These days, it seems like you need your credit score for just about everything, whether it’s a mortgage or a car loan, or even a seemingly unrelated purchase, like utility service or a new cell phone plan. But this magic three-digit number doesn’t just affect your ability to get these loans or services – it also impacts how much you pay for them. If your score is low, you’ll pay more in interest rates and fees than someone with a higher score.

Three easy steps to a higher credit score

Even if you’ve made mistakes in the past, you can start improving your credit score today by taking these three easy steps.

1. Make your payments on time. As much as 35% of your credit score is determined by your history of past payments, so it’s the first thing you should look at if you need to improve your score. Fortunately, this is an easy problem to correct. Most lenders offer automatic payment programs that will simply deduct an amount you specify – either the minimum payment or a larger amount – on the credit’s payment due date. These programs can be extremely helpful if you find yourself missing your payment deadlines consistently, as they take all the work out of the equation for you.

In addition, paying on time has another exciting advantage – saving you money. Although late payments aren’t typically noted on your credit report unless they’re 30 days or more late, your lenders may increase your interest rates substantially if you’re even one day late. Enrolling in an automatic payment program will help keep your interest rates in check, meaning that you’ll save money over the life of the debt.
2. Pay down your account balances.  Another major factor in determining your credit score is what’s known as your credit utilization rate – basically, the balances you carry versus the credit lines you’ve been extended. For example, if you have one credit card with a $10,000 line of credit and you carry a $2,000 balance on it, you have a utilization rate of 20%.

This rate – which accounts for roughly 30% of your credit score – shows lenders how much you’ve extended yourself. A high utilization rate, for example, tells lenders that you may not be able to cover all of your monthly payment obligations should your income change unexpectedly, making them more reticent to offer you additional credit. For this reason, most financial gurus recommend maintaining a utilization rate of no more than 35%. If your rate is higher than this, do your best to pay down your balances until your rate reaches 35% or less and you’ll see a dramatic change in your credit score.

3. Maintain a balanced debt portfolio. When investing, you don’t want to put all of your eggs in one basket, and the same is true for your debt portfolio. Factors like the length of your credit history and the types of credit you’ve been extended also have an impact on your overall credit score. Lenders like to see that you’ve successfully managed your debt for a long period of time and that you’ve managed to balance several different kinds of debt – such as mortgages, auto loans, student loans and credit cards.

To score points in this area, keep your accounts open as long as possible, even if you’ve paid them off entirely. Closing your older accounts will shorten the length of your credit history, bringing down your score by a few points. In addition, it’s a good idea to maintain a few different types of credit (depending on your situation), as well as credit cards from more than one major lender (such as Visa, Mastercard or Discover) to demonstrate to potential lenders that you’re capable of managing several different kinds of debt.

Many people are considering cash advances, credit cards and savings obsolete in the current market. They either don’t have these tools or are wary of using them to cover bills. The age-old fallback plan for a lot of people is to find family or friends to borrow money from. While this may be a viable option, remember that there are some things to decide on before you ask and while you discuss the transaction. Here are three questions to think about:

1. What will the money be used for?
2. What plan do you have to pay it back?
3. What plan do you have to make sure this doesn’t happen again?

These questions are all very valuable to explore before you ask for the money and when you are stating your case. It’s not only a good way to protect your family, but it also gives you a good gauge as to how well you have thought the plan out. For example, if you need $1,500 but are out of a job and don’t know when you’ll be bringing money in again, you may be putting your borrower at risk. Are they in the position where they can wait for you to get a job and start paying the loan back? What if you can’t pay the money back in one lump sum, but rather pay it back in installments-can they wait?

Make it official

Any loan you take out from a family or friend may seem much more casual than going to a loan company or an online cash advance lender, but it needs to be as formal. It not only gives the lender the assurance that you are serious about paying the money back, but it also gives you the chance to really get a plan down in writing as to what you are going to do. Make sure you have a contract that specifies the terms of the agreement, from the total amount to the payback schedule to the payment amount. If it is a considerable amount, many people look for legal help and have a lawyer draw up the documents. Whatever method you use, be sure to include:

• Names of borrower and lender
• Contact information
• Current Date
• Total Amount
• Interest rate, if applicable
• Number of payments over time
• Date when loan should be repaid
• How often payments will be made
• How payments will be made
• How records of payments will be kept
• Late charges to be added

The point is to make the structure of the loan as transparent as possible for all parties involved.

Taxes and interest

If the loan you are borrowing is under $10,000, then most likely taxes won’t be an issue. The IRS is concerned with amounts at that number or greater. If it is higher, talk to a tax specialist and find out exactly what is involved in the transaction. On the other hand, if it’s a lower amount, consider interest. Remember that if your loved-one has to take the money out of an interest bearing account, they are losing money beyond just the principal. You should try to include some form of interest in the payments you submit to mitigate the lender’s losses.

Loans and loved-ones

Loans and loved-ones can be tricky. To avoid any misunderstandings, be sure you lay out your plan in full. Write down the details and explain to your friends or family exactly how the loan will play itself out. If there are issues or you see some problems, try using a credit card, savings or cash advance loans instead. There are better ways to find funding that don’t involve risking relationships.

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Consumers who are looking to find cash now should look at their television and communication costs. A new survey done by the New York Times shows that the average consumer spends $997 a year on cable TV and internet and another $1,000 on cell phone charges. It’s a new high in the cost of entertainment and communication to the American public. For the first time, people are spending as much on TV and communications as they do on dining out.

For example, the study done by the New York Times showed the example of a family of four regularly spends $400 a month on TV and communication. That number includes texting plans, two annual subscriptions to Xbox Live, DirectTV, Netflix, high-speed internet and Blackberry data transfer. Though this family is on the higher end of the study, there were more people spending higher amounts on entertainment than ever.

The cable bill

For those who don’t want to spend $5,000 a year on entertainment and cell phones, there are ways to cut back. The first thing to look at is the cable or satellite TV. Companies make it hard to settle for smaller packages. They strategically position the better and most popular stations into the higher priced packages. The basic cable package won’t have nearly as many options as one up-grade does. Of course that up-grade can come with anywhere from an additional $10 to $30 a month cost. When it comes to watching TV, there are many other options. For example, www.Hulu.com offers free TV and movies, and www.Netflix.com offers a monthly program that is very reasonable. Both are much more cost efficient than paying a cable company or a direct TV provider. Of course, there also is the totally free option of going to the library and signing out DVDs and CDs.

