J, a month is on average 4.33 weeks. There are 52 weeks in a year, divide that by 12 you get 4.33. 4.33 * 475 is $2058. That's how I got my calculation. The only month that's exactly 4 weeks is February.
By my calculations, $475/week is $1900/month. Where do you get "more than $2000 a month" from?
Do you mean in addition to other benefits?
There are always a few people for whom any assistance is a disincentive to work. But they are the exceptions. Most people use these programs until they can get something better, i.e. a decent job. Believe me, decent jobs are hard to come by right now!
States can vary it some, but the basic model from the federal government is that there's a baseline period of unemployment benefits that applies most of the time, and then a longer period when the unemployment rate is high. So, for example (they've been changing the details and I haven't kept up, so these are example numbers), normally it's 6 months, but when unemployment goes over 6% it goes up to 1 year.
I think that makes a lot of sense. When economic conditions are normal, you keep the benefit short enough that it's not so easy to take advantage of, but then when times are tough, you make them more generous.
I don't think there's widespread abuse of unemployment benefits to take time off, simply because most people live right at the edges of what they can afford. Most people can't get by on just what unemployment provides, so they need to find another job as quickly as possible.
That said, there are some people who arrange their life to minimize the amount of work they have to do and to take maximum benefit of things like unemployment. I wrote about one of them here:
It should give you enough information to get started, and it makes you aware of many potential pitfalls (agency issues, "checklist" inspection reports, etc.).
WOW, $475 is alot more than the $275 that I am receiving in TN which I'm sure is based on the cost of living but man!
I happened to lose my job right before the college semester started so I signed up for school. I had no intentions on returning but I could get my degree while I was getting "paid" u/e benefits.
What I find funny is that the food stamp office tells me I make too much money on u/e and can only draw partial food benefits. Really, $275/wk for a family of 5. OK, glad I use coupons or I really couldn't survive!
Well, the thing is there are families that live on minimum wage here in California, and like I said $475 a week is a lot more than minimum wage. It is definitely possible to live on that amount of money, especially if you have two people in the household who both get that much unemployment. In that situation the household would be making over $4000 a month, and that is above the national average household income and above the household income of some working families I know. Also, as a tangent, isn't it a bit unfair that the poorer people who get paid minimum wage are paying for a group of people to be paid more than them for not working?
Welfare always seems a bit unfair to the people who are paying taxes and working at the same time. And I wouldn't suggest that there AREN'T people who would happily continue to accept unemployment for as long as they can, rather than to look for work.
But I guess I'd argue that I'd rather risk having some people take advantage of the system than see a vast increase in the number of homeless families. Lesser of two evils, really, as with nearly all issues of a failing economy.
I'm not sure that anecdotal evidence is a good indicator of how people are going to treat extended benefits. $475 a week may be good enough if you live with your parents or have lots of roommates, but what about people who have a family to feed? I seriously doubt many of them would chose $475 in government checks if they had a better option.
The Shop@ING DIRECT has been serving savers since 2001 as an additional way for our Customers to experience what it means to save money with ING DIRECT. Just like our innovative ING DIRECT Cafes that encourage saving through financial literacy seminars, savings tips & tools and fantastic deals on Café items; the products we offer on the Shop promote saving, security and financial literacy; all at a great value to our Customers (our products are sold at or near cost with deep discounts on shipping).
We invite you to check out the Shop and Save your money.
PS: Note that the special birthday coupon will ONLY work for our birthday Customers.
I've read somewhere that "Dividends" from insurance policies aren't real "Dividends" but return of overpayments of payments made to the policy. It may it different because i live in Canada, but i've never seen any tax slips regarding Dividend on the Insurance policys my parents have pruchased for my sisters and me. If theyare true dividends aren't they taxable income?
My real estate agent recommended only houses at or above my "maximum" price and plenty of things that were out of the area. I had only FOUR requirements: 1) affordable to me, 2) accessible to downtown, 3) big living room, 4) solid foundation. And she couldn't even keep her recommendations within those bounds.
I found an inspector recommended by friends, but he wasn't available for several weeks. So I used one recommended by my agent; later I learned that the inspection report shouldn't be "just a checklist," which is exactly what mine was. Luckily, the house was okay.
