Consumer Interest Articles

October 2009
Mastering the Basics of Credit Scoring
CCCSSA Happenings

July 2009
Conserving Resources This Summer
Are You a Financially Savvy College Student?
Working with a Debt Settlement/Reduction Company
Have you been Smished?

April 2009
Announcing Financial Literacy Month
Should I Stay or Should I Go?
Set a New Trend - Budget
Become a Homeowner Today

January 2009
Handling Money Stress
If it sounds too good to be true

Mastering the Basics of Credit Scoring

Remember when your first grade teacher told you howimportant it was to know the basics? You learned the ABC’s in order to read and write; you mastered counting to ten to learn arithmetic. In these times, it is essential that you know your financial basics, one factor of which is your credit score.

What is a credit score?

Your credit score is an important number. It's how creditors and lenders quickly decide if you are creditworthy. FICO scores range from 300 to 850 - the higher the better. The Fair Isaac Corporation (FICO) explains that your credit score is used to help creditors decide whether or not to extend credit to you. Your score indicates the amount of risk they are taking at the time of your application.

Learn your score.

It may surprise you that you can have three different credit scores at the same time. This happens because most creditors do not report information to all credit reporting bureaus: Experian, Equifax or TransUnion. However, knowing even one of your credit scores can provide you with an overview of all three.

Raise your point value.

There are definite steps you can take to improve your credit score. You may be surprised to learn that the largest portion of your score is based on your payment history. According to Consumer Action, being late or missing any payment in the past two years negatively affects the score, so do your best to never be late. If you have missed a payment, take the time to develop a bill repayment plan to get back on track. Contact us if you need assistance with this step. It may take a while to change your habits, but it is well worth the effort.

Source: Fair Isaac Corporation, 2005

Another factor that raises your score is to maintain a positive credit history; repeatedly opening and closing accounts has the opposite effect. Other factors considered include the amount of debt you owe, your income, length of employment at your present job and the type of credit for which you are applying.

Review reported information.

It is important to review your credit report for its accuracy; if the report contains mistakes, take measures to correct the information. There are a number of web sites, such as Equifax, a credit reporting bureau, which include online tutorials on the disputing process. Our agency presents a free workshop called “Building a Better Credit Portfolio” which demystifies the credit reporting and scoring process. We also provide private and confidential credit report review sessions.

For more information on credit scoring basics, contact our agency at 800.410.2227 or find us on the web at www.cccssa.org.

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CCCSSA Happenings

CCCSSA hosts 2^nd Annual National Protect Your Identity Week, October 18-24, 2009. We are offering Identity Theft Prevention Presentations in conjunction with the event. Go to the web at www.identitytheftcounsling.org, at the bottom of the web page click on the Protect Your ID Day banner to learn how you may get involved. All activities are free and open to the public.

If you or anyone youknow thinks they may be a victim of Identity Theft, contact us at 800.410.2227 or email us at info@cccssa.org.

Reverse Mortgagesprovide solutions for qualified Senior Citizens.
When confronted with financial decisions, some senior citizens feel stretched. Which item takes priority, food, transportation, or healthcare? In view of these costs and others, some senior homeowners are exploring the Reverse Mortgage Counseling Program. A Reverse Mortgage allows qualified homeowners, 62+ years and up to convert a portion of their home’s equity into cash. Want more information? Give us a call at 800.410.2227 or email us at info@cccssa.org.

CCCSSA offers financial classes inNortheast San Antonio
To better serve the Randolph Metrocom community we now offer Money Principles For Today Workshops at our NE San Antonio Office. To sign up online at www.cccssa.org/Education, then follow the links to the Workshops page.

CCCSSA Social media update.

Twitter: Want to stay current on financial industry updates and tips? Follow us on Twitter.com, www.twitter.com/cccssa.

Financial Fast Facts: Consumers can access NFCC video tips (Financial Fast Facts), DVDs and PSAs on our web site. Go to www.cccssa.org/Education - follow the links to the Education home page.

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Resources This Summer

Summer’s here, and we’re experiencing our usual south-Texas heat, and the frequently accompanying water restrictions. The need to conserve water can remind us of conserving other scarce resources – in this case, our money!

A recent survey we took of our staff showed our monthly electric bills run from a low of $43 to a high of over $200. We found similarly that phone/internet bills ran from a low of $45 to a high of over $150. Our water bills were all over the map, also.

Where do you fall in this range? How can you drop your usage of these modern utilities and save some money to put away?

Water

San Antonio Water System (SAWS) suggests you conserve water by filling the dishwasher before cleaning your dishes, rinsing vegetables in a sink full of water rather than under a running faucet, and insulating your water heater and pipes. These sound like great ideas, but around our house I found that we had to run the hot water each time because it cooled off in the pipes which run through the slab. There are a couple of nifty solutions; one recirculates your water through the cold water line, so you don’t waste water; you can install it yourself. Another possible do-it-yourself project installs an instant-on hot water heater under your sink. However, there is an even easier way to get a small amount of water quickly heated; the microwave. I found I can heat a cup of water in about 1-1/2 minutes warm enough for many hot-water applications.

Electricity

Conserving electricity requires that you first analyze your heaviest usage. Ceiling fans can somewhat reduce the need for air conditioning, but if you’re not in the room, leaving them running just generates more heat. Make sure you check the air filters periodically, and of course, turn off appliances when they are not in use and lights when no one is in the room. It is a good idea to have your A/C unit checked twice a year; if it is low on coolant, it may run continuously, or even freeze up.

Here’s a quick refrigerator test you can run yourself. Stand in your sandals in front of the opened refrigerator door; how soon do you feel the cold air on your toes? That’s how quickly the cold air falls out, which then you will pay through increased refrigeration to replace. Remember also that freezers and refrigerators work more efficiently when they are at least a thirdfull; empty units cause more cycling on and off. You can often turn down your hot water heater in the summer, and this would be a good time to install a timer to shut it off during the night. Contact your utility company for more tips on electrical usage testing and conservation; often, they will come to your home and conduct an energy audit. CPS Energy will install a thermostat that gives you a 10% reduction if they can remotely adjust it at times.

Automotive

How about one of those magnets that improves your gas mileage? Just put it next to the main fuel line, and tests have shown it will make no difference whatsoever in your mileage! Oops. However, you can save fuel if you figure out how to consolidate your trips; if you add in the cost of driving out for lunch, you might be surprised to discover that you are spending as much on transportation as for the food itself. Instead of always driving solo, seek car-pooling and public transportation opportunities. When you purchase your next vehicle, think of going smaller, and of course we’ve all heard that it is a good idea always to have your tires filled to the correct pressure, not only for improved gas mileage, but because underinflated tires can lead to tire failure.

Putting even one of these options into action can reduce consumption levels. There are many additional ways to save money to achieve your financial goals. We can help with ideas, including helping consumers change habits, in our Money Principles For Today Workshop. Plan to attend by enrolling online, www.cccssa.org or call us at 210.979.4300 / 800.410.2227 toll-free.

-George Merkle, President & CEO

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Are You a Financially Savvy College Student?

If you are in college, you have invested in your career and long-term personal financial future. You have needs and wants and dreams to fulfill, but where do you begin? Taking control of your financial situation will increase your “savvy”.

Create a Spending Plan.

Having a written spending plan will help you monitor your expenses. Always be aware of checking and savings account balances. Treat debit purchases like checks by recording the amount in your check register. Tracking your cash spending habits will make you more conscious of your daily spending. You may be surprised to see what you spend your money on and how quickly it adds up.

Make Savings a Priority.

You may not feel that you can save money while you are in school, but controlling your spending choices helps savings become a reality. Do your research; find a financial institution that will allow you to open a savings account with $5. This small amount can add up, for example: five dollars deposited monthly over a 4-year period at 3.5% generates $263.71. Starting small will help you develop a savings habit, prevent the amount from being a burden, and give you a nest egg to roll over into a more aggressive account after graduation.

Pay Your Bills on Time.

Get in the habit of paying all your bills in a timely manner. Consistently doing this will help you develop good habits and keep your credit score high.

