Dealing With Debt Collectors - 5 Steps To Protect Yourself

When dealing with debt collectors, the stress and anxiety can make you forget a crucial fact: you have rights. There are a number of state and federal debt collection laws that exist to protect you, including the Fair Debt Collection Practices Act (FDCPA).

So when a creditor calls, don't panic. Instead, here's a simple 5-step process you can follow when dealing with debt collectors.

Step One
When the collection agency calls, ask them to send you a written notice of the debt. It's your legal right under the FDCPA. They then have five business days to send you the notice.

Step Two
Once you receive the debt notice, review it carefully. In particular, you should make sure that:

* You really do owe the debt. If you don't, you can dispute it.

* The amount is correct. Make sure that the creditors haven't added any extra illegal charges. If you believe the amount is incorrect, you can dispute it and/or contact an attorney.

* The debt is not too old. If the debt is too old, you can send the collection agency a cease contact letter. Note that certain debts, such as child support, tax debts, and student loans, aren't covered by this statute of limitations

Step Three
If you believe that you do not owe the debt or that it is too old, you can send the collection agency a cease contact letter. Send the letter through certified mail and keep a copy for your records - good records are important when dealing with debt collectors.

IMPORTANT! If you send a creditor a cease contact letter, the only way they can collect from you is to sue you. It's best to talk to an attorney before sending a cease contact letter, to be sure that you're protected.

Step Four
If you think you do owe the debt, but you can't afford to pay it, you do have options. A bankruptcy attorney can help you find out if your property is protected from collection agencies.

Step Five
If you owe the debt, but you can't pay it in full, try negotiating a settlement. Collection agencies will often accept a smaller lump sum rather than the full amount. Just be sure to get any agreement you come to in writing!

If you follow these five steps when dealing with debt collectors, you should end up in pretty good shape. Remember, the law is there to protect you!

If you're looking for an attorney, but can't afford to pay for one, you have a few options available to you.

* If the creditors acted illegally at any point, you may be able to sue them for damages. If you win, they may have to pay your legal fees. Because of this, some attorneys will take your case on a contingent fee basis - they don't get paid unless you win.

* The Collection Complaint Hotline offers a free and confidential consultation with attorneys who deal with debt collectors.

Dealing with debt collectors can be stressful, but this five step process will help set you on the right path.

Donald Coggan of accessible.org has helped disabled people deal with debt since 1998. Visit his site to learn more about dealing with debt collectors and receiving free legal advice.

Article Source: http://EzineArticles.com/?expert=Donald_Coggan

Top Internet Banking Tips – Staying Safe

Set a strong password for your internet banking account

Prior to setting up your internet banking password, ensure that you come up with a strong password that only you can remember. A strong password ideally has at least 14 characters or more – essentially the more the better. The password must be made up of letters, numbers, punctuations (if possible) as well as other symbols. Make use of capital and small letters to enhance the complexity of your password. Avoid dictionary words, names written backwards, repeated sequences and passwords derived from personal items such as your driving license or identity card. Once the password is set, ensure that you memorise it rather than to write it down on a piece of paper or store it somewhere in your computer. Additionally, change your internet banking password frequently or ideally after every three months.

Ensure that the correct internet banking address is typed in

Always access your internet banking account by typing the address in your browser. Never access your account via a link included in an email or other form. Make sure that the correct URL for your internet banking is typed in so as to not enter your log in information in a fraudulent internet banking website that will later use the information to access your real internet banking account.

Review your statements

Request the bank to send you weekly or monthly statements or alternatively make use of the ones drawn up online. It is important to check your statement on a monthly or weekly basis so as to check for any irregularities. If you notice anything unusual or transactions that you did not execute or authorize, it is important that you contact your bank immediately.

Keep informed of the latest developments by your bank

It is important to check your bank's website on a regular basis in order to keep abreast of the latest changes, notifications and other communication messages. This will keep you informed of the latest information on staying safe when using your bank's online banking website. Banks usually introduce new security features such as the one-time-pin and cellular phone notifications.

Install computer protection software

It is important to keep your computer system safe. Owing to the fact that your computer or laptop system is connected to the internet, local or wide area network, it is important that you make use of antivirus firewall software. Once you have installed and configured your antivirus firewall software, it is important to keep it updated as new virus, malware, spyware are introduced on a daily basis. This will ultimately minimise the threat of someone gaining unauthorised access to your computer system and internet banking information.

