Having problems with an upside down mortgage? All is not lost.

Believe it or not but miracles still do happen. Imagine how this New York couple must have felt when a reputable bank instituted foreclosure proceedings against them. How can they win, one might ask? They must have prayed for a miracle. Lo and behold! A miracle did occur. Thanks to a sympathetic judge in New York. Yes, there are still kind people out there who protect the financially challenged and not just the financially gifted. A big question mark though on the use of the word “gifted.” This judge not only canceled the indebtedness but discharged the mortgage as well. It’s almost as if the couple now has a clean bill of financial health and need not worry any further about settling what was once an apparently insurmountable obligation secured by their home.

So how did this couple ever merit this blessing and the heart of the judge? Here are some tips that may be useful to those similarly situated.

Can You Stop Foreclosure & Get Your Debt Canceled?

As the case we discussed has illustrated, it is possible to fight foreclosure and win, even though it may be an uphill battle. Of course, each case is different.

1. First, upon the filing of a lawsuit to foreclose on your property, you must reasonably request the court for a settlement conference. This would show good faith on your part that you intend to settle your obligation and not escape liability.

2. Second, your proposal for settlement must be reasonable. Don’t ask for the moon by demanding a waiver of the indebtedness. No, this just won’t happen. Not even in the movies. Neither should you tinker with the interest (ie. ask for your interest charges to be modified). That’s how banks make money so don’t mess with that. A good start for a reasonable request would be a modification of terms. In other words, this is like admitting that you owe so much but you just need additional time to pay it off. One tried and tested method is to accompany your requested modification with a substantial payment. As the saying goes: “Show me the money!” Banks thrive on money. They need to see the money.

3. The last tip is often the most overlooked and neglected. You need to engage the services of a lawyer to assist you in your requested loan modification. True, lawyers are costly but they cost money because they can save you money or give you the much needed breathing space to settle your debts. Bear in mind that the people you will be dealing with have their own lawyers who themselves prepared the loan and mortgage documents. You need a lawyer to level the playing field.

In the particular foreclosure case in New York, the judge actually considered the social ills that might result if the home were to be foreclosed. Would the foreclosure be “repugnant to the public interest when seen from the point of view of public morality?” Heavy stuff, one might think. The court hastened to add that foreclosed properties are oftentimes boarded up, which in turn leads to vagrancy, dumping, vandalism, litter and the eventual decline of property values in the area.

Is there a glimmer of hope for those facing foreclosure of their homes? The bank referred to has filed an appeal to a higher court. Prudence dictates that we await the decision of the appeals court.

(Disclaimer: This is not intended to be legal advice but purely for informational purposes. The services of a lawyer have to be engaged if legal advice and representation are sought.)

 
This guest post was written by my dear brother-in-law, Earl Fischer, who is one passionate lawyer.

This is a post from The Smarter Wallet.

Can You Stop Foreclosure & Get Your Debt Canceled?

When it comes to financial crises, few can argue against the fact that the recession the U.S. has been experiencing over the past several years is one of the worst on record. What’s worse is that in today’s society, the chaos theory applies. The chaos theory is the one that says that a butterfly flapping its wings in Africa will cause a tornado in Kansas. It looks like our financial meltdown has had a pretty significant impact on Europe, with Greece taking the brunt of it.

In what looks like a mirror image of what happened here in the U.S. two years ago, seven big banks are on the brink of failure including:

• Fortis
• Dexia
• Société Générale
• BNP Paribas
• ING
• Barclays
• Deutsche Bank

It didn’t hurt that each of these big financial institutions had their hands in more than a few unscrupulous AIG/Lehman backed mortgage securities. (Did the A-Ha moment just happen for you?) All told, these organizations hold about $35 billion of Greek bonds. It’s easy to see just how devastating it’s going to be for Greece — a small, yet distinguished country — if these banks fail.

But what does all this mean for us? Well, remember when our economy began to tank and the banks were no longer willing to loan money to each other? It was the worst credit freeze ever recorded…at least up until that moment. Our economy practically stopped. Not only were our own banks unwilling to issue loans to each other for fear of loss, foreign banks were also reserved, limiting any loans extended at all, to a repayment period of days.