The appraiser appraised the house at exactly my offer. What a coincidence. (I was hoping it would appraise lower, closer to what the tax guys said, so I could negotiate the price down.)
For mortgage brokers, I got good-faith offers from several sources and chose the best one. That worked fine (both when I bought the house and when I re-financed). And I requested to see all the closing documents before closing day so I could look them over ahead of time. And there were no surprises there. But I've heard of plenty of people who ARE surprised on closing day and don't have the guts to walk out and start over.
I'm much better at researching the issues than finding people I can trust.
I agree with Phil about self control. I have yet to benefit from any credit card perks. I am not part of the elite 5% that can consistently pay of my card each month. I am considering getting rid of my credit cards all together once I pay off the last of my debt. I think that it's important to have a savings account for emergencies, and to use debit cards instead of credit cards. Debt cards have the same capabilities of credit cards when it comes to E-commerce and limit you to only spending what you have.
I do agree that it is important to find people you can trust -- that's not easy but doable. My husband and I met with a dozen or so real estate agents before we found one that we liked and trusted for our first home purchase. We've had similar experiences in the next 2 purchases. Ditto for mortgage brokers, closing attorneys, inspectors, appraisers etc. Having unbiased third-parties involved is helpful though and those should be the inspectors and appraisers.
The problem with not eventually finding someone to trust is that you may alienate those who can help you and you're paralyzed in making a decision. I should mention that I bought homes when the process was more tightly regulated (though I did have one agent tell me that the appraiser would make sure that the appraised value would equal the purchase price; so of course I found another agent). I look forward to reading about the questions to ask of agents, brokers, etc.
Whole life may or may not be a good investment. It depends on the specifics of the policy. What are the fees, what is the interest return, what are the sales commissions, what is the full insurance coverage level? You have to answer ALL those before you can really make a judgment saying if whole life is a good investment or not.
If you already have a policy then deciding to keep it or not will depend on the payments required and how much its really worth. If you already have one it may be more worthwhile to keep it than if you were examining starting a policy from scratch. Or maybe not... it really depends on the policy premium and its return rate.
It's called credit card arbitrage and it is a popular game amongst financially savvy creditworthy individuals. I personally profited over $5k in 2008 doing credit card arbitrage on a dozen cards with over $150k in credit limits. Worked like a charm!
As for the original topic I love my credit cards and I charge ever chance I get. When the credit card company gives me 2% back on every transaction I'd be crazy not to take them up on their offer. I really don't think I spend more because I use plastic but The $480 check from American Express last year before Christmas sure was a sweet deal!
This works fine for probably one to five percent of the population, but unfortunately for the others they don't have enough self control.
Don't get me wrong; I'm in the 95 % group. I know better; I can't trust myself. My Amex card was at a fifty thousand dollar limit and I had them drop it to one thousand because, well again, I don't trust myself. It's too much of a risk that I'm not willing to take because I know it's hard. We are in this economic situation because of easy credit (credit cards, mortgages, & home equity loans / lines of credit) and a lack of self control along with an unhealthy bit of greed.
Some people need to learn how to keep themselves from being tempted by available credit. Cutting up the cards are unfortunately the only option for some of us.
This is about using credit cards wisely! Unfortunately, not everyone has the financial fortitude to do this, but I do this myself as well. Paying the bill each month in full, having the cc company fight your battles for you and convenience are great. I try to use cash as well for smaller purchases just so I can keep track of what I am spending. But, hey, if it works for you... no problem.
Also, yes credit card companies make a fortune in transaction fees - not as much as from the revolvers, but a lot. Your wait staff and hair stylists, etc. have to share in those fees with their tips - so if you are a heavy user of credit cards or even debit cards, consider bringing a stash of ones with your when you dine out or get your hair done, etc. to give as tips (if you're a tipper - to each his/her own).
If you frequent small/locally owned businesses, consider that a cash transaction puts as much as 4% back into the local business person's pocket as well.