Cell phone plans

The next way to find savings is to look at the cell phone plan. Even if a contract isn’t up, cell phone companies may still negotiate. Every consumer should look at his or her own needs and then ask for a plan that caters to it. For example, heavy texters may find it advantageous to spend the extra $14.99 cash now for an unlimited texting plan. On the other hand, consumers with family far away will find free long distance more valuable. There are numerous options today in terms of individualizing a cell phone plan, and many offer substantial savings.

Internet usage

Internet usage is another area where consumers are spending a lot of money. Sure the cable company advertises their super high-speed internet connection that lets you download things at the drop of a hat, but is that really necessary? Consumers need to consider how much they really download in any given month. For anyone who isn’t downloading streaming videos, it may surprise them how a basic plan is adequate to serve their internet need. There are also ways to comparison shop with internet usage. Bundles come from some companies and can save a consumer money, while other companies have good introductory charges. It’s good to take advantage of an introductory charge because it gives the consumer a way to figure out if a specific package is sufficient for them.

Saving in today’s economy

Saving in today’s economy isn’t easy. But those looking for cash now have some options. Businesses are highly competitive and know that in order to keep old customers and bring in new ones, they have to create plans that serve the needs of the people. Consumers should all do research and find ways to cut back on costs. With some careful planning, finding savings can be done.

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With consumers struggling to earn payday cash, many are cutting back on the extras. A recent study showed that those extras include beer. The previous notion was that beer was impervious to market changes—even when Americans were limited with cash, they still would buy beer. Possibly a repercussion of the recent recession is showing its power again with the visible decline in alcohol purchasing. Craig Purser, the CEO for National Beer Wholesalers Association, said, “Lots of folks have thought beer is recession-proof or recession-resistant. The numbers don’t bear that out.”

The beer market post-recession

One of the biggest beer companies in the country, Molson Coors, posted a loss this past year in Q4. Earnings were $1.02 per share, which is 8¢ below analyst’s projections. That’s bad news for the company and on top of that drop, sales were down by 4% since early last year. The company’s CEO Peter Swinburn said, “In the US, MillerCoors’ fourth-quarter results reflect a significantly weaker beer industry than expected.”

Molson Coors is not alone in its declining numbers. IBISWorld, market research firm, announced that beer overall is down 2.7% already from last year. The recession is contributing to overall market downturns for almost every industry, and that includes alcohol consumption. Part of the reason is that despite the difficult economy, there are few discounts to attract customers. Traditionally, every retailer uses bonuses and specials to bring in customers. During a recessionary period, they still use the tool as a means of maintaining sales and bringing in new customers. The beer industry has not turned to discounting. In fact, according to Nielsen date, the average cost for a case of beer is up by 2.5% since last year.

Why prices aren’t going down

Beer has been steadily increasing in price over the past few years. The reason is because brewers have had to struggle through their own rises in cost. Crude products have risen over the years and brewers have no way to handle the extra cost other than to keep increasing the price point for the end-user. Without some ease in purchase price, consumers can expect their payday cash to be limited when it comes to beer-buying power. In 2010, the price of beer is not set to come down at all. Experts are projecting that beer will continue to grow in cost as the economy regulates itself. Though the recession is over, there are still high costs for businesses to manage. Since all crude products are most likely not declining in cost, most likely neither will beer.

How consumers will manage

Surveys are showing that consumers will cut back on beer if it doesn’t fit in with their budgets, but that doesn’t mean they will completely stop buying. Many bars and pubs reported that though their numbers have yet to make a substantial jump, they haven’t declined either. That’s good news for breweries. Though they likely won’t see huge revenues, they will still be able to manage and hope for an increase in customers in the future.

Paying bills rather than buying beer

Breweries are struggling just like the rest of the world. Consumers want to return to their old buying patterns, but payday cash is just too precious a commodity right now. Luxuries like beer and alcohol in general are being put on hold. Consumers would rather focus on building up cash reserves, paying down debt and keeping their heads above water.

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The auto sector is experiencing continuing tough economic conditions. The auto industry will have to emerge from the other side of this recession with a new look; a look that will be forever changed. The way autos are made and sold will never be the way it was. In reaction to this, many auto makers like GM and Honda are cutting low margin or poor selling models and lines to better define and strengthen their market positions. GM has killed the Pontiac line, for example. Honda has stopped making their S2000 roadster, and many others will follow suit from auto makers across the globe.

Clearance Sales are not always Deals when it comes to Cars

Normally, retail clearance sales of discontinued items can be great buys. The deep discounts create enough value to justify the purchase. However, cars are a bit more complex in how they fit into the sales model. Automobiles need to retain a residual value, how much they are worth for later resale, to be considered good investments. Discontinued car lines have a difficult time holding their residual market value because of a lack of demand and a lack of replacement parts and available service and warranty options. Once the particular discontinued model is out of the mainstream, very few people are interested in buying an old model. Combine that with the other difficulties in parts and service and you end up with very little value in the market.

Separating the Good Deals from the Bad

The key to determining which discontinued models are the best deals is good solid research. There are several places one can look to find out what the analysts see as the car’s future value. KBB.com, U.S. News’ car ranking site and Edmunds.com are a few good places to find out valuable information on how much the car is worth. These sites give valuable information on quality and reliability which directly affect the car’s residual value. Remember, residual value only matters if the car is going to be re-sold or traded in. If the car will be owned for 10 years or more, the residual value is not much of a factor. The car will not be worth much of a percentage of its original value anyway.

To Re-sell or not to Re-sell

The buyer has to have a plan in place before making the decision to buy a discontinued car model. If the plan is to keep the auto for 8 or 10 years or more, then residual value isn’t a consideration, but warranty and service are. Ask the dealer if the warranty will be honored after the model is discontinued. Also, ask if the warranty can be extended afterward. Many parts are universal on a lot of models, but an important question to ask is whether or not replacement parts will be available 5, 8, or 10 years down the road. If the buyer’s plan is to get a bargain price and then re-sell or trade in the vehicle, residual value comes back into play. No matter what the plan, research plays a key role in providing reliable information the buyer can use to get the best deal possible.

Appraisers looking for cash today, have to be smart. Research is showing that one of the biggest issues consumers trying to sell their properties have to contend with is the appraiser. At its best, the appraisal is supposed to help home buyers find the right priced home and keep lenders from overestimating the value of the property. If the appraisal is too high, buyers can risk defaulting on the home in the future. If the appraisal is too low, it may be too difficult to sell or refinance the home. Unfortunately, due to the recession, many industry experts are saying that the accuracy of the appraisal is falling sharply.