Review Your Credit Report

You are entitled to one free copy a year of your credit report from each of the three major credit reporting bureaus, (Experian, Equifax, TransUnion). We suggest you stagger the reports, obtaining one at the beginning of the year, the next in the middle and the third at the end. Reviewing your credit reports throughout the year will help you catch mistakes and minimize fraud and identity theft problems. You may access your credit report from our web site, www.cccssa.org, by clicking on the link, “Order a Credit Report”. There is no cost for obtaining the copies. If you have questions about your reports, call us for a free credit report review session.

Use Credit Wisely

Before getting involved, learn all you can about credit. How you handle credit today determines your access to it later. Successful consumers have sound credit portfolio’s, they know the terms and conditions of their credit accounts and are aware of their credit scores and debt loads. We suggest you have one credit card, and make small purchases that can easily be paid in full when the bill arrives. Staying below your credit limit has a positive effect on your credit score. To learn more about credit cards, plan to attend our College Credit for Life Workshop, presented the third Saturday of the month from 11:30 a.m. to 1:30 p.m. (except December).

Keep Student Debt Loads to a Minimum

When it comes to student loans, please note that you must repay your loan whether or not you graduate, if you can't find a job related to your program of study, or are unhappy with the education you paid for with your loan.

Defaulting on student loans can have serious consequences. As mentioned in the May 30, 2009 Express-News article, “Tips on repaying student loans,” your credit profile will be damaged and you will not be eligible for any type of loans in the future.

If you have defaulted on a student loan and need assistance reviewing your options, our agency provides student loan repayment counseling. The initial session is free.

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Working with a Debt Settlement/Reduction Company

“In debt?” “FeelingOverload?” “Don’t know where to turn?” Advertisements like these are plentiful. Whether you reduce or settle your debts, the process can have a negative effect on your credit profile especially when you hire a debt settlement company to perform this service. Now more than ever, consumers need to know how to tell the good help from the bad.

Debt Settlement/Reduction Process

Debt settlement or reduction is a process through which your creditor agrees to accept less than the full amount owed. Settlement companies often advertise that they can negotiate reductions of 40 percent or more in the debt you owe. Then they set up a repayment plan that typically takes between two and four years.

Settlement companies charge significant fees.

Different settlement companies have different fee structures, but there are two basic approaches. In one model, the settlement company’s fee will be a percentage of your total debt. The fees in that model typically range from 13-20 percent. Another option the settlement company may offer is to base their fee on the amount of debt reduction they can negotiate. Fees under this model can be as high as 35 percent of the debt. In addition, many settlement companies also charge a monthly fee that can range from about $19-$89 a month for the entire program. (For a three-year program, if the maximum monthly fee was assessed, it would total an additional $3,200.)

Upfront Fees

Some debt settlement companies front load their fees. In other words, they collect a large part of their fee before you receive any benefit. For example, a $50,000 debt could generate a fee of $7500. Stalling payment to creditors until the fees are collected will probably destroy your credit profile.

Stop Paying Creditors.

A settlement company may suggest that you stop paying your creditors instead they direct you to begin making deposits into a special third-party account. The settlement company will attempt to negotiate a settlement offer with your creditor once enough money relative to the debt is on deposit. This may take six months or more, although the exact length of time will vary with circumstances. During this time, the balance on your debt can continue to grow if interest and various penalty fees continue to be charged by your creditor. As a result, you may owe more than when you started and your credit may suffer because of your failure to make any payments on your debt. Even worse, legal actions may be filed against you during this time.

1099-C Tax Form

The consumer may be responsible for taxes on the forgiven debt. If the forgiven debt totals $600 or more, you will receive a 1099-C from the creditor at the end of the tax year and the debtor should report the same amount as income on their tax return. This will substantially reduce the total savings from debt settlement/reduction.

Credit Report Consequences

Debts paid off through settlement will generally show “Paid by Settlement” on your credit report. If you later apply for new loans or credit, when reviewing your credit report the prospective lender(s) will see that a previous debt was paid by settlement, indicating that your repayment did not cover the total debt that you owed, but that your creditor accepted a lesser amount.

Credit Score Consequences

The credit score is based on information contained in the credit report, with the highest consideration given to how you repay your debts. If you’re not repaying the creditor or have missed payments, it will show on your credit report and potentially lower your credit score significantly. Your reduced credit score will limit future financial transactions, such as car notes and insurance premiums. We suggest you make a careful analysis to understand if the increased income tax and the higher cost of future debt hinders the initial “savings” that debt settlement companies advertise.

Did you Know?

If a debt settlement company cannot negotiate the promised reduction, or if you have to leave the program early, all of the fees paid could be lost before you realize any benefit.

Your debt may actually grow larger when you work with a debt settlement/reduction firm because negotiations between the settlement/reduction firm and creditors may not start for several months after you signed up. Creditors will generally continue to charge late fees and interest each month during that time.

Debt settlement/reduction companies are virtually unregulated in most states. There are no common industry standards for the services they offer, the fees they charge, the way they promote themselves, or the information they disclose. If you choose to deal with them, you do so at your own risk.

There is Another Option

Our agency is not a debt settlement or debt reduction company. We do not have a minimum or maximum debt requirement in order to work with you. Because every person’s situation is different, your debt management plan is based on who you owe money to and how much you owe. Contact us at www.cccssa.org or 800.410.2227 for more information.

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Have you been Smished?

Along with technological advances come new scams, the latest is called “smishing,” which stands for SMS (Short Message Service /text message) fraudulent messages. Similar to phishing, text message attacks are sent to cell phone users.

What could be more irritating than a text message asking you to confirm the purchase of a $1500 computer you did not buy? Or how would you react when you learn you’ll be charged $2 a day until you confirm the dating service you never ordered?

Scam artists are counting on your quick response. When you go to the contact web site or the 800 telephone number to resolve the mistake, you are guided to a thief pretending to be a Customer Service representative. They assure you the matter will be resolved, they just need the following: credit card/debit card number, CVV code on the back of your credit card, ATM card PIN, social security number, and/or email address. Of course whatever the threatening message warns you about never happens; and the web site and phone numbers are equally false.

What can you do to counter this crime? Be aware. The only legitimate business that will notify you by text message about changes, purchases, upgrades, etc. is your cell phone provider. Anything else is probably a scam.

If you are concerned about what you should do in this case, contact our Identity Theft Specialist at 800.410.2227, or email us at info@cccssa.org.

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Consumer CreditCounseling Service Announces
April as Financial Literacy Month

In April 2009 Americans will celebrate financial literacy month. The month was designated by the United States Congress in 2006 to increase public awareness about the importance of financial education in the United States and the serious consequences that may result if one lacks an understanding of personal finances.

Personal financial literacy is important to ensure that individuals are prepared to manage money, credit, and debt. It also is essential so that individuals become responsible workers, heads of households, investors, entrepreneurs, business leaders and citizens.

The Value of Financial Literacy
Being financially literate means knowing how to manage money, use credit effectively, build assets and make sound financial decisions. It is not related to the amount of your income. It means knowing what to do with your paycheck once you have earned it.

The value of financial literacy needs little explanation to the visitors and clients of Consumer Credit Counseling Service of Greater San Antonio and Budget & Credit Solutions in Austin. They know our confidential counseling and educational services offer the skills needed to meet the financial challenges of their own lives.

We encourage you to take advantage of the financial information and insights we make available through our counseling, classes, publications and web site, especially when you are confronted with financial challenges now and again.

The Consumer Credit Counseling Service of Greater San Antonio team is committed to providing you with financial education and resources to improve financial literacy.

To learn more about Financial Literacy Month events, contact CCCSSA at 1.800.410.2227 or find them on the web at www.cccssa.org.

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Should I Stay or Should I Go?

Back in 1981, a band known as The Clash recorded their only number-one hit, “Should I Stay or Should I Go?” Unfortunately, that is an all too familiar refrain among homeowners facing foreclosure.

“Getting into the house of your dreams is just the first step. The long-term objective is staying there,” said George Merkle, President and CEO. “However, if making the mortgage payment is a struggle month after month, if it is going to present a hardship to your family, then other options should be considered.”