How The Greek Debt Crisis Impacts The Global Economy

The same phenomenon is being felt in Europe. The main driver for the current economic crisis is this: while our economy continues to recover from the U.S. financial crisis, thanks to the help of government bailout funds, many of the multinational banks are facing the possibility that the Greek bonds they hold are going to become worthless in the coming months. The failure of Greece, and the possibility that Spain could follow, is not something that any of these banks are equipped to handle, since the share of Greek debt held by each bank makes up something like 40% or so of their assets. This effect is increased exponentially if Spain follows suit.

And not only are these banks not willing to lend to each other, they are no longer able to lend to U.S. banks and contribute to our recovery. This means that once again, we are faced with a credit crunch on an already overtaxed financial system. Our banks, because of the lack of international funding, will once again be in jeopardy; this may happen because their core business process for earning revenue is by lending. And this will threaten to push the already weakened economy back into the recesses of recession.

But what about Spain?

The bigger concern at this point is the stability of Spain. The reason is two-fold. One, the debt of Spain is more than double that of the debt of Greece. Plus, a bunch of Spanish debt, about 45% of it, is held by foreign countries. When this debt becomes worthless…well, you get the picture.

It’s an unfortunate side effect of a globalized economy. No longer are countries functioning individually, but rather as individual pieces of the worldwide puzzle. The puzzle’s success as a whole depends on each piece doing its part to fill the gaps. When one piece is missing, the rest of the puzzle no longer works.

And so, we sit and we watch the financial crisis unfold in Europe, much as they did during ours, holding our collective breaths that the events we fear the most will not unfold and undo what forward progress we’ve been able to make in 2010. That the debt in Greece will not unleash the perfect storm and destroy the global financial system.

Just like the butterfly in Africa.

This is a post from The Smarter Wallet.

How The Greek Debt Crisis Impacts The Global Economy

Have you received a bonus this year? Or, are you one of the millions who are unemployed at this time? There has been so much hype about company bonuses in the last year that this country seems to have become an anti-bonus citizenry. Sure, I agree that companies being subsidized by the government to avoid bankruptcy (and an even greater economic fallout) should not be paying exorbitant bonuses. But really, is anyone else sick of hearing about how bad the economy is, and what is or isn’t fair?

Let’s face it; this country was built, among other things, on the premise of free ideas, enterprise, and capitalism. Anyone who disagrees with that should re-evaluate their definition of the “American dream” and what the modern market economy means. It seems that a lot of what we enjoy today, we owe to one of the strongest economies in the world, which is consequently built upon our ability to work hard, to allow free market capitalism to do its thing, and to innovate. When did we come to be a country of whiners looking for the next scapegoat on whom to blame our financial woes? Companies and employees of companies go to work to make a profit (don’t you?). That’s what keeps the economy going. And, like it or not, bonuses are part of that process.

Don’t get me wrong, there were certainly some unscrupulous (to put it mildly) business activities that directly led to an economic meltdown of historic proportions. And those people involved should be held accountable. But it’s happened, and hopefully we — as a country and as an economy — have learned some valuable lessons.

However, when we blame “crooked CEOs” or the “big Corporations”, are we not missing a valuable lesson too? WE are the ones responsible for our futures and our financial well being –- not other people. Playing the blame game never has helped us and never will. Where is the American spirit to persevere, adapt, and innovate that has helped us come so far? Looking at various websites and hundreds of user comments, I see that these things seem to be missing.

Think about it. One of the contributing factors that led to the economic crisis was us, the consumers. Sure, there were plenty of bad loans being offered, but no one forced millions of financially illiterate people to sign up for mortgages that they had no business applying for. Where’s the financial responsibility there?

Irrational Exuberance & The Roots of Our Economic Problems

Prior to the recession, we were experiencing abnormal economic growth in real estate markets. And, it was simply a matter of time for it to correct itself and bring it back to more normal, sustainable values and growth rates. Who caused this? Did WE? Remember how many people jumped on the real estate bandwagon? Everyone was a realtor, mortgage professional, real estate investor at the time. And, what happened? Real estate values were artificially inflated causing more people to want “a piece of the action”.

As Yogi Bera said “it’s deja vu all over again.” Remember the stock bubble of the late 90’s ? This was the exact same thing. Many believed that it was easy to make money investing in the stock market. Shoot, lots of people were enjoying 20 and 30 percent returns by doing nothing. What did this lead to? This resulted in many people looking for the next dot com, paying over a $100/share for companies that had no sales, inflating values of stock prices; this eventually led to an inevitable stock market correction. Sound familiar? There were, of course, bad companies back then too. Remember Enron and MCI? Like today, they were a part of the problem, but they were not entirely at fault. Because WE are partially to blame.