One case study of an appraisal

Bob Blake was selling his Palm Beach Gardens, Florida home. He was startled when the appraiser came back with an estimate that was well below what he expected. Homes in his area were selling for on average $290,000 but the appraiser valued his property at just $228,000. Blake and his mortgage broker immediately challenged the figure and practices of the appraisal company. Eventually, the company sent a revised appraisal that brought the home’s value up to $295,000. The result was a more competitive, and reasonable price, but it still delayed Blake’s plans to refinance for well-over a month and a half.

The debate over appraisals

There is naturally a debate over appraisals due to the competition between real estate agents and mortgage brokers. Each one has a vested interest in the price of a property and when an appraiser works against their stated home price, the deal can quickly be thrown off. In an effort to better regulate the field, New York Attorney General Andrew Cuomo is looking to change current appraisal legislation. In 2009 Cuomo pushed Fannie Mae and Freddie Mac to implement a stringent code of conduct for the appraisal industry. Due to the power of these two companies and their providing funding for most US home mortgages, the new code is now the nationally accepted standard.

The new code for appraisers

The new code for appraisers bans loan officers, mortgage brokers or real estate agents from selecting appraisers. Sellers in need of cash today, need to have separate entities handle each aspect of the sale. The result is that more lenders outsource the selection to appraisal-management companies or AMCs. The AMCs are not without controversy though, due to their own portion of the appraisal fee. Bill Graber, spokesman for the Appraisal Institute, said, “Many appraisers are struggling to survive on the fees paid by the AMCs.” An AMC takes up to 40% of the appraisal cost and then gives the rest to the appraiser. In former times, the appraiser collected the entire fee.

The Appraisal Management Company

Appraisal Management Companies deny that they are taking too much out of the appraisal fee at the expense of the appraiser. A spokesman for Wells Fargo & Co, a bank that owns an AMC, said, “We have invested substantial time and research in the quality control of the valuation process to, among other things, ensure that individual appraisers have relevant knowledge of the markets and properties they review.” Appraisers are now instructed to follow a set of rules known as the Uniform Standards of Professional Appraisal Practice. The hope is that building safeguards into the system of appraisals will protect sellers, buyers, lenders and the appraisers.

The appraisers’ response to the changes

Appraisers in need of cash today have to be efficient, smart and careful. According to the Uniform Standards of Professional Appraisal Practice code, appraisers need to spend sufficient time researching unfamiliar territories. Though this is meant to protect all parties involved, appraisers have to budget their time carefully. LaRon Hall, an appraiser in California, said, “You are getting less money and you are having to do more…it is definitely a sticky situation.”

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Recently terminated workers are turning to installment loans, savings and family help to survive. In 2008 Paul Joegringer was laid off from his job as the CEO for a small bank in Virginia Beach, Virginia. The recession forced the bank to make concessions and one was his position. They did offer him a severance package, however and he walked away with one year’s salary of $200,000. Joegringer is one of the thousands of Americans who are relying on loans and cash reserves to make it through the difficult economy.

The severance economy

A new term has cropped up in the market today called the “severance economy.” It’s a growing number of unemployed Americans who are relying on severance pay to sustain their post-lay off lifestyles. Joegringer said he’s worked hard to maintain his lifestyle, “but on the outside no one has any idea that I am in trouble.”

Most of the severance economy lost their jobs in 2007 and 2008. They were under the impression that they would soon find employment, so downsizing was not an immediate option. Once the recession began, job opportunities began to quickly dwindle. People out of work were sadly disappointed when they embarked on job searches. Though many filed for unemployment, that option also proved to be a temporary solution. The National Employment Law Project reported that unemployment benefits are expected to run out for over 1.3 million people by the end of the year.

Severance is being cut back

During the recession the long-term jobless rate hit a record high. Overall companies throughout the country have cut back drastically on jobs to cut costs. For people who received severance packages, the average allotment is 12.5 weeks of pay, which is down from 21.7 weeks just ten years ago. In particular the automobile and financial industries have been hardest hit and severance in these industries was notably lower. Even worse news for the market is that these two industries have experienced permanent cuts in jobs and most likely will never return to what they once were. People who lost jobs in either market are relying heavily on installment loans, cash reserves and what little severance they have to sustain them during their joblessness.

The problem with severance

Ellen Turf, CEO of the National Association of Personal Financial Advisors said, “There is an end date when that severance is going to run out. At that point the only life preserver is unemployment or getting another job…It’s an awful situation.” Many Americans are making the mistake of not changing their lifestyles once they are let go. Turf added, “I think there are a few lessons here. First is that if you lose your job, cut early and deep. Second is that a job search may take a lot longer than you think, so if you still have a job, you’d better be saving money now.” Savings seems to be the key with managing any lay-off or firing. Consumers who have a good amount of savings to fall back on are fairing much better than those who have little to none.

The future of the severance economy

The severance economy is going to have to sort itself out but experts are not yet aware of how that is going to happen. Though many people are relying on their severance, along with installment loans and cash, to sustain themselves, without strict cutbacks they could be in trouble sooner than later. Experts are cautioning the unemployed to keep up their aggressive search for jobs and never rely on severance completely. Joegringer added, “You’d think that $200,000 was a good amount to live on, but when you are accustomed to using most of it for expenses, without saving, it creates a huge problem.”

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The home price index

The recession is officially over according to experts and now is the time to watch home prices rise. For a long time house values declined causing much stress for homeowners. A new study however, just revealed that for the fifth month in a row US home prices moved upward. According to the Standard & Poor’s/Case-Shiller, the home price index edged upward about 0.4% from September to October. Economists are predicting, however, that there is a winter decline still to come due to the hefty number of foreclosures entering the market and a decrease in government aid. Dean Baker, co-director of center for Economic and Policy Research said, “I’d be very surprised if we don’t go below the lows we hit this year. We still have a very glutted housing market.”

Variations in the market

One of the reasons the US market is still difficult to predict is the varying conditions of cities. For example, Denver and Minneapolis have seen price increases over the past six months. On the other hand Chicago and Florida have seen numbers falling steadily since August. One of the key indicators to watch however is the home price average. Dr. Michael Firesethe, of Harvard School of Economics, said, “Many of the predictors of the market can be tied to public perception. When home values are on the rise, people tend to feel more secure. When they are more secure, they start spending more money.”