A home is usually a person’s largest investment, and thus it is one that should be protected, but not at all costs. A recent NFCC-MSN Money Financial Literacy Survey revealed that one in every 10 Americans with a mortgage, or roughly 10 million adults, report being late or missing a mortgage payment in the last year. Today’s consumers often take drastic steps to satisfy the mortgage payment like payday loans or withdrawing money from their retirement plans at work.

Obviously, a payday loan should not be a long-term solution to a monthly shortfall. Paying extremely high interest rates is never good. Likewise, individuals continually tapping into their retirement plans could end up with no house and no money for retirement.

Average consumers do not know the difference between a short sale, a deed in lieu, forbearance or a loan modification, nor should they. That’s where professional help becomes essential; the good news is that there is help available, and the help is free at CCCSSA.

Statistics show that over half of those whose homes are foreclosed on never speak with their lender/servicer prior to foreclosure. This may be due to the perception that nothing can be done, but today there are options not previously available.

The struggling homeowner does not have to go through the process alone. Certified housing counselors at CCCSSA stand ready to help homeowners evaluate their options.

If your mortgage is at risk, call for help, the sooner the better. Let a trained professional review your situation and find the resolution best-suited to your individual circumstances. Will you always be able to stay in your home? No. Is there life after foreclosure? Certainly. If you ever needed a friend in the business, now is the time.

Foreclosure Prevention Basics Workshop Added to our Roster.
Consumers who are concerned that their mortgage is at risk due to changing finances may join CCCSSA onSaturday, April 18^th from 9 to 11 am for the introduction of a new workshop, “Foreclosure Prevention Basics”. The workshop is designed to give consumers new insights into keeping their home during difficult economic times. Call CCCSSA to reserve your space: 210.979.4300 or 1.800.410.2227 toll-free or go to the web at www.cccssa.org.

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Set a New Trend - Budget

Nowadays it’s trendy to be thrifty!

More people from all walks of life are embracing financial basics; they realize how essential a good budget is. Being in the “In crowd” means replacing countless trips to Starbucks and maddening searches for the latest designer fashions with well-planned purchases at discounted prices. In these uncertain economic times, having a budget in place helps people realistically obtain financial wellness. Budgeting is trendy because it reduces uncertainty.

Struggling to maintain a certain lifestyle is now replaced by other essential words of “planning” and “controlling”. Like a diet however, the planning part is easy, it’s the putting it into action part that makes it work. Here are some suggestions to consider.

Put it in Writing.
You may be pretty sure of how much money is coming into your household and how much you are spending on a monthly basis, but without a written budget the only proof of it at this moment is a bank statement and some crumpled-up receipts. The process of writing goals down along with your plan to achieve them establishes a feeling of commitment and improves your budget’s effectiveness. A written goal is less likely to be adjusted when minor issues come up.

Know Who Gets Paid First.
Even though you may have plenty of money right now, if you had to live on less, who would or wouldn’t get paid? This goes beyond cutting out frugal expenses and asks who really comes first. Consumer Credit Counseling Service of Greater San Antonio recommends you make housing, transportation, healthcare, utilities, food, and secured debts highest tier of priority in your budget.

Account for Everything.
It is extremely important when organizing a workable budget that you are honest and accurate. If your income is somewhat flexible be conservative. Track expenses for one month, some expenses will require more tracking than others. Review flexible living expenses such as groceries, gasoline, and entertainment, and if necessary reduce and set limits. Keep and organize all receipts and statements to simplify the tracking process.

Expect the Unexpected
A workable budget helps you expect the unexpected. Not only have you budgeted enough to cover the basics, such as rent, utilities, insurance, you have also reserved money for periodic expenses. Even though expenses like car maintenance, taxes, and special occasions don’t come up on a regular basis, planning ahead and putting that money away provides a financial comfort zone. Then you are better prepared to handle those larger ticket items, like medical bills or automotive repairs.

Good Budgeting Equals Zero.
This doesn’t mean you are left with nothing after paying all the bills, rather it means there are no loose ends. Know where all of your money is going and make sure you are paying yourself utilizing a category for savings.

Maintain your budget.
After a short period of time, review budget items and make revisions, making any estimates more accurate based on actual expenses. A budget will show you where you are spending your money and provide structure and guidance for you. Budgets should match your needs and lifestyle, when necessary add more categories.

For more budgeting information and techniques that will help you on the road to financial success, come see us. Our budgeting counseling sessions are free and confidential, as is our Money Principles For Today Workshops. To learn more about our services call us at 1.800.410.2227 or visit us on the web at www.cccssa.org. There’s never a better time to call Consumer Credit Counseling Service of Greater San Antonio.

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Become a Homeowner Today

Recognize that with some careful planning, realistic goal-setting and a clear understanding of the costs involved, home ownership can be achievable.

Every day, CCCSSA helps homebuyers navigate the overwhelming amount of available information so the home-buying process isn’t so stressful or intimidating.

We suggest the following tips for potential homebuyers when exploring homeownership opportunities:

Determine the right time for homeownership.
If you know you want to own a home, whether it’s today or in a few years, you first should determine what kind of a home you can afford to buy. How much money will you be able to borrow? What types of mortgages are available and which mortgage is best for you? What can you really afford? Before calling or meeting with real estate professionals or potential lenders, be sure to have these answers to these questions.

Analyze how much money you have saved.
There are up-front costs associated with buying a home, such as a down payment, home post-purchase inspection, appraisal, and closing costs that can range from 3 to 6 percent of the cost of the house as well as additional costs such as movers and repairs.

Be realistic about increased maintenance costs.
Compare your current expenses to the ongoing costs of a home purchase. How does your current rent or mortgage compare to the new monthly mortgage payment? Don’t forget that with home ownership you owe taxes and need insurance, as well as other costs like utilities and maintenance. It is likely that you’ll need more furnishings, both indoors and out. And, once you’re the proud owner, responsibilities such as plumbing and roofing repair fall to you.

Examine your credit report.
Before shopping for the dream house or meeting with the mortgage lender, obtain a free copy of your credit report at www.annualcreditreport.com or by calling (877) 322-8228. Your credit report is used extensively by potential lenders to evaluate your credit worthiness. Your credit score can impact your interest rate and costs for other items such as homeowner’s insurance. Most times, the higher your score, the better chance you have of getting a lower interest rate.

Decide what type of home you want.
Prior to house shopping, a prepared homebuyer will develop a checklist of “must have” versus “would like” features to compare properties. When creating the checklist, consider the following: how much space your family needs; the style and layout you prefer; where you want to live; and what amenities are “must haves” such as a garage, large backyard, appliances, etc. Also consider distance from work and family, environmental and utility factors, neighborhood and school zones and other non-physical preferences.

Do some “window shopping.”
To find the right home, check as many leads as possible. Let your friends and acquaintances know you are looking to buy. Drive through neighborhoods and check out the “for sale” signs and then look them up on the Internet. Newspapers and shoppers’ guides are full of listings.

Shop for a mortgage that’s best for you.
Select a mortgage and loan terms that are most favorable to your financial situation. Shop around for the best deal, which may begin with a financial institution where you already have a financial relationship, such as a checking or savings account, or from friends, family, co-workers and real estate professionals.

Sign up for a free or low-cost homeownership session.
To find out if homeownership is right for you, determine how much home you can get with your money, what mortgage lenders look for in approving a loan, and how first-time homebuyers and low and moderate income households can stretch your borrowing power. Owning a home can be within reach for educated homebuyers. For more information about becoming a homeowner, contact CCCSSA at 210.979.4300 or 1.800.410.2227 toll free, or find us on the web site at www.cccssa.org.

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Handling Money Stress

With the recessionary economy, low interest rates, and the bear stock market, many people are feeling the pressure of money stress. The good news out of all this bad news is that there is something we can do about money stress.

Money Stress defined.

The American Psychological Association says there is no exact definition of money stress. However, people can experience money stress when making financial decisions about paying bills on time, and worrying about living within their means. Like other types of stress, dealing with money can affect a person physically as well as emotionally. And if left untreated, this type of stress may lead some to seek relief in unhealthy ways.

