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July – August 2021

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What's in this issue

I Want My HDTV

There has been some confusion about television stations’ transition to digital broadcasts at midnight on February 17, 2009. Most of the confusion comes from who will need to update their televisions and who will be ok.

 

If you receive your television broadcasts through an antenna and do not subscribe to a pay service cable or satellite service will need to upgrade your service to receive reception. If your television has a digital tuner already built into it your TV will continue to work after February 17, 2009. The chances are if your TV is older than 1998 it will not have a built-in tuner. Check with the manufacturer or owner’s manual (if you still have it) to see if your TV has a digital tuner.

 

If you already pay for cable and receive your television signal through that means there is nothing you need to do before the transition. You do not need to upgrade your service to digital cable or buy a high-definition television.

 

For those that need to upgrade you have a few options. You can subscribe to a local cable service, which will cost you a monthly fee. You can purchase a converter box that plugs into your television and will allow you to receive broadcasts without any problem.

 

TV converter boxes will cost anywhere between $40 to $70. The good news is the government is willing to help you with the cost of the converter box. They are giving out coupons toward the purchase of TV converter boxes. Each U.S. household is allowed up to two coupons that are worth $40 each towards the cost of eligible converter boxes.

 

Here is the contact information to request a coupon:

Phone: 1-888-DTV-2009 (1-800-388-2009)
Mail: PO Box 2000: Portland, OR 97208-2000

When you receive your coupons in the mail it will include an insert of retailers in your area where you can purchase the converter box. Don’t hesitate to ask a retailer for help on how to install the converter box. You will need the model of your television to assist with installation.

hdtv

Budget Boosters

There seem to be a lot of natural disasters ravishing communities throughout the country and it may get many of you worrying. If you were to be involved in a natural disaster would your insurance cover you or do you need additional insurance, and is it worth it?

 

Start by looking at your current homeowners insurance policy. This will tell you what type of coverage you already have. You may be surprised by what your policy already covers. Most standard policies (HO-3) cover quite a bit, including fires, wind damage, hail damage, vandalism, major leaks, and lightning.

If you have any questions or concerns you should contact your insurance agent and have them explain to you what is and what is not covered under your policy.

 

You may be required to have additional insurance if you live in certain areas. If you are near a flood plain you may be required to carry separate flood insurance, as standard insurance doesn’t cover natural floods. If you live in an area with frequent earthquakes, like portions of California you may be required to obtain earthquake insurance.

 

Nearly everyone is susceptible to at least one kind of natural disaster so extra insurance is at least something to consider. Talk with your insurance provider about additional coverage. You may save by going through the provider that is already covering you in other areas. Find out what the annual premiums would be and if they can be paid monthly. You may find that you are willing to pay so much more a month for the peace of mind of being covered. You will also want to find out what the deductibles will be and how much coverage the plan includes. You may determine that the coverage amount is not worth the extra money each month.

 

Another thing to consider is that the government or FEMA may not always be able to assist you. The president has to declare a natural disaster in order for government money to be dispersed to victims and even then, the amount may be limited and may not be able to fully accommodate your replacement needs.

 

It’s important to keep detailed records for insurance purposes. Having pictures and receipts of expensive items will provide solid proof for a claim. Pictures of your home in good standing condition are also a good idea as well as taking photographs of any damage left by disasters. It may be a good idea to keep this information in a weatherproof safe or at another secure location.

 

Instead of disaster insurance, you can find out ways to improve your home to withstand the power of some natural disasters like hurricanes and earthquakes. Some home improvements will help minimize the damage and could save your home, thus minimizing the need for disaster insurance.

 

If you are fortunate, you may never need to use disaster insurance but for some, knowing that some of their expenses will be recovered is worth the extra cost each month.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

HERE IS OUR PENNY PINCHER FOR THIS MONTH

My grandchildren are very active in sports and have collected many shirts and jerseys over the years. Instead of letting them take up space I tool them and made a commemorative sports quilt for them. That way they can keep the memories without having to keep all those shirts and they love them.

