Before You Sign That Contract…

Before You Sign That Contract…

Dense legal text is foisted upon you every time you want to download software, start a membership, or take just about any action where money is changing hands. So it’s easy to get in the habit of skipping over the fine print. However, it’s wise to pick out a few important aspects to identify and understand with any contract you agree to.

The parties to a contract are the people or organizations responsible for upholding the agreement. Your name is supposed to in the contract, of course, but pay special attention to the other party. Is it the person or organization you’ve been dealing with? If not, why is that? Also make sure the contract can’t be assigned to another entity without your consent.

This may sound like an obvious one, but make sure the pricing you agreed to is clearly stated in the paperwork. You don’t want a situation in which you verbally agreed to one price and then found out later the numbers in the contract were different. 

Rights and duties
Simply stated, what are you expected to give and what are you expected to get? This is an area where a little ambiguity can mean a big headache.

Delivery/Payment timeframes
It’s all well and good to have an agreement for what’s going to happen and how it is going to happen, but it’s important to be up front about WHEN they are going to take place.

What is considered default on the contract: if payment is one second past due, or 30 days late? What kind of service or product is judged to be unacceptable? 

When is the contract scheduled to end? What right do you have to terminate the contract early? Are there conditions under which the contract would automatically end? Does the contract automatically renew after a certain period? 

Dispute resolution
Contract disagreements are resolved through mediation, arbitration or litigation. Keep in mind that mediation in general is non-binding. With arbitration, you may not be able to demand information from the other party to build your case. Litigation is likely your best avenue for being made whole. 

In a perfect world, contracts would always be honored. In the real world, though, one party sometimes isn’t able to live up to their end of the deal. With any financial decision, it can be helpful to weigh what would happen in the worst-case scenario. It’s no different with signing a contract. Make sure you won’t be penalized too heavily should you need to break the agreement. Additionally, make sure there is enough incentive for the other party to not simply walk away from the deal.

Keep in mind that contracts can be very complex and that if you aren’t experienced in reviewing them, you shouldn’t expect to always understand everything contained within. Enlist the help of an attorney if you feel overwhelmed by the technical language of a proposed contract.

Latest Scams To Watch Out For – Fall 2014

Latest Scams To Watch Out For – Fall 2014

As part of our ongoing series keeping you up-to-date on the latest identity theft, fraud, and theft scams popping up, we bring you a list of new list of schemes to be aware of.

The scam: Toll pass email
You receive a very official-looking email stating that your electronic highway toll pass payment information needs to be updated for security purposes or because it is out-of-date. You are provided with a link and/or phone number to give your current credit card information, Social Security number, etc. 

Preventing it
Such vital information should never be given out in response to an email request, no matter how legitimate the request looks. When you receive an email like this, call the company the email alleges to be from – at a number you have independently verified – and ask if they sent the email.

The scam: Additional video software needed
A “click bait” video with a scandalous or otherwise enticing title is posted via social media. When you click on the video, you are notified that you are missing the proper software to watch this must-see clip. You are then directed to a different site to download this special video-playing software, which turns out to be malware designed to harvest your personal information from your computer or device. 

Preventing it
Instead of relying on what some random post is advising you to download, avail yourself of the most popular online video players like QuickTime, Adobe Flash and Real Player. Makers of online videos produce clips formatted for these players because they want the highest number of people possible to see them. You don’t need anything beyond these few major players and periodic updates. Also, it helps to simply slow down a bit when shuttling around the internet. Think about what is you are clicking on and how well you know what you are getting yourself into. 

The scam: Dropped cash at the ATM
A thief stands behind you in line at an ATM and waits until you your cash withdrawal has been processed. At the moment your dough is being dispensed, the criminal places a bill on the ground and tells you that you’ve dropped some money. When you bend over to pick it up the thief takes the money from the machine or from your hand. 

Preventing it
Be wary of anyone trying to speak to you at the ATM. Common courtesy dictates giving someone privacy when they are handling financial transactions. Secure your belongings before responding to a stranger in this sensitive area. 