Markets tend to have a natural equilibrium. When they are low or undervalued, they naturally want to expand. When they are high and overvalued, they eventually contract or correct. A simple analogy is a forest. When the forest is cleared of debris and overgrowth, sunlight and moisture are allowed in for new growth (economic expansion); when there’s overgrowth along with excessive brush and debris, things die (economic contraction) and nature creates fires which clear the forest and restart the cycle. Financial and real estate markets are no different. Prior to the recession, we were experiencing abnormal economic growth in real estate markets. And, it was simply a matter of time for our economy (like the forest and the stock market bubbles) to correct itself and to bring itself back to more normal, sustainable values and growth rates. Who helped caused this? WE did.

The problems were already there and were inherently caused by us consumers. Our common human nature of irrational exuberance, chasing deals and the next money maker, and inability to make independent, rational, and unemotional financial decisions ultimately led us to our own financial demise. Believe me, I feel for those who have been irrevocably damaged by the economy, by unethical business practices, and by greedy corporations. But, please stop blaming everyone else for something you and I helped create. The forest will reestablish itself after this fire. Just be poised to avoid it next time. Become an educated consumer, and adapt to things as they come. Look at things differently. For instance, bonuses CAN be a good thing. Why? Because companies are again becoming profitable. Profitable and healthy companies do not lay off workers — they hire. While I do not see bonuses as a direct link to an improved economy, lower unemployment rates and more hiring is.

This is a post from The Smarter Wallet.

Irrational Exuberance & The Roots of Our Economic Problems

It’s been a while since the issue of economic bailouts for big financial institutions have made it to front page news; I haven’t heard of banks receiving government handouts lately, have you? But with economic signs signaling continued risk of an ongoing downtrend, the issue of bailouts may once more rear its head.

Federal Reserve Ben Bernanke testified in a Congress appearance some time ago, that the Feds acted to prevent the U.S. financial crisis from spreading by bailing out large banks: “The deal, late in 2008, was part of Washington’s effort to rescue the troubled financial system.” Not everybody, of course, has agreed with that decision, as top Republicans in Congress have recommended that failing banks should be left to die: “John McCain and Richard Shelby, two high-profile Republican senators, have said that the government should allow a number of the biggest U.S. banks to fail.” Who is right and what would the consequences be?

Can We Trust Politicians?

Politicians and Wall Street have always had a cozy relationship which Main Street looks upon with total distrust. Millions of lobbying dollars have found their way as soft money to PAC committees and nobody has ever doubted that the quid pro quo has existed ever since the first democracy was created in Greece more than 2,000 years ago. Now translate this into what’s happened during the recent financial crisis, caused in part by a lack of government oversight due precisely to that “old boys” club alliance. One of the former SEC high ranking functionaries even stated that they couldn’t even imagine that the “respectable and respected” Bernie Madoff would ever pull such a gigantic Ponzi stunt; it would have helped had they paid attention to the early signs and alarms: “his repeated warnings that Wall Street money manager Bernard Madoff was running a giant Ponzi scheme have cast Harry Markopolos as an unheeded prophet.”

Do Large Banks Need Government Bailouts?

All this brings us back to whether it makes sense to save large banks and whether politicians should act as savior of the common people or rescuers of wealthy shareholders. Not long after President Bush announced a huge package of $250 billion to rescue the banks in Oct 2008, sharp reporters discovered and announced to a scandalized nation that lavish parties and bonuses were being bestowed on high executives in these failed financial institutions. It therefore makes sense to reject the bailouts, made with OUR money and not the government’s as some members of Congress seem to believe, because the only people who benefit are wealthy shareholders and top management. The ordinary guy like you and me is protected by the FDIC for up to $250,000 in each account in each bank. If the bank goes bankrupt, private accounts are not at risk and assets are either bought by other financial institutions or used to shore up the bank once it emerges from the process.

To Trust or Not To Trust

The other side, those who favor bailouts, claims that letting Lehman Brothers fail was a huge mistake because of the confidence factor. Ah, confidence — that famous hidden element that is rarely mentioned; yet Madoff was able to pull his Ponzi scheme thanks to the very trusting clients who worshipped the ground he walked on.

