Frugal Mom Blog

Archive for the ‘Manage Your Money’ Category

Have you struggled with getting rid of your debt?  Maybe you have high credit card bills, medical bills, car payments and the like.  And it seems no matter how many payments you make, you never get seem to get rid of them.  Many of us are either there, or have been there, and it is not a fun place to be.  It is very discouraging to feel as though your debt owns you for life.

For more information, visit DaveRamsey.com

For some, the family cell phone plan is the greatest invention ever. Instead of managing four or five individual lines — and paying full price for each — family cell phone plans allow families to pool together and share a bucket of minutes. This saves the time of managing each account, and because of the discount cellular carriers give for purchasing more minutes, it can be cheaper too. Well, that is, until you find out you have a teenager who loves to talk and text. That realization usually comes in the form of a huge cell phone bill, which usually catches parents off-guard. What are they supposed to do? Cut off the teen’s cell phone?

Many parents opt to pay a higher price for more minutes and unlimited text messaging, but that can get quite expensive. For families looking to cut costs, it’s probably not a cost-effective option. But what are the alternatives? They’re not right in front of you for the most part, but rather tucked away in the prepaid sector of the wireless industry. There are plenty of prepaid wireless plans which can help save your family money and keep your teen talking and texting.

Pay-as-you-go cellular

The most common form of prepaid wireless is pay-as-you-go. Users buy top-up cards, which they activate on the account. The corresponding number of dollars or minutes are added to the account, and users are limited to what’s available. In other words, there are no overages. Once the allotment is used up, that’s it until you top up again.

Parents can set a monthly budget for their teens, adding only that amount at the beginning of each month. Teens must then budget their minutes so they can use the phone all the month. They’ll learn this pretty quickly in most cases. Overeager teens will use all their minutes during the first week of the month, and then will be stuck without a cell phone for three weeks. This is something that parents can’t accomplish with most family plans.

Prepaid cellular not only teaches teens budgeting, but also moderation. Because there are set limits, teens must restrain themselves and not obey every impulse to send a text message or make a call. While some parents might not find this necessary (and for them there’s another alternative), others might welcome it with open arms. It can have far-reaching effects, like teaching them how to save (for a car, maybe?), but also short-term ones — like allowing them to come back on the family plan without setting off massive overages.

Unlimited prepaid

For parents who don’t want to impose such restrictive limits on their teens, there is an alternative. A number of prepaid companies offer unlimited plans, which allow teens to talk and text to their heart’s content, all for one flat monthly rate. While this won’t promote restraint, it will prevent your blood pressure from rising by seeing yet another monthly cell bill.

Boost Mobile introduced one such plan earlier this year. It costs $50 per month, and provides unlimited voice, messaging, and Web surfing. The cost includes taxes and fees, so it really is $50. The advantage this holds over other unlimited services is that Boost runs on Nextel’s network, which is nationwide. Other prepaid unlimited carriers include MetroPCS and Cricket. They can be superior to Boost in that they offer multiple tiers of service, most of which are below $50. However, they are not nationwide services, so they are not available in all areas.

Either of these options can help your family cut your monthly cell costs. As always, comparison shopping is the best here. Figure out exactly how much your teen is costing you per month by determining how much you, or you and your spouse, would spend on your cell phone monthly without your teen. Then subtract that from your normal monthly bill. You can then shop around to see what prepaid plans can help you reduce costs.

Joe Pawlikowski is the editor of Prepaid Reviews, a site which provides information and news on prepaid wireless services.

One night while trying to fall asleep, something disturbing popped into my mind – my oldest son is 14 and he’ll be going to college in a short 4 years…and we are not ready to take on the cost of college. There’s more. Three years after he enters college, I will have 3 more sons entering college. Needless to say, that was a wake up call for me.

As we near the end of 2008, I’ve been brainstorming ways my family can get serious about reducing our debt. I like fresh starts, so the beginning of a year is a great time to make changes. The problem my family faces is we already live frugal lives, so any changes will need to be radical changes.

As I pondered ways to cut down even more on spending, there were some serious questions that came to mind:

• Is it possible to save for college if I start now?
• Can my family take radical measures to cut down on spending?
• Are we willing to take radical measures?
• Am I willing to ask my children to get radical with not spending?
• If we continue to live frugally (and not get radical), will it be enough?

What my husband and I have decided to do is Dave Ramsey’s Total Money Makeover. I’ve had this book for years, and have half-heartedly applied the principles to our lives. But now it is time to get serious. If you aren’t familiar with the book, it is based on baby steps.

1. Save $1000.00 for an emergency fund. This is a true emergency fund and shouldn’t be used for things like clothes for the kids, or groceries. The reasoning is because those aren’t true emergencies – we know those things will be coming up, and we should plan ahead for them.
2. Pay off all debt using the Debt Snowball.
3. Set aside 3 to 6 months of expenses in your savings account.
4. Invest 15% of household income into Roth IRAs and pre-tax retirement.
5. College funding for children.
6. Pay off home early.
7. Build wealth and give! Invest in mutual funds and real estate.