The scam: Multiple cell phone cancellations
You are offered the chance to make big money quickly by starting several cell phone contracts, selling the discounted phones you receive to a ringleader, and then cancelling the contracts. The crook’s pitch is that since you are no longer under contract once you cancel the phone plan, you don’t owe the phone company anything. What you aren’t told is that you are required to return the phone when you cancel the contract. You are left on the hook for the fees charged for not returning the equipment. In other cases, you may not be able to even cancel the contract, which means you are responsible for paying for the phone and the agreed-to service plan. 

Preventing it
Get rich quick schemes have earned a bad rap for a reason. Steer clear of anyone paying you to do something on their behalf. If it were on the level, they would be doing it themselves.

If you have encountered any of these or other scams, contact local law enforcement, your state’s attorney general office and the Federal Trade Commission at

Scary Good Halloween Party Savings

Scary Good Halloween Party Savings

There was a time when Halloween budgets focused on kid items: colorful plastic superhero costumes, paper spider decorations with moveable legs, and bags full of little sugar bombs. But more and more, Halloween is becoming a major celebration for adults, too. If you’re one of those overgrown kids who loves to celebrate the scariest night of the year, you can do so without being terrified to look at your checking account on November 1.

Creative costumes
If you wanted to invest in an industry growing at an explosive rate, you could do a lot worse than the adult costume racket. Unfortunately, the price tags on the grown-up get-ups can also be explosive. Instead of having everyone buy elaborate and expensive disguises for your shindig, focus more on tapping into your collective inventiveness. Tell attendees they must create a costume out of whatever spare items they have in their household. The resulting creations will make for much better party conversation than, “So…I see you’re a pirate. How’s that going?”

Horrifyingly bad movie night
Sure, you can shell out the $15 to buy the latest horror movie release to screen at your party. But that’s so blasé…and not at all conducive to interaction. Instead, head to your local public library and try to find the absolute worst horror movie in their collection. And by worst, we mean low production values and high cheesiness. We suggest Troll 2, if it’s available. Engage in a running commentary with your friends as you watch it. This will be a lot more fun than sitting in silence – you can do that by yourself!

Campfire theme
If you’re worried about having to shell out a lot of money for food, consider having a campfire-themed party. S’mores and hot dogs are inexpensive and can be quickly prepared in the microwave. Organize chairs/couches in a semi-circle around a candle or flashlight for that camping in the forest feel. Require that attendees tell a personal ghost story or one from their hometown.

Make boo-tiful music together
If you’re the kind of person who likes to have some creepy tunes to play during your All Hallows’ Eve bash, you may be used to selling your platelets every October to pay for the playlist. After all, even if you’re just paying $0.99 per song, that could still be well over $50 for a 4-hour party. Your guests will feel more integral to the party if you ask for their help in compiling some eerie music. Plus you’ll definitely get some great conversation-starter ditties. Have everyone on the invite list send you 3-4 songs that give them the heebie jeebies ahead of time.

With holiday celebrations, you may find yourself wanting to throw “The Best Party Ever” or outdo another event from the past. But the important thing is getting good people together and having a fun time. Halloween is about being scared, but not about the expense of it all.

Rolling Over a 401(k) to an IRA: You Make the Call

Rolling Over a 401(k) to an IRA: You Make the Call

If you’ve got retirement money residing in a 401(k) with a former employer, you’ve probably been wondering whether or not you should roll that money over to an Individual Retirement Account (IRA). You’ll want to consider several criteria before doing so.

A rollover to an IRA might be right if you:

  • Want more flexibility and control with your investment choices
  • May need to borrow money from your retirement account and are above age 59.5
  • Are concerned about a possible large tax hit to your beneficiaries in the future
  • Want to consolidate multiple retirement accounts
  • Are looking to maintain a balanced asset allocation across multiple retirement accounts

A rollover might be wrong if you:

  • Have significantly lower fees with the 401(k)
  • Live in a state that gives greater lawsuit protection to a 401(k) than an IRA
  • May need to borrow money from your retirement account and are below age 59.5
  • Would lose access to retirement planning services provided to 401(k) holders at your previous company

These criteria should help to get you thinking about the ramifications of a potential rollover. A final decision should only be made after consulting with both a tax professional and a professional financial planner.

What are Bankruptcy Risk Scores?

What are Bankruptcy Risk Scores?

