Beating Broke

Personal Finance from the Broke Perspective

Restrain Holiday Eating and Spending for a Happier New Year

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Have you been in this situation before?

You want to start a diet and shed a few pounds, but you decide, since it’s November already, you should just wait until after the holidays.  You tell yourself you’ll have a fresh start January 1st.  New year, new life, all that.

This plan may sound good to you, but since you keep thinking about the diet you’re going to start in January, you indulge more than you normally would over the holidays and gain 10 pounds.  Now, you have an even bigger job ahead of you come January 1st.

Restrain Holiday spending and eatingIf you had instead started your new eating plan at the beginning of the holiday season, you would have had better control over your eating.  You likely wouldn’t have gained weight.  If you were doing great and were motivated, you may have even lost weight, but let’s be honest—even remaining the same weight during the holidays is an accomplishment.

We’re in November, which is when most people are at risk of two negatives—eating too much and spending too much.

Just like the decision to lose weight, many people may decide to start focusing on managing their money better after the holidays.  After all, there are so many presents to buy and parties to host.  Getting on a budget isn’t possible during the holidays, they think.  And then, because they’re not keeping an eye on their finances, they spend lavishly and find themselves facing an exorbitant credit card bill that they can’t pay in full.

Sound familiar?

Why not make this year different?

Yes, the holidays are right around the corner, but it’s not too late to keep your finances in check.  Here are some simple strategies:

Don’t give gifts to everyone.  If you don’t have a lot of money saved up for gifts, don’t go into debt to buy them.  Think about it.  Do you remember what gifts you received for Christmas last year?  Do you remember who gave them to you?

Yeah, I thought so.

I remember only one gift from last Christmas, even though I got several.

Give a gift that you can pay for later.  I love this strategy!  If you don’t have a lot of money for holiday gifts but still want to give something, consider offering a gift at a later date.  For instance, you could offer a close friend a present of dinner and a movie at a time of her choosing.  Maybe she decides in March that she’d like to take you up on the offer.  You’ve had three months to save the money for that gift.

Don’t give in to peer pressure.  There is an enormous amount of peer pressure during the holiday season to go to parties, bring food, buy gifts for everyone. . .It’s okay to step off this spendthrift merry-go-round and simply say no.  You don’t have to go to every party.  You don’t have to buy a present for everyone you have contact with in your life.

Just say no.

The next four to six weeks can have a significant impact on the first few months of 2016.

Are you going to indulge occasionally in sweet treats but mostly eat healthy, or are you going to let loose and gain 10 pounds?

Are you going to be financially responsible and only give gifts that you have the means to give, or are you going to charge everything and create a hole that will take you three or four months to dig out of, if not more?

Haven’t you had enough of overindulgent holidays?  Wouldn’t you like to start 2016 with a truly fresh start and no extra weight or bills?

 

 

 

 

Is It Worthwhile To Still Use Credit Cards with So Many Data Breaches?

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Just recently, PF Chang’s acknowledged that 33 of their restaurants had suffered a security breach over the last 8 months and that the credit card numbers as well as possibly the customers’ names and the expiration dates of the cards were compromised.  This news should be shocking or surprising.  Unfortunately, data breaches have become common place.  Just consider the recent security breaches at Target, Michael’s, and Neiman Marcus, to name a few.

If you’re diligent about shredding your personal information so that it can’t get into the wrong hands, you’re still not safe.  Consider all the recent security breaches.  It’s enough to make people start to think about not using credit cards just  to avoid this problem. Until they remember all the cash back they’re earning!

But even that is not a complete solution.  Yahoo! Finance just announced that a Russian gang has stolen billions of Internet passwords and millions of e-mail addresses.  “The records include confidential material gathered from 420,000 websites, ranging from household names to small Internet sites” (Yahoo! Finance).

The problem is so widespread.  If you want to live in the modern world, going without the Internet and credit cards to preserve your identity is very difficult.  Instead, consumers need to become even more diligent in their efforts to protect themselves and their identities.

Data Breaches Consider taking these steps:

1.  Change passwords frequently and make them difficult.

If you’re using “Sunshine” or “password123” as your password, it’s time to step things up.  Choose passwords that have capital and lower case letters as well as symbols and numbers.  A password like “S&36ptrM$9” will be much more difficult to crack than the passwords most people use.

