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Money Matters

Your Voice Changes Verizon Fee Policy

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Early last week I heard about the new $2 fee Verizon instituted. The fee would be for all payments made by phone or online. I was ready to write an article about the fee, and how to avoid it, when something strange happened. Verizon changed it’s mind and will not be instituting the fee.

The fee was originally going to start January 15th and would apply to all phone and online payments except: payments made by check, payments made by electronic check on the Verizon website, payments made through AutoPay, payments made from a financial institution’s online bill pay, going into a Verizon kiosk or store, or payments made using a Verizon gift card or rebate. Verizon said that they wanted to continue to offer excellent service so they needed to ask customers to bear the costs incurred from collecting payments.

Yep, you heard that right. They wanted customers to pay for the costs of having customers pay their bills. I would also argue that they wanted to have access to your accounts. It seems that the method Verizon would have preferred that you use is allowing them to automatically debit your account when your bill is due. If you’ve ever had a cell phone company, cable company, internet company, credit card company, etc. overbill you then you understand why granting a company entrée into your financial accounts might not be a good decision.

At any rate, it doesn’t matter because guess what happened? People like you and I started talking about what a bad idea this was. We posted, and blogged, and tweeted and Facebooked, and generally let Verizon know that we were not going to let this fee stand without a fight. They heard us loud and clear. As of December 30, 2011 Verizon has decided that the fee would not to into effect. Just like that.

We have a voice. We have agency. We can, and do, change the way companies interact with us all of the time. Good job, readers.

Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event or to find out more about her work, visit her at www.BiggerThanYourBlock.com.

Air Jordan Fans Missing Out on $7,634.85

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Last weekend Nike's newly released $180 Air Jordan 11 Retro Concords hit stores. People across the country lined up to fork over $180 per pair of shoes. People pushed, shoved, and trampled people to spend $180 that could have turned into $7,634.85, most of it free money.

It’s Cool
Emma Dawney and Hetan Shah discuss this phenomenon, much better than I can, in a paper named “Seven principles for policy makers”. They came up with a list of seven principles of behavioral economics, but the first two are especially relevant to this event:

1. Other people’s behavior matters: people do many things by observing others and copying; people are encouraged to continue to do things when they feel other people approve of their behavior.

2. Habits are important: people do many things without consciously thinking about them. These habits are hard to change – even though people might want to change their behavior, it is not easy for them.

I often wonder if people are doing things they really want to do or if they are doing things that they believe others think are cool. It’s not cool to save and invest your money. It’s not cool to be financially stable. It is not cool to travel the world. It, apparently, is cool to spend money in a way that doesn’t allow you to build wealth (read my article Building Your Net Worth http://www.blackvoicenews.com/bvn-now/money-matters/46595-building-your-net-worth-.html) . I hear it’s also pretty cool to lick sneakers.

Free Money
I’m guessing that the people standing in line ranged in age between 16 and 24. That means the average age of folks waiting in line at midnight to buy shoes was 20 years old. If you take $180 and invest for 47 years, assuming a conservative interest rate of 8% per year, that initial investment would yield $7,454.85 in interest alone. That means that if the people that fought and pushed to buy those sneakers would have invested that $180 and not added another penny they would have ended up with almost $8,000 in retirement. (Read my article Four Things You Might Not Know About Retirement Accounts http://www.blackvoicenews.com/bvn-now/money-matters/46466-four-things-you-might-not-know-about-retirement-accounts.html)

You can waste money right now or you can invest it and end up with thousands of free dollars later. I don’t know about you, but I think free money is pretty cool.

Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event or to find out more about her work, visit her at www.BiggerThanYourBlock.com.

Lender Using Social Media to Deny Loans

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It’s been said that if you add up the incomes of your five closest friends and then divide that number by five, you’ll end up with your income. Some lenders are taking that saying a bit further and choosing to give loans based on your social media friends.

How it works
Hong Kong based lender Lenddo.com has begun offering loans to people that qualify and are willing to give them access to their social media accounts. The thinking is that if you have friends that are credit worthy you’re probably also credit worthy. You have to create a Lenddo.com account and add friends to it. When you pay your loan back on time it increases the score of everyone in your friendship circle. When you miss payments or refuse to pay, the scores of everyone in your Lenddo.com network are lowered.