Consumer confidence is a huge factor when it comes to gauging the market for success. Two main issues with consumers are the unemployment rate and home values. Now that home values are fluctuating, but moving up slowly, it’s unemployment that people are watching closely. Although the unemployment rate is still high, it grew in December at a slower pace than it has for the past six months.

The real estate market

The real estate market’s performance is really the number one indicator of how the economy is changing. To encourage home buying, the government created a federal tax credit for first-time home buyers. There were thousands of buyers who rushed to close their deals prior to the November 30th deadline. Watching how much activity there was in sales of homes, it’s easy to see how eager people are to take advantage of tax credits. Because of the rush to close on homes, the government extended the tax credit through April 30th.

In addition to the first-time home buyer credit, there is also a program that includes homeowners who relocate after living in one location for five or more years. This credit is up to $6,500. Consumers understand that now is a great time to buy if they can get a loan and many are taking advantage of the “buyer’s market” that the recession created. To keep interest rates low, the Federal Reserve also bought up $1.25 trillion in mortgage-backed securities. The government is doing all it can to continue the growth of the real estate market and push the economy back to a position of positive growth.

The 40-year mortgage is growing more popular, but is it a true answer to debt relief? Many loan officers are promoting lower mortgage payments, citing the 40-year long term as a huge benefit to cash-strapped homeowners. But how exactly are they beneficial?

President of MortgageGrader.com, Jeff Lazerson, stated that the 40-year mortgage “is a joke.” He added, “Amortizing a loan over 10 more years does very little to decrease the payment, and the industry has historically priced 40-year loans more expensively than 30-year loans, so the benefit that the consumer perceives they should get, [in reality] they don’t get.” Typically, these types of loans come with higher interest rates, and over the course of four decades, the consumer will end up paying much more in interest than a 30-year mortgage holder would.

An example

To see how a 40-year mortgage weighs against a 30-year mortgage, here is an example. If a consumer borrowed $100,000.00 at 5% with a 30-year mortgage, their monthly payment would be approximately $540. Borrowing at the same rate, but for a 40-year mortgage would bring their monthly payment down by $54, to $482.

Typically finding a 40 year and 30 year mortgage with the same interest rates is impossible. Normally 40-year mortgages come with a higher interest rate automatically. So, looking at the above example with a 5.25% interest rate on the 40-year mortgage, it now brings the payments to $499 a month. That still would bring a savings of $37 a month as opposed to the 30-year mortgage.

The real savings come into play when you look at the overall interest payments on the lifetime of the loan. See the chart below for the final numbers.

In the end, the 40 year mortgage at 5.25% means an additional $46,560 in payments. That’s a significant amount considering the monthly savings was only $37. Is having an extra $37 to put towards debt relief important enough to lose almost $50,000 in the end?

The Upside

There is a small percentage of people who would opt for the 40-year mortgage. These are the consumers who are not particularly sensitive to the time of the loan, and want the smallest monthly payment they can possible find. Robert Satnick, president of Prime Financial Services, stated, “What’s nice about a 40-year loan—if it’s not an interest-only loan—is that they are contributing something, even though it’s a small amount, to pay down their principle. It increases the pride of ownership, rather than, at the end of the five years, [consumers end up] owing as much as they borrowed.”

A Way to Maneuver

The 40-year mortgage can also be managed by making larger payments. Bob Walters, Chief Economist at Quicken, stated, “The term of the loan doesn’t have to be locked into 40 years. You can’t make it longer, but you can certainly make it shorter.” Making extra payments to pay off the loan can quickly help consumers dramatically. Walters added, “People can still benefit from a 40-year loan by paying it off quicker, taking advantage of the lower payment, but adding money to it as they move along.”

Consumers Decide

For consumers looking for monthly debt relief, the 40-year loan may be a viable answer. As long as they understand that their total payments, if they stick to the actual loan structure, will be significantly higher in the end than a 30-year mortgage. If a consumer is looking to sign up for a 40-year mortgage, they should understand the terms and conditions, and then choose wisely.

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Good for All

In times of hardship, we tend to pull in and focus only on ourselves. Isolationism worked for a time in the past, but all economies are now global economies. No country functions as an island anymore. Consequently, economic recovery needs to be global economic recovery. International trade and banking require the whole system to be in good working order for all of it to reach optimal levels.

Encouraging News from Abroad

Many countries are reporting improved economic conditions in the fourth quarter. According to an Associated Press report, China’s figures are the best they have been in a year. Robust growth in retail sales, investment, and factory output combined with the smallest fall in exports since 2008 compared to the same month last year (1.2%) show China is beginning to make a serious recovery effort. Asian markets have rallied of late on encouraging global economic news and the aversion of any debt related problems in Dubai.

All Eyes on Us

Global recovery is important for all, but U.S. recovery is a key indicator that the world looks for in deciding how much confidence they should have in long term recovery overall. Sales in the fourth quarter for retail markets in the U. S. have not been robust, but have not been in decline either. The Commerce Department reported that November retail sales rose 1.3%, the economies best showing since August and exceeding most economists’ predictions. Another encouraging sign was a 2.8% increase in sales at electronics and appliance stores. This is usually a sign that consumers are feeling more confident by shelling out money for large ticket items such as TV’s and refrigerators. The rest of the world is just as interested in these numbers as we are since many of the items being purchased come from around the world.

Generally Upbeat Information

The overall economy grew an estimated 2.8% in the 3rd quarter which was the first increase after a year’s worth of declines. Analysts warn that the expansion could be short-lived if the unemployment numbers don’t begin to brighten up, as well. A fall in the 10% unemployment rate in the first half of 2010 will be essential to continued strong recovery. In November, sales were strong in other sectors with the exception of autos. When autos were factored out, retail sales rose 1.2% for the month which was three times what analysts expected. The economy continued to be a mixed bag with increases in some areas like department stores, but unexpected falls in areas like furniture.

U.S. More Sensitive to Global Economy than ever Before

In past years, the U.S. led the global economy. Now, we are an equal partner with most and following others like China. This is a new position for the American people and American economists. The ability to predict what will happen next will be more difficult than ever before. Fluctuations from around the globe will affect the U.S. recovery more than ever before. The worst recession since the 1930’s will not recover the same way as that one did 80 years ago.

Renters are using short term loans to help with the loss of their homes. Since the recession, many homes have fallen into foreclosure and a lot of those homes have renters living in them. These renters are in difficult situations, not knowing when to leave, what the procedure is or what to do. Now a new federal law has been enacted that offers renters protection from eviction if the property they are renting is lost in a foreclosure.