Article by: Antivirus Firewall Software South Africa

Read more: http://www.articlesbase.com/banking-articles/top-internet-banking-tips-staying-safe-2197432.html#ixzz18cAoLkiy
Under Creative Commons License: Attribution

Bank of America Alert – Update Your Account Scam!

I must admit that I get very tired of opening my email accounts only to see spam email after spam email, designed to sell me something I don’t want and that I have absolutely no interest in. While these emails are not harmless given that sending spam violates the Acceptable Use Policy (AUP) of almost all Internet Service Providers, it’s the phishing emails that cause me the most frustration.

It seems that more and more often, these days, I get phishing emails in my inboxes all designed to trick me into revealing financial information that can be used to steal my money. This morning was no exception when I received a Bank of America Alert requesting that I update my account information.

If you’re unfamiliar with phishing, it is defined as the act of tricking unsuspecting Internet users into revealing sensitive or private information. It relies for its success on the principle that asking a large number of people for this information, will always deceive at least some of those people. So phishing is considered an opportunistic attack, rather than the targeting of a specific person.

In a phishing attack, the attacker creates a set of circumstances where the potential victims are convinced that they are dealing with an authorized party; in this case, the Bank of America. What makes this particular type of scam so potent is, the average person on receiving an email from an authoritative source, generally lowers their defenses.

According to this email my online banking privileges with Bank of America have been blocked due to security concerns. This looks like an official email to me and the enclosed link makes it simple to get this problem solved with just a mouse click. What could be easier than that?

Clicking on the link would have redirected me to a spoof page, comparable to the original site, and I would then have begun the process whereby the scammers would have stripped me of all the confidential information I was willing to provide.

My financial and personal details, had I entered them, would then have been harvested by the cyber-crooks behind this fraudulent scheme who would then have used this information to commit identity and financial theft.

The reality is of course; your bank or any other legitimate financial organization will on no account, ask you to divulge account information or passwords via email. Credit card numbers, ATM PIN numbers and additional financial information would never be required to enable you to find out the current status of your account.

These types of attacks against financial institutions, and consumers, are occurring with such frequency that the IC³ (Internet Crime Complaint Center), has called the situation “alarming”, so you need to be extremely vigilant.

Be kind to your friends, relatives, and associates and let them know that these types of scams are now epidemic on the Internet. In that way, it raises the level of protection for all of us.

Minimum safety precautions you should take.

• Consider every email, telephone call, or text message requesting confirmation of your personal and financial information as a scam.
• When contacting your bank; use a telephone number from your statement, a telephone book, or another independent source.
• Don’t open emails that come from untrusted sources.
• Don’t run files that you receive via email without making sure of their origin.
• Don’t click links in emails. If they come from a known source, type them on the browser’s address bar. If they come from an untrusted source, simply ignore them, as they could take you to a web designed to download malware onto your computer.
• Never click on embedded cell phone links.
• Keep your computer protected. Install a security solution and keep it up-to-date.

New and Aggressive “Settings File” Phishing Campaign

Over the last few days we’ve noticed a substantial and high-volume new Phishing attack that is tricking many users into providing their confidential email account login information to spammers at an alarming rate.

What is unique about this new Phishing scam is that it uses enough personalization and randomization to confuse the recipient into believing it might be a legitimate message from the user’s own email administrator.

For example:

Settings File Phishing

While the above example contains an example of such a message sent to our OnlyMyEmail.com domain, it’s important to note that the user’s address and domain are unique to each email sent in this new Phishing campaign.

So far, the Subject lines for the campaign are all consistent in that they contain a reference to the recipient’s own email address, and also some mention of a “Settings file” or “Mailbox” or “Email Account” – common examples include:

• For the owner of the user@canale.com e-mail account
• A new settings file for the user@onlymyemail.com mailbox
• A new settings file for the user@canale.com has just been released
• The settings for the user@the-competitive-edge.com were changed

Sending addresses are spoofed to look like they are coming from the recipient’s own domain, typically using one of the following variations:

• no-reply@
• operator@
• automailer@
• support@
• info@
• system@

In reality these emails are sent by existing infected zombie PCs scattered throughout the globe.

