Spring 2002 Newsletter Spring is the perfect time of year to tidy up the yard, clear out the garage, and revive the barbeque. It's also the perfect time to straighten up your old spending habits and ideas about money management. This issue of Money Sense Online deals with sweeping away old money habits and planting new ideas to achieve your financial dreams.

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Spring Clean Old Money Attitudes They say old habits die hard, and no habits are tougher to change than the ones we have about money.

A Fresh Start for Checking Accounts Checking account problems can haunt you for up to five years, but now there's a way to show banks and other financial institutions that you deserve a second chance. It's a program called "Get Checking."

Are You a Victim of Identity Theft? America's fastest growing fraud crimes are now identity theft and credit fraud. According to some estimates, consumers lose a whopping $2 to $3 billion each year to these illegal activities.

Tax Refund Fever Often, your first urge when you hear the magic words, "tax refund," is to start planning your spending spree. If you can resist the pull of instant gratification long enough to assess your finances objectively, you may find better uses for your refund money.

Couples & Money: Planting the Seeds of Harmony Why does money seem to be the focus of so many marital problems? Possibly because people would rather talk about almost any other intimate detail of their lives than money.

Spring Clean Old Money Attitudes

Why do some people "work hard for their money," while others let their "money work for them?" Do you find it easy to "stretch a dollar," or hard to "make ends meet?" They say old habits die hard, and no habits are harder to change than the ones we have about money.
Take the Money Attitude Quiz

Find out if your money attitudes could use a spring cleaning by answering these questions:

1. Do you avoid looking at bank or credit card statements?
2. Do you "forget" to open bills when they arrive?
3. Do you have trouble getting to sleep because of money worries or do you wake-up stressed about money?
4. Do you feel like money problems are adding tension to your relationships?
5. Are you on the "slow track" at work, missing opportunities and promotions?
6. Do you feel like money problems shadow almost every aspect of your life?

If you answered yes to any of the above, it's time to make a change.

Look for Habit Patterns

	"By avoiding the problem, you're also avoiding the solution."

Money beliefs are rooted so deeply that many people reach adulthood without ever examining the ideas that cause money problems. Change is possible, says money guru Marilyn August, but to change a habit you must first recognize what a money habit is. "Look for patterns," she says. "Do you find yourself at the drive-thru again because it feels safer to spend $5 there than $40 at the grocery store?" Perhaps, she suggests, what you're really doing is feeding fear, not fighting hunger. Or do you feel like there's never any money, even though you don't really know how much money you have, what you spend, or how much your bills are? You're doing more than avoiding the problem, says Marilyn, you may be avoiding the solution, too.

Money-Health and Wisdom

One good way to break old money habits is to attend CCCS-OC's seminar, "Money-Health and Wisdom."Speaker and author Marilyn August helps people explore solutions to money problems by taking a look at the real causes of financial stress. "This class isn't about money," she says. "It's about our relationship with money, with our family, with spending, and with work. It's about changing attitudes and taking actions that result in changed lives." A recent poll of Money-Health and Wisdom graduates showed that over 77% gained control of their spending after attending the class, while 67% reported achieving financial harmony in their home. Another 44% said they increased their productivity at work, while 20% received a raise, promotion, or better job.

Click here to get more information or to sign up for Money-Health and Wisdom.

A Fresh Start for Checking Accounts

If you've been in financial trouble, you know how quickly one problem leads to another. Worse, if you've mishandled your checking accounts in the past, you may find yourself unable to open new ones. Although checking account problems can haunt you for up to five years, now there's a way to show banks and other financial institutions that you deserve another chance. It's a program called "Get Checking."

No Checking Costs You Money

Not having a checking account causes a world of trouble and costs you money. You can no longer pay bills just by putting a check in the mail. Not only must you take the extra time to purchase a money order, you also have to pay for it. You have no debit card to make purchases and reservations. It's harder to cash your paycheck, and the long lines may tempt you to skip over to a check-cashing shop whose fees cause another money drain.

What is ChexSystems?

	"Even bankruptcy doesn't remove a negative ChexSystems report."

Many banks subscribe to a program offered through a company called ChexSystems. This program helps banks identify account applicants who have a history of troubled checking accounts - such as accounts closed for being overdrawn. A negative report remains on ChexSystems file for five years, unless it's removed for legal reasons or at the request of the financial institution that filed the report. Even bankruptcy doesn't cause the report to be removed. Bottom line: Most banks don't want to risk opening a checking account that might leave them liable for overdrafts.

Four Steps to a Second Chance

But now CCCS-OC has a way to reinstate your banking privileges in just four easy steps:

1. Register and attend "Get Checking," a six-hour seminar costing $50.
2. Pass a short quiz to make sure you understand the seminar material.
3. Make sure all previous financial obligations in your ChexSystems report have been paid in full.
4. Take your "Get Checking" completion certificate to a participating bank or credit union to open a new checking account.

Take advantage of this new program to get a fresh start!

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Are You a Victim of Identity Theft?

America's fastest growing fraud crimes are now identity theft and credit fraud. According to some estimates, Americans lose a whopping $2 to $3 billion each year to these illegal activities. While victims are usually protected financially, they receive no compensation for the time it takes to clean up the problem or for the emotional distress identity theft can cause.