The Protecting Tenants at Foreclosure Act

A Federal Reserve release reads, “The fundamental purpose of The Protecting Tenants at Foreclosure Act is to ensure that tenants facing eviction from a foreclosed property have adequate time to find alternative housing. To that end, the law establishes a minimum time period that the tenant can remain in the foreclosed property before eviction.”

The National Low Income Housing Coalition, or NLIHC, estimates that about 40% of houses in foreclosure have renters in them. NLIHC President Sheila Crowley stated, “This bill brings long overdue relief for the most blameless victims of the foreclosure crisis—the families who, after paying their rent each month, are suddenly told they must move out of the homes because their landlords have been foreclosed on.”

How the new law works

The Protecting Tenants at Foreclosure Act gives renters with existing leases the ability to stay in their homes until the leases terminate. The only way an existing lease can be altered is if the property is purchased by new owners who plan to use the home as their primary residence. In that case, the renter is still allotted 90 days to vacate the property, and the law overrides the lease termination date. Crowley added, “There are stresses when the home you are renting is going into foreclosure and most people have budgetary issues that won’t allow them to immediately relocate.”

How renters are managing

Increasingly, families that have to relocate rely on short term loans, family help, and savings to facilitate the move. Howard Gregory of Plainfield, Illinois said, “It was hard when we had to move, but having financial resources was what kept us hopeful for a solution.” Industry experts are cautioning every renter to have some emergency fund to fall back on. It is imperative that they have the means to act quickly if need be.

The Protecting Tenants at Foreclosure Act also helps tenants who do not have existing leases. According to the new law, they still have 90 days to manage their move. This gives them enough time to search, move and get settled before any evictions proceedings even start. That’s good news to the millions of Americans who are renting. It’s a way for them to manage a difficult situation.

The future of renters and foreclosures

The numbers speak for themselves. Foreclosures are rampant in the US market today. It is estimated that more than 60% of homes in Las Vegas, for example, are foreclosures. That means many renters may have difficult times ahead of them. They may need savings or short term loans to fund moves. With the Protecting Tenants at Foreclosure Act, however, things should be a little easier.

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For decades parents have pushed their kids toward college. For decades employers have cried out for better-educated workers. For decades, educators have steered students toward higher education whether they wanted it or not; whether they were equipped for it or not. Parents started saving for college educations, virtually, at conception. The federal government enticed young people to put their lives on the line in order to get a free college education.  And hordes of young people did just that.

Now, according to Daniel Pink, an author who writes about motivation in the workplace, a bachelor’s degree “does little more than verify that you can show up on time and stick with it.” A college degree is still desired by most employers, but it lacks the significance it once had.

Why so many college graduates?

Why are so many college graduates in the job market? One reason is supply and demand. The market place demanded college degrees, so the education system found a way to provide them. Unfortunately, degrees were provided by pushing through under-qualified students. After the 1970s, a four-year degree became what a high school diploma was in the 1950s. According to federal statistics, in 1973 only 47% of high school graduates went on to college. That number had risen to 70% as of October 2008.

Who can say what’s really in a college degree today? According to Marty Nemko, a career and education expert who has taught at U.C. Berkeley’s Graduate School of Education, “That piece of paper no longer means very much, and employers know that. Everybody’s got it, so it’s watered down.”

The irony of supply and demand

More people have pursued higher education, thus increasing the demand for a college degree. This increase in demand has driven up costs consistently since the 1970’s. Higher education costs rose an average of 6.5 % for the fall of 2009 and the amount of debt carried by graduates rose to an average of $23,200 in 2008. Ironically, as the cost of a degree has risen over the last 35 years its value has declined.

Return on investment

Is a college degree still worth it? Most employers still see it as a basic requisite for hiring and promoting. The question is moot from that perspective; but how much a dollar spent on education is actually buy in terms of career advancement can’t be answered if you can’t even get a job without one. Interestingly, the unemployment rate for recent college graduates was 10.6% or pretty much the national average for everyone. That figure is a record high, and it may, at a minimum, suggest that a college education does nothing to forestall a layoff.

What’s next?

According to a survey conducted by the Higher Education Research Institute, 42% of college freshmen today plan on getting their master’s degree, up from 31% in 1972. Perhaps the one clear conclusion to drawn from this trend is that more parents with college students can delay making plans for an empty nest, since their fledglings won’t be getting jobs until age 24!

Phishing, pharming, spoofing, smishing —what do all these words mean? Each one has to do with online hackers and your personal information. Almost everyone today who does anything online has had some experience with unscrupulous companies or people. Phishing for example is when you get an email that looks like it’s coming from your bank or PayPal or EBay, but is actually a fake. It instructs you to click on a provided link to “confirm” your information. The link is phony and will take you to a website that collects your personal information and allows thieves access to your account.

Different words, same result

Then there’s pharming, also known as spoofing, where hackers redirect legitimate online traffic to their own website, and smishing, where criminals use cell phone text messages to get you to divulge your personal information.  Regardless of the name, each one of the above are things hackers use to steal your personal information. They may use the information themselves by trying to withdraw money from your account, or they may sell it to a third-party, black-market company. Either way, you’ll have some trouble fixing the problem once your information is compromised.

Hackers are getting smarter

Some people think they can outsmart hackers by eliminating the computer from their daily bill payment method. Sure this may cut out some of the above tactics, but rest assured there are others. Hackers spend hours devising ways of stealing information. They also use vishing, or “voice phishing,” to leave you automated phone messages from fake banks or credit card companies. The message will ask you to confirm your information in order to get details about where you are keep your money.
There’s also bank-card skimming where thieves actually put bogus ATM machines. When you enter your card, your information is captured and when you enter your pin, they have that too. A simple portable card reader does the trick and can leave you vulnerable to theft.

Not to spread alarm, but . . .

The solution is not to stop answering phone calls or get rid of your credit cards. Phones and credit cards are modern necessities. But the reality is that you have to protect yourself. Here are some basic tips to remember about identity theft:

• Order your credit report yearly. You are allowed one free report every year from Equifax, Experian, and TransUnion. Get them, review them, and make sure everything is accurate, including account numbers and balances, your name, and addresses.
• Never give your personal information to anyone over the phone or online. Remember that your bank, PayPal, EBay and your credit card company already have your personal information. There is no reason for them to request it again.
• If you are self-employed, do business on your own computer and never a public one. Even after you sign out, you may leave valuable information on a public computer. Wireless connections are also more dangerous when dealing with business issues.
• Protect yourself when you are at an ATM. Don’t be afraid to let someone go before you if you think they are standing too close. Also, be sure to never keep your PIN near your card. There’s a reason why banks tell you to pick a number you can easily remember.
• Use the paperless option when it comes to your bank statement. Thieves will go through your mail and garbage to get your information. Handling transactions online leaves no physical record for anyone to steal.