Although much more information has come to light about credit scores and how they are calculated over the past several years, their cousin the bankruptcy risk score has remained mysterious. While what the general public has been told is limited, a few of the basics are known.

What are they?
Bankruptcy risk scores are an attempt to attach a numerical value to the likelihood you will declare bankruptcy. This differs from credit scores, which attempt to measure the likelihood you will pay back a debt.

How are they calculated?
Like credit scores, bankruptcy risk scores are based on information in your credit report. Companies that calculate bankruptcy scores compare data from past consumers who have declared bankruptcy to the financial aspects of your credit files to arrive at the score. Some companies that sell bankruptcy scores also use transaction data from your credit card provider(s), cross-referencing your activity against recent trends for bankruptcy declarers.

What’s a good score?
Not only do bankruptcy scores use a different scale than credit scores, but they also use a rating system in which a lower score is better. Add in the fact that there are several different companies producing scores and it becomes impossible to nail down one milepost for a “good” score.

How do I improve mine?
While the credit bureaus understandably refuse to give away the complete formulas for calculating their scores, they have noted that bankruptcy scores – like credit scores – reward paying bills on time, keeping balances low on revolving accounts, having a variety of types of credit and limiting the number of new credit applications. A couple specific tidbits that have come to light are that bankruptcy scores put a great deal of negative emphasis on consumers who quickly amass large amounts of debt and/or apply for new credit several times in a short period. According to the companies that produce bankruptcy scores, these behaviors are frequently precursors to bankruptcy.

Who uses them?
Just about any lender you would apply for a financial product from has access to bankruptcy scores. They could be used in conjunction with an application for a mortgage, car note, personal loan, credit card, or other form of credit.

How are they used?
Lending experts have pointed out that financial institutions most commonly use bankruptcy risk scores as a backup to credit reports and scores. In other words, they likely wouldn’t be the major determining factor, but a questionable bankruptcy score could still mean you are denied for credit.

How do I get mine?
Unfortunately, you as a consumer do not currently have access to your personal bankruptcy score.

Without a doubt, it’s frustrating to have decisions being made on your financial future with information you don’t have access to. That may change soon, though, as at least two of the major credit bureaus have expressed an interest in selling bankruptcy risk scores to consumers. Stay tuned.

5 Secured Credit Card Must-Knows

5 Secured Credit Card Must-Knows

A secured credit card can be a wonderfully effective tool for building a positive credit history or gaining entrance into the world of credit. Because it allows people with little financial history or less-than-perfect past credit to have and use a genuine credit product, a secured card can open up myriad opportunities for the future. However, not all offerings are created alike. There are a few basic criteria to make sure you understand before you jump into this type of account.

Secured credit cards are generally easier to qualify for because you are essentially putting down a security deposit for the amount you are able to charge on the card. This deposit amount normally ranges anywhere from $100-$500, with the limit on the card usually equaling your deposit amount. If you can find a secured card with a low deposit amount, it would free up money to put toward your other financial goals.

Interest on the Deposit
Many financial institutions allow you to earn interest on the deposit you have put down to secure your card. While this may not amount to a vast sum of money, if everything else is equal, you should choose the card that helps you put your deposited money to work for you. Don’t forget to compare interest rates for the money you put down.

Transition period
In most cases, financial institutions are willing to refund your initial security deposit after a sort of probationary period. For example, if you make all your payments on time for a period of one year and never go over your limit, the financial institution that gave you the card may be willing to give you back your deposit and transition your account into an unsecured credit card. This may be timed to coincide with a regularly scheduled account review taking place every six or twelve months.

It has become increasingly common for financial institutions to offer secured credit cards with no fees. By shopping around, you should be able to find a card that at the very least has minimal fees. Be careful to review all potential charges, since some less morally encumbered issuers of secured cards will try to mask fees under other terminology.

Credit Bureaus Reported To
If building a strong credit history is one of your goals for opening a secured card, you’ll need to find out which credit bureaus your payment history on the card will be sent to. Not all cards – secured or otherwise – report to all three major credit bureaus. The best-case scenario is that they report to each of the three major bureaus – Equifax, Experian and TransUnion. This way, you avoid a future situation in which a lender doesn’t see enough of a credit history to approve you for a financial product.

