More employers running credit checks
July 28, 2009
More and more employers are starting to do credit checks on their job candidates. This seems to have led to uncertainty on the part of job seekers who wonder why their potential employer is conducting a background check and what effect that check will have on their credit.
Employers may check your credit history for a variety of reasons. In particular, if you have applied for a job handling money, your employer will likely want to know how you’ve handled your own finances. Other jobs, such as with the federal government, may be high security, and you may be considered at risk to take a bribe if your finances are poor.
You must sign a form giving the interviewer permission to pull your credit reports, so you will know if the employer is going to run a credit check.
If you have a poor credit history, be prepared to answer any questions your potential employer may have.
These types of credit checks do not hurt your credit score.
There are two types of inquiries that can show up on your credit report, hard inquiries and soft inquiries.
Hard inquiries are the credit checks that are made when you’ve applied for credit. These types of checks could be made by a credit card issuer or a bank if you have applied for a car loan or a mortgage. Hard inquiries do put a little ding in your credit score.
Soft inquiries are credit checks made by you, your potential employers or creditors you already have accounts with. These soft inquiries will not have any effect on your credit score.
Coffee on a budget
July 20, 2009
Many people are trying to turn over a frugal new leaf lately. Faced with the possibility of job loss, wage reductions, increasing costs and an unstable stock market, even people who are doing okay are trying to buckle down.
There are tons of web sites dedicated to frugal living. One topic that seems to garner some attention is the cost of coffee. Like people on opposite sides of the political aisle, there are people on opposite sides of the coffee aisle.
You have the people who are coffee connoisseurs and especially love good quality coffee. Those people are often willing to pay for it. Then you have the occasional coffee drinkers, or those who see little to no difference between a cup at the gas station versus the brew served at a specialty coffee house.
I would put myself into the first category. I love my coffee. I love good coffee. And I can tell the difference between a good and bad cup of coffee, regardless of where it came from or how much it cost. And I should note that with coffee, like with wine, cost is not necessarily an indicator of how good the product will be. I just have certain brands that I like the best, and some are more expensive than others.
The expensive coffee critics love to cite the infamous $4-a-cup Starbucks coffee. That’s a bit of an urban legend. A regular cup of coffee at Starbucks is less than $2. The drinks that push the $4 price range are the large, fancy espresso drinks.
I say drink what you like … as long as you can afford it!
Even if you have expensive coffee taste but money is tight, you can still indulge your gourmet tastes on a gas station coffee budget.
If you buy a pound of coffee from a coffee house to brew at home and you pay $12 a pound, you can average approximately 56 cups of coffee from that pound. (That’s if you like your coffee on the strong side.) That averages out to 21 cents a cup. Not a bad price.
One other thing to watch out for is the actual amount of whole bean or ground coffee you are buying. I’ve noticed in some stores you’ll see a package of coffee for $8, but you’re only getting 12 ounces of coffee, not a full pound. If you’re comparison shopping by price, make sure to compare apples to apples, or, in this case, ounces to ounces.
Start saving: Pennies can turn into big dollars
June 1, 2009
Have you ever heard the tongue-in-cheek saying, “Why do today what you can put off until tomorrow?”
Despite its sarcastic nature, there are plenty of people who procrastinate and actually live by this philosophy. (Full disclosure: If I’m not careful I can be quite the procrastinator myself, so I’m certainly not looking down on those who tend to put things off.)
I think people tend to procrastinate particularly if the task is either difficult or boring. And this is what leads many people to put off fixing their finances. Let’s face it, budgeting and saving isn’t exactly exciting. And it can be scary and seem impossible, especially if you are facing a big financial crisis.
I always tell people that it’s easier to pay off $5,000 in credit card debt than it is until you’ve amassed $50,000 in debt. It seems like a no brainer, but sometimes it’s easier said than done.
The same goes for saving. According to a Bankrate.com survey, fewer than four out of 10 Americans have an emergency fund to fall back on. Roughly 70 percent of people have some sort of savings, but it’s less than the recommended three months of living expenses.