Addition randomization included to confuse spam filtering systems is attempted by adding a bogus “Message ID” at the end of each email and the spammer goes so far as to not only randomize the “ID” number but also the the formatting as well, varying the separators and also the lengths. Examples include:

• Message_ID#6LU5C6V2ZQKVSIJFU7VG6M
• Message-ID#KX2NTY1RKHUFF39NS1
• Message ID#3EQT00S01ZVMF
• Message ID#RAMU9HVLG38FX1FGOFFN9810QV

So far, the only consistent part of the phishing email is the main body, though that also will include a customized reference to the recipient’s own email address:

We are informing you that because of the security upgrade of the mailing service your mailbox (user@onlymyemail.com) settings were changed. In order to apply the new set of settings click on the following link:

The link provided will also include the user’s domain and also their address which is a nice finishing touch that sells the fraud.

http://onlymyemail.com/owa/service_directory/settings.php?email=user@onlymyemail.com&from=onlymyemail.com&fromname=user

Despite what is displayed the actual link will not be to the recipient’s domain as displayed in the email, but instead to a server controlled by the fraud artist.

We are currently seeing a high volume of these fraud emails to all of the domains that we protect at the MX level through our Corporate MX-Defender anti-spam system, to our own domain and also to bogus honeypot domains we maintain which have no legitimate users. Combined, this profile indicates a very high rate and width of distribution.

We are also monitoring a substantial number of end users that will “Resend” these emails, releasing them form spam quarantine folders, even when they are specifically designated as being Spam and/or Fraudulent messages.

Western Union Phishing Frauds

Western Union Phishing fraud emails are again picking up steam into the new year. Most of these fraudulent emails are sent from the spoofed address: “westernunionresponse@mail.westernunion.com” though they actually originate from infected personal computers throughout the world.

These fraudulent emails contain a variety of email subjects, such as:

Thank you for using Western Union
Your Western Union money transfer has been authorized
Your money transfer has been authorized and is now available for pick up

In a twist, rather than promising that you are about to receive vast sums of money, this campaign instead asks to you verify that you’re transferring funds to someone else. Typical language includes:

Your money transfer has been authorized and is now available for pick up by the receiver.

Helping sell the potential credibility of the scam, the “Order Date” for the fictitious money transfer is always the current date and the amounts are also randomized, ranging from minor sums such as $89.50 and ranging all the way into the thousands like: $5328.50.

Western Union Phishing Fraud

The randomizing of the dates and the amounts not only makes the emails appear more beliveable but also helps these emails evade spam filtering wish is often less effective with such variables.

The last ingredient for selling the fraud is the hyperlink which is convincingly baited with:

You can cancel this transfer by using the hyperlink below:

And is displayed similar to:

http://wumt.westernunion.com/WUCOMWEB/transactions/HomePage/cancel.php?session=&mtcn=304245374&summ=5328.50&date=Wed, 6 Jan 2010 22:49:09 -0300

However, despite what is displayed by the email client, the actual hyperlink will be to a compromised attack server such as:

http://wumt.westernunion.com.ye3eddh.com.pl

Visitors that attempt to log into the fraudulent sites (presumably to report the funds transfer as an unauthorized transaction and to “cancel” it) will be providing their personal, private and confidential information to the spammers.

PayPal – Notification of Limited Account Access

Another variation of PayPal Phishing fraud is making the rounds.

While it claims to come from “report@paypal.com” these messages actually originate from already infected personal computers throughout the world.

The email begins:

From: “PayPal”
Subject: Notification of Limited Account Access RXI034

Note that the subject line ends with a random string of letters and numbers in an attempt to make each email appear different in the hopes that spam filters won’t see the messages as being identical.

Dear Member,

As part of our efforts to provide a safe and secure environment for the online community, we regularly screen account activity.

Our review of your account has identified an issue regarding its safe use. We have placed a restriction on your account as a precaution.

To lift the restriction we will require some further information from you.

If, once we review your further information and we’re confident that the use of your account does not present a safety risk to our service and customers, we’ll be happy to reinstate your account.

We have sent you an attachment which contains all the necessary steps in order to restore your account access. Download and open it in your browser.

After we have gathered the necessary information, you will regain full access to your account.

We thank you for your prompt attention to this matter.

Very sincerely,

PayPal Review Department

Despite being cordial and fairly well written (many Phishing/Virus emails tend to be quite sloppy) the attachments are viruses:

* agreement.exe
* agreement.zip

If such an email should be received it can simply be deleted. Only by executing either of these attachments will the user’s computer become infected.