Keep your guard up

These are just some of the ways you can protect your identity and your finances from hackers and thieves. Be vigilant and careful with your information. Theft in general and identity theft in particular, can be difficult to sort out when it happens to you.

If you’re one of the 47 million Americans without health insurance, finding a place for insurance in your budget may seem like an insurmountable task. However, there are options out there, and the expenses involved in these options should be weighed against the cost of an unexpected medical emergency – a $50,000 emergency surgery is a lot harder to cope with than a few hundred dollars each month.

Let’s take a look at a few of the options available to you:

Employer-sponsored plans

If you have the opportunity to purchase health insurance through your employer, talk to your employer about getting enrolled. Even if you’re required to cover a substantial portion of your premiums, your monthly costs will be much lower than they will with private health insurance. Your employer may also offer a Flexible Spending Account (FSA) or Health Savings Account (HSA) option, which will help you to cover qualified medical expenses with pre-tax funds.

Government-sponsored health insurance

If you don’t have access to an employer-sponsored plan, check to see what government health-insurance options are available to you. No, this doesn’t refer to the Obama administration’s current health-care proposals – plenty of states already offer government-sponsored health insurance plans that you may qualify for.

Although many of these programs are only available to low-income parents and their children, more and more states are adding options for single adults in certain income brackets. The benefits of these plans vary from covering catastrophic injuries or illnesses only to more comprehensive options with preventative medicine benefits and prescription drug coverage.  If you’re a low-income household, visit your state’s aid website or speak with a Health and Human Services representative in your area about the benefits you may qualify for.

Private health insurance options

Private health insurance is generally considered to be the least desirable medical coverage option, as the premiums for these plans are much higher than what you’ll find from an employer-sponsored plan. In addition, as a private purchaser, you lose the premium increase protection that group plan members enjoy, meaning that your premiums may increase dramatically over time or in response to a large number of claims. You may even find that you’re turned down for a plan due to a pre-existing medical condition.

High-deductible plans

But even if you do qualify for private health insurance, it’s not uncommon for monthly premiums to exceed $300 per month – even for healthy participants. One option for lowering your costs is to consider a high-deductible health plan, which will give you a smaller monthly payment in exchange for a lower level of coverage. For example, you may elect a $2,500 deductible (the amount of money you’ll pay out of pocket before your coverage kicks in) in order to get a monthly premium that you can afford. It’s not ideal – you’ll have to pay out of pocket for any doctor’s appointments or tests until you reach your deductible – but it will prevent major medical expenses from causing you to go bankrupt.

If it sounds too good to be true, it probably is.

With the current financial crisis and increased unemployment, many people have explored the various possibilities of making money online in an effort to subsidize their incomes. Those looking for online money-making possibilities have inevitably come across the concept of affiliate marketing. This is essentially the idea of promoting an online business and receiving payments for every referral you manage to send to the business.

The method of compensation varies among companies, but the basic idea is to promote a product or service online and when you succeed in getting others to visit the company’s website, you receive a small cash payment for your efforts. For the company this amounts to outsourcing online advertising and promotion to affiliate marketers who work as independent contractors

Does affiliate marketing work for businesses?

Whether or not affiliate marketing actually works depends upon your perspective. For many businesses, the idea is excellent because it operates on a “pay for performance” model; meaning that the business pays only when an affiliate successfully generates tangible results. A number of major online businesses, such as Amazon.com, did very well with affiliate marketing in their early years.
Similarly, since the online business can develop its own affiliate programs that operate under its own terms and conditions, many online businesses have chosen to set them up. On the other hand, affiliate marketing offers few benefits for businesses that operate on a local basis or whose product or service is off-line in nature. Further, failure to properly restrict the activity of affiliates or to monitor for abuses also leads to many unscrupulous affiliate marketers giving the business they are promoting a bad name or negative associations.

Does affiliate marketing work for affiliates?

It is undeniable that at least some people have built successful careers from affiliate marketing, but at the same time, it appears that the overwhelming majority of affiliate marketers make very little money, if any at all. Because affiliate marketers are independent service providers, the industry is completely unregulated which makes it very difficult to get exact numbers on how successful the industry is for most people.
Another difficulty in assessing the effectiveness of affiliate marketing is that one of its primary niches is the selling of information about how to become an effective affiliate marketer. This means that there is an enormous amount of misleading information online about how successful affiliate marketers can be, since the promoters have a vested interested in getting people to buy their “how to” materials. Because affiliate marketing is primarily an online endeavor, people are able to make whatever claims they want and it is virtually impossible to confirm them. Just because an affiliate marketer claims to make $60,000 a month does not mean it is true at all, and there is virtually no way to find out whether or not it is.

Who is successful at affiliate marketing?

Like any industry, there are occasional flukes where people succeed by sheer luck as opposed to skill or talent; but as always, these are the exceptions. In general, most of the confirmed successful affiliate marketers are people who already had a strong background in advertising and marketing before they took up affiliate marketing. Additionally, most of the proven success stories concern people who have been involved since the beginning of the industry in the late 1990s.
There are very few success stories about people who jump into the industry and become immediately successful, and the stories that do exist are impossible to verify. The few who have become successful very quickly usually have had access to some new innovation, such as the development of a completely new niche, technology, or marketing strategy. Despite claims to the contrary, there is virtually no verifiable evidence that most affiliate marketers ever make significant amounts of money.

Get rich quick? Probably not.

Since so many affiliate marketers are making their money by selling instructional affiliate marketing materials, there are many claims that affiliate marketing offers the opportunity to get rich quick. These claims tend to resonate loudly in the current economic climate where so many desperate people are looking for ways to make livings or supplement incomes. However, as is the case with most “get rich quick” schemes, more often than not it’s just a scam. Even if you have an innovative concept that might open a new niche or market and even if you have a strong background in advertising or marketing, the odds are that it will take years to turn these ideas into enough money to live on.
While setting up the basic online infrastructure for affiliate marketing can be done within a couple of months, actually making money from it always takes much longer. Most of the confirmed successful affiliate marketers freely admit that it took them anywhere from one to five years before they were making enough to even consider dropping their day jobs.