Elizabeth Scott, About.com's Guide to Stress Management, has written about, counseled and coached people on effective stress management and healthy living strategies for 13 years. She reports that people with money stress can turn to drinking, overeating or smoking to reduce their anxiety about money. Loss of sleep and feelings of frustration and hopelessness are common responses as well. Some people cut back on items like health care to pay for basics of food and shelter. While this may work in the short term, smaller health issues can easily turn into larger problems when unchecked.

Money Stress reduction techniques.

Consumer Credit Counseling Service of Greater San Antonio has found that clients who take the following steps indicate they feel much less money stress. Why not give it a try?

1. Create a budget.

Contrary to what many think, a budget isn’t restrictive. It is an effective financial management tool that helps you to avoid debt and overspending. Many people have no idea where their money went at the end of the week. An important practice in money management is to track your spending. Track all of it for a month, and you will have a good idea what you are doing with your money. And you can modify your spending and plan accordingly. Once you know what you are doing with your money, you can actually plan your spending, and create a budget. Having a budget puts you in control of your finances and makes it easier to live within your means.

2. Get organized.

Be sure to put all your financial papers in the same place. You can organize your papers into the following categories: bills, agreements/contracts, tax returns, insurance policies, mortgage documents, investment/retirement statements, and warranties or service contracts. This saves you time, as you won’t have to search for misplaced documents.

3. Simplify.
If you can help it, don’t buy anything. Don’t spend money. If you already have 3 pairs of black shoes, don’t buy another until you wear 2 pair out. If you have 5 pairs of jeans, you probably don’t need another pair. Get the picture? You can even have a garage sale and get rid of things you don’t need.

4. Keep your checkbook balance up-to-date or watch your online bank account.

This will help you to prevent overdrafts and unnecessary fees. Don’t forget to calculate banking and auto draft fees that banks and credit cards can charge, and if you are paying these fees look into other ways to avoid paying these charges.

5. Set up a savings account and an emergency fund.

In order to save money you have to make saving the priority. If you pay bills and buy things you want first, you probably won’t have money left over to put into savings. So if you really want to save money, you have to put a percentage of your earnings into savings before you start paying for bills and buying stuff. If possible, join your work 401k/403b or start investing in a long-term account – don’t worry about the fact that interest rates are currently low. Ten percent of your net income is a good savings amount to aim for, but build up to it. Start at 1% if that is all you can do, but put some money away, and start building up your savings.

Another important habit to acquire is to fund an emergency fund. Put a small portion of your take-home pay into an interest bearing account each month and forget it’s there. Promise yourself that you will not pull any money out short of a true emergency.

6. Spend wisely.

When shopping instead of looking for the cheapest package, look for the best value. Spend wisely and save by researching pros and cons, consumer ratings and best prices on products or services you plan to keep for a while. Returning merchandise takes time and money. You can avoid that hassle with some research before making your purchase.

Buy used, not new. Almost everything depreciates the first day that it is owned. If you can buy a car 1-3 years old, you save thousands of dollars and have a product that is relatively new, and often still under factory warranty. You can do the same for furniture, household items, appliances, etc. Where do you look for good used bargains? Try your local thrift store, garage and estate sales, and craigslist.com. When looking at garage sales, also look for community events, like church or school rummage sales. And don’t forget moving sales where people have a lot of goods to offer. Following these practices can also reduce your money stress as you realize you are spending less.

If you have some extra money, pay off your high interest debt; renovate or repair your home, but don’t start a project you can’t finish; open the college savings account that you’ve been putting off.

7. Tackle your debts.

Credit card debt may be preventing you from achieving many of your goals. If you’re in a financial hole, stop charging. It is impossible to become debt free while still adding to your debt load each month. Make your purchases with cash or a debit card. This way, when the money’s gone, the spending stops.

When repaying your debts, get in the habit of paying more than the minimum. This will reduce the amount of time and interest that you owe. And money you save on interest can go to savings.

8. Know what is on your credit reports.
Americans are allowed one free credit report from each of the major bureaus every 12 months. You can order all three reports at the same time or stagger your requests. Ordering your reports at different times during the year gives you the opportunity to reduce money stress by staying current on your credit status, without having to pay for additional reports. To avoid any unwelcome surprises, it's important to see a copy of your credit report before you apply for credit such as car loans, mortgages, or credit cards. Errors in credit reports can be common. Go to www.annualcreditreport.com to access the reports online. Contact our agency for an appointment at 800.410.2227 if you need help interpreting the data.

9. Be aware of the risks of credit fraud.
Identity theft and credit card fraud are serious issues, but there are ways to protect yourself. Never let someone else borrow your credit card. Do not leave your card or receipts lying around for anyone to see. Never give out your credit number to a caller unless you can confirm it is legitimate company or organization. If in doubt, don’t give it out.

10. Get help if you are in financial trouble.
If you feel stressed about your personal financial situation, affordable and reliable financial help is only a phone call away. We are at www.cccssa.org or call us at 210.979.4300 or 1.800.410.2227 toll-free.

You can also learn more about reducing your money stress by participating in our ongoing financial management workshops. Classes resume the second week of January.

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If it sounds too good to be true

Last month a huge Ponzi scheme was uncovered, one that had fleeced mostly wealthy people around the world and leaving many of them completely broke. Some victims said they initially thought it sounded “too good to be true,” but they invested anyway – and now have lost all of their money. In these times, it’s good to heed the advice that if it sounds too good to be true, it probably is. When people seek quick-fix solutions to their financial difficulties, they often cause more problems than they solve. Unfortunately, as demand for better credit grows, the opportunity for scams becomes more prevalent.

Credit Repair Scams

We are all bombarded through the media – including lawn signs -- with too good to be true offers to “fix” our credit score (even overnight!). Some credit repair scams may even require you to dole out large sums of money to fix the problem with a new miracle method. Having bad credit removed from your credit report for a fee may sound tempting, but as any honest credit expert will tell you, aside from correcting errors on your credit report, it takes time and good credit habits to improve your credit score.

The Federal Trade Commission warns us to watch out for credit repair scams, especially those that include the following:

The company wants you to pay before services are provided;
The company does not inform you, free of charge, of your rights or options for handling debt on your own;
The company does not want you to contact the three major credit reporting bureaus directly;
The company tells you they can get rid of most negative credit information even if it is accurate;
The company suggests you reinvent your credit identity by applying for an Employer Identification Number instead of a Social Security Number;
The company advises you to dispute all information on your credit report regardless of its accuracy or timeliness.

Debt Settlement

Offers that promise a quick resolution of your debts are common. While the possibility of being “debt free in 12-36 months” may be attractive, it’s best to research what the offer entails before giving them your business.

The problem is that the majority of debt settlement companies are “for profit” and not very well regulated. Consequently, there are many dishonest debt settlement companies in existence today. Even honest ones will collect fees for something you can do yourself.

Debt settlement is not debt consolidation. Settlement means to resolve your debt at a negotiated reduced balance. When you hire a company to settle your debts, take the time to select one that fully informs you of your options. You will likely pay high fees to participate in their program. It is also important to review their method of settling debts before proceeding. When you agree to third party negotiations, ask them upfront what happens to your funds if the offer is rejected by a creditor.

Be suspicious of companies that ask you to arrange to have all your bills sent to them while you pay their deposit. Because building up these funds can take a while, your debts may be turned over to a collection agency which can open the door for harassing phone calls. In addition, even if you save money in their program, you may owe income tax on the “forgiven” debt, and your credit score will be damaged for years.

Have you been victimized?

Report any fraudulent credit repair or debt settlement services to the Texas Attorney General Offices at 1.877.FTC.HELP.

To avoid being the victim, CCCSSA recommends that you do your research and find an agency that best fits your needs. You can contact the Better Business Bureau to find if there are any pending investigations with a company. The Federal Trade Commission warns against relying on Chambers of Commerce or other trade associations where membership is based solely on a fee.

CCCSSA can help you set up a realistic budget as well as arrange repayment plans that are acceptable to you and your creditors. For an objective analysis of your situation, call us at 210.979.4300, 1.800.410.2227 toll-free, or go to the web at cccssa.org.