Fidelity Phishing Alert

Seeing more Phishing fraud emails from spoofed “alert@Fidelity.com” addresses where the underlying IP’s tend to be coming from telcos in India.

Typical email includes a somewhat poor copy of the Fidelity logo and language such as:

We’re making some exciting changes that will make your online banking experience even better, We therefore request your to verify your location.

A copy of the actual email:
Phishing Example - Fidelity Alerts

Phishing Example - Fidelity Alerts

The only real excitement is on the part of the con artist who’s trying to get you to provide your Fidelity username and password. The included hyperlink is displayed as:

“Go To Verification Process”

But it links to servers such as:

http://login.fidelity.com.k210f867.net/ftgw/Fas/Fidelity/RtlCust/Login

And while this link does include “login.fidelity.com” that’s just what we call “URL Bait” to make it appear to be a legitimate Fidelity link and to obfuscate the true domain “k210f867.net” which is just one of many servers hosting this scam.

Bank of America Alert: Secure Your Online Banking Informatiom

A pretty clever new Phishing fraud tactic is now being used to trick users into providing their Bank of America login information.

The email itself is fairly standard for a Phish, omitting both the user’s actual name or any reference to the real account number, instead relying on generic terms like “Dear Member.”

There are also are some spelling inconsistencies, including in the Subject line itself which includes “Informatiom” rather than “Information”

The complete email:

Subject: Bank of America Alert: Secure Your Online Banking Informatiom
From: ”Bank of America”

Dear Member,

As part of our efforts to provide a safe and secure environment for the
online community, we regularly screen account activity.
Our review of your account has identified an issue regarding its safe use.
We have placed a restriction on your account as a precaution.

To lift the restriction we will require some further information from you.

If, once we review your further information and we’re confident that the
use of your account does not present a safety risk to our service and
customers, we’ll be happy to reinstate your account.

We have sent you an attachment which contains all the necessary steps in order to restore your account access.
Download and open it in your browser.
After we have gathered the necessary information, you will regain full access to your account.

We thank you for your prompt attention to this matter.

Very sincerely,

Bank of America Review Department

Notice that while the email claims to be from “Bank of America” the headers reveal the message actually comes from hijacked foreign connections and mail servers.

What’s slightly different about this Phishing scam is that the email itself doesn’t contain the malicious hyperlink and the attachment isn’t an executable file, these being to the most common phishing tactics.

Instead, the email includes an HTML attachment to help avoid spam and security filtering, and it is that attachment leads to the Phishing host site.

Once you’re on the site, visitors are prompted to provide just about every piece of account data to the con artists. Directions on the harvesting site include:

Provide answers to the following authentication questions to help us identify you and your account.

To complete verification, you will be taken through the following stages:

1. Input your Personal Information
2. Input your Account Information
3. Input your Online Banking Information
4. Click on Continue

The data that you’re asked to provide includes everything a criminal would need to steal your identity, your money and essentially ruin your life. They’re not just Phishing for your Bank of America account (though they’ll clean that out too) but also ask for:

* Date of Birth
* Social Security Number
* Mother’s Maiden Name
* Bank of America Login/Password
* Credit Card Numbers
* “SiteKey” Challenge Questions and responses

While this Phishing fraud may or may not have a high success rate, the depth and duration of the damage done to anyone who falls for the ruse will be absolutely devastating.

While the current campaign targets Bank of America, this will no doubt be adapted to target many other financial institutions in the future.

Scam threat looms for online banking

Experts are warning about a Trojan horse that targets users of online banking services and can redirect money transfers to the attacker's account without the user's knowledge.
According to Symantec Corp., a major computer security company, the Trojan, named Silentbanker, was first found in the United States late last year.
Although serious damages have not been reported and no Japanese banks had confirmed problems as of the end of January, experts say there are no measures against the Trojan horse once it is activated.

Silentbanker intercepts online banking transactions made on infected computers and redirects them to the attacker's bank account. The customer is provided details of what is expected so that he or she proceeds with what looks like a valid transaction.

The virus can target transactions with more than 400 banks in the world as it downloads a configuration file that contains the domain names of those banks.

The file configures the initial settings for computer programs.

With its great attack capability and the ability of circumvent two-stage authentication processes, the Trojan can break through security measures and intercept traffic between the customer and the bank.