 

-Dorris S. VA

Finding the Best Machanic

Helpful Tips

Your car breaks down and you are worried that you are going to take it in to get fixed and get fleeced by the mechanic because you don’t know much about cars. Follow some of these tips to avoid being taken advantage of.

 

The best way to avoid a rip-off is to establish a good working relationship with a mechanic. Take your car in for regular maintenance before there are any major problems. Regular maintenance will keep your vehicle running at its best and may catch any potential problems before it’s too late.

 

When you take your car in don’t be afraid to ask questions and have them explain it to you as simply as they can. Mechanics can throw a lot of technical terms at you that you may not be familiar with and they may take advantage of that fact to confuse you. Find a mechanic that you are comfortable with so when you need major work done you are confident that they can do the job right without taking advantage of you.

 

When you have a malfunction take your car in and have them assess the problem for you. Once a problem is established make sure they tell you what needs to be done to remedy the problem and ask for an estimate. They should be able to give you a close approximate to the charges. Make sure it includes everything for the job. You can also request it in writing, that way you have something if they try and throw more charges at you later.

Ask them if they anticipate coming across any other problems while fixing this one. A problem many consumers seem to have with mechanics is they take their car in for one thing and are then later informed that there are more problems, which in turn means more money out of your pocket. Make sure they get your approval before working on anything else beyond what you received the quote for and that the additional work is absolutely necessary.

 

It could be quite possible that your vehicle is in need of some more work but anything that is not a safety hazard can be worked on in intervals instead of too many repairs at once which will result in a hefty bill. A good mechanic will give you a timeframe in which he believes something should be worked on. For example, he may tell you that you have a couple of months before your tires need to be rotated instead of rotating them without telling you then charging you and insisting it needed to be done at that time.

 

Once all the work on your vehicle is done make sure you get an itemized bill that states how much the parts and labor individually cost. Review the bill and don’t hesitate to ask questions if you find what you believe to be a mistake. They should be able to explain the charge or it could be an honest mistake and your observations can save you money.

 

It can be difficult to explain a specific problem or noise to a mechanic. If the car is still able to run, it’s quite reasonable to ask the mechanic to take it for a drive so they can feel, see, or hear the problem for themselves and identify and fix the problem faster and easier.

 

Many times you do not have the convenience of looking for a mechanic beforehand. In some instances, you may be out of town or break down while traveling. When looking for a mechanic you may want to look for endorsements from AAA. Any AAA-approved mechanic will have a sign in the window. This way you know that they had to meet a set of quality standards and are inspected regularly on performance and customer satisfaction. If you are a member of AAA and your car breaks down they may send for a tow and take you to an AAA-approved mechanic.

 

If your car is new and is under lease or warranty your best option may be to take your car into the dealership’s auto repair garage. In some cases, it may be required that you get problems fixed with the dealership. Even if you are past your warranty you may be better off using a manufacturer garage as the quality is backed up by the car company.

 

It’s inevitable that you will need to take your vehicle in for some kind of service and by doing some of the work beforehand you can save yourself money and prevent yourself from being taken advantage of.

Payday Loans

Risky Business

It seems like you can’t turn on the radio, TV, or favorite webpage without seeing or hearing an ad for a payday loan center. They all promise the same thing; fast cash, no credit checks, easy money in your pocket for whatever you need. Unfortunately, they don’t tell you how you can get caught in a web of never-ending debt. They forget to mention that their interest rates can be up in the hundreds. Does it still sound like easy money?

 

There are many reasons that the payday loan companies tell you why you should use their services. Some reasons play off of your fears while others entice you to splurge on yourself. They may show you a scenario where you need money to pay a bill or for an emergency and you don’t have anywhere else to turn. Their convenience and no credit checks are tempting to individuals who have a hard time getting loans elsewhere.

 

A payday loan works like this. You go into one of their offices and receive a cash loan for a pre-determined amount. You then write them a post-dated check for the amount you borrowed PLUS interest and fees. The date of the check usually corresponds with your payday to ensure that you will be receiving money. If you do not pay back the loan before that date the lender will process your check accordingly.