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In commitment to our community, we offer these financial literacy courses: Building a Better CreditPortfolio College Credit for Life Foreclosure Prevention Basics Live a Richer Life - Pre-Discharge Class Mastering Your Finances Money Principles For Today	Consumer Interest Articles October 2009 Mastering the Basics of Credit Scoring CCCSSA Happenings July 2009 Conserving Resources This Summer Are You a Financially Savvy College Student? Working with a Debt Settlement/Reduction Company Have you been Smished? April 2009 Announcing Financial Literacy Month Should I Stay or Should I Go? Set a New Trend - Budget Become a Homeowner Today January 2009 Handling Money Stress If it sounds too good to be true Mastering the Basics of Credit Scoring Remember when your first grade teacher told you howimportant it was to know the basics? You learned the ABC’s in order to read and write; you mastered counting to ten to learn arithmetic. In these times, it is essential that you know your financial basics, one factor of which is your credit score. What is a credit score? Your credit score is an important number. It's how creditors and lenders quickly decide if you are creditworthy. FICO scores range from 300 to 850 - the higher the better. The Fair Isaac Corporation (FICO) explains that your credit score is used to help creditors decide whether or not to extend credit to you. Your score indicates the amount of risk they are taking at the time of your application. Learn your score. It may surprise you that you can have three different credit scores at the same time. This happens because most creditors do not report information to all credit reporting bureaus: Experian, Equifax or TransUnion. However, knowing even one of your credit scores can provide you with an overview of all three. Raise your point value. There are definite steps you can take to improve your credit score. You may be surprised to learn that the largest portion of your score is based on your payment history. According to Consumer Action, being late or missing any payment in the past two years negatively affects the score, so do your best to never be late. If you have missed a payment, take the time to develop a bill repayment plan to get back on track. Contact us if you need assistance with this step. It may take a while to change your habits, but it is well worth the effort. Source: Fair Isaac Corporation, 2005 Another factor that raises your score is to maintain a positive credit history; repeatedly opening and closing accounts has the opposite effect. Other factors considered include the amount of debt you owe, your income, length of employment at your present job and the type of credit for which you are applying. Review reported information. It is important to review your credit report for its accuracy; if the report contains mistakes, take measures to correct the information. There are a number of web sites, such as Equifax, a credit reporting bureau, which include online tutorials on the disputing process. Our agency presents a free workshop called “Building a Better Credit Portfolio” which demystifies the credit reporting and scoring process. We also provide private and confidential credit report review sessions. For more information on credit scoring basics, contact our agency at 800.410.2227 or find us on the web at www.cccssa.org. Back to Top CCCSSA Happenings CCCSSA hosts 2^nd Annual National Protect Your Identity Week, October 18-24, 2009. We are offering Identity Theft Prevention Presentations in conjunction with the event. Go to the web at www.identitytheftcounsling.org, at the bottom of the web page click on the Protect Your ID Day banner to learn how you may get involved. All activities are free and open to the public. If you or anyone youknow thinks they may be a victim of Identity Theft, contact us at 800.410.2227 or email us at info@cccssa.org. Reverse Mortgagesprovide solutions for qualified Senior Citizens. When confronted with financial decisions, some senior citizens feel stretched. Which item takes priority, food, transportation, or healthcare? In view of these costs and others, some senior homeowners are exploring the Reverse Mortgage Counseling Program. A Reverse Mortgage allows qualified homeowners, 62+ years and up to convert a portion of their home’s equity into cash. Want more information? Give us a call at 800.410.2227 or email us at info@cccssa.org. CCCSSA offers financial classes inNortheast San Antonio To better serve the Randolph Metrocom community we now offer Money Principles For Today Workshops at our NE San Antonio Office. To sign up online at www.cccssa.org/Education, then follow the links to the Workshops page. CCCSSA Social media update. Twitter: Want to stay current on financial industry updates and tips? Follow us on Twitter.com, www.twitter.com/cccssa. Financial Fast Facts: Consumers can access NFCC video tips (Financial Fast Facts), DVDs and PSAs on our web site. Go to www.cccssa.org/Education - follow the links to the Education home page. Back to Top Resources This Summer Summer’s here, and we’re experiencing our usual south-Texas heat, and the frequently accompanying water restrictions. The need to conserve water can remind us of conserving other scarce resources – in this case, our money! A recent survey we took of our staff showed our monthly electric bills run from a low of $43 to a high of over $200. We found similarly that phone/internet bills ran from a low of $45 to a high of over $150. Our water bills were all over the map, also. Where do you fall in this range? How can you drop your usage of these modern utilities and save some money to put away? Water San Antonio Water System (SAWS) suggests you conserve water by filling the dishwasher before cleaning your dishes, rinsing vegetables in a sink full of water rather than under a running faucet, and insulating your water heater and pipes. These sound like great ideas, but around our house I found that we had to run the hot water each time because it cooled off in the pipes which run through the slab. There are a couple of nifty solutions; one recirculates your water through the cold water line, so you don’t waste water; you can install it yourself. Another possible do-it-yourself project installs an instant-on hot water heater under your sink. However, there is an even easier way to get a small amount of water quickly heated; the microwave. I found I can heat a cup of water in about 1-1/2 minutes warm enough for many hot-water applications. Electricity Conserving electricity requires that you first analyze your heaviest usage. Ceiling fans can somewhat reduce the need for air conditioning, but if you’re not in the room, leaving them running just generates more heat. Make sure you check the air filters periodically, and of course, turn off appliances when they are not in use and lights when no one is in the room. It is a good idea to have your A/C unit checked twice a year; if it is low on coolant, it may run continuously, or even freeze up. Here’s a quick refrigerator test you can run yourself. Stand in your sandals in front of the opened refrigerator door; how soon do you feel the cold air on your toes? That’s how quickly the cold air falls out, which then you will pay through increased refrigeration to replace. Remember also that freezers and refrigerators work more efficiently when they are at least a thirdfull; empty units cause more cycling on and off. You can often turn down your hot water heater in the summer, and this would be a good time to install a timer to shut it off during the night. Contact your utility company for more tips on electrical usage testing and conservation; often, they will come to your home and conduct an energy audit. CPS Energy will install a thermostat that gives you a 10% reduction if they can remotely adjust it at times. Automotive How about one of those magnets that improves your gas mileage? Just put it next to the main fuel line, and tests have shown it will make no difference whatsoever in your mileage! Oops. However, you can save fuel if you figure out how to consolidate your trips; if you add in the cost of driving out for lunch, you might be surprised to discover that you are spending as much on transportation as for the food itself. Instead of always driving solo, seek car-pooling and public transportation opportunities. When you purchase your next vehicle, think of going smaller, and of course we’ve all heard that it is a good idea always to have your tires filled to the correct pressure, not only for improved gas mileage, but because underinflated tires can lead to tire failure. Putting even one of these options into action can reduce consumption levels. There are many additional ways to save money to achieve your financial goals. We can help with ideas, including helping consumers change habits, in our Money Principles For Today Workshop. Plan to attend by enrolling online, www.cccssa.org or call us at 210.979.4300 / 800.410.2227 toll-free. -George Merkle, President & CEO Back to Top Are You a Financially Savvy College Student? If you are in college, you have invested in your career and long-term personal financial future. You have needs and wants and dreams to fulfill, but where do you begin? Taking control of your financial situation will increase your “savvy”. Create a Spending Plan. Having a written spending plan will help you monitor your expenses. Always be aware of checking and savings account balances. Treat debit purchases like checks by recording the amount in your check register. Tracking your cash spending habits will make you more conscious of your daily spending. You may be surprised to see what you spend your money on and how quickly it adds up. Make Savings a Priority. You may not feel that you can save money while you are in school, but controlling your spending choices helps savings become a reality. Do your research; find a financial institution that will allow you to open a savings account with $5. This small amount can add up, for example: five dollars deposited monthly over a 4-year period at 3.5% generates $263.71. Starting small will help you develop a savings habit, prevent the amount from being a burden, and give you a nest egg to roll over into a more aggressive account after graduation. Pay Your Bills on Time. Get in the habit of paying all your bills in a timely manner. Consistently doing this will help you develop good habits and keep your credit score high. Review Your Credit Report You are entitled to one free copy a year of your credit report from each of the three major credit reporting bureaus, (Experian, Equifax, TransUnion). We suggest you stagger