Silentbanker's ability to spread is rather low, which likely accounts for the limited number of reports of damages across the world.

However, if a variation of the Trojan is created so that it replicates itself and becomes a full-fledged computer virus, Silentbanker could spread rapidly, experts said.

source: http://www.asahi.com/english/Herald-asahi/TKY200803040082.html

How the FDIC Affects Your Wallet

You might be surprised to learn that the FDIC is not funded by tax payer revenue, so it receives no Congressional appropriations. Rather, it’s funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $45 billion, the FDIC insures more than $5 trillion of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.

Banks and thrift institutions have to comply with a host of regulations and safe operating guidelines designed to protect depositors and their money. In many ways, the FDIC could be considered a consumer protection agency as it supervises and regularly examines insured banks to make certain they are operating in safe and sound ways, thus protecting customers and their deposits.

On October 3, 2008, FDIC deposit insurance temporarily increased to $250,000 per depositor through December 31, 2009, but there is legislation currently proposed in Washington to keep the $250,000 coverage permanent. Many experts believe this will pass with little resistance, but only time will tell.

Your money in savings, checking and other deposit accounts, when combined, is generally insured to $250,000 per depositor in each bank or thrift the FDIC insures. Deposits held in different categories of ownership – such as single or joint accounts – may be separately insured. Also, the FDIC generally provides separate coverage for retirement accounts, such as individual retirement accounts (IRAs) and Keoghs, insured up to $250,000. The FDIC’s Electronic Deposit Insurance Estimator can help you determine if you have adequate deposit insurance for your accounts. We’ll cover ownership categories in more detail in our next installment.

The FDIC, Your Bank, and You

We’re launching our blog with a short series of posts dedicated to how we work with the Federal Deposit Insurance Corporation, or FDIC, to protect your hard-earned cash. (With bank failures and economic doom-and-gloom all over the news we thought it a good place to start.) But before we get into specifics, we need to provide a brief history of the FDIC and its role as a consumer protector.

The FDIC was created as an independent agency of the federal government in 1933 in response to the bank failures of the 1920’s and early 1930’s. The FDIC is headquartered in Washington, D.C., but conducts its business in Utah from a field office in Salt Lake City. This field office works closely with the Utah State Department of Financial Institutions to oversee the safety and soundness of many of the state’s banks, including Western Community Bank. Since the start of the insurance program on January 1, 1934, no depositor has lost a single cent of FDIC-insured funds from a bank failure.

The FDIC insures deposits only. It does not insure securities, mutual funds or similar types of investments that banks and thrift institutions may offer. (See Insured and Uninsured Investments on the FDIC website to determine what is and is not protected by FDIC insurance.)

Upcoming installments will cover “How the FDIC Affects Your Wallet,” “How to Make the Most of FDIC Insurance Coverage” and “How the FDIC Affect’s Your Bank’s Service.” We hope these posts will help you gain a better understanding of how you can better protect your hard-earned cash, and how your bank is working to protect you.

Make the Most of FDIC Insurance

Our last post made reference to the FDIC’s Electronic Deposit Insurance Estimator, or EDIE, to help you determine if you have adequate deposit insurance for your accounts. Today we’ll delve further into ways you can make the most of available FDIC deposit insurance coverage.

Perhaps one of the best features of FDIC deposit insurance is that’s free. You qualify for it simply by opening a qualified deposit account at an FDIC insured bank. How much insurance you can receive is a different matter. The amount of coverage is based on factors such as the amount of money you have in an insured bank, the type of account, and the kind of ownership category the account falls into.

You can never receive more money than you have in your deposit account. Traditionally, the FDIC has insured deposits up to $100,000 per depositor, but on October 3, 2008, FDIC deposit insurance temporarily increased to $250,000 per depositor through December 31, 2009. So this means if you and your family have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage – your deposits are fully insured. A depositor can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements

You may qualify for more coverage if you own deposit accounts in different ownership categories. The best source of information regarding ownership categories is the FDIC. So to help you determine how you can establish your accounts in the proper ownership categories and to help you maximize your coverage, we suggest you take some time to review the information on the FDIC’s insurance coverage info page.

