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The recent security breach at credit card processor CardSystems Solutions has many consumers worried. Thanks to a well-placed computer virus, nearly forty million credit card numbers were stolen, and cardholders nationwide are justifiably concerned about identity theft. Should a thief steal your identity, he or she could run up thousands of dollars worth of debt in your name and it could take years to sort out the ensuing financial mess.
Fortunately, a relatively new tool is available to consumers to help alert them to potential fraudulent activity on their credit record. Each of the three main credit bureaus offer a subscription-based credit monitoring program, as do numerous banks and financial institutions. Fees vary, but $50 or so per year is typical. The bureaus will notify consumers of activity conducted under their names, including the opening of new accounts, changes of address, credit inquiries from lenders, late payments and lawsuits and liens. Notification can come in the form of e-mail or even a message to your cell phone, if you like.
Should you be notified of suspicious activity, you can then call the appropriate agency, be it a lender, the credit bureau itself or the police, if necessary. The packages vary in both prices and features, so interested consumers should shop around to find a plan that works to fit their needs.
A free alternative is to obtain a free credit report. Thanks to a law passed last year, Americans can obtain one free report from each of the three credit bureaus per year through a special Website. By obtaining one report every four months, consumers can keep an eye on activity under their name for free. This is not nearly as effective as subscribing to a monitoring plan, which will notify you when activity takes place, but it is better than doing nothing at all. With the recent security breaches by major credit card processors, consumers who are worried about being victims of identity theft have genuine concerns. The credit bureaus are doing what they can to help, and the monitoring programs and free credit reports are a step in the right direction.
About the Author: ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and http://www.homeequityhelp.net, a site devoted to information regarding home equity lending.
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Fresh Content.net Did You Let Your Piggy Bank Get Away?
By Cheryl JohnsonI think most of us have at some point in our lives. Some how we forget to feed the little piggy. And, like most neglected “pets”, your piggy bank will disappear if you don’t feed it. A personal budget is important to create financial independence and setting goals for feeding that “piggy bank” should be an important part of your budget!
The most successful financial plans allow you to INVEST IN YOURSELF! It just makes good sense. A plan to build financial security should always be considered essential to any budget.
Even if you’re on a plan to reduce debt, you need to include plans to build a foundation for future financial security. A good savings routine and variable expense account are essential to building a strong foundation for financial independence.
A variable expense allowance in the budget is important to save for those expenses that seem to “hit us unexpectedly”. Funny thing is, we know these expenses will occur. They are an inevitable fact of finances for most of us. So, why do we call them unexpected? I can’t explain why, but there are many of us who make this very BIG mistake in our budgeting.
Some expenses don’t occur monthly. Some are paid out every now and then, quarterly, yearly, or bi-monthly, or semi-annually. These are expenses like car insurance and maintenance, home insurance and maintenance, property taxes, income taxes, medical expenses (prescriptions, deductibles, co-pays), pet care, school expenses (supplies, trips, activity fees, books), and clothing. Some of these are huge expenses that can put a ripple in any good budget if not planned for.
Most of us have good intentions, but it’s easy to fall prey to the credit card companies without a plan to cover all of these “unexpected” expenses. The term still makes me chuckle. I mean, don’t we “expect” to wear clothes? It’s even funnier to me knowing that I was guilty of this very thing. Poor Planning! Not expecting what should be expected.
Lesson ……….Don’t forget about this expenses in your budget. They will sabotage the best of intentions!
The other essential ingredient to a successful budget is a savings plan. A good savings plan should have a goal to reach at least the minimum amount necessary for you to survive for a three to four month period. It may take time, but this a strategy that provides a fail safe against a financial crisis. Crisis such as serious illness or job loss.
Trying to save money by cutting your savings budget out will eventually backfire on you. It is essential to build financial security, in order to remain debt free, you must not compromise your savings expense.
Only if there is no way to avoid it should you reduce the amount of your monthly savings commitment.
Start with 2-4% of your monthly income if you have to. A little is better than nothing, and then you can build it up from there to at least 10% of income as funds become available.
Some Important Points:
Applying extra funds to your debt first will not help you gain financial security. Emergency savings and variable expense savings goals should be met before debt is reduced in order to remain debt free.
After all, these sources will be the foundation you will fall back on in order to remain debt free. If you can build a reserve for emergencies you won’t have to use those nasty credit cards. This is an important defense that builds financial security.
If you use a good debt reduction plan, debt will reduce, and in a reasonable amount of time. As long as you stop creating debt. Just be patient.
Paying more on your debt, instead of saving, is not going to help you pay for that major car repair when the car breaks down. It will most likely do the opposite of your intended plan and send you running for the credit card to bail out.
Of course once you have reached your goals for savings and your variable expense account, then you should start applying extra funds to your debt reduction plan.
Using money saving tips reduces expenses in your budget in an effort to help you build that financial security. Through saving money on everyday expenses and living a frugal lifestyle, you free up monies to apply to your savings and variable expense account. These are the defenses that build a strong foundation for your financial independence.
These "defenses" prepare for the inevitable expenses that will arise. Many of us had just forgotten to plan correctly for these types of expenses. That's how we got in the "big red mess" to begin with. Properly preparing for necessary variable expenses is your defense against feeling the need to use the credit cards.
Once you have balanced your expenses with your income, you have created a Budget for Debt Free Living. Congratulations! You are on your way to financial freedom and security. Enjoy! This concept is simply “living within your means.” Something that many of us in today’s “plastic society” have forgotten to do.
Live Debt Free to Be Free. You Deserve It!
About the Author: Cheryl Johnson is a mother of four helping herself and others become, and remain, debt free. Publisher of the personal finance site Simple Debt Free Living at http://www.simpledebtfreeliving.com where you can find a free household budget plan and a variety of money saving tips to maximize savings
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