Like unsecured credit cards, secured ones come in a variety of shapes and sizes. Shopping around can help you find the card that makes the most sense for you. You might also find a financial institution you’ll want to have an ongoing relationship with.

Beware Bait and Switch!

Beware Bait and Switch!

Retailers and other companies have gotten very good at convincing you to buy their products. While most of these appeals are perfectly within their rights, there are a few deceptive practices that can actually be illegal. Bait and switch is one of these.

What is it?
Bait and switch refers to the practice of advertising a product or service at a low price to entice you into the store, only to claim that the original sale item is no longer available. You are then pressured to buy a higher-priced product instead of the one you originally came in for.

What’s an example?
While browsing ads for a new vehicle to replace your current nightmare-on-wheels, you see a listing for a dealership selling your dream car in new condition at an extremely attractive price. Excited about the possibility of getting a great deal, you manage to coax your rust bucket the 25 miles to the dealership. Once there, you are told that the ad was actually a mistake, but the salesperson does have an even nicer car for only $5,000 more.

How do I counteract it?
In short, have a plan and stick to it! For larger purchases, it helps to have not only a model in mind, but also a price ceiling. If, for instance, you want to buy a new TV, there are dozens of choices with varying price tags. If you try to make your decision “in the heat of the moment” with a salesperson whispering in your ear, you’re much more likely to make a choice that is counterproductive to your budget. 

Don’t be afraid to walk away. There are very few things you need to buy IMMEDIATELY. If what you wanted isn’t available – whether because of a company’s deception or for legitimate reasons – head back home and regroup. Chances are there’s no need to rush into a decision. 

How do I report it?
If you feel a company is engaging in deceptive advertising practices, file a report with the Federal Trade Commission at Additionally, it’s a good idea to contact the Better Business Bureau at to warn others of this potential hoodwinking. Lastly, contact your state’s attorney general office to see what punitive action may be applicable in this situation.

If you’re like most people, you’ve been conditioned to expect things to be available quickly: car insurance quotes, movies on demand, drive-through coffee, etc. However, when you’re in a store or even if you’re buying online, take the time to slow down and analyze your options. This way, you decrease the likelihood you’ll fall for sneaky sales practices.

Self-Employed Tax Deductions Checklist

Self-Employed Tax Deductions Checklist

Are you your own boss? If so, you already know some of the advantages that can come with that role. You get to set your own hours, wear Hawaiian shirts whenever you want and always be first in line at the coffee machine. But the good times don’t have to stop there. Being self-employed also comes with the potential for numerous advantages at tax time too. Don’t forget to either research the following deductions on your own or bring them up with your tax professional.

  • Self-employment tax
  • Home office expenses (portion of rent/mortgage, furniture, property taxes, utilities, insurance, maintenance, depreciation)
  • Health insurance
  • Social Security
  • Meals
  • Entertainment
  • Travel
  • Interest on business loans or credit cards
  • Subscriptions
  • Software
  • Education or training
  • Retirement plan contributions
  • Equipment purchases
  • Depreciation of equipment
  • Supplies
  • Professional organization fees
  • Advertising/promotional costs
  • Banking fees
  • Telephone bills
  • Gifts

While not all deductions will apply to your situation, it’s wise to invest a little time in researching the ones that do. You can also pay a tax professional to research it for you; you’ll still probably come out ahead even after adding this expense.

Winning Winter Window Weatherproofing

Winning Winter Window Weatherproofing

Ever walk by a window in your home in the chillier months and feel a rush of artic air hit your skin? If so, you’re probably all too familiar with the fact that as the cold air comes in the money goes out. You might think making your windows more efficient requires a huge gust of cash outflow. But you might just be surprised at how much cozier a few inexpensive fixes can make your energy expense situation.

The method: Draft guard
Estimated cost: $5-$10 per window
If, upon closer inspection, you realize that the base of the window is the real problem spot, a draft guard could make a big difference. Sometimes called a draft snake, this device is simply a fabric tube filled with clay, rice or sand to block the air and keep the guard in place on your windowsill. You can find any number of well-reviewed types online, or you can make one on your own with supplies from a home improvement or craft store. 