Loans based on fake friends
The trouble is that social media is layered and nuanced. Haven’t we all “friended” people on social media that we know little about other than we both joined People That Love Black People or both follow #FunnyCats? Absolutely. Social media is where many Americans go to have fun. They create silly, fake names and interact in ways that they might not if the person was standing in front of them. Most of us have no idea if our friends are paying their bills on time or what their credit scores are. There is a lot of criticism about using social media to make decisions about real-world events, but Lenddo.com is already making loans based on your credit worthiness and that of your social media friends.

Telegraph, telephone, and tell all your friends
As if that weren’t bad enough, Lenddo.com also will let your friends know if you default on the loan. Lenddo.com reserves the right to contact your friends via social media and make them aware that you have not paid your loan back in a timely manner. The Lenddo.com site says, “Lenddo does not require any physical collateral; we leverage your reputation with your friends and family as collateral.”

There are many reasons that someone would want to take advantage of the Lenddo.com model, however there are also some drawbacks. It will be interesting to see what happens with Lenddo.com and if traditional lenders follow suit.

Will you be signing up for a Lenddo.com account any time soon?

Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event or to find out more about her work, visit her at www.BiggerThanYourBlock.com.

7 Tips for Buying a Used Car

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As tax time rolls around, many people have started to talk about buying a car. With the economy being the way it is, many of those people are considering buying a used car. There are some good deals to be had when buying a used car, there are also some horrific horror stories about deals gone wrong. Here are seven tips to help you choose the right car and make the right deal on your next used car purchase.

See what’s available on Craigslist.org and AutoTrader.com
Everywhere you look people are offering cars for sale. From cars parked on the street to a plethora of websites that allow sellers to post their cars. A couple great websites to begin searching for a used car are Craigslist.org and AutoTrader.com. Both sites are offer used cars from private sellers and dealers. Both sites are searchable by price and type of car. As you’re looking at cars don’t forget to check:

• Is the car currently registered? You want a car that is.
• Does the car have a salvage title? That means that the car has been in some kind of accident. You want a car that does not have a salvage title.
• How many miles does it have? The average is about 12,000 miles per year. Knowing how many miles the car has versus how many is should have will tell you a lot about the car.
• Does the seller have maintenance records? A car is a machine. The better the car has been taken care of the less worry you’ll have about potential problems.
• Does it have everything that you are looking for? Power windows/locks? An alarm? A CD player? Seat warmers? Drink holders?

Once you see a few cars that you like you’ll need to find out if the car is really worth what the seller wants to sell the car for. You are the one buying the car. You have a choice in what you want to buy. You have every right to get the most value for your dollar.

Check the Kbb.com value
To find out if what the seller wants for the car is reasonable you’ll need to visit the Kelly Blue Book site at Kbb.com. Input the car’s year, make, model, miles, and body type to have the site estimate what the car’s value is. If what the seller wants and what KBB says it’s worth are in the same range: hoorah! If not, you’ll need to decide if you’re willing to try to haggle with the seller or if you want to move on to another car.

Print out everything
Once you find a car that you want to go see, print up all the paperwork relating to the car. That means you need to print out the original listing (people will ask for more once you’re on site), the KBB information, and any other information that you’ve found relating to the car. Have everything in front of you before you call.

Start calling
Give the seller a ring. Make sure to ask any questions that you have before you make a plan to go over and see the car. Also, listen to the person you’re speaking to. Do they sound like someone you want to do business with? What does your gut tell you? You don’t want to put yourself in a situation where you might get involved in a bad deal or put yourself in physical danger. If anything about the person makes you uncomfortable, move on to the next car on your list.

Take a look-see
Show up on time and take a thorough look at the car. Definitely drive it on the street as well as the expressway. There is really no way to know how safe a car is without a mechanic taking a look at it, but there are some things to check for before you pay a mechanic. Check for:

How much tread is on the tires? Make sure that there are no bald spots and definitely no metal pieces showing.
Is there an oil leak? Leave the car running and check the engine and on the ground under the engine.
If you see drips of dark fluid or puddles of dark fluid then there may be a problem.
Are there any other leaks? Check for green fluid (coolant), red fluid (steering fluid), or any other strange fluids.
Does the car need an alignment? When you’re driving, notice if the steering wheel is tugging in any direction. It shouldn’t be.
Does the starter work? When you start the car, is it difficult to turn the starter? It shouldn’t be.
How is the electrical system? Do the dashboard lights come on? The overhead light? The lights for the radio and A/C?
Are the lights functioning? Take a look at the headlights, turning signals, and brake lights. Make sure they all function appropriately.
Does everything else work? Turn on the radio, air, heat, and anything else you concerned about. Are they functioning correctly?