 

An example is you go to Johnny’s Payday Lending Center* on the 5th of the month and want to borrow $100. You write them a check for $120 ($100 cash + $20 charge) and date it for the 15th of the month, which is your next payday. The lender gives you the hundred dollars cash and you can walk out the door.

It is now the 15th of the month and you get paid but are still short funds. You go back to the Lending Center and they tell you that you can roll it over an additional two weeks for the same $20 charge. You now owe them $140 on the 30th of the month. So you paid forty dollars to borrow a hundred.

 

Some advertisements will even suggest that you can come to them to borrow money for unnecessary things like vacations, guitars, TVs, clothes, and many other things that should be budgeted. If you don’t have the money to buy these things then you should not borrow high-interest money.

 

If you are between paychecks and need money for a bill, there are plenty of other options out there for you instead of a payday loan.

 

You can ask your employer for a payday advance. They may be able to advance you the amount you need or even the entire check based on their paying schedule.

 

Call your creditors and ask them for an extension. Even if you were late with the payment the fees and charges are usually less than the interest you would pay with a payday loan.

 

Ask to borrow the money from a friend or family. Use a contract and a repayment schedule so you don’t strain your relationship over borrowed money.

 

You can also try and apply for a small loan at your bank or credit union. This will depend on the amount you are asking for and your credit standing. Some banks are more willing than others to work with you.

 

Even a cash advance on a credit card will cost you less than getting caught in the cycle of payday loans. This works best with a card with a low APR. This should not become a habit however or you will find yourself in a whole different mess.

 

If you have exhausted all of your options and still think that a payday loan might work for you, take these things into consideration. Only borrow the amount of money you can afford to miss from your next paycheck. Make sure that you payoff your balance on the day that it is due so you don’t acquire any more charges and fees. Review your spending and find where you can cut back so that you are not left short of money between paychecks again.

 

You also need to find a way of trying to put together some funds for your savings account. This will help you if you have an unexpected problem when all of your other money is spoken for.

 

There may be some of you out there that have already dealt with them and some of you may have even come through it unharmed. It is our advice that you try and ignore the bombardment of ads. They are meant to help you with a temporary setback but can oftentimes become a permanent problem.



*A fictitious name and any similarities to an actual loan center is purely coincidental.

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My Financial Journal

It’s hard to believe that the summer is already nearing an end. My family has been making the most of it spending as much time outdoors as possible (see picture below). We had an excellent 4th of July and are trying to squeeze as much in as possible.

 

To start, I would like to share that I have had a generous amount of bad luck when it comes to cars and unfortunately I am not a skilled amateur mechanic so I have spent a lot of time working with mechanics. I have been lucky in the fact that some of my dad’s closest friends are mechanics and we have been able to get quality work without having to spend too much on labor costs. I have also had to deal with mechanics I did not personally know, and while most of them did great work and were honest, there have been a couple of times where the mechanic was taking me for a ride.

There was one time when my car broke down just out of town on the highway. I called a tow truck and the tow truck guy picked me up and hauled my car into his shop. After some time in the garage, he came out and said, “I got you all fixed up.” I responded by asking what was wrong and all I got in return was that it was “a couple of things” and he handed me a $230 bill. Not only was I shocked but also I was both mad and confused. I told him I didn’t have that much money and if I would have known it was going to cost so much I would not have got it fixed.

 

The mechanic could care less and even threatened to undo whatever it is he “fixed” and tow me back to the highway. Being younger and naïve I felt I didn’t have much of a choice and borrowed some money in order to get my car back. I never did find out what the exact problem was but made sure I never came close to returning to him. This was unfortunate for him as I had quite a few other car problems throughout the years and if he provided honest service would have probably made more in the long run than taking advantage of me once.



I got some good news that the interest on my student loans dropped and my payments would be lower. I thought that this was a pretty good deal, and then I had an idea. Why pay them less monthly when the previous payment I was making was already budgeted for. So I decided that I would continue to pay the same amount on both the loans.

 

My previous monthly payment was $249 and my new payment dropped to $205. So by continuing to pay $249 a month I am essentially paying an extra $528 a year, or over two payments. It’s like making 14 payments a year.

