Christian Finance Blog

Here’s a step-by-step guide on how to get your free credit report from all three credit bureaus (Experian, Equifax, and TransUnion) once every year (12 months).

It’s important to check your credit report to make sure there are no mistakes, errors or signs of identity theft. According to Consumer Reports, consumers find 13 million errors on their credit reports every year. And CNN Money says that 1 in 4 credit reports have errors serious enough to affect your FICO score drastically. This can affect the interest rate on loans and even your job prospects. Remember that your FICO scores (you have three of them; one from each credit bureau) is based on your credit reports.

Not only that, identity theft is the fastest growing crime in the country with over 9 million victims a year (Better Business Bureau). It’s so important to check your credit reports! And because they’re free, you have no reason not to. I stagger the three reports every four months. So I pull one in January, April, and September each and every year.

So here’s the quick step-by-step instructions:

1. Go to annualcreditreport.com. It’s the only place to get free credit reports from all three credit bureaus. Freecreditreport.com is not government-sanctioned or free and you’ll be signing up for a recurring bill if you try them so avoid them like the plague! Select your state and click “Request Report”.

2. Enter your personal information including name, date of birth, SS#, address.

3. Select the credit bureau reports that you want. Experian, Equifax, or TransUnion. Click Next.

4. Click Next again. You will be taken to the credit bureau’s website. View your free credit report. Do not pay for anything. The credit report itself is free. Anything else is an added service and not needed. Don’t pay for any “credit scores” as these are not actual FICO scores that the majority of banks use. You can only get true FICO scores at myFICO.com and these are not free. I would either print it out or save as a PDF file for your records.

And that’s it! Four easy steps! Now you don’t have an excuse not to pull your credit report 3 times a year. And all for free!

Skip recently wrote to me asking a very interesting question. Here it is in full:

“Part of my spouses income has been acquired through sinful means in my opinion. My spouse does not believe she is being sinful.

What does the Bible say about money earned through sinful means? Should it be returned (likely impossible in this case), given to charity or … what?

I feel a little guilt at having the benefit of that money acquired sinfully. What should I do?”

Here’s my advice on this situation.

If it’s possible, it should be returned. Remember what Zacchaeus did in Luke 19:8. He was a tax collector and essentially stole money by collecting more taxes than were due. He gave half of his goods to the poor and returned four times as much to anyone he stole from.

However, money acquired “sinfully” sometimes cannot be returned. I think it’s okay to give it to charity but it also comes down to a similar question, “Should a preacher accept “sinful” money like drug money?” Giving to God is a matter of the heart. An acceptable gift depends on the person’s heart and not the source of the money. Zacchaeus gave half of his wealth to the poor. Then Jesus said that salvation had come to Zacchaeus.

I also think it’s okay to keep the money as long as there is true repentance (turning from the sin and turning to God) and to not to earn the money sinfully again.

I think the bigger issue is why your spouse doesn’t think it’s sinful. It’s hard for me to say without knowing the exact situation but there are some clear-cut principles laid out in the Bible. Stealing is obviously wrong. So is prostitution or gambling. If there is some debate as to whether it’s sinful or not, there are some sin issues that need to be sorted out; not the issue of what to do with the money.

Have a question? Ask me today and I just might answer it right here!

Since I blogged about the IndyMac Bank failure a little while ago, there have been several banks to go under with First Priority Bank in Bradenton, Florida being the latest casualty. It was closed last Friday, August 1, 2008 and is being taken over by SunTrust Bank. Two banks were also closed on July 25 bringing the total number of bank failures this year to eight.

This is just another reason to make sure you are covered under the FDIC insurance protection of up to $100,000. You can find more information on the article I wrote earlier on FDIC insurance. This is no time to panic. Your money is safe and there’s nothing to worry about.

Any bank can fail if there is a run on the bank because of the way banks operate to begin with. Banks don’t hold all of their deposits on hand and are only required to hold a certain percentage so if there is a run on the bank, there won’t be enough assets to cover the withdrawals. But there is no reason to take out your money because of FDIC insurance.