the reports, obtaining one at the beginning of the year, the next in the middle and the third at the end. Reviewing your credit reports throughout the year will help you catch mistakes and minimize fraud and identity theft problems. You may access your credit report from our web site, www.cccssa.org, by clicking on the link, “Order a Credit Report”. There is no cost for obtaining the copies. If you have questions about your reports, call us for a free credit report review session. Use Credit Wisely Before getting involved, learn all you can about credit. How you handle credit today determines your access to it later. Successful consumers have sound credit portfolio’s, they know the terms and conditions of their credit accounts and are aware of their credit scores and debt loads. We suggest you have one credit card, and make small purchases that can easily be paid in full when the bill arrives. Staying below your credit limit has a positive effect on your credit score. To learn more about credit cards, plan to attend our College Credit for Life Workshop, presented the third Saturday of the month from 11:30 a.m. to 1:30 p.m. (except December). Keep Student Debt Loads to a Minimum When it comes to student loans, please note that you must repay your loan whether or not you graduate, if you can't find a job related to your program of study, or are unhappy with the education you paid for with your loan. Defaulting on student loans can have serious consequences. As mentioned in the May 30, 2009 Express-News article, “Tips on repaying student loans,” your credit profile will be damaged and you will not be eligible for any type of loans in the future. If you have defaulted on a student loan and need assistance reviewing your options, our agency provides student loan repayment counseling. The initial session is free. Back to Top Working with a Debt Settlement/Reduction Company “In debt?” “FeelingOverload?” “Don’t know where to turn?” Advertisements like these are plentiful. Whether you reduce or settle your debts, the process can have a negative effect on your credit profile especially when you hire a debt settlement company to perform this service. Now more than ever, consumers need to know how to tell the good help from the bad. Debt Settlement/Reduction Process Debt settlement or reduction is a process through which your creditor agrees to accept less than the full amount owed. Settlement companies often advertise that they can negotiate reductions of 40 percent or more in the debt you owe. Then they set up a repayment plan that typically takes between two and four years. Settlement companies charge significant fees. Different settlement companies have different fee structures, but there are two basic approaches. In one model, the settlement company’s fee will be a percentage of your total debt. The fees in that model typically range from 13-20 percent. Another option the settlement company may offer is to base their fee on the amount of debt reduction they can negotiate. Fees under this model can be as high as 35 percent of the debt. In addition, many settlement companies also charge a monthly fee that can range from about $19-$89 a month for the entire program. (For a three-year program, if the maximum monthly fee was assessed, it would total an additional $3,200.) Upfront Fees Some debt settlement companies front load their fees. In other words, they collect a large part of their fee before you receive any benefit. For example, a $50,000 debt could generate a fee of $7500. Stalling payment to creditors until the fees are collected will probably destroy your credit profile. Stop Paying Creditors. A settlement company may suggest that you stop paying your creditors instead they direct you to begin making deposits into a special third-party account. The settlement company will attempt to negotiate a settlement offer with your creditor once enough money relative to the debt is on deposit. This may take six months or more, although the exact length of time will vary with circumstances. During this time, the balance on your debt can continue to grow if interest and various penalty fees continue to be charged by your creditor. As a result, you may owe more than when you started and your credit may suffer because of your failure to make any payments on your debt. Even worse, legal actions may be filed against you during this time. 1099-C Tax Form The consumer may be responsible for taxes on the forgiven debt. If the forgiven debt totals $600 or more, you will receive a 1099-C from the creditor at the end of the tax year and the debtor should report the same amount as income on their tax return. This will substantially reduce the total savings from debt settlement/reduction. Credit Report Consequences Debts paid off through settlement will generally show “Paid by Settlement” on your credit report. If you later apply for new loans or credit, when reviewing your credit report the prospective lender(s) will see that a previous debt was paid by settlement, indicating that your repayment did not cover the total debt that you owed, but that your creditor accepted a lesser amount. Credit Score Consequences The credit score is based on information contained in the credit report, with the highest consideration given to how you repay your debts. If you’re not repaying the creditor or have missed payments, it will show on your credit report and potentially lower your credit score significantly. Your reduced credit score will limit future financial transactions, such as car notes and insurance premiums. We suggest you make a careful analysis to understand if the increased income tax and the higher cost of future debt hinders the initial “savings” that debt settlement companies advertise. Did you Know? If a debt settlement company cannot negotiate the promised reduction, or if you have to leave the program early, all of the fees paid could be lost before you realize any benefit. Your debt may actually grow larger when you work with a debt settlement/reduction firm because negotiations between the settlement/reduction firm and creditors may not start for several months after you signed up. Creditors will generally continue to charge late fees and interest each month during that time. Debt settlement/reduction companies are virtually unregulated in most states. There are no common industry standards for the services they offer, the fees they charge, the way they promote themselves, or the information they disclose. If you choose to deal with them, you do so at your own risk. There is Another Option Our agency is not a debt settlement or debt reduction company. We do not have a minimum or maximum debt requirement in order to work with you. Because every person’s situation is different, your debt management plan is based on who you owe money to and how much you owe. Contact us at www.cccssa.org or 800.410.2227 for more information. Back to Top Have you been Smished? Along with technological advances come new scams, the latest is called “smishing,” which stands for SMS (Short Message Service /text message) fraudulent messages. Similar to phishing, text message attacks are sent to cell phone users. What could be more irritating than a text message asking you to confirm the purchase of a $1500 computer you did not buy? Or how would you react when you learn you’ll be charged $2 a day until you confirm the dating service you never ordered? Scam artists are counting on your quick response. When you go to the contact web site or the 800 telephone number to resolve the mistake, you are guided to a thief pretending to be a Customer Service representative. They assure you the matter will be resolved, they just need the following: credit card/debit card number, CVV code on the back of your credit card, ATM card PIN, social security number, and/or email address. Of course whatever the threatening message warns you about never happens; and the web site and phone numbers are equally false. What can you do to counter this crime? Be aware. The only legitimate business that will notify you by text message about changes, purchases, upgrades, etc. is your cell phone provider. Anything else is probably a scam. If you are concerned about what you should do in this case, contact our Identity Theft Specialist at 800.410.2227, or email us at info@cccssa.org. Back to Top Consumer CreditCounseling Service Announces April as Financial Literacy Month In April 2009 Americans will celebrate financial literacy month. The month was designated by the United States Congress in 2006 to increase public awareness about the importance of financial education in the United States and the serious consequences that may result if one lacks an understanding of personal finances. Personal financial literacy is important to ensure that individuals are prepared to manage money, credit, and debt. It also is essential so that individuals become responsible workers, heads of households, investors, entrepreneurs, business leaders and citizens. The Value of Financial Literacy Being financially literate means knowing how to manage money, use credit effectively, build assets and make sound financial decisions. It is not related to the amount of your income. It means knowing what to do with your paycheck once you have earned it. The value of financial literacy needs little explanation to the visitors and clients of Consumer Credit Counseling Service of Greater San Antonio and Budget & Credit Solutions in Austin. They know our confidential counseling and educational services offer the skills needed to meet the financial challenges of their own lives. We encourage you to take advantage of the financial information and insights we make available through our counseling, classes, publications and web site, especially when you are confronted with financial challenges now and again. The Consumer Credit Counseling Service of Greater San Antonio team is committed to providing you with financial education and resources to improve financial literacy. To learn more about Financial Literacy Month events, contact CCCSSA at 1.800.410.2227 or find them on the web at www.cccssa.org. Back to Top Should I Stay or Should I Go? Back in 1981, a band known as The Clash recorded their only number-one hit, “Should I Stay or Should I Go?” Unfortunately, that is an all too familiar refrain among homeowners facing foreclosure. “Getting into the house of your dreams is just the first step. The long-term objective is staying there,” said George Merkle, President and CEO. “However, if making the mortgage payment is a struggle month after month, if it is going to present a hardship to your family, then other options should be considered.” A home