 

By doing this I will cut down the repayment time on my loan, saving money and interest in the long run. Another option is I know that if for some reason the money is tight I can make a payment of $205 and have that extra go towards something else, but I don’t plan on that happening.

 

So if you have been paying your bills comfortably each month and come across a scenario similar to mine I encourage you to try this technique. This would also work in other ways. Say you paid off a debt, the next month take that money and put it right into savings. If you get a raise you can take the raise amount and put that in the bank as well.

 

I’m assuming my last month of summer will pass by with velocity as my wife and I are super busy from here on out and it will have an impact on our expenses. We have two weddings, one in which we have to travel a few hundred miles and pay for hotel accommodations. We are also going to try to squeeze in a couple of nights camping and are anticipating the roar of the Sturgis Bike Rally & Races. If you have never heard about Sturgis, it’s one of the biggest motorcycle rallies in the world and brings in a lot of fun people and events. I’m sure I will have more to report on next month. So, until then good luck and have fun.

The Perks of Credit Cards

Credit card companies will do anything in order to get you to sign up for one of their cards. Incentives have been popular for many years and are now evolving to suit the needs of their customers. While some of the incentives may be beneficial some may not be worth what you have to spend in order to redeem them.

 

The majority of credit cards offer some type of reward, whether it is airplane miles, gift certificates, or cashback. Lately, it seems hard to find one that doesn’t compensate you for using their card.

 

It’s important to read the details of the card and not choose one only based on the incentives promised. A card that offers the best incentives could have higher interest rates and larger fees. You are better off looking for a card with a low Annual Percentage Rate (APR). Unless you know that you can use a credit card within your limits, you should not get a credit card regardless of the perks.

 

If you are overspending in order to reach an incentives milestone you are wasting the benefit by raising your amount due. If you can’t pay the total amount due each month the incentives are not worth the extra you will be paying in interest by only making the minimum payment.

Here are some of the more popular types of credit card incentives being offered.

 

Cashback – One of the most popular incentives, cashback gives you a percentage of your money back when you use the credit card for purchases. Depending on the card and your contract you could receive half percent up to 2% back on your total purchases. This is generally paid to you once a year. Most cards have a limit to the amount you can receive back each year.

 

This card is basically giving you a discount on the purchases you make but instead of getting the discount right away it is saved for you and given to you at the end of the year.

 

Gas Incentives – Incentives that will probably be getting more attention due to the recent increases at the pump are cards that offer gas discounts. These types of cards offer you a higher percentage of cashback when used to purchase gas. They may also offer cashback for other non-gas-related purchases. If you know that you can pay an entire month’s worth of gas off at the end of the month it might not be a bad idea to get a gas card and save a few bucks when you fill-up.

 

However, you may want to find out if there are any gas stations in your town that offer a discount for using cash at the pumps. Credit card companies charge gas stations when someone uses their cards. So some stations will offer a discount when you use cash because the station is saving money by not having you use a credit card.

 

Bonus Miles – Another popular incentive is racking up travel miles every time you swipe your card. Some cards feature programs that give you a mile for every dollar that you spend. You can also earn points that can be used to redeem other travel expenses like lodging, car rentals, attraction tickets, cruises, and resorts to name a few.

 

Many cards that offer travel incentives have many stipulations and restraints that come with them. There are certain times that you are and are not allowed to redeem your travel rewards. Also, many people have travel rewards but do not use them. So if you are one that does not travel often you may want to look at a card that has other offers.

 

Various – There are hundreds of cards that offer special discounts and rewards. You can find a card that builds points that you can use to buy your next car. It seems just about every department store has its own credit card which offers you discounts and points every time you use it at their chain of stores and then you can receive gift cards for merchandise. Even the NFL, MLB, and NASCAR have cards where you can earn points and redeem them for event tickets or merchandise. Some cards have a variety of incentives and then let you choose how you want to use your rewards points.

 

Credit cards are not an absolute evil but they can get you into big trouble if you can’t use them correctly. Incentives can be beneficial for those who can responsibly use their cards but they can also be a burden for those who use their card too often to try and gain more rewards. So if you can use a credit card responsibly find one that can suit your lifestyle and take advantage of the credit card perks.