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The Princess and the Penny

Do you remember the story of the Princess and the Pea where a pea is placed below a ridiculous stack of mattresses to help a desperate prince determine if a traveler claiming to be a princess really is a princess? The prince thought if the woman could feel a pea through all those mattresses that she had to be a princess, because “only a princess could have skin so delicate” as to feel that small irritating pea under all of those mattresses. Sure enough, the woman proved to be a princess. She did not sleep all night because she could feel the tiny irritant under all the mattresses. Imagine what she would think today sleeping on one mattress with a penny-or a stash of money-stuffed under it.

Admittedly, this story is recalled in order to make a point: As bad as the economy is, or may get, the mattress is not the smartest way to save. If you don’t want to loose sleep over the safety of your money, or sleep with an annoying lump in your bed, do some homework and find a safe and secure bank where you can open a simple savings account. You will have greater peace of mind knowing your money is FDIC insured and that your bank is working hard to deserve your trust.

Remember that the bank failures you’re hearing about in the news are typically large banks, and that there are thousands of smaller institutions, like community banks, that continue to operate in safe and sound ways. What’s more, your local community bank is most likely owned, managed, and operated by people in your community who understand your needs, the local economy, and the issues that affect your neighborhood.

Resist the temptation to open a “restless-nights-sleep account” and open a simple savings account at a trusted local community bank instead. You’ll sleep better.

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Benefits of “Going Local”

“The past few years have seen increased emphasis on “going local,” or supporting local communities by consuming products that are produced and sold by independent organizations rather than big-box, franchised retailers,” according to American Fork City Councilman, Dale Gunther in an article published in the February 2009 Utah County Business Journal. “The trend has really taken off…because it helps local communities thrive by reinvesting local dollars at home.”

“While it’s natural to think of products such as produce and art as part of the “going local” movement,” Gunther continues, “one product that is often overlooked is the community bank. Yes, the community bank is indeed a local product that supports local communities.”

So what are some benefits to banking with a local community bank? Here are a few cited by Mr. Gunther:

• “Community banks are locally owned and geographically centralized. This means the money deposited by citizens in your town is generally loaned back to citizens in your town” – not citizens or businesses in other states or even counties.
• “Local management also means faster decision making and less red tape.”
• “At community banks, there are fewer layers to get to the top, which means you have easier access to executives.”
• The employees of community banks are almost always from the community. They “know the community and have been working at the bank long enough to know how to best meet the needs of the community. They know the market and have a vested interest in seeing the local economy succeed.”
• Smaller banks are better to work with you when you have problems with your account. “[They] work with you to avoid fees in the first place and, when incurred, they don’t sting as much as those of their bigger brethren.”

When you consider “going local,” do as Mr. Gunther suggests and “realize that as much as spending locally lifts communities, saving and borrowing locally does, too,”

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“How much should I have in savings?”

It’s not often that I read the magazines in the break room–partly because I could care less what’s going on with Brangelina or because I have no interest in making cupcakes look like butterflies. But I confess to opening the April 1, 2009 issue of Family Circle Magazine a few days ago and stumbling upon an article by Kate Ashford titled “Financial Planner.” The article was shorter (much shorter) than I expected, but there were some good bits of advice.

“Confused by the economy?” Ms. Ashford begins, then answers four (only four, mind you) finance-related questions. I’m not going to repeat them all–you can click the link to the article above if you want to read the entire piece. The third question and response is worth sharing here because I hear this question with some regularity when I’m in the bank, and when people I meet find out I work at a bank:

“Q. How much should I have in savings?

A} At least six months of living expenses. The general rule of thumb has always been that dual-income families should have three to six months of living expenses accessible in a savings account…But fewer than 40% of adults have enough in savings to tide them over for even three months, according to Bankrate.com. And now that the economy is so uncertain, experts are leaning toward six months. “If someone loses his job, it’s anybody’s guess how long it will take to become employed again,” says Donald E. Whalen, a certified financial planner in Alpharetta, Georgia. But don’t get overwhelmed by the thought of having to save so much money-”living expenses” doesn’t mean cash for leisure activities. It’s the money needed to cover bare essentials, like mortgage, food, and health insurance.”

To beef up your emergency fund:

A) Set up a weekly automatic debit from your checking account into a high-interest savings account, and increase the amount when you can.

B) Raise the deductibles on your home and auto insurance, or shop around for a better deal, and then stow the difference in a savings account.

C) When you finish paying off a credit card, keep making payments-to your emergency fund.