is usually a person’s largest investment, and thus it is one that should be protected, but not at all costs. A recent NFCC-MSN Money Financial Literacy Survey revealed that one in every 10 Americans with a mortgage, or roughly 10 million adults, report being late or missing a mortgage payment in the last year. Today’s consumers often take drastic steps to satisfy the mortgage payment like payday loans or withdrawing money from their retirement plans at work. Obviously, a payday loan should not be a long-term solution to a monthly shortfall. Paying extremely high interest rates is never good. Likewise, individuals continually tapping into their retirement plans could end up with no house and no money for retirement. Average consumers do not know the difference between a short sale, a deed in lieu, forbearance or a loan modification, nor should they. That’s where professional help becomes essential; the good news is that there is help available, and the help is free at CCCSSA. Statistics show that over half of those whose homes are foreclosed on never speak with their lender/servicer prior to foreclosure. This may be due to the perception that nothing can be done, but today there are options not previously available. The struggling homeowner does not have to go through the process alone. Certified housing counselors at CCCSSA stand ready to help homeowners evaluate their options. If your mortgage is at risk, call for help, the sooner the better. Let a trained professional review your situation and find the resolution best-suited to your individual circumstances. Will you always be able to stay in your home? No. Is there life after foreclosure? Certainly. If you ever needed a friend in the business, now is the time. Foreclosure Prevention Basics Workshop Added to our Roster. Consumers who are concerned that their mortgage is at risk due to changing finances may join CCCSSA onSaturday, April 18^th from 9 to 11 am for the introduction of a new workshop, “Foreclosure Prevention Basics”. The workshop is designed to give consumers new insights into keeping their home during difficult economic times. Call CCCSSA to reserve your space: 210.979.4300 or 1.800.410.2227 toll-free or go to the web at www.cccssa.org. Back to Top Set a New Trend - Budget Nowadays it’s trendy to be thrifty! More people from all walks of life are embracing financial basics; they realize how essential a good budget is. Being in the “In crowd” means replacing countless trips to Starbucks and maddening searches for the latest designer fashions with well-planned purchases at discounted prices. In these uncertain economic times, having a budget in place helps people realistically obtain financial wellness. Budgeting is trendy because it reduces uncertainty. Struggling to maintain a certain lifestyle is now replaced by other essential words of “planning” and “controlling”. Like a diet however, the planning part is easy, it’s the putting it into action part that makes it work. Here are some suggestions to consider. Put it in Writing. You may be pretty sure of how much money is coming into your household and how much you are spending on a monthly basis, but without a written budget the only proof of it at this moment is a bank statement and some crumpled-up receipts. The process of writing goals down along with your plan to achieve them establishes a feeling of commitment and improves your budget’s effectiveness. A written goal is less likely to be adjusted when minor issues come up. Know Who Gets Paid First. Even though you may have plenty of money right now, if you had to live on less, who would or wouldn’t get paid? This goes beyond cutting out frugal expenses and asks who really comes first. Consumer Credit Counseling Service of Greater San Antonio recommends you make housing, transportation, healthcare, utilities, food, and secured debts highest tier of priority in your budget. Account for Everything. It is extremely important when organizing a workable budget that you are honest and accurate. If your income is somewhat flexible be conservative. Track expenses for one month, some expenses will require more tracking than others. Review flexible living expenses such as groceries, gasoline, and entertainment, and if necessary reduce and set limits. Keep and organize all receipts and statements to simplify the tracking process. Expect the Unexpected A workable budget helps you expect the unexpected. Not only have you budgeted enough to cover the basics, such as rent, utilities, insurance, you have also reserved money for periodic expenses. Even though expenses like car maintenance, taxes, and special occasions don’t come up on a regular basis, planning ahead and putting that money away provides a financial comfort zone. Then you are better prepared to handle those larger ticket items, like medical bills or automotive repairs. Good Budgeting Equals Zero. This doesn’t mean you are left with nothing after paying all the bills, rather it means there are no loose ends. Know where all of your money is going and make sure you are paying yourself utilizing a category for savings. Maintain your budget. After a short period of time, review budget items and make revisions, making any estimates more accurate based on actual expenses. A budget will show you where you are spending your money and provide structure and guidance for you. Budgets should match your needs and lifestyle, when necessary add more categories. For more budgeting information and techniques that will help you on the road to financial success, come see us. Our budgeting counseling sessions are free and confidential, as is our Money Principles For Today Workshops. To learn more about our services call us at 1.800.410.2227 or visit us on the web at www.cccssa.org. There’s never a better time to call Consumer Credit Counseling Service of Greater San Antonio. BBack to Top Become a Homeowner Today Recognize that with some careful planning, realistic goal-setting and a clear understanding of the costs involved, home ownership can be achievable. Every day, CCCSSA helps homebuyers navigate the overwhelming amount of available information so the home-buying process isn’t so stressful or intimidating. We suggest the following tips for potential homebuyers when exploring homeownership opportunities: Determine the right time for homeownership. If you know you want to own a home, whether it’s today or in a few years, you first should determine what kind of a home you can afford to buy. How much money will you be able to borrow? What types of mortgages are available and which mortgage is best for you? What can you really afford? Before calling or meeting with real estate professionals or potential lenders, be sure to have these answers to these questions. Analyze how much money you have saved. There are up-front costs associated with buying a home, such as a down payment, home post-purchase inspection, appraisal, and closing costs that can range from 3 to 6 percent of the cost of the house as well as additional costs such as movers and repairs. Be realistic about increased maintenance costs. Compare your current expenses to the ongoing costs of a home purchase. How does your current rent or mortgage compare to the new monthly mortgage payment? Don’t forget that with home ownership you owe taxes and need insurance, as well as other costs like utilities and maintenance. It is likely that you’ll need more furnishings, both indoors and out. And, once you’re the proud owner, responsibilities such as plumbing and roofing repair fall to you. Examine your credit report. Before shopping for the dream house or meeting with the mortgage lender, obtain a free copy of your credit report at www.annualcreditreport.com or by calling (877) 322-8228. Your credit report is used extensively by potential lenders to evaluate your credit worthiness. Your credit score can impact your interest rate and costs for other items such as homeowner’s insurance. Most times, the higher your score, the better chance you have of getting a lower interest rate. Decide what type of home you want. Prior to house shopping, a prepared homebuyer will develop a checklist of “must have” versus “would like” features to compare properties. When creating the checklist, consider the following: how much space your family needs; the style and layout you prefer; where you want to live; and what amenities are “must haves” such as a garage, large backyard, appliances, etc. Also consider distance from work and family, environmental and utility factors, neighborhood and school zones and other non-physical preferences. Do some “window shopping.” To find the right home, check as many leads as possible. Let your friends and acquaintances know you are looking to buy. Drive through neighborhoods and check out the “for sale” signs and then look them up on the Internet. Newspapers and shoppers’ guides are full of listings. Shop for a mortgage that’s best for you. Select a mortgage and loan terms that are most favorable to your financial situation. Shop around for the best deal, which may begin with a financial institution where you already have a financial relationship, such as a checking or savings account, or from friends, family, co-workers and real estate professionals. Sign up for a free or low-cost homeownership session. To find out if homeownership is right for you, determine how much home you can get with your money, what mortgage lenders look for in approving a loan, and how first-time homebuyers and low and moderate income households can stretch your borrowing power. Owning a home can be within reach for educated homebuyers. For more information about becoming a homeowner, contact CCCSSA at 210.979.4300 or 1.800.410.2227 toll free, or find us on the web site at www.cccssa.org. Back to Top Handling Money Stress With the recessionary economy, low interest rates, and the bear stock market, many people are feeling the pressure of money stress. The good news out of all this bad news is that there is something we can do about money stress. Money Stress defined. The American Psychological Association says there is no exact definition of money stress. However, people can experience money stress when making financial decisions about paying bills on time, and worrying about living within their means. Like other types of stress, dealing with money can affect a person physically as well as emotionally. And if left untreated, this type of stress may lead some to seek relief in unhealthy ways. Elizabeth Scott, About.com's Guide to Stress Management, has written about, counseled and coached people on effective stress management and healthy living strategies for 13 years. She reports that people with money stress can turn to drinking, overeating or smoking to reduce their anxiety about money. Loss of sleep and feelings of frustration and hopelessness are common responses as well. Some people cut back on items like health care to pay for basics of food and shelter. While this may work in the short term, smaller health issues can easily turn into larger problems when unchecked. Money Stress reduction techniques. Consumer Credit Counseling Service of Greater San Antonio has found that clients who take the following steps indicate they feel much less money stress. Why not give it a try? 1. Create a budget. Contrary to what many think, a budget isn’t restrictive. It is an effective financial management tool that helps you to avoid debt and overspending. Many people have no idea where their money went at the end of the week. An important practice in money management is to track your spending. Track all of it for a month, and you will have a good idea what you are doing with your money. And you can modify your spending and plan accordingly. Once you know what you are doing with your money, you can actually plan your spending, and create a budget. Having a budget puts you in control of your finances and makes it easier to live within your means. 