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Getting Ahead
4th Quarter 2009

In this issue:

Expenses That Are Keeping You in Debt

Easy Holiday Savings Strategies to Start Now

BBB on How to Stand Out From the Crowd at a Job Fair


Expenses That Are Keeping You in Debt

In the United States, 43% of families are spending more than they earn each year, according to MSNMoney. With numbers like these, living with debt seems unavoidable and paying it off seems like an uphill battle you are destined to lose. However, if you are interested in living debt-free, here are seven expenses to watch for that may be holding you back.

1. Not Knowing Your Limits
According to the National Consumer Law Center, the average overdraft fee is $34.65, and considering a purchase as small as your morning cup of coffee could put your account in the red, that's a hefty price tag. According to a survey done by the Pew Safe Credit Cards Project in March 2009, 92% of credit cards had a fee for exceeding the credit limit, including 100% of student cards. The over-the-limit fee and the late payment fee were both $39 for most accounts. Also, these infringements can result in your interest rate skyrocketing up to 30% or higher.

2. Fees, Fees, Fees
Make sure you understand what and how you are being charged. Some accounts advertise as being free, but in order to have the monthly charges waived, you may need to fulfill some conditions including but not limited to a minimum balance, not exceeding a set number of transactions per month and/or having a set number of direct deposits or automated bills associated with that account. Remember, if you withdraw money from an ATM, the average $1.50 fee is charged both by the cash machine AND by your financial institution.

3. Paying the Minimum
You've probably read everywhere that this is financial suicide, but let's take a look at what the actual damage would be with an average balance of $11,000. The average interest rate on a credit card in the U.S. is 11.2% according to However, with this kind of payment history, and one-third of credit card holders paying between 20-41%, let's guess conservatively that this family's interest is around 20%. The minimum payment is usually around 2% of the total balance, so in this case that would be about $220 per month. If only that minimum is paid, the debt would be paid off in nearly 77 years, with a total of more than $52,000 paid in interest. Push that interest rate up to 30% and the minimum payment is insufficient to ever pay down the debt.

4. Credit Card Cash Advances
The minimum percentage of fees on cash advances is 3% with a minimum ranging from $5-$15 with no maximum fees. Add these fees to the transactions fees you might be paying and you'll be shocked to see the total amount that disappears from your wallet each month on convenience fees alone.

5. Payday Loans
The industry standard in annualized interest is between 200 and 500%. These lenders are able to avoid usury laws by calling their interest charges “service fees” which are not regulated the same way in many places. In fact, payday services have been outlawed or severely restricted in 13 states according to (Hold too tightly to this rescue line and you'll soon be drowning in debt.

6. Not Negotiating
If you are having trouble paying down your debt, call your creditor and ask to have your interest rate reduced. These companies want your business, so often you will be able to negotiate a repayment schedule that can help you pay down your debt faster. Make sure you ask for the lowest fixed rate – an introductory rate that will shoot right back up in a few months will have you back at square one.

7. Ignorance Is NOT Bliss
Make it a priority to keep records of where and how you spend your hard-earned cash. Make a repayment plan and have set goal-dates for paying off debts.

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Easy Holiday Savings Strategies to Start Now

If you're already thinking about how much the holidays are going to cost you this year, you're not alone. A new survey by Kelton Research shows that 58 percent of Americans are concerned about the cost of holiday shopping.

"Good Morning America" financial contributor Mellody Hobson has advice to help you get started early and save some real money.

Early Travel Savings Tips

One of the biggest expenses is always travel. More than 50 million Americans fly during the Thanksgiving and Christmas holidays, according to AAA. Hobson says there are ways to save money on holiday travel by planning ahead.

The good news is that according to Bing Travel Services, airline experts believe that Thanksgiving airfares will be down 22 percent from last year and Christmas and New Year's fares are expected to be down 17 percent.

But Hobson cautions that you still need to book early and be flexible about your travel dates in order to save.

Avoid super travel days around the holidays: Several airlines (American, United and U.S. Airways), have added $10 surcharges to most tickets for travel on the three busy days around Thanksgiving and the New Year's holidays, so avoid travel on Nov. 29, and Jan. 1 - Jan. 3.

By avoiding the busiest days of the year, you'll also avoid higher fares in general. For example, Hobson says that if you return on the Monday after Thanksgiving, you can save 10 percent. You can save up to $70 if you travel on Thanksgiving day, and 10 percent if you travel on Christmas day.

Check Out New Holiday 'Club Accounts'

A lot of people go into debt every year because of holiday shopping and expenses, but some of the nation's largest retailers now have holiday club accounts that let you save without tapping your credit cards.