I’d love to hear your plans for reducing debt in 2009! Tell me in the comments.

Yesterday I received a phishing email, and it reminded me of how eager some people are to steal our identity. Now granted this wasn’t a very convincing email, but it was still a mean person trying to trick me into giving up confidential information. In this case it was my Paypal login.

The Phishing Email I Received:

We have completed our review and have restored your account. Thank you for your patience during this process and for helping to make PayPal the safest and most trusted online payment solution.

Please update your account by clicking the link below:

Fake Paypal Link

Sincerely,

PayPal Account Review Department

Another Fake Paypal Link

Please do not reply to this email. This mailbox is not monitored and you will not receive a response. For assistance, log in to your PayPal account and click the Help link in the top right corner of any PayPal page.

I immediately forwarded the email to spoof@paypal.com and received a confirmation from Paypal that it was indeed a phishing scam and they were working to disable it.

So what is phishing (pronounced ‘fishing’)?

Phishing is the attempt to retrieve personal information such as account passwords, bank account information, user names, credit card numbers, etc.. It is done by someone posing as a trustworthy company such as Paypal, eBay, your bank, the IRS, or your credit card company, and tricking you into giving up the information they are phishing for. This is most often done through email, or instant messaging.

In the case of my fake Paypal email, the email contained a link to click. If I had clicked the link, it would have taken me to a fake Paypal website. Undoubtedly this site would look like the real Paypal. It is very easy to grab a website’s code and make a look alike website. Once I entered my password into the fake Paypal website, the scammers would have my information.

How to Protect Yourself from Phishing

The FTC suggests the following tips to protect yourself from phishers:

• If you get an email or pop-up message that asks for personal or financial information, do not reply.
• Area codes can mislead: Some scammers send an email that appears to be from a legitimate business and ask you to call a phone number to update your account or access a “refund.” Because they use Voice Over Internet Protocol technology, the area code you call does not reflect where the scammers really are. If you need to reach an organization you do business with, call the number on your financial statements or on the back of your credit card. In any case, delete random emails that ask you to confirm or divulge your financial information.
• Use anti-virus and anti-spyware software, as well as a firewall, and update them all regularly.
• Don’t email personal or financial information.
• Review credit card and bank account statements as soon as you receive them.
• Be cautious about opening any attachment or downloading any files from emails.
• Forward spam that is phishing for information to spam@uce.gov and to the company, bank, or organization impersonated in the phishing email. Most organizations have information on their websites about where to report problems.
• If you believe you’ve been scammed, file your complaint at ftc.gov.

To their list I’d add:

• Never click a link in an email. For example, if you need to visit your bank’s website, type the website address into your browser directly rather than clicking the link in an email.

One of the main reasons scammers continue to phish is because there are enough people out there who make it worth their while. In other words, it is profitable. The best defense we can have is to expose their schemes and not be gullible when it comes to phishing scams.

What experiences have you had with phishing? Tell me in the comments!

Additional Resources:

• FTC-Spam
• GetNetWise on Spam
• Privacy Rights Clearinghouse
• Paypal Challenge: Can You Spot Phishing?

Photo Credit: cynchang

**Quick note… we have another fun giveaway later this week!

Today we’ll use the Family Monthly Budget to build your budget.

In Part I of How to Budget Your Money, you put together your spending log and have a good idea of your spending habits. Hopefully you’ve pinpointed areas of wasteful spending, or ways you can cut back on your spending.

Now we’ll put together your budget. We’re going to use the numbers you collected on your Spending Log to create your budget, and we’ll use a spreadsheet called the Family Monthly Budget to do it. Now please don’t get scared by the term spreadsheet – the hard part has been done for you. If you can type in numbers, you can use this spreadsheet!

Download the Family Monthly Budget Spreadsheet. (This spreadsheet you are downloading is from my personal files. It has been scanned and is free from any type of virus, spyware, etc.)

• In order to use the spreadsheet you will need Excel. If you do not have Excel, you have a couple of options. You can download Open Office which is completely free and offers a spreadsheet component, or you can use Google Documents which is also free.

The spreadsheet is very easy to use, and will give you an easy and accurate picture of your spending and income. It has 2 parts: your planned spending with income, and your actual spending with income.

Planned Spending & Income Instructions:

1. For each category, add your Planned Spending – what you plan on spending each month.
2. Add your Planned Monthly Income – the amount you normally bring home each month.
3. The spreadsheet automatically keeps track of your balance.
4. If the number in the Planned Balance Column is black, your income is higher than your spending. That is good.
5. If the number in the Planned Balance is red, your planned spending is higher than your planned income. You’ll need to lower your planned spending.

Actual Spending & Income Instructions:

1. Follow above instructions, but now enter in your actual spending for each category, and your actual income.
2. The Actual Balance automatically calculates and shows your final totals for the month!

Download Family Monthly Budget.

Additional Budgeting Resources:

• Mvelopes Personal - This system uses the envelope system, and is done online. They offer a free 30-day trial.
• My Budget Planner – This is very popular with Frugal Moms, and they even have systems for teens and children!