2. Get organized. Be sure to put all your financial papers in the same place. You can organize your papers into the following categories: bills, agreements/contracts, tax returns, insurance policies, mortgage documents, investment/retirement statements, and warranties or service contracts. This saves you time, as you won’t have to search for misplaced documents. 3. Simplify. If you can help it, don’t buy anything. Don’t spend money. If you already have 3 pairs of black shoes, don’t buy another until you wear 2 pair out. If you have 5 pairs of jeans, you probably don’t need another pair. Get the picture? You can even have a garage sale and get rid of things you don’t need. 4. Keep your checkbook balance up-to-date or watch your online bank account. This will help you to prevent overdrafts and unnecessary fees. Don’t forget to calculate banking and auto draft fees that banks and credit cards can charge, and if you are paying these fees look into other ways to avoid paying these charges. 5. Set up a savings account and an emergency fund. In order to save money you have to make saving the priority. If you pay bills and buy things you want first, you probably won’t have money left over to put into savings. So if you really want to save money, you have to put a percentage of your earnings into savings before you start paying for bills and buying stuff. If possible, join your work 401k/403b or start investing in a long-term account – don’t worry about the fact that interest rates are currently low. Ten percent of your net income is a good savings amount to aim for, but build up to it. Start at 1% if that is all you can do, but put some money away, and start building up your savings. Another important habit to acquire is to fund an emergency fund. Put a small portion of your take-home pay into an interest bearing account each month and forget it’s there. Promise yourself that you will not pull any money out short of a true emergency. 6. Spend wisely. When shopping instead of looking for the cheapest package, look for the best value. Spend wisely and save by researching pros and cons, consumer ratings and best prices on products or services you plan to keep for a while. Returning merchandise takes time and money. You can avoid that hassle with some research before making your purchase. Buy used, not new. Almost everything depreciates the first day that it is owned. If you can buy a car 1-3 years old, you save thousands of dollars and have a product that is relatively new, and often still under factory warranty. You can do the same for furniture, household items, appliances, etc. Where do you look for good used bargains? Try your local thrift store, garage and estate sales, and craigslist.com. When looking at garage sales, also look for community events, like church or school rummage sales. And don’t forget moving sales where people have a lot of goods to offer. Following these practices can also reduce your money stress as you realize you are spending less. If you have some extra money, pay off your high interest debt; renovate or repair your home, but don’t start a project you can’t finish; open the college savings account that you’ve been putting off. 7. Tackle your debts. Credit card debt may be preventing you from achieving many of your goals. If you’re in a financial hole, stop charging. It is impossible to become debt free while still adding to your debt load each month. Make your purchases with cash or a debit card. This way, when the money’s gone, the spending stops. When repaying your debts, get in the habit of paying more than the minimum. This will reduce the amount of time and interest that you owe. And money you save on interest can go to savings. 8. Know what is on your credit reports. Americans are allowed one free credit report from each of the major bureaus every 12 months. You can order all three reports at the same time or stagger your requests. Ordering your reports at different times during the year gives you the opportunity to reduce money stress by staying current on your credit status, without having to pay for additional reports. To avoid any unwelcome surprises, it's important to see a copy of your credit report before you apply for credit such as car loans, mortgages, or credit cards. Errors in credit reports can be common. Go to www.annualcreditreport.com to access the reports online. Contact our agency for an appointment at 800.410.2227 if you need help interpreting the data. 9. Be aware of the risks of credit fraud. Identity theft and credit card fraud are serious issues, but there are ways to protect yourself. Never let someone else borrow your credit card. Do not leave your card or receipts lying around for anyone to see. Never give out your credit number to a caller unless you can confirm it is legitimate company or organization. If in doubt, don’t give it out. 10. Get help if you are in financial trouble. If you feel stressed about your personal financial situation, affordable and reliable financial help is only a phone call away. We are at www.cccssa.org or call us at 210.979.4300 or 1.800.410.2227 toll-free. You can also learn more about reducing your money stress by participating in our ongoing financial management workshops. Classes resume the second week of January. Back to Top If it sounds too good to be true Last month a huge Ponzi scheme was uncovered, one that had fleeced mostly wealthy people around the world and leaving many of them completely broke. Some victims said they initially thought it sounded “too good to be true,” but they invested anyway – and now have lost all of their money. In these times, it’s good to heed the advice that if it sounds too good to be true, it probably is. When people seek quick-fix solutions to their financial difficulties, they often cause more problems than they solve. Unfortunately, as demand for better credit grows, the opportunity for scams becomes more prevalent. Credit Repair Scams We are all bombarded through the media – including lawn signs -- with too good to be true offers to “fix” our credit score (even overnight!). Some credit repair scams may even require you to dole out large sums of money to fix the problem with a new miracle method. Having bad credit removed from your credit report for a fee may sound tempting, but as any honest credit expert will tell you, aside from correcting errors on your credit report, it takes time and good credit habits to improve your credit score. The Federal Trade Commission warns us to watch out for credit repair scams, especially those that include the following: The company wants you to pay before services are provided; The company does not inform you, free of charge, of your rights or options for handling debt on your own; The company does not want you to contact the three major credit reporting bureaus directly; The company tells you they can get rid of most negative credit information even if it is accurate; The company suggests you reinvent your credit identity by applying for an Employer Identification Number instead of a Social Security Number; The company advises you to dispute all information on your credit report regardless of its accuracy or timeliness. Debt Settlement Offers that promise a quick resolution of your debts are common. While the possibility of being “debt free in 12-36 months” may be attractive, it’s best to research what the offer entails before giving them your business. The problem is that the majority of debt settlement companies are “for profit” and not very well regulated. Consequently, there are many dishonest debt settlement companies in existence today. Even honest ones will collect fees for something you can do yourself. Debt settlement is not debt consolidation. Settlement means to resolve your debt at a negotiated reduced balance. When you hire a company to settle your debts, take the time to select one that fully informs you of your options. You will likely pay high fees to participate in their program. It is also important to review their method of settling debts before proceeding. When you agree to third party negotiations, ask them upfront what happens to your funds if the offer is rejected by a creditor. Be suspicious of companies that ask you to arrange to have all your bills sent to them while you pay their deposit. Because building up these funds can take a while, your debts may be turned over to a collection agency which can open the door for harassing phone calls. In addition, even if you save money in their program, you may owe income tax on the “forgiven” debt, and your credit score will be damaged for years. Have you been victimized? Report any fraudulent credit repair or debt settlement services to the Texas Attorney General Offices at 1.877.FTC.HELP. To avoid being the victim, CCCSSA recommends that you do your research and find an agency that best fits your needs. You can contact the Better Business Bureau to find if there are any pending investigations with a company. The Federal Trade Commission warns against relying on Chambers of Commerce or other trade associations where membership is based solely on a fee. CCCSSA can help you set up a realistic budget as well as arrange repayment plans that are acceptable to you and your creditors. For an objective analysis of your situation, call us at 210.979.4300, 1.800.410.2227 toll-free, or go to the web at cccssa.org. Back to Top

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