These "club accounts" at national retailers such as Sears, K-Mart and Lands End can offer up to a three percent match up to $100.

You can activate these accounts with just a $5 deposit at a store or online. For every dollar you set aside in the account, the stores will give you a three percent match on your total as of Nov. 14, up to a maximum contribution of $100.

You can't get that money back. Once you've made the deposits, the money can only be spent at that store, but the savings won't expire so there's not a rush to use it. If you think it will encourage you to spend more than you otherwise would at a certain store, don't use it.

How to Start Saving Now on Holiday Spending

Use Credit Union 'Holiday Accounts;' Avoid Credit Cards

Hobson says that credit union holiday accounts can help you keep all these costs off your credit cards, so you only spend what you really have and can afford.

A quarter of all Americans will take 12 months to fully pay off their holiday purchases -- that's 12 months of paying interest and being in debt. To avoid running up credit card bills, Hobson recommends using a holiday account at your credit union.

When you set up the accounts, money is automatically pulled from your checking or savings account on a periodic basis and put into your holiday account (the amount and frequency of deposits depend on the rules of your financial institution).

In November, your credit union will either send you a check for the amount in your account, or they will deposit it into your existing account. Most of these accounts only require a small minimum deposit, usually just $5.

Plan a Slow-Down Holiday: Spend 10-20 Percent Less

Last year, the average American spent about $630 on gifts, and about $830 total on holiday-related spending.

Hobson says the best thing to do is lower your budget by 10 to 20 percent. You can spend even less if you communicate with your family and friends and plan a slow-down holiday or a buy-less holiday. She suggests setting limits on gifts costs or instituting a "gift wheel," where one person buys a gift for someone else, but not everyone.

And most importantly, she says to make sure to keep track of your spending with a detailed budget. If you make a list in advance, you'll be prepared to look for items on sale and you'll have a good sense of your total shopping budget.

How to Start Saving Now on Holiday Spending

Seek Out Online Deals; Shop Early

Most Americans do at least some holiday shopping online -- Consumers spent almost $26 billion on retail e-commerce sites last holiday season, according to a study by Comscore.

There are sites out there specifically dedicated to spotting holiday deals.
collects prices and sales information from 600 retailers. You can see who has the best sales and terms such as free shipping. The site is a one-stop resource for sales and coupons.

Hobson says important online strategy is to shop early. Sites like have a great selection, but as they sell out of items, only the more expensive versions of a product will be available. An additional advantage of the internet is that in some cases you do not have to pay a sales tax.

Courtesy of ABC News Internet Ventures

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BBB on How to Stand Out From the Crowd at a Job Fair

With unemployment rates climbing to double digits in some states, job hunters are turning out in record numbers at job fairs hoping to make a good impression and get back into the workforce. Competition for landing a job can be fierce and Better Business Bureau (BBB) is offering advice on how job hunters can make a strong impression and position themselves as the candidate of choice with potential employers.

BBB offers the following advice for job hunters on how to prepare and present themselves at a job fair:

Research companies first.
In some cases, only one employer is holding a job fair, which makes research much easier. For larger job fairs bringing in many employers, job hunters should be able to find a list of attending companies at the host’s Web site and begin researching the companies they want to target beforehand.

Take plenty of resumes.
Job hunters should have customized resumes prepared for their target businesses, and should bring plenty of copies of their standard resume to pass along to other employers. Also, job hunters should take a briefcase or portfolio to organize and hold business cards and other materials.

Perfect an elevator pitch.
An elevator pitch is your description of who you are, what your skill set is, and how you can benefit the business. The pitch should be brief, conversational and natural, but should be well-rehearsed. The elevator pitch simply must be memorable and sincere since job hunters may only have a few minutes at the most to make an impression on the potential employer.

Dress and act the part.
Putting your best foot forward at a job fair means “looking the part” by wearing professional clothes, such as a suit and removing any unusual piercings and covering tattoos. A job hunter also needs to act like a professional, including not swearing or making inappropriate jokes or speaking ill of a former employer.

Be confident.
While a day at a job fair can be exhausting, it’s important to always act confident and enthusiastic. Job hunters should work hard to stay positive and take breaks to get organized and recharge their batteries. In fact, BBB recommends taking a few minutes to review your elevator pitch and materials before approaching each of your target businesses.

Don’t become a victim.
While instances of scammers setting up shop at a job fair are rare, job hunters should never pay an upfront fee to any potential employer at a job fair, nor should they give any personal information such as credit union account or Social Security numbers until they have researched the company fully outside of the fair.

Article courtesy of

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