D) Try bundling expenses (like getting phone, Internet and cable from one company) then stash the savings.”

These are great ideas, and the emphasis is clear: Look for places to cut expenses and then save the money rather than spend it. For more ideas on how to save money, check out some of our past posts.

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Half-empty or Half-full?

The US Department of Labor released a report today stating that the national unemployment rate rose to 8.5% in March 2009 — the highest level since 1983. At the risk of sounding a little heartless: So what? What does this often quoted statistic mean to me and you? It’s 8.5% of what? How does Utah, or Utah County, or Orem, Lindon, Pleasant Grove, or American Fork fit into this statistic? These are all good questions that deserve some attention. So here goes…

The unemployment rate is a measure of the percentage of the work force that is unemployed at any given date–which means that 91.5% of the work force is still employed according to the March 2009 numbers.

How does this affect us locally? For simplicity’s sake, let’s take a look at February’s statistics, because we have them for the nation and state. In February 2009, the US unemployment rate (or sometimes called jobless rate) was 8.1%, which means that the 91.9% of the workforce who wanted to be employed had a job. The rate for the same period in Utah was 5.1% (or 94.9% employed). This puts Utah at number six on the list behind Wyoming (3.9%), Nebraska, North Dakota, South Dakota, and Iowa (4.9%) out of the 50 states and Washington D.C. In the Provo-Orem and Salt Lake City Metropolitan Statistical Areas, the rate was 5.2%. This places our local rate at 27 on a list of 372 other Metropolitan Statistical Areas.

We all know we’re in turbulent economic times, but in our neck of the woods we’re not being impacted as heavily as other areas of the country, and we’re not getting through it unscathed, either. Have we seen the worst of it? Probably not. Is the glass half-empty? No. There is still plenty to be thankful for, because it surely could be a lot worse for many more people.

Chances are high that you know someone who has been laid-off or needs a job. Do them a favor by keeping your ears and eyes open for opportunities, and let them know about what you see or hear. History tells us that communities that work together are usually better insulated against downturns as each member helps his or her fellow citizens. The situation will get better. At a recent event I attended, Steve Forbes, the Chairman and CEO of Forbes, Inc., and Editor-in-Chief of Forbes Magazine, said, “The world can only end once–and this is not it.”

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Tax Fun Facts

Is it really fair to place the words “tax” and “fun” next to each other? We’ll let you decide, but with April 15^th bearing down on us, here are some interesting–if not fun–tax facts to divert your thoughts for a few minutes and hopefully lift your spirits.

• The first property tax in the United States was in 1798.
• The first US income tax started during in the Civil War to help raise money back in 1862.
• The first federal tax office in the US was the Office of the Commissioner of Internal Revenue in 1862.
• The 16th Amendment, ratified in 1913, established the first permanent US income tax. Four states rejected the amendment: Connecticut, Florida, Rhode Island, and Utah, and two never considered/discussed it: Pennsylvania, Virginia.
• The Gettysburg address, one of the greatest speeches in U.S. history, has 269 words. The Declaration of Independence contains 1,337 words. The Holy Bible consists of 773,000 words. Yet there are over 7,000,000 (not a typo that is 7 million) words in the U.S. Tax Code (laws and regulations).
• There were 402 tax forms in 1990, by 2002 that number jumped to a staggering 526.
• The number of pages in the tax code and regulations went from 26,300 in 1984 to an astonishing 54,846 in 2003. There are 500 pages in a ream (standard package) of paper–that’s nearly 110 reams of paper! A ream is about two inces thick, so if you stacked all 54,846 pages on top of each other, you would have a stack of paper 220 inches high, or about 18 feet tall!!
• The IRS sends out over 8 billion pages in forms and instructions every single year, that’s nearly 300,000 trees. (Thankfully, they now use recycled paper).
• The easiest form, the 1040EZ, has 33 pages of instructions–ridiculous.

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Minimizing the Stress of a Layoff – Part 1 of 3

Layoffs are commonplace in a sagging economy, and chances are good that you know someone who has recently been laid-off from his or her job. And it often doesn’t matter how good you are at your job or how hard you work. But a layoff doesn’t have to be the end of the world, nor should it be. The key to minimizing the stress and negative fallout is to know how to react if you are laid-off and to prepare now for the possibility of a layoff in the future.