The latest bank to “bite the dust” is IndyMac Bank in Pasadena, California. Earlier today, the FDIC took over the failed IndyMac Bank. This is already the fifth bank to fail this year alone compared to “only” three in 2007 and none in 2006 or 2005. This is also the second largest bank failure in U.S. history.

So what happens if your bank fails? Well, not a whole lot. The bank usually is taken over by the FDIC (Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Administration) and an announcement is made (notices posted on doors, news information sent out). Usually, another bank will buy the assets (and liabilities) of the failed bank and the branch will be reopened as a branch of the new buyer. When there’s a buyer of the bank, checks will continue to clear, debit and ATM cards will continue to work. This is only applicable to the insured amount ($100,000 per depositor or $200,000 per joint account).

However, if there is no buyer, the checks, debit cards, and ATM cards will not work. Checks will be returned and stamped “bank closed.” Typically, the bank is closed on a Friday and by Monday, checks are mailed out for the insured deposits. You will have almost immediate access to your insured funds. However, any amount that exceeds the FDIC insured deposits becomes a creditor of the failed bank and you may or may not see the money after the assets are sold off by the FDIC. You may not see all of your money.

You likely won’t know that a bank’s about to fail until it has happened. That’s why it’s so important not to exceed the insurance limits at any one bank. So don’t keep more than $100,000 at any one bank. If you stay within the insured limits, you’ll have relatively quick access to your money.

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Source: MarketWatch, Bankrate

The national average gas price hit a record $4.02 recently (and some states pay much higher than that). How can we beat high gas prices? Well, I’m not sure if you can really beat outrageous gas prices but you can sure take some steps to try and make your gas go further. Here are some ways you can stretch that dollar and help save on gas!

1. Slow down!

You lose approximately 4 mpg for every 10 mph over 65 that you drive. That may not seem like much but it adds up. Based on $3.25 a gallon you would be paying 54 cents more per gallon! That would be even higher based on a $4.02 a gallon gas price! So slow down and avoid hard acceleration and braking.

Not only that, aggressive driving (which includes speeding and tailgating) accounts for 56 percent of fatal crashes. There are approximately 5 fatal crashes every hour nationally. More than half of those fatally injured did not wear their seatbelt. So the public safety announcement for today is to buckle up and slow down!

2. Stop idling!

If you’re going to stop for more than 30 seconds, turn off your engine. Every minute spent idling burns a half-mile worth of gas. So when you’re at that drive-thru, turn off your engine! In fact, don’t even use the drive-thru, you lazy bum.

3. Inflate your tires!

Most drivers never check their tire pressure and drive on dangerous tire pressure levels. Tires already lose air in time and temperature. Under-inflated tires decrease fuel economy, can be bad for handling, and could even cause a high-speed blow-out due to increased heat.

4. Turn off the A/C!

Okay, it is true that using the A/C will decrease fuel economy. At lower speeds, it is more economical to roll down the windows. As speed increases, however, the increased drag and wind resistance makes the A/C the more efficient choice.

5. Lose weight!

Remember that extra weight cuts fuel economy, so hit the gym and lose some weight (just kidding). Every 100 pounds decreases fuel economy by about 2% according to the EPA. So clean out your car periodically and see what you can toss. You’d be surprised at what you’ll find!

6. Cruise!

Using your cruise control at 77 mph can improve fuel economy by 10 to 15 percent. Of course, this doesn’t apply to city driving, but for long road trips and highway driving with little traffic, cruise control makes sense! Avoid using cruise control when you’re tired or sleepy, though. You just might fall asleep and that’s not good.

7. Don’t Drive!

Here’s a great way to save on gas; don’t drive! Sometimes that’s not possible, but there are still some things you can do like taking public transportation, carpooling, walking or biking. Always ask yourself whether the trip is necessary. Consolidate errands and trips into one trip. Go to the farthest stop first to warm up your engine and reach optimal efficiency. Then make your other stops on the way back home.

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Yes, I admit it. I should be in Cheapskate’s Anonymous, although I prefer to be called frugal. But you can call me cheap if you want, I really don’t care. I’m not completely cheap, though. I’ll spend money on things I care about, but I will never try to jeopardize my financial future. I always have not only the future consequences of all of my actions in mind, but the eternal consequences as well. See, we as believers are governed by something higher than this world’s economy, rules, regulations, and government. We must answer to a higher being not only here on earth but in eternity as well. We must be held accountable to God.

