Jill Russo Foster

When should you use a credit card?

When should you use a credit card? I get asked this all time. There is no simple answer for everyone. Only you know what kind of spender you are.

Here are some general guidelines:

You can charge anything within your monthly budget if you pay your credit card bill in full each and every month.

However, you should think twice before using your card if you are paying down your debt and are currently incurring interest on your credit card bill.

Some people feel that you should never use a credit card. I disagree. Credit cards can actually help you maintain a good credit rating if you stay within your means. And, some credit cards offer benefits like consumer protection. These benefits should come with the card at no cost, or minimal cost, to you. Here are some examples:

American Express offers travel insurance at a minimal cost when you charge an airline ticket.
Some credit cards offer purchase protection on lost or broken merchandise.
Some credit cards offer an extended on purchases.
Some offer insurance coverage on rental cars.

Know all the perks that come with your credit card, that can help you decide whether to make a purchase on credit. If you’re not sure what benefits your card offers, call them for details.

My gift to you for the year 2012

You’ve heard me say how important it is that you check your credit report. You’ve also heard me say that you can check your credit report for free – 3 times per year. That’s because each of the three major credit reporting agencies must give you access to their version of your report.

But, how many of you remember to order your credit report even once, let alone 3 times?

I promise to help you remember. As my blog subscriber, you will receive three reminders this year: one in January, one in May and one in September. Each reminder will tell you exactly how to order your report and which agency to choose. Easy!

Do you want to share this gift with your friends? Simply share this post and allow them to sign up for free credit report reminders, too! There are many ways to subscribe:

Potholes on the Road to Success

Do you feel like you’re stuck? Are your goals the same this year as the year before (and the year before that?) Here we are near the end of another year. Did you achieve your goal? If not, read on.

Earlier this year, I did a talk about the things people believe about money. The attendees were given a list of money scenarios, and I asked them to check off the scenarios they believed were true about them. Nearly everyone in the room checked off beliefs of scarcity – robbing Peter to pay Paul, not having enough to pay monthly bills, etc. I suggested that it was their beliefs holding them back – and not their situation

Let’s go back and talk about beliefs. Beliefs are not facts. They are often things that you learned when you were younger and you now believe them to be true (whether they are or not). One belief that I struggle with is that I am not worthy of success. I have done a lot of reading, and a lot of work on myself, to overcome this belief. I have to admit that I am not fully there, and there are times that I catch myself reverting back to my old thoughts. Overcoming false beliefs can be a never ending process.

I’ve learned that I have to retrain my subconscious mind to accept a new belief or affirmation. An affirmation is a positive belief that reframes your thoughts. Taking my example, I replace the words “I am not worthy” with “I am deserving of happiness, success and love just the way I am.” I repeat this affirmation to myself several times a day until I believe it to be true.

You can reframe any belief into a positive affirmation. Remember that old philosophical question: is the glass half empty or half full? Train your subconscious mind to think positively and you will be amazed at what life brings you when you are open to receive it.

How to set your goals for 2012:

Reframe each goal into an affirmation, i.e. “I deserve to be free of debt.”
Write down the reasons you want each goal. Reasons can help you to see the bigger picture. For example, if your goal is to be free of debt, you could write “I want to be stress free. I want to focus on saving for retirement. I want a more flexible monthly budget.”

Now that you’ve set your goals for 2012, try this for your 2012 resolution.

Think positive.
Be aware of when a negative belief comes up and replace it with your affirmation.
Make a list of the things that you are grateful for each and every day to keep you in that half full glass mode.

When you give yourself a positive outlook, you clear the path to achieving your goals in all areas of your life.

Should you move your money?

Since the Credit Card Act of 2009, banks have been looking for ways to make up for lost revenue. Has your bank increased fees or even added new fees? Look for changes in…

overdraft fees
inactivity fees
annual fees
ATM fees

This past month, a major bank decided against adding a debit card fee. I believe that negative consumer response was the only reason they changed their plan. Their customers did not want to pay to use a debit card and they made their voices heard.

But what if the protests hadn’t worked? Being a consumer means you have a choice. You don’t have to stay with the same bank. You can choose a bank, or even a credit union, that has no fees or minimal fees.

It’s very simple to move your money. If you are unhappy with your bank, do some research and change banks. There are plenty of banks and credit unions that will give you a free checking account with no ATM fees.

Some banks have investment policies or divisions that made them more vulnerable during the crisis. These banks are going to have to make up lost revenue. Even though that particular bank did not go forward with the new debit card fee, they may find a less controversial way to increase their fees.

You need to be aware that fee increases could be coming your way. Look at your monthly statements and the inserts. Be aware of what is going on at your bank so you can be proactive.

What are you grateful for?

I write a journal most nights about what I am grateful for from that day. I list the five best things (sometimes more) that happened that day.

They can be as simple as the stranger who held the door open for me, that parking space that opened up, those 5 extra minutes in the morning, an unexpected income check, or a bill coming in smaller than I expected. Looking at the world through grateful eyes helps me stay positive for whatever life throws at me.

I am grateful for you and all of my readers. I’m grateful for your great feedback, suggestions and the progress you are making with your finances. I truly love to hear from you, so keep those emails and posts coming. I am thankful for Val, my terrific assistant, who makes this and many other things happen from behind the scenes. You make my life so much easier.

Smart Charitable Giving

The end of the year is coming up. People are meeting with their tax preparers to find out how to increase their deductions.

Now is a great time to increase your charitable donations. The charities know it too, so they increase their advertising this time of the year. Most of them look like great causes, but, you need to determine if the charity is legitimate and how your donation will be used.

Choosing a charitable organization can be challenging. Here’s what you need to look for:

They must have a 501(c) tax status if you are planning to deduct this on your IRS tax return.