I'm not telling you to actually do either of these things, but they're things I do because my sister is a lifer-waitress who told me about the tips thing and we really try to buy from local merchants when we can. One day at a craft fair a woman told me about the credit card transaction fees and I wrote her a check instead. Some people don't take the risk of checks, so cash may be inconvenient, you have to take the information that's there and make your own decisions based on your values and priorities.
I track my purchases on my credit card, just like any other checking or savings account, on Microsoft Money so that I always know what is my balance. And since I pay off my balances each month, I have been able to leverage the rewards to offset some pricey items that I buy.
For example, I would trade in $20 for a $25 giftcard for Sephora. A $38 primer would end up costing me $14. I would never spend that kind of money on makeup if I have to pay for all of itself, but with my rewards, I can indulge this way.
But this kind of stuff only works for someone who backs off their balances each month.
1. When I started my senior year in HS (in . . . gulp 1991) my mom and my homeroom teacher withdrew me from my second Shakespeare class and enrolled me in a class my teacher was co-teaching with our business teacher. It was practical economics. Lessons included learning how to read stock reports, credit reports (and more importantly what a credit report), balance a check book, get a credit card, and our research project was to find a job that would hire a high school graduate, calculate our payroll taxes & Social Security costs, find a local apartment, budget for utilities, rent, food etc. We had field trips to the grocery store, etc. Then we had things thrown at us, like- what if you have to go to the doctor, how much will that cost. . . . anyway, best thing my mom ever did for me, and I even wrote the business teacher how I credit her with my 896 credit score today. I can read Shakespeare in my free time, at least I didn't fall into the same trap so many of my peers did with astronomical and debilitating credit card debt.
2. Suze Orman is a crazy orange Umphalump with no shortage of shoulder pads and goofy sweaters, but she's dead-on right with the emergency fund evangelizing. Our hot water tank broke two weeks ago. $800 later for parts and labor, and I am SO SO SO glad I have a decent emergency fund. It took a lot of work and sacrifice to save up for it, but I feel better knowing that I can handle some of these crappy situations without going into a complete panic. Incidentally, I did get a Lowe's card to save 10% off the price of the actual tank, and it's already paid in full. I think this article is good because if you KNOW the rules, you can use them to your advantage - be a dead beat to them, be in control of yourself. Back to Suze, I wish she would go to Congress and do a "Can you afford it," segment when they work the budget.
3. My first credit card was from Citibank. This weekend, after sixteen years, it dies and is replaced by a Bank of America card because I use the UPromise rewards program (to date, I've reduced my student loan by $1800 by paying medical bills first with my credit card to both get a discount from the hospitals, then a UPromise kickback, then paying the cc balance in full from my emergency fund). Strangely, I was sad to lose my Citibank card having had it for so very long, but then I remembered when two years ago someone stole my number online and made $10,000 in purchases. Even though we very closely monitored our credit, and alerted Citi the instance we saw the first errant charge for $300, because we hadn't lost the actual card, they refused to close the account and reissue a new card. Within a week there were 8 charges totaling more than $10K. I had to sign 8 different affidavits and have them notarized. So, then I realized, I won't miss Citi.
Credit cards are a part of our lives, because they are a part of our culture. How we use or misuse them depends on us, and I am grateful to the writer for educating the public on these issues. The better informed you are the more you can make the credit card and credit card company work to your advantage.
...an exercise mat, that is. I've been looking for a durable, affordable one for ages, and I found it at ING. It cost 8 bucks with free shipping. C'mon!! What a deal. Yes, it says ING all over it, but it beats worrying about the staph infection I could be picking up from the communal yoga mats.
And some of their educational tools look very helpful, especially for teaching kids how to be financially responsible.
I've also read about people depositing cash advances into high yield checking account, transferring the cash advance amount to a zero percent interest. They collect interest on the cash advance while they use the money from their savings account to pay down the card. It sounds like they have basically figured out a way to borrow money for free, and earn interest from the borrowed money.
I wouldn't advise this for most people, but I do think there there are some that can benefit from this...I certainly wouldn't do it.
J, a month is on average 4.33 weeks. There are 52 weeks in a year, divide that by 12 you get 4.33. 4.33 * 475 is $2058. That's how I got my calculation. The only month that's exactly 4 weeks is February.