That being said, I always ask for a discount. I think that it is wise and being a good steward to try and get the best value for your dollar on everything. I’m not talking about taking advantage of people. I’m talking about using the money and resources God has blessed us with to get the best deal possible without hurting anyone. Everywhere I go shopping, I ask for a discount. If you’re a student, ask for a student discount. If you’re a senior citizen, ask for the discount. If you’re in the military, ask for the military discount. Even if you don’t fit in any of those, ask for a discount. When you’re checking into a hotel, ask if there’s a better rate. My philosophy is that it doesn’t hurt to ask, and the worst that can happen is that they say no.

It doesn’t matter who’s watching or if you’re going to be embarrassed asking for a discount or for using coupons. You’re never going to see the people behind you in line again. This also applies to getting “stuff” that makes you look cool. That’s why we shouldn’t buy things to impress other people. Like that shiny, fancy, new car that you want because it will make you look successful. The people you pass up on the freeway will never see you again. And their opinion doesn’t really matter anyway. The people who matter most are your family and true friends, and especially God. Everything else doesn’t really matter except who you are in God’s eyes.

So always ask for a discount and live a life that’s pleasing to God Almighty. I try to.

The Fed recently cut the federal funds rate (the rate that affects consumer loans such as home equity lines of credit, auto loans, and credit cards) by a half percent after cutting it by three-quarters of a percent on January 22 in an emergency meeting. The federal funds rates now stands at 3% which is the lowest it has been in two years. The discount rate (the rate at which banks borrow from the Fed) was also cut half a percent to 3.5%.

What does this mean to you and me? The rate cuts means lower rates for borrowers but also lower rates for savers. Average 30 year mortgage rates now stand at 5.49% which is also the lowest in two years. If you’re looking to buy a home, it seems like now’s the time to buy with home prices considerably lower than even a couple years ago in some markets. It may also be time to refinance your existing home mortgage if you can save at least one percentage point or more.

You should also see lower rates for your variable credit cards. If you don’t, give your credit card company a quick call and ask them to lower the rate. If they don’t, ask for the retention department and threaten closing your account and transferring balances elsewhere. The retention department has the power to lower the rate for you. Of course, this doesn’t affect you if you pay off your credit balances off each month.

But these rate cuts also mean lower rates for your emergency cash savings in CDs and savings accounts. ING Direct now stands at 3.40% and Electric Orange is at 2.25% for balances up to $49,999 (if you want a free $25 for opening an account, let me know). FNBO Direct (which is where most of my emergency fund now sits) is at a still-great rate of 4.30%. WaMu’s online savings account now stands at 4.25%. HSBC Direct stands at 3.80%. You can check out Bankrate.com for the latest rates. But your emergency fund is not designed to make you money; it’s just there for an emergency and it’s nice to earn a little interest on it. But if you already have your 6 to 9 month emergency fund in place, it may be time to look at longer-term investments in the stock market. I absolutely love Roth IRAs and an index fund within a Roth IRA is perfect for most people! If you have a 401K offered by your employer, it may be time to increase your contributions.

One last thing to remember. Just because the rates are lower doesn’t mean you have to borrow. Remember that the goal is to save more and not spend or borrow more. But at the same time, there may be some opportunities to save some money. God Bless!

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The proposed $150 billion “economic stimulus package” by President Bush is promising rebates of between $300 and $1200 or more to the low and middle class people of the United States to help kickstart the economy by giving money to those who are most likely to spend it. Why don’t you go against the current and actually save it instead of spending it?

Here are the quick facts on the proposed plan:

1. Most single taxpayers will receive a $600 check
2. Dual-income households will receive $1200.
3. For each child (dependent) you will receive $300 each.
4. Workers who made at least $3,000 but didn’t pay taxes will receive $300 ($600 for those married and filing jointly).
5. Income limitations are $75,000 for single taxpayers and $150,000 for couples.
6. Apparently all of this is based on your 2006 tax return.