The method: Weather Stripping/Sealing
Estimated cost: As little as $0.50 per window
In most cases when experiencing a draft, you’ll probably need to shore up more than just the bottom of your window. Weather stripping (sometimes called weather sealing) is a quick and easy way to seal gaps around the edges of your window frame. Besides the low cost, weather stripping also has the advantage of minimally impacting the aesthetics of your windows. Be careful where you apply to the stripping, though, since removing it can peel away paint.

The method: Caulking
Estimated cost: Pennies per window
For areas of your windows that need freedom of movement, weather stripping is terrific. However, for spots that don’t feature moving parts, caulk is probably your best solution. Caulk is a waterproof sealant used to fill gaps in your home where air or water have found vulnerabilities. Watch an online tutorial video if this is your first time using caulk, or ask a sales associate at a home improvement store to give you a quick lesson.

The method: Insulating window film
Estimated cost: $3-$10 per window
In some cases, it may not just be the cracks or gaps that are letting in the cold air, but the glass itself. Much like the plastic sheet that protects the screen of a new smartphone or other electronic device, insulating film fits over the face of your window. In many cases, the film may be heated with a hair dryer to further adhere it to the window. This isn’t a good option for windows from which you want a view of winter happenings, since the wrap will make the window filmy.

The method: Winter shades or curtains
Estimated cost: $23-$39 per window
Depending on the style you are looking for, heavier winter-specific curtains or cellular (honeycomb) shades can help trap frigid area before it gets too far into your living area. Or, to really fortify your sanctuary, use a combination of both. The downsides are that you have to remember to draw the shades/curtains during the day to let the sunlight warm your home and that the energy efficiency achieved per dollar spent isn’t as high as other options.

You really don’t have to spend that much to make your home much more efficient during the winter. Plus, doing so not only makes your home more comfortable, in the long run it puts money back in your pocket.

Getting Your Name Off the Mortgage After Divorce

Getting Your Name Off the Mortgage After Divorce

Your divorce has been finalized. You’ve moved into separate places, set up individual bank accounts and otherwise taken every step you can think of to create distinct financial lives. There’s just the matter of that pesky mortgage with your name still on it – despite the fact that you no longer live in the home!

If this is your situation, you may find yourself very motivated to not have your credit standing or financial obligations tethered to the vagaries of your ex’s payment record. If that’s the case, pay special attention to these options for removing your name from the mortgage.

The reason lenders don’t want to make it easy to just “delete” your name from the mortgage records is because the loan was originally made under the assumption that multiple people would be responsible for payment. If you were to remove yourself from the picture, that fundamentally changes the risk assessment for the loan. For this reason, a lender wants the opportunity to re-evaluate the loan if there is only going to be one person on it – or a new person. If your ex-spouse has enough household income to maintain mortgage payments and has a strong enough equity position, a refinance to take your name off the loan could be an option.

Assumed loan
It isn’t terribly common, but in some circumstances, one spouse may be able to “assume” – or take over – the loan after a divorce. Don’t hold your breath, but it’s at least worth contacting your lender about.

Sell the home
If other methods fail, you can always try to talk your ex into selling the property. Given the financial turbulence that unfortunately tends to accompany divorce, your former spouse may be inclined to unload the property anyway.

Pay off the mortgage
If you’re concerned about the potential for missed mortgage payments to damage your credit, understand that if the mortgage is paid off, these concerns evaporate. If this is an option for you, consider the value of spending a chunk of money now to have a lot less worry in the future.

Dispute with the credit bureaus
As a final step, always pull your credit reports one month after your name was taken off the mortgage. Even though the lender may have removed you, this doesn’t always translate into your credit file being updated immediately.

If you still see the mortgage listed as an open account on your credit reports, dispute this item with the credit bureau reporting the data – Equifax, Experian or TransUnion. Slap a “.com” on the end of each of those names to reach their website and begin the dispute process. An online dispute should take care of the problem, but also keep handy any paperwork related to your name being removed from the mortgage just in case you need to file a paper dispute with the credit bureaus via mail later on.

While in the first few months after a divorce the mortgage ownership status can be a huge headache, normally with time and persistence the issue is resolved. It can certainly be difficult to communicate with your ex during this period, but working together to resolve the mortgage issue sooner rather than later will give you one less thing to worry about.