News

Call it an extreme foreclosure. An Atlanta-area home demolished and rebuilt on the hit ABC television series “Extreme Makeover: Home Edition” has become one of the latest statistics in the foreclosure crisis.

When I saw this story in the Washington Post my first thought was, “How could that happen?”

I must admit that I don’t really watch the show, but I know about it. I don’t live under a rock after all. I was under the impression that the home was pretty much paid for by the show.

As I continued to read I learned that not only was the house rebuilt, but the family was given enough money to pay the taxes on the home for years as well as a home maintenance fund.

It turns out the family used their beautiful new home as collateral for a $450,000 loan and fell behind on the payments.

I was left a bit stunned by this. A family who was living in a sub-standard home with an overflowing septic tank was given the gift of a brand new home, reportedly the biggest on their block. They were also given money to maintain their home and money to put into their children’s college funds. After all of that good fortune, they’re going to lose it.

The family has refused to talk to most of the media, though they did tell one television station they used the loan for a business that ultimately failed.

Most news reports say the home is set to be auctioned off Tuesday. I did read one story that said the family had reached an agreement with the lender to stop the foreclosure.

I wish the family would speak more about their situation. ABC has released some statements, but mostly said the family’s financial situation is private. To a certain extent I agree. But, I also think a family that has accepted hundreds of thousands of dollars from the community owes it to the community to step up and accept responsibility for what has happened. They owe the sponsor companies and private volunteers an explanation, an apology, something.

Regardless of what put the family in this situation, it is ultimately someone else’s time and money that has been lost.

Another strange twist in the daily news of foreclosures …

Tips

In previous posts I’ve talked about cutting back on your bills, including utility bills.

Here are some ways to trim your electric and water bills.

·        Install an automatic thermostat. Set it to the desired temperature when people are at home and adjust the temperature to a higher or lower setting, depending on the season, when your house is empty or at night.

·        Lower the temperature on your hot water heater to at least 120 degrees. You can also turn your hot water heater off if you’re going to be away for an extended period of time.

·        Use cold water to run your garbage disposal and for washing clothes whenever possible.

·        If you need a new washing machine, consider one of the newer front-loader models. They use far less water than traditional washing machines. They are also gentler on fabric, so your clothes stay nice longer.

·        Line dry your clothes.

·        Make sure to clean the lint filter of your dryer after each use. A clogged filter will result in longer drying times.

·        During the summer months, keep your house cooler by shutting blinds or drawing the curtains in the morning and afternoon when the sunlight streams into your house. Keeping those rays out will also help to keep your house from heating up.

·        During the winter months, use draft guards around the bottoms of doors that may leak cold air.

·        When it’s hot outside, prepare cold meals or use your grill. Heating up the oven will only make things hotter inside.

·        If you are using an oven, bake double batches. Freeze the extra, so you can reheat it in the microwave at a later date.

·        Turn off the tap while you are brushing your teeth or washing dishes by hand.

·        Keep unconsumed drinking water left in cups for watering plants.

·        Take showers instead of baths.

·        Install low-flow shower heads.

What are some of your tips to conserve water and electricity?

As if there aren’t enough ways to have your identity stolen, thieves are increasingly starting to target ATMs.

The method of thievery is called “skimming.” Basically the thief inserts a device into the card slot of an ATM (or other self-scan devices like gas pumps). When you slide your card in, as your normal transaction is processing, the skimming device is recording all of your information. In addition thieves are using touch pads or video cameras to see what PIN number you’re entering. Of course some still get your PIN the good old-fashioned way by lurking and looking over your shoulder.

Some crooks have even gone so far as to purchase old ATMs and set them up in remote locations where unsuspecting people slide their card and get nothing but scammed.

Bankrate.com offers the following tips to help you avoid becoming a victim of skimming:

·        Use a familiar ATM, preferably one attached to your bank.

·        Don’t use an ATM around a suspicious person or in a remote or unfamiliar location.