The Secret Crime

	"Identity thieves are equal opportunity crooks."

Identity theft is a secret crime whose perpetrators count on their victims not finding out about the illegal activities for months, and in some cases, years. Often, consumers discover a problem only when a lender refuses them credit because of a poor credit report. "Identity thieves are equal opportunity crooks," says Sally Antwiler, CCCS-OC's Education Director. "They don't care if you're rich or poor, and they don't care about your current accounts. What they want is to open new credit accounts, charge them up, and leave you holding the bag." So how can you find out if someone else is using your name to open credit accounts? Experts say to check your credit reports at least once a year, twice a year if you've ever been a victim.

Order Your Credit Reports

You can order your credit reports easily from the three major credit reporting agencies, Experian, TransUnion, and Equifax, through the mail, by phone, or online. Look for any accounts that you didn't open, and pay attention to who has been requesting your credit information. If you find an unauthorized account, contact the credit reporting agencies immediately to begin an investigation.

The Best Defense

Checking your credit report may alert you to any illegal activities, but the best defense against identity theft and credit fraud is to protect your personal information. The Federal Trade Commission (FTC) has a website with information on the best ways to guard against fraud. Visit them at www.consumer.gov/idtheft.

Help with Your Credit Reports

If you'd like help understanding your credit report, consider using CCCS-OC's Credit Report Review. For a small fee, you'll receive a combined credit bureau report and a confidential review with a Certified Credit Report Reviewer. The reviewer will help you find and learn to correct any errors and show you how to legally improve your credit.

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Tax Refund Fever

Often, your first urge when you hear the magic words, "tax refund," is to start planning your spending spree. But if you can resist the pull of instant gratification long enough to assess your finances objectively, you may find better uses for your refund money.

Sally's Refund Fever List

	"You need at least three months living expenses."

Sally Antwiler, CCCS-OC's new Education Director, says the top priority for a tax refund should be to start or add to a Family Emergency Fund. "Experts recommend that you have at least three months of expenses in reserve," says Sally. "Our counselors hear stories everyday about families being pushed into debt because of a broken car, a sudden death, or unemployment." She says that having an emergency fund can make the difference between bankruptcy and financial security.

Plan for Retirement

The second priority is to establish or add to a Retirement Fund. "Some people think that Social Security or relying on their children will be enough to get them through their senior years," says Sally. But as the cost of living rises, these two retirement "plans" may not give you the quality of life you were hoping for."

Here is how much you'd have at age 65 if you took the average refund of $1,700, and invested it at an annual rate of 10%: Age 40 initial one time investment of $1711= $18,538 by age 65 Age 30 initial one time investment of $1711= $48,083 by age 65 Age 20 initial one time investment of $1711= $124,715 by age 65

Keeping Interest

The third priority on Sally's Refund Fever list is to pay off any outstanding credit card debt. "The math is pretty simple," she says. "If you're getting 8% interest in a money market, but paying 19% on credit card debt, you're actually making a better investment by paying off the credit card."

For example, the average tax refund is approximately $1,700. If you owe $1,700 on a credit card at 18% APR and pay only the minimum amount until it's paid off, you will have paid around $3,200. If you pay off the credit card with the refund instead, you could save over $1,500 in interest.

If you belong to CCCS-OC's Debt Management Plan (DMP), you may want to consider paying more than your monthly amount. Contact your CCCS-OC counselor about how you can apply your refund to your DMP.

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Couples & Money: Planting the Seeds of Harmony

Why does money seem to be the focus of so many couple quarrels? Perhaps because people would rather talk about almost any other intimate detail of their lives than money.

	"Try to subtract emotion from the money equation."

Marilyn August, speaker and author of "Money-Health and Wisdom," a seminar offered by CCCS-OC, says that it's tough enough to figure out our own hidden feelings about money, much less try to understand someone else's. "The key here is learning to talk to each other in an open, honest, and accepting manner," she says, "The more open you're willing to be, the more your partner may will be willing to share as well."

Timing is Everything

Next time you're in a heated, impromptu "discussion" about money, consider stepping back from the argument until you've both calmed down. It may be a good idea to schedule a weekly or monthly meeting to discuss finances. Set a time limit, outline an agenda, and stick to the plan. The more emotion you remove from the discussion, the more positive the outcome.

Examine Your Own Beliefs

Before you can understand your partner's relationship with money, you need to examine your own. Are you a spender or a saver? What were your parents' attitude toward money? How did money issues impact your other relationships? Once you've faced your own issues, you may become more sympathetic to your partner's.

Work Together

Get serious about budgeting, and work together on developing a spending and saving plan. Seeing exactly where the money goes can be a real eye-opener for the partner who is too tightfisted, as well as for the wild impulse spender. If one of you has always been the bill payer, consider sharing the chore. Also be sure to allow for some personal funds for each partner that can be spent without question.

Consider Outside Help

Having an outside party help you and your partner work through your money issues can make a big difference. You can schedule a free appointment with a CCCS-OC credit counselor, consult with a family counselor or therapist, or take a class that addresses couples and money. "Money-Health and Wisdom," a four-week seminar offered by CCCS-OC, explores the unconscious and negative attitudes toward money, and helps couples learn to make better money decisions. Click here for more information.

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