Remember to also change your passwords frequently and avoid using the same password for all of your accounts.

2.  Protect your data.

When you shop online, you have the option to have the company save your credit information.  Do not opt to do this to protect yourself and your financial information.  Yes, entering your credit information every time you place an order online is a pain, but it’s much easier than trying to resolve identity theft.

3.  Order your credit report 3x year for free.

Each of us is entitled to one free credit report per year from each of the credit bureaus.  Make sure to order yours, but rather than ordering all three at once, stagger them.  Order one from Experian in January, one from Equifax in May, and one from TransUnion in September.  By staggering them, you can keep a close eye on your credit and notice fairly early if there is any unusual activity.

4.  Check your accounts regularly.

Especially if you have automatic payments set up, make sure to still take the time to look at your account to make sure there is no suspicious activity.

5.  Consider freezing your credit.

This is a radical step, but freezing your credit is the best way to protect your identity.  If your credit is frozen, no one can open a new account (including you) unless the credit is thawed using a special code you’re given when you freeze your credit.

Identity theft is an unfortunate consequence of our modern world.  You can’t avoid all technology to protect your financial information.  These strategies will help protect you while letting you use and enjoy modern financial conveniences like credit cards and ordering online.

The Argument for Freezing Credit: Is Your Social Security Number Easily Found on the Web?

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You’ve likely heard about the recent security breaches at popular stores like Target, Neiman Marcus and Michael’s.  While it’s bad enough that so many customers’ security was compromised, what’s even worse is the reports that these customers’ personal and credit information often ends up on a large database to be bought by criminals for as little as $40.

You might imagine some shady database that is hard to find unless you’re a criminal.

Unfortunately, the truth is that your personal information is surprisingly easy to find on the web.

Hiding in Plain Sight on the Internet

Freezing CreditMy husband and I are searching for a house.  Like any diligent buyer, I searched the Internet for the address of the house we’re interested in.  (I did this just to make sure it had not been the scene of a murder or crime or meth bust.  Every perspective home buyer does this, right?)

While I didn’t turn up anything amiss with the home, I was shocked when I happened upon a site that touted itself as a reverse social security number look up.  The address I was searching was there, complete with the owner’s social security number.  In fact, every social security number that was listed had either the number holder’s full name or address.

Scary stuff!

You Can’t Control What Happens to Your Personal Information

The simple truth is, no matter how cautious you are about not sharing your social security number or making sure to shred all documents containing your personal information, you can’t control all aspects of that information.

If you’re living a normal life and using a credit card or debit card, you might be the victim of a company’s security breach (even though you did everything right to protect your identity).  Your own information could very well end up on the web even if you’re diligent about not having a web footprint.

Consider Freezing Your Credit

My friend recently had her identity stolen.  She found out fairly quickly–within 3 days, but by then the thief had already charged over $20,000.  She’s spent hours trying to clear her name while also caring for her 5 young children during the day.  I can’t imagine the stress she’s under right now.

Truth is, that could happen to any of us, especially when our personal information is so freely available on the web.

If you want to protect your name, identity, and credit score, the best way to do so is to freeze your credit.

First, to clear up a misconception, if you freeze your credit, the credit lines you already have open will not be affected.  You can use your credit as normal with no inconvenience.

However, freezing credit does have a few inconveniences.  If you want to open a new line of credit or even apply for a new apartment, for instance, you’ll need to thaw your credit.  Depending on the state you live in, this can cost anywhere from $2 to $10.  Initially freezing your credit also costs about $10 per credit bureau.

My husband and I have had our credit frozen since 2009 when we had our eBay account hacked and $1,000 was purchased over night.  I plan to keep our credit frozen for the rest of our lifetimes, thawing only when needed (like we did a few weeks ago to pre-qualify for a home loan), especially now that I know social security numbers and other personal information are so easy to find on the web.

Have you frozen your credit?  If not, would you consider doing so?

(Editors note: Freezing your credit is the best way to stop a lot of this stuff from happening.  It’s what many of the services like LifeLock (not recommended) really do. Alternatively, there are ID theft protection services like Credit Karma that you can use that will monitor your credit and credit score without the freeze, or in coordination with a freeze.)