Is affiliate marketing right for you?

If you already have a solid background in advertising or marketing or you have some brilliant new idea, you may be able to make a fortune with affiliate marketing. However, even if this is the case, don’t expect to do so overnight or to be able to do it without investing a lot of time and energy. If you have no experience in the field and are simply looking for a quick and easy way to make some emergency cash, realistically speaking, affiliate marketing is probably not going to be the solution to your problem.

Many children watch their parents live on credit cards. When they need a new item or have a bill, their parents reach for their plastic card and magically they complete the transaction. Relying on credit cards does little to truly teach children about managing money or being financially responsible adults. Here are some tips on finding ways to teach children about money.

Teaching the value of money

Schools teach reading, writing and math, but rarely do they cover everyday tasks such as paying bills, understanding budgets, or working with interest. It’s up to parents to do the educating of children in this area. Here are some steps for you if you’re trying to teach your child about money:

1. Start teaching children early about money. Gone are the days of letting a child live completely oblivious to finances. In today’s tough times, children need to know that money has to be managed. Some of the ways to do this are to teach children about saving their hard-earned cash. Let them see their dollars accumulating in a box or drawer. When it’s full enough let them take it to their bank account and deposit it. Visual learning is a great way to get a message across. If they see their money growing, they can get an idea of how it will work in the future.

2.  Teach children where money comes from and the correlation between work and pay. Normally children believe that money “comes from mommy and daddy.” When mom and dad are out of cash, normally credit cards take care of purchases. Every child should be taught the basic concept of how working brings in money. And then how money buys things. And then how we use things and repeat the cycle. Paying children for out-of-the-ordinary tasks, like helping clean out a garage or attic, can also help them see the value of hard work.

3.  Consider offering your children allowances. Experts debate the effectiveness of allowances and whether or not children should be paid to do everyday chores. One way to handle this is to pay children for large tasks that aid the family, but do not pay them for their responsibilities. Their responsibilities can include keeping their rooms clean, sweeping and mopping, picking up their toys and helping with laundry. On the other hand, if the family is having a garage sale, they could pay the child for keeping everything lined up neatly or organizing goods to be sold.

4.  Make the savings plan interesting. Depending on your child’s age, help them to engage in saving money. For a younger child it could mean decorating a piggy bank. For an older child it may mean helping them save for a bicycle or larger item.

The importance of finances

With the recession hitting hard, it’s more important than ever to understand how finances work. Children need to have some instruction from parents on how to make money, how to save money, how to budget money, how credit cards work, how loans work, and how to manage it all. For their futures to be secure, they need everyday learning presented at an understandable level. Working to educate children today helps create financially responsible citizens of tomorrow.

Blind faith in your money manager is not a viable option

In the wake of the Bernie Madoff scandal, debt relief has become a persistent theme. Madoff had a long running Ponzi scheme in which he bilked investors of over $13.2 billion.

Under the guise of a gifted money-manager, Madoff attracted high-profile clients like Steven Spielberg, Kevin Bacon, and Hall-of-Fame pitcher Sandy Koufax. Madoff claimed his client’s investments were earning them big returns, but in reality he was using the investment money provided by new customers to fund those returns. The remainder of the money was used to sustain his lavish lifestyle.

A new skepticism

In the wake of such a high-profile crime, a new skepticism has been introduced to the business relationship between investors and money. For example, Tony Guernsey, a wealth manager for over 40 years, said that his clients are beginning to ask him a new question: “How do I know that I own what you tell me I own?” Guernsey said that he understands the concern in the light of recent financial developments. “The bottom-line,” he added, “is that the foundation between wealth manager and client, has been called into question, if not destroyed.”

Tips for investors

In an effort to restore consumer confidence, the Securities and Exchange Commission offers the following advice to consumers.

Read statements

The law requires all money managers to provide written account statements. Studies have shown however, that most investors rarely read them. To assist their customers, some companies have created simpler ways to track wealth. HSBC Private Bank offers WealthTrack, a system that clearly shows investors what they own, where it comes from and what the projected return is. Advent software is a wealth management reporting system that is quickly gaining steam with money management firms who know they have to regain consumer trust. The reality, however, is that consumers need to be responsible for their own investments. Blindly sending money to a money manager is no longer a viable option.

Monitor money managers

Financial advisor Kelly Campbell of Fairfax, Virginia, said that investors should “call the firm that actually holds their money to check on the manager.” Most independent money managers use third-party custodial firms to hold investor funds. Bernie Madoff, on the other hand, held the funds himself, which should have triggered the immediate doubt of his investors.

According to Campbell, “every bit of information an advisor can get, a client can get too.” It takes research, but consumers can check up on their investments for added peace of mind. Knowing where the money is and what it’s invested in is integral to understanding how it will play into retirement funding, debt relief, and savings.

Ask questions

Consumers should consistently ask questions based on their monitoring and reading of documentation. Carl Loughton, financial advisor in Chicago, Illinois, stated, “Many people are too trusting…they hand money to their money managers and walk away hoping it will sustain them in the future. Good money managers will provide answers before [the questions are asked].”

Consumers rarely reach the level of understanding a money manager has, but they can gain a basic understanding of documentation provided. Loughton added, “If something looks funny, ask. The worst that can happen is your manager saying ‘I don’t know’ and then check[ing] on it for you.” In the end, money is the responsibility of the owner. Consumers need to be proactive about their finances to ensure that someday their money will sustain their retirement, help them find debt relief, or finance their children’s futures.

New York Stock Exchange (photo: flickr.com)

It has often been said that if you want to get good at something find someone who’s already doing it, and do what they do. If you can learn to think like they do, that’s even better. If your area of interest is investing and wealth building, there’s no better person to model after than Warren Buffet.

Warren Buffet is by far the most successful individual investor in the history of investing. So, how do you gain access to the man, his mind, and his method? You can find a number of good books online, but here are some highlights.

Think of investing as your job

Many people approach investing in stocks as a hobby or a scheme. But the key, according to Buffet, is to investing as seriously as if it were your main job. You wouldn’t take dangerous risks with your main source of income, so don’t do it when you invest, either.

Too many investors want to get in, get rich, and get out quickly.  This leads to mistakes and unnecessary gambles. Act as though you are the owner of a business or as though your investing decisions are your main source of income.  This will lead to longer-term and more profitable investments.

Concentrate on the best

With businesses falling off big board left and right, it’s tempting to spread your investments out against the perceived risk, using mutual funds to diversify and protect yourself from the losses of any one company.  According to Buffet, this can be a big mistake. His approach is to focus on the interaction between you and the companies you invest in.