By my calculations, $475/week is $1900/month. Where do you get "more than $2000 a month" from?
Do you mean in addition to other benefits?
There are always a few people for whom any assistance is a disincentive to work. But they are the exceptions. Most people use these programs until they can get something better, i.e. a decent job. Believe me, decent jobs are hard to come by right now!
States can vary it some, but the basic model from the federal government is that there's a baseline period of unemployment benefits that applies most of the time, and then a longer period when the unemployment rate is high. So, for example (they've been changing the details and I haven't kept up, so these are example numbers), normally it's 6 months, but when unemployment goes over 6% it goes up to 1 year.
I think that makes a lot of sense. When economic conditions are normal, you keep the benefit short enough that it's not so easy to take advantage of, but then when times are tough, you make them more generous.
I don't think there's widespread abuse of unemployment benefits to take time off, simply because most people live right at the edges of what they can afford. Most people can't get by on just what unemployment provides, so they need to find another job as quickly as possible.
That said, there are some people who arrange their life to minimize the amount of work they have to do and to take maximum benefit of things like unemployment. I wrote about one of them here:
http://www.wisebread.com/find-work-worth-doing
I recommend the book Home Buying for Dummies.
It should give you enough information to get started, and it makes you aware of many potential pitfalls (agency issues, "checklist" inspection reports, etc.).
WOW, $475 is alot more than the $275 that I am receiving in TN which I'm sure is based on the cost of living but man!
I happened to lose my job right before the college semester started so I signed up for school. I had no intentions on returning but I could get my degree while I was getting "paid" u/e benefits.
What I find funny is that the food stamp office tells me I make too much money on u/e and can only draw partial food benefits. Really, $275/wk for a family of 5. OK, glad I use coupons or I really couldn't survive!
Well, the thing is there are families that live on minimum wage here in California, and like I said $475 a week is a lot more than minimum wage. It is definitely possible to live on that amount of money, especially if you have two people in the household who both get that much unemployment. In that situation the household would be making over $4000 a month, and that is above the national average household income and above the household income of some working families I know. Also, as a tangent, isn't it a bit unfair that the poorer people who get paid minimum wage are paying for a group of people to be paid more than them for not working?
Welfare always seems a bit unfair to the people who are paying taxes and working at the same time. And I wouldn't suggest that there AREN'T people who would happily continue to accept unemployment for as long as they can, rather than to look for work.
But I guess I'd argue that I'd rather risk having some people take advantage of the system than see a vast increase in the number of homeless families. Lesser of two evils, really, as with nearly all issues of a failing economy.
Dear me, there are some stupid comments on this thread. The last one is my favorite, though. Republican? Unbloodylikely, dumbass.
I'm not sure that anecdotal evidence is a good indicator of how people are going to treat extended benefits. $475 a week may be good enough if you live with your parents or have lots of roommates, but what about people who have a family to feed? I seriously doubt many of them would chose $475 in government checks if they had a better option.
Happy Birthday again Elizabeth!
The Shop@ING DIRECT has been serving savers since 2001 as an additional way for our Customers to experience what it means to save money with ING DIRECT. Just like our innovative ING DIRECT Cafes that encourage saving through financial literacy seminars, savings tips & tools and fantastic deals on Café items; the products we offer on the Shop promote saving, security and financial literacy; all at a great value to our Customers (our products are sold at or near cost with deep discounts on shipping).
We invite you to check out the Shop and Save your money.
PS: Note that the special birthday coupon will ONLY work for our birthday Customers.
I've read somewhere that "Dividends" from insurance policies aren't real "Dividends" but return of overpayments of payments made to the policy. It may it different because i live in Canada, but i've never seen any tax slips regarding Dividend on the Insurance policys my parents have pruchased for my sisters and me. If theyare true dividends aren't they taxable income?
I lucked out and got a good house, but:
My real estate agent recommended only houses at or above my "maximum" price and plenty of things that were out of the area. I had only FOUR requirements: 1) affordable to me, 2) accessible to downtown, 3) big living room, 4) solid foundation. And she couldn't even keep her recommendations within those bounds.