·        Check the card slot, keyboard and machine for any signs of tampering. Don’t use the machine if your card jiggles in the slot or anything else seems suspicious.

·        Don’t use an ATM with a sign or message directing you to another machine.

·        Keep a safe distance between you and other people in line at the ATM. Don’t let anyone distract you or offer to help you in any way.

·        Have your card out of your purse or wallet and ready for use.

·        Stand close to the screen and shield your activity.

·        Keep your printed receipt to compare it to your bank statement.

·        Secure your cash and card and make sure the transaction is complete and the screen in clear before you leave your ATM.

If you do suspect you’ve become a victim of skimming, notify your bank immediately. Unlike credit cards, if a thief gets a hold of your debit card that’s actual cash coming out of your bank account. The sooner you report a lost or stolen card or suspect transactions, the better chance you have of getting your money refunded.

Debt Management

Here are some more ways to stop living beyond your means.

Get your bills under control. If you don’t have some sort of system to organize your bills, make one. Start by making a list of all of your bills and the due dates for each bill. Mark the dates on your calendar, so you’ll be sure to pay all of your bills on time. A great way to make sure to pay on time is to set up an automatic withdrawal online. Nothing can derail a budget faster than late fees. Of course, if you decide to use automatic withdrawal, you must make certain there is money in your account. Overdraft fees are a budget killer, too.

As mentioned in my previous post about living within your means. If you can’t afford to pay all of your bills, it’s time to look at cutting back wherever possible.

Paying your bills on time is also a good way to maintain your good credit score or improve a bad credit score. Positive credit history is an important component of your score.

Finally, it’s important to build up savings. If you are not saving any money, start with an amount that you feel is manageable. The recommended amount for savings is 10 percent of your take-home income. If that’s too much, start with $5 or $10 a week and work up from there. You can always increase your savings once you’re in a better position.

Credit Counseling

I think most people would agree that there is a stigma attached to debt and spending problems.

People hide their debt from friends, co-workers, even family and spouses. It’s embarrassing to admit that you mismanaged your finances. But I have a theory: Hiding debt in some cases only adds to the problem.

The only way to reduce debt is to get on a spending plan and stick with it. Many times it can be a pretty restrictive plan that doesn’t leave a lot of room for “play” money.

If you are too afraid to tell your friends you can’t afford something and try to keep up with them, you’re going to quickly derail your budget.

I’ll use myself as an example. In my younger days I accumulated some debt. There was a combination of factors that led to my increasing credit card bills. But, one way that I continued to keep myself from getting ahead was trying to keep up a busy social (and therefore spending) life with my friends.

I was too embarrassed to say, “You know what, I can’t afford to go out tonight.” Or, “I really can’t afford a restaurant that expensive.”

Instead I would fork over the plastic and go out, all the while knowing I should be sitting at home.

Several years ago I realized that I had to do better with my money or I was going to be headed for some serious trouble. I took control of my financial situation and started making better choices.

I also started fessing up when I just didn’t have the money to do something. I was surprised to find out that I had other friends in the same situation or friends who understood.

The first time I bailed out on plans, I sent a text to my friend that said, “I’ve got to pass. I literally have like $15 to my name until payday.” I felt pathetic.

He responded with: “I’ve been there … I’ve been there.”

It was such a relief to read that simple message.

I recently read in a Wall Street Journal article that 11.8 million bank credit cards are delinquent. While it is a relief to know you’re not alone, I don’t find that number any kind of relief. It means there are a lot of people who need to take control of their finances.

That’s the important thing for those struggling under the weight of debt: Take responsibility and get help. Call a non-profit credit counseling agency, like Advantage CCS, and go through a comprehensive credit counseling session with a certified counselor. The counselor should help you create a budget and an action plan to help you manage your finances and reduce your debt.

Debt is not a problem that will go away if you ignore it, but you can take steps to better your situation.