The legislation has not passed yet, although it most likely will and is being pushed strongly by President Bush. But if and when it does pass, you can expect your rebate checks to come in May or June of this year (2008). Just file your 2007 taxes just like normal.

All I can say is to not act like you’ve already got the money and spend an extra $600 on something you don’t need! I’ll probably get $600 as a single taxpayer and I’ll most likely just boost my emergency savings or pay down debt or both. All I know is that I’m not going to act like I have it and spend it before I get it. It will be a welcome surprise in my budget come May or June!

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I hope that everyone had a happy holiday season and is ready to tackle another new year! I believe this year can be your turnaround year! Let this be your year of new beginnings! With a new year brings new goals, new life situations, and a fresh outlook on life. Don’t let this year be just another year. With that being said, here are my top money goals for 2008:

1. Save more, spend less. One of the golden rules to becoming wealthy is spending less than you make. Live on less than you make and you can use the extra to pay down debt or invest for your future. If you can’t do this, you need to make more money!

2. Pay down debt. Yes, even a personal finance blogger like me has debt! But I have a plan to get out of debt and although I won’t be debt-free this year, I’m still making progress. I want to pay off my car within a couple years. I’m sick of a car payment…

3. Beef up my emergency fund. I have an emergency savings account that’s not quite up to 6 months of expenses. I want to achieve that this year and some extra. I currently have my emergency fund at FNBO Direct (currently at 5.05%) and ING Direct (currently at 4.10%). If you want a free $25 bonus for opening an ING account with at least $250 to start your emergency fund, make sure to contact me.

4. Start saving for Christmas now. Christmas is not an emergency! Christmas happens to land on December 25 every year and yet many people end up charging Christmas on their plastic credit cards and end up paying way too much in interest. Start saving now and pay cash! I plan on doing that starting right now.

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7 And remain in the same house, eating and drinking such things as they give, for the laborer is worthy of his wages. Do not go from house to house.

Luke 10:7 (NKJV)

From the Life Application Bible:

Jesus told his disciples to accept hospitality graciously because their work entitled them to it. Ministers of the Good News deserve to be supported, and it is our responsibility to make sure they have what they need. There are several ways to encourage those who serve God in his church: (1) See that they have an adequate salary; (2) see that they are supported emotionally - plan special times to express appreciation for something they have done; (3) lift their spirits with special surprises from time to time. Our ministers deserve to know we are giving to them cheerfully and generously.

According to the guide to payday loans, these loans cannot be used for debt consolidation or any travel insurance down payment as well as credit card pending bills.

I decided to purchase a new vehicle (nothing very expensive) back in November 2006 and I got a great deal. While I was shopping for my new car, I dealt with several dealers via e-mail and one dealer quoted the lowest price out of all the dealers. I negotiated an out-the-door price (taxes, dmv, everything). I set up an appointment with the Internet manager for Saturday. However, when I got there, he just passed me off to one of the salesman. I thought that was strange.

Anyways, I decided to test drive my specific car that I had picked out. It wasn’t on the lot but it was down the road in their storage area. I went with the salesman to drive it back from storage to the dealer so I could test drive it. As soon as I got there, I saw my car and it was all dusty and dirty. It looked like it had been driven through some dirt roads or something! So we brought it back to the dealer and I test drove it. Everything seemed fine except how dirty it was. After the test drive, we went back to the “negotiation room” at the dealership. The salesman was trying to negotiate a price with me even though I already had negotiated with the Internet manager. So I told him that I was already quoted an out-the-door price and had a copy of the e-mail in my pocket. I showed him the printed copy of the email with my quoted price and he took it and left for a few minutes. Several minutes later, another person who claimed to be the manager (he was actually another salesman who was trying to play good cop, bad cop) came. He said that my quoted price did not include destination charge and that they were going to have to add that onto my price. I did not budge and told him that the out-the-door price is the out-the-door price!

I was pretty mad at this point and told him that I didn’t have to talk to him and that I wanted to talk to the Internet manager (the one I already had negotiated with). He then left and said that he would have to talk to a manager (I thought he said he was the manager…). The original salesman then returned and said that they would accept the quoted price.