Find out how much of each dollar is used for the cause, versus how much is used for administration expenses. The higher the dollar amount used for the cause, the better.

How do you find that information? Go to www.Give.org before making your donation.

Once you have chosen your charities, make sure you have the proper documentation for tax purposes.

For monetary donations, a cancelled check can be your receipt.

For non-cash items such as food, clothing, household items, furniture etc., you will need to make an itemized list of the items with the value. Your tax preparer can help you to determine the value of each item. Make sure to get a receipt for your donation. Attach this to your itemized list and keep it with your tax records.

What is a Pantry Purge?

If you read my Suggestions for Lowering Your Expenses, then you know that I want to lower my food spending. I took the advice of several friends and colleagues and did a pantry purge.

A pantry purge is where you eat the food in your pantry and freezer instead of buying new. I don’t mean that you eat that and nothing else, or that you eat it in a big binge. It simply means that you don’t buy any processed or frozen foods until your panty and freezer are empty. You will purchase only perishable fresh fruit, vegetables, or dairy products.

I wasn’t always sure what to make with the foods I had on hand. So, I went to recipe sites online and entered the ingredients to see what came up. Some were great and I will make those again… others were not so great. I made some new kinds of homemade soups (that gave me extra to take for lunches), and I combined ingredients that I probably would not have otherwise.

Bottom line, I emptied out the food pantry as well as substantially cut my food spending. I learned that a little more planning ahead for the week’s meals, and less buying, is better for my budget. Buying something just because it’s on sale is not better for my spending. And yes, sticking to my list when in the store, and not impulse buying, was the biggest saver.

Buy Used to Save Money

Do you want to save money? That’s probably a silly question, because everyone wants to save money. Let’s think of a better way to say this. Do you want to try another way to save money? I have a really simple suggestion – don’t buy new.

You’ve probably heard this advice when you were buying a car. A new car depreciates the minute you drive off the lot. If you buy used, you can negotiate a price that’s closer to its real value. Expand your thinking to other items and you could save money.

Let’s discuss furniture. Most people buy brand new furniture, but it doesn’t last forever – especially if you have kids and pets. What if you were to buy that sofa used – how much could you save? There are stores that specialize in selling gently used furniture, either on consignment or from furnished rentals. Much of this furniture is in great condition.

Many years ago (over 15), I was able to purchase our patio set – table for 6 with chairs, a chaise lounge and end table. The cushions had seen better days, but the furniture was in excellent condition. I paid $100 for all the pieces. I still have this set in the yard. All I had to do was purchase new cushions.

Let’s talk about kitchen items. Dishes, silverware and small appliances are always available at tag sales. Some of these items have never been used. Think of how many times you’ve been gifted with something you didn’t need. You can find brand new coffee makers, mixers, waffle-makers – still in the box with instructions – for sale cheap by your neighbors.

What about clothes? My assistant lost weight a year ago and didn’t want to spend a lot of money on new fall clothes. She went to a consignment shop and a thrift store and spent $40. What did she get? With $40 she was able to 4 pairs of jeans, 3 sweaters, 2 jackets and 4 long-sleeved knit shirts – all relatively new and in good condition.

Let’s be clear here, I am not talking about items that should have been thrown out. You can get good quality items. Depending on what you need, you can look at tag sales, consignment shops, websites, classified ads, etc.

I am not suggesting that you buy everything used. There are some things that come to mind that you shouldn’t buy used – underwear and makeup just to name two. But the next time you need something, consider the alternative. Have you saved money by buying used? Tell me about it.

Suggestions for lowering your expenses

You know how tracking your spending and budgeting are important things to do. These are the only ways that you can make the changes necessary to achieve your financial goals.

After suggesting that you track your spending, I did a month of tracking for my family. It was an eye-opener. Here are some of the changes we made:

Decreased our TV bill by eliminating channels and services
Eliminated some of our cell phone services that we didn’t use
Used a local pet store for some of our pet’s vaccinations (instead of the vet)
Planned our meals a week in advance using the supermarket sale flyer
Cooked ahead on weekends so that there was food available to eat for lunches

These reductions in cost saved us enough money that we were able to make some necessary home repairs without having to stress about tapping into savings to pay for it Our furnace is cleaned and tuned up for the winter, our roof is repaired, and the car had a tune up – all things that needed to be done, but were things I would have considered “budget-breakers” before reducing our expenses.

Our food spending is still higher than I would like, and I need to get that down even more. Next week, I will tell you what I did to reduce our grocery bill while still cooking meals at home.

Did you do the budget exercise with me? I know that several of you requested my budget worksheet. What did you learn about your spending? Let me know.

What can you do with $10?

What can you do with $10? If your first thought is “I can buy something!” you’re not alone. But, $10 won’t get you very far, and then you will be left with zero.

Another option is to save the $10.

You are probably thinking that isn’t much money. Maybe you think it’s not worth going to the bank to make a deposit so small. But, look at it this way. If you saved $10 each week you would have saved $520 in a year, but with an interest rate of 1% that would be $532.46.

You are still probably thinking that’s not much money. But, after two years, you would have $1,060.20. After three years you would have $1,593.26. After five years you would have $2,675.57.

Most people can find $10 a week to put into savings. If you look at what you are spending, there has got to be something you can eliminate to get the $10. On the other hand, if you think that $10 a week isn’t enough, challenge yourself to save more. Can you find $20 to save? That would give you $5,249 in five years. Can you find $50 to save? That would give you $13,379 in five years.

Saving any amount on a regular basis can give you money to fall back on. So the next time you are out shopping, think about the item on the shelf. Is it worth buying, or would it be better to save the money instead?