Not long ago I was reading an MSN Money article by Liz Pulliam Weston. She was writing about the importance of saving right away and compounding that savings. Here is her illustration of how compounding works:
“If I gave you a penny and promised to double it every day for a month, at the end of 31 days you would have — this is no typo — more than $10 million. At first, the doubling is no big deal, as 2 cents becomes 4 cents becomes 8 cents. As we keep going, though, those gains start to build up. The return on your money earns its own returns, and by the end we’re talking real cash.”
Granted, we aren’t going to save $10 million in a month, but if you’re not putting anything aside, and you can start to save something and gradually add to it, you could manage to save a larger amount of money than you thought capable.
Don’t procrastinate. And don’t feel overwhelmed with a large savings goal. Start with what you can, even if it’s only pennies. It could turn into real dollars.
Here’s a calculator to help you figure out how much money you can save.
Save money on food by using your freezer
May 26, 2009
How many times have you gone grocery shopping, bought food anticipating cooking every night for a week, and then wound up not using what you bought?
I think it happens to many of us. We have good intentions of eating everything we purchase, but life gets in the way. Someone invites you out to dinner. You get held up at work and are too tired or grumpy to make dinner, so you order pizza. You decide you’re not in the mood for fish and rice after all.
Whatever the case, we end up tossing what started out as perfectly good, and probably expensive, food. It’s an awful feeling to throw away squishy cucumbers, moldy bread or meat that just sat for too long uncooked and uneaten.
I saw an article in the New York Times that points out how your freezer can save you time and money when it comes to food. It’s a solution to the problem of throwing away food that’s so simple, so right there in front of our face, that we don’t see it.
As I read the article, I thought, “Hello! Why didn’t I think of that?”
Writer Mark Bittman describes how to properly freeze foods and organize your freezer to avoid throwing away perfectly good food. His ideas range from freezing fresh vegetables to creating your own frozen TV dinners.
If you have ever found yourself buying too much food, or having your dinner plans derailed, only to have a refrigerator full of spoiling goods, I suggest you read the article.
Please feel free to share any tips you have for using food quickly or preserving food so it doesn’t spoil.
Don’t lose potential savings when tackling projects yourself
May 18, 2009
I just read an article in the New York Times that made me laugh.
The article is about do-it-yourselfers who actually ended up costing themselves more money than they tried to save by tackling projects at home. Some of the people tried home repair, while others tried home beauty treatments or auto work.
Why I really laughed is that I made myself victim to this very thing about 10 years ago.
One evening I decided to save some money by lightening my hair myself. I already have dark blonde hair, but I wanted it lighter for the summer. I knew better, yet I ignored my inner voice that was telling me, “This is not a good idea. You should never color your own hair. Call and make an appointment with a professional.”
My attempt at subtle highlights resulted in a shock of bleach blonde hair that, with my short hair cut, I thought looked like the hair on Dr. Frank-N-Furter’s creation from “The Rocky Horror Picture Show.”
My family assured me it wasn’t as bad as all that, but I wore a hat the next day until I could get an emergency appointment with my very amused stylist.
The end result?
It cost me about four times as much to have my hair color corrected back to its original color and properly highlighted. And you can’t put a price tag on my embarrassment and bruised ego.
There are many, many competent do-it-yourselfers out there. My family is full of them. I’m incredibly lucky that we rarely have to pay a professional to do anything at our house. But not everyone is good at home repairs or hair coloring. Not everyone has the proper tools to work on a car or tackle a major plumbing problem.
If you, or someone you know, are skilled at a certain project, it’s a great way to save money.
However, if you are tackling a big project and don’t know what you’re doing, it might be more cost effective to hire a professional. If you are going to have to buy special tools, will they eat up any potential savings? Likewise, if it’s a potentially dangerous project (Think replacing a roof or working with electricity), you might be further ahead to hire a professional. If you are injured, hospital bills and time off of work — depending on the severity of the injury — could end up costing you a bundle.
If you are going to tackle a home project, make sure you read all instructions. At least talk to someone who knows what they’re doing. Take the proper safety precautions.
Are you a do-it-yourselfer? Have you ever had a project go haywire and cost more to fix than you saved? Please share your comments and suggestions.
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