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Getting Ahead
4th Quarter 2007

'Tis the Season to Overspend

Credit CardsIt is hard to believe that the holiday season is only a few short months away. As you make your plans to celebrate the season with friends and family, be sure to develop a holiday spending budget; doing so beforehand will not only help you avoid overspending, but will also ensure that you don’t spend all of 2008 paying off holiday debt.

Here's how to get started:

  • Determine the amount of funds that you will have available to spend over the holidays. Consider how much you spent last year, then decide if you want to increase or decrease that amount for this year.
  • Make a list of holiday expenses to be paid. Typically, holiday expenses include travel costs, gifts, food for entertaining, decorations, postage and holiday cards. If your expense column is greater than what you have available to spend, reprioritize your list and cut any unnecessary expenses. 
  • List everyone you plan to buy for and establish a maximum dollar amount to be spent per individual. Electing to give less traditional, more creative presents, such as babysitting, yard work or housecleaning is a great way to personalize your gift and avoid straying from your budget.

With a bit of creativity, pre-planning and diligence, you can enjoy the holiday season and avoid debt that can linger for years to come. After all, the best things in life - like spending the holidays with friends and family - are free.


Tips for Avoiding Foreclosure

Establishing CreditWith interest rates on the rise and many adjustable-rate mortgages coming due, there has been a lot of attention given to foreclosures in the national and statewide news. Foreclosures are a bad deal for both the borrower (you) and the mortgage lender.

People get into challenges paying their mortgage for many reasons. The important thing for you, as a mortgage borrower, to do is be realistic about your ability to pay your mortgage on time.

Assess Your Finances
It’s important to be honest when assessing your finances. Calculate all your monthly payments and find out exactly how much you will be able to afford to pay in the upcoming months.

Before You Miss a Payment
To help in the event that times become tight, maintain an open and honest dialogue with your mortgage lender. As soon as you know you will not be able to make your mortgage payment, contact your lender. It is best to do this before you miss a payment. A missed payment will haunt your credit score for a long time. It’s important to talk with your lender and figure out your next steps in order to keep your credit in tact.

Discuss Options
With your lender, work out a compromise on your mortgage. A foreclosure is extremely costly for lenders, so they want to avoid this outcome if at all possible. Find out if you can get an extension on your payments or a flexible payment plan.

Work Out a Game Plan
A payment plan or extension is only a temporary fix to a larger problem. Meet with a financial planner or credit counselor to make a long-term plan. It’s important to make an effort to change your financial situation.

The GettingAhead Association has several resources to assist you. Contact us at for addtional information.

Consolidating Your Student Loans

GraduationIt’s not unusual for college students to graduate with more than one student loan, which means more than one payment to keep track of and more than one interest rate. A federal consolidation loan can lock in your interest rate, simplify your bill-paying and lower your monthly payment significantly.

Here are some facts to keep in mind:

  • Consolidation can reduce your monthly payment up to 60 percent.
  • You can extend your term to as long as 30 years, but remember, a longer term means more interest payments and a higher overall cost.
  • Student loans can only be consolidated once, so you'll want to be sure it's a good idea before moving ahead.
  • If you're in default on a federal student loan, you still might be able to consolidate, provided the defaulted loan is not subject to a judgment or wage garnishment.

Visit to learn more.


Year-End Tax Tips

With the holidays drawing near, you may be thinking of family dinners, seeing old friends and finding the perfect gifts for those you love. But you also should be considering taxes. While it may seem too soon to think of April 15th, not waiting until the last minute can help you get the most out of your taxes this year.

Below are a few tips to consider:



    1. Get Organized. If you haven’t already done so, set up folders for the following: Receipts, tax forms and reports (from employers, financial institutions, clients, etc.), charitable contributions, investments and miscellaneous deductions.
    2. Make flexible spending work for you. If you don't rack up enough medical expenses in 2007 to meet the amount you set aside in your flexible spending account, you'll lose the money. If you've got extra, it's a good idea to start making a few last-minute appointments, and be sure to save your receipts for medications.
    3. Get serious about retirement. One way to lower your taxable income for the year is to contribute to or open a retirement plan, such as a 401(k), 403(b), deductible IRA, SIMPLE IRA or SEP. Make contributions for 2007 up until December 31 for 401(k)s and 403(b)s. With some plans, you have until April 17 to make those donations. Check with a tax professional to determine which move is best for you.
    4. Adopt a charitable attitude. Donating clothing and household goods to charities before January 1, 2008, is not just a good deed, it's also deductible on your 2007 return. Be sure to get a receipt from the organization you're donating to, and keep in mind that the deduction is limited to the item's current fair market value (what you could sell it for at a garage sale). So do a good deed and let it work for you.
    5. Don't let extra money sit around. If you have a large amount of cash to invest and want to shift some of your income to 2008, consider investing in a short-term CD or a Treasury bill that matures in 2008.
    6. Strategies for the self-employed. If you're self-employed and use the cash method of accounting, you can decrease your 2007 taxable income by delaying your December billings until January, setting up a qualified self-employed retirement plan (SEP) and deducting contributions you make on your 2007 return, and buying supplies and equipment this year instead of next.


Downsizing to a Smaller Car? How to Make Sure It's Safe

With today’s gas prices, many people are considering trading in their big gas-guzzlers for something smaller. By doing a little research ahead of time, you can drive with confidence, enjoy less pain at the pump, and protect yourself and your loved ones.

The National Highway Safety Administration recommends asking the following questions before purchasing a vehicle:

• How well does the vehicle protect people during a crash?
• What features does this vehicle have that can help you avoid a crash?
• What other types of safety features does this vehicle have?

Front seat belts are now augmented by air bags, traction control, anti-lock braking systems and a host of other features designed by auto makers to keep drivers and passengers safe.

The Department of Transportation provides detailed information on
crash-test ratings and other important vehicle safety information.