The salesman then brings a copy of the sales contract from the finance manager and shows it to me. The salesman then leads us to the finance manager who goes over the sales contract in detail with us. However, the final price ended up being about $50 higher than the quoted out-the-door price. Here they go again, trying to nickel and dime everything and trying to add hidden costs. It was a “doc fee” which you should be able to contest. I was exhausted at this point from several hours of negotiations and arguments from the rude sales staff and I didn’t feel like fighting it. Besides, I was happy with the price. So I signed everything and took delivery of the car that day since I already had my own financing.

So that’s my story of my “triumph” with the dealership. Here are my keys to getting a great deal on a new car:

1. Do your research. Make sure you know what the “invoice” prices are and the cost of different options. Go to websites like edmunds.com and research several models that you’re interested in.

2. Next pick a day to test drive your several vehicle choices. Make sure you let the salespeople know that you’re only there to test drive and not to buy. Next pick a vehicle that you’d like, but don’t fall in love with it (or at least don’t show it). Salespeople can key into that and you’ll be taken advantage of.

3. Next a quire your own financing if you’re going to finance (it’s better if you can put a big chunk as a down payment, or better yet, pay cash for your car). Go to your credit union or your bank and see if you can preapproved for a car loan along with the interest rate that they’ll give you. You should know the approximate price of the car that you’re interested in because of your previous research. You can also try Capital One Auto Finance or E-Loan Auto which offers “blank check” capabilities where they’ll approve you for an amount that you can write a check for when you purchase your vehicle at the dealer. That will start the loan. If you’re a Costco (they use Capital One) or Sam’s Club (they use E-Loan) member try going to their websites for auto finance as they will sometimes offer a better interest rate. When you get to the dealer, you won’t have to take their financing unless they can beat your interest rate that you already have.

4. Next go to about 3-4 dealerships’ websites and email them for an out-the-door quote on a specific model with certain options so that you’re comparing apples to apples (you can also fax them if you’d like). Make sure to tell them that you’re emailing several other dealers and that they’re competing for your business and the lowest quote will “win” your business. Make sure to write not to call you or just don’t put your phone number if you can. You want records of all your conversations so email is the best. That way you can bring a copy of the email like I did if they quote you a price.

5. If you have a trade-in, do not tell them when you’re getting quotes. You want to deal with each step separately so they don’t try and make up some profits in a different area. I would suggest that you don’t trade in your car to the dealer and that you try to sell it on your own. Also, make sure you know the approximate value of your car using Kelley Blue Book or Edmunds. You can list your car for free on a online classified list like Craigslist. I listed my car on there and sold in literally 3 days!

6. Now you can call the Internet manager, fleet manager or whoever you’ve been dealing with over email of the dealership that gives you the lowest price. Set up an appointment to see him or her and tell him or her that you’re interested in purchasing the vehicle you’ve been negotiating on. Make sure there’s one on the lot ready to go. Then go and pretty much sign the papers and go. If the deal is any different from what you’ve negotiated, pull out a copy of the email and show them. If it’s still different, walk out. There’s no point in dealing with people who want to take advantage of you.

Hopefully this has helped some of you who are thinking about buying a new car. Generally the best month to buy has been October when dealers try to sell the current year models to make way for next year’s models.

I wrote this story for the Get Rich Slowly Writing Project Contest. Make sure to visit this great blog!

You heard that right; my checking account got broken into! To be more specific, someone tried to use an electronic check to take money from my checking account at Washington Mutual. This happened to me a couple weeks ago. I only noticed it because I never used this checking account for making payments. I only used it to transfer to my different savings accounts, brokerages, and direct deposit my paycheck. The electronic check was only for $19.95 but I caught it. Here’s a copy of the check (with my information hidden):

The check was treated as a regular check but with one key difference; they didn’t need my signature because it was an “electronic check”. So the bank paid it out. However, there were some other errors that probably should have flagged someone. First of all, my address was partially wrong. It was an old address with a current zip code. Also, the check number on this check was used a very long time ago (when I actually used checks). And obviously, my signature wasn’t on it.

