Finances 101 at Credit.com

With the credit/financial/economic crisis, Americans started paying more attention to their financial health.

When you’re losing your home, income, or investments, it tends to get your attention, right?

These kinds of issues can lead to a lot of questions, and we heard about Credit.com from some smart folks in the credit union world. Credit.com offers a great Knowledge Base section that serves as a Frequently Asked Questions (FAQ) about financial topics.

Topics are arranged by categories like “identity theft,” “auto loans,” and “credit cards” – making it easy to find what you’re looking for. Credit.com also features certain questions/answers, and shoots the most popular up to the top for easy reading.

Some of the posts are super handy, like how to increase your credit score and how bankruptcy affects your tax issues.

The San Francisco-based site was established by the former director of the New Jersey Division of Consumer Affairs, and runs a blog and a forum where users can ask detailed questions.

Storage units bad, saving money good

Do you keep things in a storage unit? If so, it could end up costing you thousands of dollars that could be better spent somewhere else.

That’s the lesson behind Wise Bread’s storage unit post.

The conclusion? Storage units are a money, time, and effort sink.

Not only do they cost money to store things you’re probably not using anyway, they also affect the world around you:

Bigger houses are harder to fill up, which may explain why Americans buy twice the number of consumer goods than the citizens of any other first world nation. (Okay, so we’re a geographically huge country, but if we’ve got such big homes, why do we need an additional billion square feet of storage space?) The environmental cost of creating, transporting and finally housing two billion square feet of unused possessions is mindboggling.

If you’re backpacking across Europe for a year, or a member of the armed forces, storage units can make sense.

If, however, you’re using a storage unit to stash away possessions because you don’t have room for them, you might have a problem.

Ask yourself: if your photo albums or boxes of momentos are important to you, why are they out of sight, out of mind?

Use direct deposit to avoid lost/stolen checks

Columnist Terry Savage shares some sobering statistics:

It seems a point almost too obvious to make. Yet, last year, more than 480,000 Social Security checks were reported lost or stolen and had to be reissued. And $64 million in Treasury-issued checks were fraudulently endorsed.

Savage recommends that SS benefit recipients enroll in direct deposit, ensuring that payments will go directly to their account.

Savage says GoDirect.org can give more information and guidance on the benefits of direct deposit. We feel that, once you have direct deposit, you’ll never go back to regular paper checks. It cuts a lot of hassle out of the whole process.

Disaster planning: organize your info

Trent at The Simple Dollar blog brings up a point we’ve made before: it’s good to prepare for the worst.

He recommends having a binder with documents listing all your financial, insurance, and legal information:

Even aside from the peace of mind that will come from having this document, there will come some point in your life where having all of this information at hand will come in handy – your house burns down, or your spouse passes away suddenly. During those times of crisis, having all of this data available easily to you will make all the difference in the world, taking a healthy dose of stress away from that painful and challenging moment.

While it takes some time and effort to prepare a “just in case” file, the time and effort saved if something happens is more than worth it.

How do you prepare for the theoretical worst case scenerio?

Grow your own veggies to help your budget

The Washington Post reports on the growing demand for vegetable, fruit, and bean seeds as a way to save money on groceries:

Seed producers and merchants across the United States are reporting the same phenomenon of crazy demand and even some shortages, especially of staples like beans, potatoes and lettuces. Sales of seed packets picked up last year and have grown significantly again this season, which runs from January to June.

Industry observers attribute the boost in sales to a concern for food safety following outbreaks of E. coli and salmonella poisonings and a desire by consumers to be a part of the local food movement. Michelle Obama’s new vegetable garden at the White House may also be inspiring people, they said.

But the primary reasons, they speculate, are the recession, income loss and the need for people to lower their grocery bills by growing their own.

Here around the American 1 branches, many employees grow their own vegetables and bring in the extras to share. They’re helping themselves and their co-workers. If you’re growing your own garden and have a surplus of veggies, share the wealth.

Have your own garden story or tips to share? Tell us in the comments!

Haggling helps save money

Amy Reiter at Salon.com shares her experiences learning how to haggle – the resurfaced art of dickering for a better deal.