If you have done your homework, you will have a gut feeling for the companies you are comfortable with and those you aren’t. Stick with the companies that are best for you rather than investing your dollars into companies that are your 10th, 20th, or 100th choices. You’ll be better off in the long run.  And by the way, Warren Buffet never invests in mutual funds.

Keep your eye on the prize

This bit of advice might seem contrary to doing your homework, but Buffet suggests never listening to market forecasts. What he’s talking about are generalized forecasts that make sweeping predictions about the overall stock-market.  These generic forecasts tend to be useless. Choose the particular targets that are right for you. When the time and price are right for you, strike no matter what the forecasters are saying.

The bottom line is drawn by you

The pattern for success is easy to follow. Find someone who is doing what you want to do and then learn to act and think like they do. You need to have confidence in yourself to take your investment activities seriously. You have to concentrate on what you think are the right targets for you. Finally, trusting your own hard work and research, you have to strike when you think the time is right. Only you can establish the bottom line for your success. But when in doubt, it’s still okay to ask yourself this question: “What would Warren Buffet do?”

Add a "c" to "Shleppers" and you may have an arduous journey! (photo: flickr.com)

No one wants to max out their credit cards when moving. But that’s what happened to John Winston of Salem, Massachusetts: “We were a simple move…going to a neighboring city. Our moving company promised that it would cost $875, and a possible added cost for extra time. That was reasonable.”

In the end, the moving company gave John an onsite estimate of $1,950, after his things were loaded on the truck. Fearing the movers would hold his property hostage, he decided to pay the bill with a credit card and dispute it with the office later.

The dispute with the office never happened, however, because the moving company closed before John could contact them. The company completed the move, but John ended up paying the entire $1,950. The contract he signed clearly stated that any disputes had to be handled prior to moving.

How to move without breaking your budget

Moving can be a disaster if consumers aren’t prepared for the transaction. People who are moving should settle the details before the moving truck shows up. Here are some tips for moving without breaking your budget.

Do some comparison shopping

Moving costs can vary widely based on the company you choose. Check with at least three companies before signing on the dotted line. Visiting CityMove.com is a great way to get online bids from several moving companies. Consumers can compare quotes and decide which services are most important and most cost effective.

John Katz, CEO for Flat Rate Moving Company advises, “Request the moving company visit your home prior to moving so they can see exactly what items, big and small, are going to be going. You don’t want any surprises on the day of the move for yourself or for the company.” Also, make sure that quotes include an estimate of how long the job will take. The last thing you want is additional charges to your credit cards for over-time hours.

Perform background checks

Consumers should also run background checks on every company they are considering. The Better Business Bureau can give valuable information on the business dealings of each company and consumers can see the complaints, if any, that have been filed. Make sure the company doesn’t have any repeat offenses, such as continually showing up late, misrepresenting themselves, or overcharging. BBB.org or Yelp.com can provide reviews of businesses. Consumers should also ask moving companies for three recent client references.

Sort through your stuff

Moving time is a great time to get rid of things you don’t use or need. Moving estimates can be made on either total weight or per-hour rates. Either one can be minimized by less having less to move. Garage sales, donations, and give-a-ways are great ways to get rid of things you don’t want to pay to move. Not only does getting rid of excess baggage cut down on moving expenses, it provides extra cash from garage sales or a tax deduction receipts from donations.

Jon Sorber of Two Men and a Truck, suggests people move small items themselves. Sorber said, “Every time a mover has to go into the house, that’s more time [you're paying for].” It’s often easy to move lamps, plants, books, china, and toys for yourself. You can also can pack items, roll up rugs, and break down bed frames yourself rather than pay movers to do it.

Invest a little extra effort

With a little extra effort, consumers can spare themselves unnecessary expense when it comes to moving.  Rather than maxing out credit cards, paying twice as much as the estimate, or paying for unnecessary things like packing, consumers should take a proactive approach to moving. Doing so will save time and ultimately, money.

Image from flickr

Although many people are not aware of it, the medical industry is one of the few American industries where negotiating the price is not only acceptable, but common. The reason many uninsured or underinsured people are quoted higher prices than insured individuals is because the price for many services has already been negotiated down by the insurance companies and HMOs. However, this practice is not limited to major institutions. Individuals can — and do — negotiate the price for particular services on a regular basis and this can result in significant savings.

Negotiating can save you up to 60 percent

According to Consumer Reports, only about thirty percent of Americans even try to negotiate with medical care providers; however, of those who try, 93 percent are successful at least once. The average savings are between thirty and sixty percent of the original amount owed, though there are many stories of people saving as much as ninety percent through effective negotiation. There are no guarantees that negotiation will get you a discount, but experience shows that most people who make the effort are successful to some extent.

Step One: Negotiate in advance

The first step to negotiating medical expenses is to negotiate terms in advance for planned medical visits and examinations. Due to problems with delayed payment, many medical service providers offer “prompt pay” discounts that can reduce your medical bill by as much as ten to twenty percent. These discounts are usually reserved for those who are able to pay for planned medical services at the time of the visit. However, many providers will also offer a prompt pay discount to those who are able to make large, although partial, payments on the spot.

Step Two: Talk to the CFO

The next step is to speak with the provider’s Chief Financial Officer (CFO) after you have received your bills. More often than not, just asking the CFO for a discount will get results. However, to do this effectively you have to know what is reasonable from the provider’s point of view. For this reason, you should know the average cost in your area for the services provided and you should ask for a price in that range. You can find out what the normal charge for various services is by looking at websites like Healthcarebluebook.com and many insurance company sites.

Step Three: Discuss payment options with the billing department

If you get a discount from the provider’s CFO, you probably will not be able to negotiate further discounts from the billing department. However, you may be able to negotiate an interest-free payment plan. The interest that accrues on medical expenses paid over time can be significant. Negotiating a payment plan that does not include interest will greatly reduce the amount you ultimately pay.

You have nothing to lose and much to gain

Contrary to the impressions of many people, most medical service providers are willing to negotiate and rarely expect everyone to pay every cent originally charged. In fact, many providers specifically budget for a lower repayment than they initially bill. For the consumer, there really is nothing to lose by trying to negotiate discounts and reasonable repayment terms. The worst case scenario is that the provider will refuse to grant a discount. But negotiating is worth the effort. As Consumer Reports has documented, 93 percent of those who try do in fact get a discount.