I have no idea who could have gotten my checking account information but it could have came about any number of ways. Your account number and routing number of the bank is on every check that you use. Also, your employer has that same information if you use direct deposit. Not only that, any online accounts such as savings accounts, online brokerage accounts, etc. have that information if you do electronic ACH transfer. So a security breach at any one of those places could have let your information get out. Another possibility could be stealing the information from the debit card associated with that account but I never used it.

So what can you do to protect yourself? First of all, you should monitor your bank accounts closely (I do it daily) so that you’ll notice when something out of the ordinary happens. Plus, the quicker you catch it, the quicker you’ll get your money back and avoid missing any deadlines for reporting fraud activity. I caught mine the next day (Friday) and I went to my bank personally to file a fraud investigation on that transaction (you can also do it over the phone). The next Thursday, I got my refund of $19.95 plus the overdraft charge because the checking account was empty at the time.

Another thing you can do is to be careful who you write a check to, or better yet, don’t use checks at all. You should use your bank’s bill pay service because the checks that they send out don’t include your account information. Also be careful who you allow access into your checking account including businesses that collect bill payments from you, online savings and brokerage accounts and anything that would require your account information.

So if you notice anything that looks weird and could be possible fraud, act quickly and call up your bank. Monitor all of your accounts closely and you can also monitor your credit reports if you think it could be identity theft. The key is knowledge. Know your options, know the procedures, and know what’s going on! This post from the Consumerist states that 58% of American consumers don’t know online threats exist. Hope you don’t have to go through the hassle of closing down a checking account that is linked to so many other accounts like I did.

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Yes, that’s right. Free financial retirement advice from professional (normally) fee-only financial planners. Kiplinger and the National Association of Personal Financial Advisors (NAPFA) are teaming up to bring the Kiplinger’s Jump-Start Your Retirement Plan Days. Just call 888-919-2345 between 9 am and 6 pm eastern time on Friday, August 17, and Thursday, August 30.

You can also ask your questions by email (jumpstart@kiplinger.com) and a NAPFA advisor will reply to your question. What a great way to get some professional advice for free! And you don’t even have to pay the normal $100 to $250 an hour that they charge! So get your questions ready!

Source: Kiplinger

That’s right. I just got an email saying that FNBO Direct is capping customers’ deposits to $1,000,000. So unfortunately, you can’t deposit more than a million dollars anymore with FNBO. Too bad I don’t have that problem. If you do have that problem, you probably don’t need my help! Anyway, I don’t think you should be putting more than $100,000 into any one account because it is only insured up to that amount. In the case of a bank failure, you will only receive $100,000 from the FDIC and you become creditors to the bank and they will probably sell off assets to try and pay you back. However, this is not guaranteed.

Banks still fail. The latest bank to fail was Metropolitan Savings Bank in Pittsburgh, PA on February 2, 2007. Try not to have more than $100,000 in any one account so you’ll be protected and safe.

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(Not mine, btw)

Now that you’ve probably received your refund check in the mail or even direct deposited, here’s how you can spend your tax return from a Bankrate article. Hopefully you haven’t spent it already!

1. Pay down credit card debt.

2. Open an IRA (I recommend a Roth IRA unless you don’t qualify).

3. Take stock (I’m not too sure about this one. I recommend that you don’t invest in the stock market unless you have at least basic knowledge of how it works).

4. Set up a rainy day fund.(In other words, an emergency fund. I would probably put this higher than number 4, though).

5. Refinance your house (They’re saying use part of the refund to pay the closing costs of refinancing. I don’t think you should refinance unless you’re going to save at least

6. Add to your mortgage payment (A great idea!).

7. Spruce up the homestead (They’re talking about some do-it-yourself landscaping or remodeling).

8. Auto details, details, details (They’re talking about detailing your car, if you’re planning on selling it soon. I think it’s a good idea only if you’re planning on selling, though).

9. Service your car (They’re saying most people don’t maintain their cars. That’s true, but why wait to maintain them? It will cost you less to keep a well-maintained car).

10. Get the star treatment (In other words, splurge a little. Don’t go crazy now, but you deserve a little splurging once in a while).