Bad Credit Advisor

The word “budget” has a tendency to make people grimace, and “frugal” is no different. But that’s perhaps because people often forget that the whole point of budgeting or frugality is to maximize the value of your money—by saving money where it doesn’t matter to you so you can spend it where it does.

A Lesson in Dollar Value

In his recent book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays, professor Joel Waldfogel reveals a thought-provoking statistic: on average, people value gifts they receive at 20 percent less than the price the giver paid.

This illustrates the concept of dollar value: something that’s worth ten dollars to one person may be worth only eight (or less) to another.

Maximize Your Dollar Power

The point of being frugal, then, is making the most of the dollars you have, which consists of two smaller steps:

• Spending less where you won’t miss it. We all have areas where we can cut back on expenses without feeling the pinch – whether it’s in opting for second-hand clothing or cutting back on eating out, we encounter chances every day for saving money (see below).
• Spending more where it will make you happy. Some people savor their wine. Others love nice purses

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Does the following scenario sound familiar to you?  The Smith family has had a difficult year financially.  John Smith lost his lucrative career as a result of cutbacks to middle management at a previously thriving construction company and has been working two jobs in retail for several months.  Jane Smith recently re-entered the workforce after twelve years of staying home to raise children in order to help make ends meet.  As the year comes to a close, Mr. and Mrs. Smi

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While most of us may be inclined to look ahead as we plot out our goals for the new year, it may be a useful money-saving strategy to look back a few years. How, you say? Read on.

Spend Less on Paper

If you use paper towels, paper napkins, tissues and disposable cleaning cloths, you may be shelling out more than you realize on stuff you throw away. The solution? Do what your grandmother did:

• Use rags: Not long ago, I was about to toss an old tee shirt that had seen better days (much better days), but then I decided to use it as a household rag. This isn’t a new idea, but many of us have abandoned it for the convenience of disposable cleaning items. Now I scrub with old clothes and drop them in the wash when I’m finished.
• Go fancy: It’s ironic that cloth napkins seem like a luxury item when, in fact, they can save us money. You d

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The U.S. Department of Commerce released data this week on personal income for November, and the numbers look modestly positive, with a 0.4 percent increase in personal income last month. Further, the numbers show that:

• Real disposable personal income rose 0.2 percent
• Wages and salaries increased by $16.1 billion
• Real personal consumption expenditures rose 0.2 percent
• The saving rate remained steady at 4.7 percent

These numbers show a different situation than a year ago, when personal income was on the decline, but many economists have cautioned that they may not be enough cause for celebration. To fully recover from the recession, it seems, more substantial increases are needed.

The Commerce Department also reported this week that consumer spending rose by 0.5 percent (0.2 percent after adjustments for inflation) last month, likely a byproduct of the slight bump in income.

New Home Sales Fall

On a less positive note, data from the Census Bureau show that single-family home sales plummeted last month to 355,000, which represents an 11.3 percent drop from October and the lowest rate in seven months.

The combination of these indicators has some analysts worried about the ability of the U.S.

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If you’re considering filing for bankruptcy, you may feel like the you’re the only one. You’re not alone. In fact, more than one million people filed for bankruptcy in 2008.

There is a misconception that filing for bankruptcy is about “cheating the system.” The truth is, however, most people who file for bankruptcy do so after a life-changing event that puts them in financial constraints.

Filing for bankruptcy is not a sign of personal failure. More often than not, a person files for bankruptcy because circumstances beyond their control have caused them to fall further and further behind on their bills.

One of the most common reasons for filing for bankruptcy is a serious illness. Other reasons include job loss and divorce. These three reasons account for more than 90% of all bankruptcy filings. In these cases, an already difficult situation is compounded by mounting debt and worries over foreclosure and repossession.

Bankruptcy helps individuals who have found themselves in financial straits by wiping the slate clean. Bankruptc

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The recession has been hard on a lot of Americans, in part because the decreased availability of credit now means that many people are seeing their accounts limited or closed for what seem like mysterious reasons.

Here’s a look at some potential explanations for why you may have seen your limit shrink recently.

• Changes to Your Credit Score: Many card issuers have a certain minimum credit score cardholders must maintain in order to keep their accounts open. If your score falls below that number, you may see some of your credit yanked.
• Negative Credit Action: Opening a new credit account, defaulting on an account, missing a payment, having a credit inquiry (which usually happens when you apply for a new line of credit), changing how much debt you carry, using your cards more than usual and having too many of your accounts in dispute could all cause one of your card issuers to close or limit your account.
• Neighborhood Problems: In some cases, living in “high risk” parts of the country (where unemployment or foreclosure rates are especially high) could be enough to affect your credit.
• Tough Times: Sometimes financial difficulties that haven’t directly affected a credit account can cause a card issuer to preemptively alter interest rates or credit limits. Such di

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