If you’ve been following this blog, you know we recently posted information about Utah County’s unemployment rate. Fortunately, the Provo/Orem Metro Area ranks 27th out of 372 other Metropolitan Areas in the U.S. according to February 2009 numbers–so it could be lots worse. Nevertheless, while 91.5% of the workers in the Provo and Orem areas are still employed, there are an increasing number of good, honest, hard-working people who want to work, but who do not have a job.

If you’ve been laid-off, have hope. You will survive to work another day if you’re determined to work. You may even find a way to embrace the layoff for what it may be–the opportunity to make a career change that you’ve been considering for a while.

We don’t know about you, but we’re tired of hearing about hope and seeing nothing done. It’s time for solutions. We’ll be posting information we think may be useful for anyone currently employed, anticipating a layoff, or who may have already been a casualty of downsizing.

Please leave us comments with ideas or helpful information you have that may help someone facing the stress of a layoff.

Minimizing the Stress of a Layoff – Part 3 of 3

Here are some additional ideas that may be useful to help reduce the stress of a layoff, or to prepare for the possibility of one in the future:

Be Wise with Your Emergency Fund – This assumes you have an emergency fund. If you don’t have one, start one. Cut back on discretionary purchases and put as much of your paycheck into your emergency savings fund as you can. If a layoff has already affected you, cut back or eliminate unnecessary expenditures and be wise with your use of the fund. Our “How much should I have in savings?” post can help you determine the right amount to put away. And the information in our “Automate Your Savings” post can help you save effortlessly. Hopefully, if you do get laid off, you’ll also have a severance package that will help you pay the bills. However, the more you can sock away, the more peace of mind you’ll have if the axe falls.

Communicate with Creditors and Billers – One of the major stresses after a layoff is making ends meet. The more willing you are to communicate openly and honestly with creditors and billers, the greater your chances are that they will work with you to help you meet your obligations. It’s not a guarantee, but you may be surprised by what they are willing to do to help you.

Remember to Look on the Bright Side — At worst, getting laid off is a temporary trial (and you will get through it, I promise). At best, your layoff may be the kick in the pants you need to find a more fulfilling job. It’s surprising how often I hear people speak of being thankful for their layoffs (some of them volunteered or even begged to be let go). Their severance packages gave them the time and opportunity to pursue the careers of their dreams. If you’ve been unhappy in your current career path, this layoff may be your chance to explore your options.

Know What Resources are Available — There are many resources available to help if you have already been let go. The Utah Department of Workforce Services has offices in American Fork, Provo, and Spanish Fork with professionals who can help. The Church of Jesus Christ of Latter-day Saints has Employment Resource Centers available to anyone, regardless of religious affiliation.

Tell Everyone You Know That You’re Looking for a Job – Now is not the time to be the strong, silent type. Ask for leads from family, friends, and neighbors. Sometimes it really is who you know, not what you know that leads to a meaningful job opportunity.

If you have ideas or helpful information that may help someone facing the stress of a layoff please leave us a comment.

“You want to do what?!?”

A recent discussion with my wife about our long-term retirement hopes was very revealing. The discussion went something like this:

Wife: “When you retire I think it would be fun to go to culinary school together and consider opening a restaurant. We have so much fun in the kitchen talking and cooking.”

Me: “Yeah. That would be fun. It would be a lot of work, but it would be fun. But what I would really like to do when I retire is be Donald Duck.”

Wife: “You want to do what?!?”

Me: “I want to be Donald Duck at Disneyland or Disney World. I think it would be fun seeing all those happy kids everyday. Don’t you?”

Wife: “I guess, weirdo. But wouldn’t it be easier and more fun being with me doing something we both enjoy?”

At that point I knew she had issued a checkmate, and I had best think about my plans more as our plans to stay out of trouble. It was also apparent that both ideas carried financial implications we have never discussed. Culinary school and funding a business are not cheap, nor is relocating to Anaheim or Orlando.

Consequently, a study from Fidelity Investments indicates this type of discussion is not entirely unusual. It finds we are not doing a very good job talking about our long-term financial goals with our significant others.

The study reports that only 45% of couples regularly discuss finances. And when it comes to retirement plans, 60% of couples don’t agree when they’ll retire, and 42% are like me and my wife–they don’t agree on what kind of life they’ll lead after they retire.

Does your significant other know your financial goals? Do you know his or hers?