I found an inspector recommended by friends, but he wasn't available for several weeks. So I used one recommended by my agent; later I learned that the inspection report shouldn't be "just a checklist," which is exactly what mine was. Luckily, the house was okay.
The appraiser appraised the house at exactly my offer. What a coincidence. (I was hoping it would appraise lower, closer to what the tax guys said, so I could negotiate the price down.)
For mortgage brokers, I got good-faith offers from several sources and chose the best one. That worked fine (both when I bought the house and when I re-financed). And I requested to see all the closing documents before closing day so I could look them over ahead of time. And there were no surprises there. But I've heard of plenty of people who ARE surprised on closing day and don't have the guts to walk out and start over.
I'm much better at researching the issues than finding people I can trust.
paul michael = republican
I like to use them for the Cash back programs. It's great to save a bit of money that way.
I agree with Phil about self control. I have yet to benefit from any credit card perks. I am not part of the elite 5% that can consistently pay of my card each month. I am considering getting rid of my credit cards all together once I pay off the last of my debt. I think that it's important to have a savings account for emergencies, and to use debit cards instead of credit cards. Debt cards have the same capabilities of credit cards when it comes to E-commerce and limit you to only spending what you have.
-Dan Malone-
I do agree that it is important to find people you can trust -- that's not easy but doable. My husband and I met with a dozen or so real estate agents before we found one that we liked and trusted for our first home purchase. We've had similar experiences in the next 2 purchases. Ditto for mortgage brokers, closing attorneys, inspectors, appraisers etc. Having unbiased third-parties involved is helpful though and those should be the inspectors and appraisers.
The problem with not eventually finding someone to trust is that you may alienate those who can help you and you're paralyzed in making a decision. I should mention that I bought homes when the process was more tightly regulated (though I did have one agent tell me that the appraiser would make sure that the appraised value would equal the purchase price; so of course I found another agent). I look forward to reading about the questions to ask of agents, brokers, etc.
Whole life may or may not be a good investment. It depends on the specifics of the policy. What are the fees, what is the interest return, what are the sales commissions, what is the full insurance coverage level? You have to answer ALL those before you can really make a judgment saying if whole life is a good investment or not.
If you already have a policy then deciding to keep it or not will depend on the payments required and how much its really worth. If you already have one it may be more worthwhile to keep it than if you were examining starting a policy from scratch. Or maybe not... it really depends on the policy premium and its return rate.
@Adam,
It's called credit card arbitrage and it is a popular game amongst financially savvy creditworthy individuals. I personally profited over $5k in 2008 doing credit card arbitrage on a dozen cards with over $150k in credit limits. Worked like a charm!
As for the original topic I love my credit cards and I charge ever chance I get. When the credit card company gives me 2% back on every transaction I'd be crazy not to take them up on their offer. I really don't think I spend more because I use plastic but The $480 check from American Express last year before Christmas sure was a sweet deal!
This works fine for probably one to five percent of the population, but unfortunately for the others they don't have enough self control.
Don't get me wrong; I'm in the 95 % group. I know better; I can't trust myself. My Amex card was at a fifty thousand dollar limit and I had them drop it to one thousand because, well again, I don't trust myself. It's too much of a risk that I'm not willing to take because I know it's hard. We are in this economic situation because of easy credit (credit cards, mortgages, & home equity loans / lines of credit) and a lack of self control along with an unhealthy bit of greed.
Some people need to learn how to keep themselves from being tempted by available credit. Cutting up the cards are unfortunately the only option for some of us.
This is about using credit cards wisely! Unfortunately, not everyone has the financial fortitude to do this, but I do this myself as well. Paying the bill each month in full, having the cc company fight your battles for you and convenience are great. I try to use cash as well for smaller purchases just so I can keep track of what I am spending. But, hey, if it works for you... no problem.
Also, yes credit card companies make a fortune in transaction fees - not as much as from the revolvers, but a lot. Your wait staff and hair stylists, etc. have to share in those fees with their tips - so if you are a heavy user of credit cards or even debit cards, consider bringing a stash of ones with your when you dine out or get your hair done, etc. to give as tips (if you're a tipper - to each his/her own).