After a few financial setbacks, Reiter started to look for ways to save money around the house:

And so, a few months back, I got on the horn to the cable company and sheepishly asked if there was a way to lower my monthly payments without sacrificing the children’s TV programming on which my early-morning sleep depends: To my surprise, the customer-service representative instantly slashed my monthly bill in half by cutting some feature I didn’t even know I had. Emboldened, I dialed up the New York Times, my long-distance phone carrier and anyone else I could think of, whittling down my standing monthly charges until they were as slim as a post-NutriSystem Marie Osmond, or — more aptly — as slim as my wallet these days.

The key, say the experts Reiter talks to, is practice. Haggle often enough, and you get comfortable at it.

Learn the secrets of car dealerships

The world of auto sales is like another planet: so many secrets and plans and methods. Purchasing a vehicle involves patience, stamina, and a bit of self-education.

Thankfully, we can help with the last one.

Over at the Consumerist, you can learn about the “four squares” method of making deals at a car lot, which involves directing your attention away from things like the actual price of the vehicle you’re buying or financing. As with most Consumerist posts, a lot can be learned from the comments section, so be sure to check out the readers’ stories at the end of the article.

One of the posters pointed to Car Buying Tips, an encyclopedia of car dealer trade secrets and tactics. For some good fun, check out the mail the site gets from angry dealers.

The most important lessons I caught were (a) get pre-approved at a credit union to know how much you can/should spend, (b) haggle over the purchase price before anything else (trade-in, monthly payment, options) is talked about, and (c) do your research. A well-informed buyer is the most powerful person on a car lot.

Dave, a reader over at the Get Rich Slowly blog, offers some advice from working at a dealership, too. Here’s a realistic one:

Do not try to bluff or BS anyone in the dealership — they are a lot better at it than you are, and they do it far more often.

Our Member Relations department is happy to answer any questions you have about this stuff. Working with dealers as much as we do, we’ve learned a thing or two. We even have a guy, Dale, in the department that used to sell cars. He has some fun stories to tell.

Peace of mind: millions paid in life/disability claims

When you sit down to finance a vehicle with American 1, we ask you if you would like to take advantage of life and disability credit protection.

If you’re wondering whether or not to take advantage of these loan protection products, don’t take our word for it: the insurance company we partner with to offer life and disability, Allied Insurance, has paid out more than $1.7 million in life claims and more than $2.3 million in disability claims just since 2007.

In other words, if you become unable to work or unable to make your loan payments due to disability, sickness, or injury, your disability loan protection will cover you – and has covered many of you – giving you one less thing to worry about.

The same peace of mind can be given to your family knowing that, if you pass away, the life protection you place on your loan will cover the costs. All it takes is a quick phone call to American 1 to let us know what happened, and we’ll help you through the whole process.

According to Health Affairs, unexpected illnesses and injuries cause 350,000 personal bankruptcies each year. Two out of three U.S. homes are underinsured.

You don’t want your loan payments to become a burden to yourself (if you’re sick or injured) or to your family (if you pass away). That’s why you owe it to yourself to try out our life and disability coverage free for 30 days.

Chances are, you’ll see the benefit even if the unfortunate never happens.

Ask about life and disability protection the next time you finance a vehicle at American 1.

How to build an emergency fund

Trent over at The Simple Dollar explains what, exactly, an emergency fund is:

An emergency fund is cash that you’ve saved up for the sole purpose of helping you maintain your normal life through the emergencies that life hands you. Most of the time, you shouldn’t touch the emergency fund at all – it just sits there earning a bit of interest and waiting until you actually need it. When you lose your job. When an appliance breaks down. When your car needs a repair.

His advice is to start building a healthy emergency fund one goal at a time: start out with $250, then $500, then $1,000. After a while, you can cover whole months, like saving up a month’s worth of expenses, then two, and so on. Six to eight months of expenses is a good goal to have.

How do you get there? Trent recommends even $5 or $25 a week saved in an account you won’t touch. This is where something like a club account or money market comes in handy. Make it automatic, so you won’t be tempted to use that money for something else.

Finally, Trent recommends a bunch of ways to trim that $5 or $25 out of your budget, like eating in more or saving on utility bills.

The point is, bad things happen, and when that something does happen, you should have a healthy emergency fund (anything is better than nothing) saved up to cover those expenses.

Any creative ways to earn extra cash?

The Five Cent Nickel blog has posted “36 ways to earn extra money,” with tips like the usual “sell stuff around the house,” and “get a second job.” But how about “renting ad space on your car?” Or “make and sell crafts?”

Economic times like these call for the creative solutions – what’s one creative way you’re earning extra money?