Dollar Stretcher, Inc. Printed with permission. All rights reserved.