If you frequent small/locally owned businesses, consider that a cash transaction puts as much as 4% back into the local business person's pocket as well.
I'm not telling you to actually do either of these things, but they're things I do because my sister is a lifer-waitress who told me about the tips thing and we really try to buy from local merchants when we can. One day at a craft fair a woman told me about the credit card transaction fees and I wrote her a check instead. Some people don't take the risk of checks, so cash may be inconvenient, you have to take the information that's there and make your own decisions based on your values and priorities.
I track my purchases on my credit card, just like any other checking or savings account, on Microsoft Money so that I always know what is my balance. And since I pay off my balances each month, I have been able to leverage the rewards to offset some pricey items that I buy.
For example, I would trade in $20 for a $25 giftcard for Sephora. A $38 primer would end up costing me $14. I would never spend that kind of money on makeup if I have to pay for all of itself, but with my rewards, I can indulge this way.
But this kind of stuff only works for someone who backs off their balances each month.
1. When I started my senior year in HS (in . . . gulp 1991) my mom and my homeroom teacher withdrew me from my second Shakespeare class and enrolled me in a class my teacher was co-teaching with our business teacher. It was practical economics. Lessons included learning how to read stock reports, credit reports (and more importantly what a credit report), balance a check book, get a credit card, and our research project was to find a job that would hire a high school graduate, calculate our payroll taxes & Social Security costs, find a local apartment, budget for utilities, rent, food etc. We had field trips to the grocery store, etc. Then we had things thrown at us, like- what if you have to go to the doctor, how much will that cost. . . . anyway, best thing my mom ever did for me, and I even wrote the business teacher how I credit her with my 896 credit score today. I can read Shakespeare in my free time, at least I didn't fall into the same trap so many of my peers did with astronomical and debilitating credit card debt.
2. Suze Orman is a crazy orange Umphalump with no shortage of shoulder pads and goofy sweaters, but she's dead-on right with the emergency fund evangelizing. Our hot water tank broke two weeks ago. $800 later for parts and labor, and I am SO SO SO glad I have a decent emergency fund. It took a lot of work and sacrifice to save up for it, but I feel better knowing that I can handle some of these crappy situations without going into a complete panic. Incidentally, I did get a Lowe's card to save 10% off the price of the actual tank, and it's already paid in full. I think this article is good because if you KNOW the rules, you can use them to your advantage - be a dead beat to them, be in control of yourself. Back to Suze, I wish she would go to Congress and do a "Can you afford it," segment when they work the budget.
3. My first credit card was from Citibank. This weekend, after sixteen years, it dies and is replaced by a Bank of America card because I use the UPromise rewards program (to date, I've reduced my student loan by $1800 by paying medical bills first with my credit card to both get a discount from the hospitals, then a UPromise kickback, then paying the cc balance in full from my emergency fund). Strangely, I was sad to lose my Citibank card having had it for so very long, but then I remembered when two years ago someone stole my number online and made $10,000 in purchases. Even though we very closely monitored our credit, and alerted Citi the instance we saw the first errant charge for $300, because we hadn't lost the actual card, they refused to close the account and reissue a new card. Within a week there were 8 charges totaling more than $10K. I had to sign 8 different affidavits and have them notarized. So, then I realized, I won't miss Citi.
Credit cards are a part of our lives, because they are a part of our culture. How we use or misuse them depends on us, and I am grateful to the writer for educating the public on these issues. The better informed you are the more you can make the credit card and credit card company work to your advantage.
...an exercise mat, that is. I've been looking for a durable, affordable one for ages, and I found it at ING. It cost 8 bucks with free shipping. C'mon!! What a deal. Yes, it says ING all over it, but it beats worrying about the staph infection I could be picking up from the communal yoga mats.
And some of their educational tools look very helpful, especially for teaching kids how to be financially responsible.
I've also read about people depositing cash advances into high yield checking account, transferring the cash advance amount to a zero percent interest. They collect interest on the cash advance while they use the money from their savings account to pay down the card. It sounds like they have basically figured out a way to borrow money for free, and earn interest from the borrowed money.
I wouldn't advise this for most people, but I do think there there are some that can benefit from this...I certainly wouldn't do it.