Beating Broke

A Tip for Your Food Bank Donation

September 19, 2022 By MelissaB Leave a Comment

We’re heading into the holiday season with the trio of Halloween, Thanksgiving, and Christmas. Not only does this time because more hectic for most people, but it’s also a time when people become more generous and think of donating to others. Of course, one excellent way to donate is to give non-perishable food, but consider this tip for your food bank donation.

What Is Food Insecurity?

Thanks to the pandemic and inflation, food insecurity has a strong presence in our country. According to the U.S. Department of Agriculture’s Economic Research Service, “10.2 percent (13.5 million) U.S. households were food insecure at some time during 2021.”

Due to increased demand, many food banks around the country report that they do not have enough food to give to those in need so now is an excellent time to give to a food bank.

My Experience with Food Insecurity

I have only been food insecure once in my life. I was in 7^th grade, and my dad had been laid off 18 months prior. Despite actively searching for a job, he had trouble getting interviews, let alone a job.

Money in our family had always been tight, but after he was laid off, money became very tight. And then his unemployment checks ended. No job was on the horizon, and I remember the panic my mom felt. Feeding our family of four was a challenge.

A Tip for Your Food Bank Donation

That Thanksgiving, someone anonymously left us a basket filled with food. Inside was a large turkey and many canned goods. We were delighted to have that basket. For a few weeks, if we stretched the contents, we wouldn’t have to worry about where our next meal would come from.

During that time, we were always grateful for any food we received. However, most of the non-perishable food that people donated was unbranded. Of course, there is nothing wrong with off-label food, but we hadn’t eaten that way before, so the food wasn’t quite as good to my taste buds. It made me feel “poor.”

But in that Thanksgiving basket, I found an item that made me feel like life was back to normal. Inside the basket were several boxes of Kraft Macaroni & Cheese, which had been my favorite before my dad had gotten laid off. I’d eaten that at least twice a week. While I was grateful for the unbranded mac & cheese we received from food banks, having the real thing, the branded mac & cheese I had loved, made me so happy! I don’t remember how the turkey tasted that year, but I still cherish how good the Kraft Macaroni & Cheese tasted.

Final Thoughts

If you choose to give to a food bank this year, I suggest that you not buy all generic foods. True, they are the most economical choice, and you can donate more food for less money when you buy off-brand. However, I promise you, some child is missing his old favorite food that is now out of financial reach for his family. So, if you buy some name-brand food to mix in with the generics, you will delight the children of the family who receive the food, I promise.

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How to Freeze Your Family’s Credit

September 5, 2022 By MelissaB Leave a Comment

About 15 years ago, I discovered someone had opened an account in my name and charged $1000. Luckily, I caught the fraud early, and the business where the theft occurred gave me my money back. However, that experience spooked me, so I froze my and my husband’s credit within days. At the time, parents could not freeze minor children’s credit, but that has since changed. Just recently, I started the process of freezing my younger children’s credit. If you’d like to do the same, here’s how to freeze your family’s credit.

The Drawbacks of Freezing Your Credit

My husband and I love that our credit is frozen because we feel less vulnerable to identity theft. However, there are a few drawbacks to this peace of mind.

You Must Thaw Your Credit in Advance If Applying for Credit

Recently, we bought a new house. The mortgage broker needed access to our credit scores and history, so I had to thaw our credit for all three credit bureaus. This takes me about 30 minutes each time I have to do this.

You Can’t Apply for Credit Spontaneously

Likewise, if you’re in a store and the clerk offers you a discount if you apply for the store’s credit, you won’t be able to because you have to thaw your credit first. But, again, I don’t consider this a drawback because it helps me avoid spontaneously signing up for credit, but some people feel boxed in by having frozen credit.

Limitations of Freezing Your Credit

While a credit freeze prevents thieves from opening new accounts in your name, it does not stop credit theft entirely. For example, within the last five years, my credit company has notified me three times that someone had fraudulently tried to charge something on my card. Luckily, each time the credit card company caught the theft and issued me a new card. However, in instances like this, my credit freeze did nothing to protect my existing lines of credit that I legitimately opened years ago.

How to Freeze Your Credit

Freezing your credit is simple. You can choose to call each credit bureau or complete an online form. Online is the easiest and fastest. You’ll need to give your name, address, and social security number. You’ll also need to answer some personally identifying information such as former addresses and counties you have lived in. This will allow you to set up an online account with each bureau so you can freeze and thaw your credit.

You can also choose to freeze your credit by mail, but this is the least efficient way and takes two to three weeks.

How to Thaw Your Credit

If you want to thaw your credit over the phone, you’ll need to use the PIN that the credit bureau gave you when you froze your credit.