If you are okay with everything up to this point, it’s time to have a professional mechanic take a look at the car. This is where things can get rocky.

Get a AAA check-up
Having the car checked-out by a professional mechanic should be a non-negotiable. The worse thing that could happen is you end up buying a lemon because you didn’t want to spend the $90 to have a professional look at it. The American Automobile Club offers a great service for members looking for a used car. Any AAA-approved auto center will perform a once-over and provide you a written report for only $90. Most mechanics have similar products. Ask at your favorite mechanic’s shop.

To get the car checked-out you’ll have to get the current owner’s approval. Some owners may become upset when they hear that you want to have a mechanic check it out. They will tell you that the car is sound, that there is no reason for a mechanic, that you don’t trust them. Of course you don’t trust them, you don’t even know them! If they won’t let you have it checked out, do not buy the car. Obviously, they know something about the car that you don’t know.

If you are able to get a mechanic to look at the car and the report comes back clear, then you are on your way to making a deal.

Sign the paperwork
If everything is up to snuff, you’ll need to sign some documents to make the sale official. All the forms can be found online. You’ll need:

• California Certificate of Title or Application for Duplicate Title (REG 227)
• Signature(s) of seller(s) and lienholder, if any
• Signature(s) of buyer(s)
• Transfer fee

You may also need:

• Smog certification
• Use tax and/or various other fees
• Additional documentation

If you have any questions about the paperwork required, you should call the DMV at 1-800-777-0133 to speak to an operator between the hours of 8 a.m. and 5 p.m. Monday - Friday, Pacific Time. Buying a used car can be an undertaking, but there’s no greater feeling than driving your new car knowing that you don’t have a car payment. Happy car hunting!

Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event or to find out more about her work, visit her at www.BiggerThanYourBlock.com.

The Best Gifts This Holiday Season

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The holiday season is upon us. According to the National Retail Federation, the average American is expected to spend $704 million on holiday gifts. That amount of holiday spending is considered “average”, but many of us are concerned about how the future might influence our income, not to mention our savings, and are making the decision not to spend a penny this holiday. Let’s take a look at some of the best holiday gifts available that will be good to your loved ones and your pocketbook.

Time Doing Nothing
The best gift this year is definitely Time Doing Nothing with loved ones. Think back over your life. Haven’t some of the happiest memories been sitting around the house with your friends and family laughing about things that only your group finds funny. Don’t be quick to dismiss this gift out of hand. This may be the hottest gift of the season.

Playing Together
Another hot item this year is Playing Together. It doesn’t matter if it’s playing a card game or playing a physical game, friendly competition is all the rage this season. We all like to tell the story of the time we finally beat our father-in-law at dominoes or the one about all the cousins having a footrace in the street. Playing Together will bring memories of this holiday season for years to come.

Encouraging Each Other
This one is sure to be the one everyone is talking about. One of the best gifts is the gift of Encouraging Each Other. The seeds of confidence this gift provides will last long after the wrapping paper has been picked up and the tree is out on the curb. Haven’t we all benefited from this gift from time to time? It doesn’t matter if it’s a huge bag of, “You’re great at ________” or a small box of, “’I really appreciate you ________”, make an effort this holiday season to give this gift to everyone you meet.

Group Photos
The last gift on your list should definitely be Group Photos. Nothing puts people in a better mood than seeing themselves with their loved ones. Take photos during the season and after January 1, send an email with the photos attached and a cheery note. I know you expected me to talk about the latest gadget or coolest toy, but these are gifts that will your loved ones will enjoy and they won’t cost you an arm and a leg. The spirit of Christmas is about appreciating each other and sharing that feeling.

May you truly enjoy your Christmas this year.

Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event or to find out more about her work, visit her at www.BiggerThanYourBlock.com.

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