If you want to thaw it online, log into your account with the credit bureau. A PIN is not required. Then you choose whether you want to temporarily or permanently remove your credit freeze. If you remove it temporarily, you can enter the date you want the thaw to begin and the date you want it to end.

Some credit bureaus used to charge a fee to thaw your credit, but, thankfully, now each of the three credit bureaus offers this service for free.

Why Should You Freeze Your Minor’s Credit?

Your child’s credit is a blank slate for a criminal. Because your child is too young to open credit, you will likely never check to see if their identity has been stolen. Unfortunately, this means criminals can open up a line of credit in your child’s name and have it for YEARS before your child first applies for credit or you check their credit for theft.

Furthermore, unscrupulous relatives can also steal your child’s identity. There have even been cases of parents using their child’s identity and opening lines of credit in the child’s name.

How to Freeze Your Minor’s Credit

Freezing your minor’s credit is more complicated than freezing your credit.

You must freeze your credit at the three credit bureaus, just like adults do. However, to freeze your child’s credit, you must establish both your child’s identity and yours as the child’s parent. You will need to send copies of the following documents to the credit bureaus:

Your driver’s license (or other government-issued ID),
Your birth certificate,
Your child’s birth certificate,
Your social security card,
Your child’s social security card,
A utility bill with your name and address on it

In addition, you’ll need to complete and send in the Minor Freeze Request form from Equifax and Experian. Transunion requires you to complete the Child Identity Theft Inquiry and send in the necessary documentation.

If your child does not have a credit report (which is what you want since it means no one has opened credit in their name), the credit bureau will first need to open a file on your child. Then, the bureau freezes the child’s account. This process can take 10 to 15 days or longer before the freeze takes effect.

When Can a Minor Control Their Credit Freeze?

When minors are 16 or older, they can decide to leave their credit freeze in place, temporarily thaw it, or permanently remove it.

Final Thoughts

Freezing your family’s credit may seem over the top or paranoid, but it’s not. With our increasingly online data-driven culture, our personal information is on many online sites. As the news reminds us, these sites are regularly hacked allowing thieves to sell and use our personal information to their advantage. A credit freeze on each family member’s credit bureau file helps protect them from identity theft and the nightmare that comes from trying to prove you are not the one who ran up thousands of dollars on credit.

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How We Used the Proceeds from the Sale of Our House

August 22, 2022 By MelissaB Leave a Comment

This summer has been a crazy one. We found out in May that my husband would likely get a new job 2,200 miles away from our home, and in June, he signed the contract for the new position. We sold our house, bought a new house, and drove four days across the country to settle in our new area. Thanks to the housing shortage due to the pandemic, we made a nice profit on our old home. Here’s how we used the proceeds from the sale of our house.

About Our Old House

Our old house had almost doubled in value from when we bought it eight years ago. When we listed it, the house sold in three days, and we had six offers, two of them for over asking. The couple we picked also waived their right to an inspection, which saved us money.

About Our New House

Our new house is slightly larger than our old house and cost 8% more than our old house sold for. Unfortunately, the property taxes are three times higher. (Yes, property taxes in Arizona, where we moved from, are affordable.)

We wanted to find a smaller house that cost less than our house in Arizona. However, we only had a week to look for a home in our new area. Unfortunately, many of the places on the market were less than desirable, with moldy tubs and awkward layouts. Or, a few were in highly desirable areas and went well over asking; we had no desire to pay that much.

How We Used the Proceeds from the Sale of Our House

I would have liked to have put all of the proceeds from our house into our new home so we would have a smaller monthly payment, which is especially important in this high-interest rate environment. However, both our financial planner and mortgage broker talked us out of this.

Instead, we used the proceeds from the sale of our house this way:

Seventy percent for a 20% down payment on our new house and to cover closing costs.

Six percent to increase our emergency fund. This allowed us to grow our emergency fund from one month of expenses to 2.5 months.

Four and a half percent for home improvements. While we didn’t pay over asking for this house, we did pay the list price. The house has some issues like mold on the wood window in one of our kids’ bedrooms, which we will need to replace before winter comes. We also need to replace a leaky, cracked sink and a few other items.

Six percent to increase our car replacement fund. We’ll need a new car within the next year or two. (Our current vehicle is 18 years old.) So, we added to this fund.

Two and a half percent to cover moving costs. We had to pay for our hotel rooms and food as we journeyed across the country, as well as other miscellaneous expenses.

The rest is unassigned for now. We’ll see how we need to use the remaining money, whether for college tuition, increasing the emergency fund further, or buying other household needs like a snowblower.

Final Thoughts

We tried to use the proceeds from the sale of our house as responsibly as possible. As a result, we were able to put 20% down on our new house, and we were able to bulk up many budget categories that put us in a more secure financial position.

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