Just a minute you may say, is this about trust or greed? ‘Bernie, I trust you to give me a huge return on the millions I place in your “capable” hands.’ Am I greedy? Of course. I have $3 million and I still want more. Still, a few more victims were non-profit associations that suffered dearly, and that justified the 150 years sentence that Madoff ended up receiving.

The same kind of financial collapse happened with those famous derivatives that were based on toxic assets. Unscrupulous salespeople “guaranteed” that the scheme was insured and that nobody would lose. Instead, we found ourselves having to struggle to survive the credit and mortgage crisis. Meanwhile, our well-paid government agents continue to be asleep at the wheel.

What About the Little Guy?

Governments the world over have bailed out their biggest banks in order to apparently preserve the confidence of the people, but failed miserably to bring to justice the guilty parties, the recipients of huge bonuses and golden parachutes. Is that supposed to restore our trust in the financial system? Wouldn’t it be better from the Main Street point of view, to clean out these mismanaged banks and other institutions such as GM and Chrysler? Either let them fail or nationalize them, but stop pouring billion after billion of our tax money into toxic institutions, thus allowing the “bad” guys to continue making the wrong decisions. The ordinary people in this great country would like to see some bailout money coming their way to solve their own urgent problems. Let’s see… what do you think of the 2009 stimulus plan and the homeowner affordability and stability plan? How do you think these programs have panned out?

This is a post from The Smarter Wallet.

Do Large Banks Need Government Bailouts?

I was just reading what President Obama was planning for the 2011 national budget, and it appears that there could be some impact here on our taxes. From this CNN Money article, we see that some significant tax changes are part of the proposal (but nothing etched in stone till the Congress votes too):

• For high income families, the Bush tax cuts of the past could expire. If these changes push through, then individuals making $200,000 and families making $250,000 will be affected. Ouch! The top marginal tax rates will be moving up such that the 33% rate will now be 36%; what is 35% will shoot up to 39.6%. If you live in California, like I do, this could mean a hefty tax bill at the highest brackets (and don’t forget our California state tax on top of this: the highest marginal rate is 10.3%)!
• Long term capital gains taxes are pegged to rise from 15% to 20%.
• A bunch of personal exemptions could expire.
• Itemized deductions may be limited and capped. But could this hurt charitable giving?
• There may be possible changes to the estate tax so that the exemption is at $3.5 million, with the top rate on taxable assets being 45%.
• Investment fund managers may have their profits taxed.
• Capital gains taxes on small business stock may be eliminated.
• Tax cuts for lower and middle income households may be made permanent.
• No more “wealth” tax for the middle class?
• Make Work Pay, child-care, low-income and American Opportunity tax credits may be extended.

Will these make it to law? We shall see! It’ll be a tough sell to the Senate if this economy continues to struggle. Just some observations.

Personal Finance Articles

For more financial views, check out these money articles!

• Wise Bread: 5 Strategies To Wipe Out Your Credit Card Balance
• Foreigner’s Finances: Which Mortgage Loan Is Right For You?
• Ask Mr. Credit Card: A Small Business Can Save On Taxes With A Cash Balance Plan
• One Mint: Analyzing GameStop, A Leading Video Game Retailer
• Debt Tips: The Benefits of Refinancing Your Home
• A Gaishan Life: Recognizing Market Capitalization In Stocks
• 20sMoney: Maintain Good Credit Before A Home Purchase
• Lazy Man and Money: Public Storage: Problem Ignored
• Pragmatic Environmentalism: Festival of Frugality

This is a post from The Smarter Wallet.

2011 National Budget and Tax Changes: The Roundup

More thoughts on health insurance and health care reform.

Health care costs are sky high in America, so it seems to me that having good health becomes a much more valuable matter here than anywhere else. This fact rings very true every time I come across a story about how someone goes bankrupt because of medical reasons. When you fall ill, not only do you lose your ability to earn a living (hence you need disability benefits of some sort), you also get squeezed dry by soaring medical costs.

Image from AmericanProgress.com

Besides all this, there is one other unfortunate statistic that needs to be reversed. That would be the number of lives that are lost due to the lack of accessible health care for American citizens. I’ve noticed a disturbing trend: more people are deferring medical treatment for life-threatening problems because they simply cannot afford health insurance or health care. The latest casualty in this predicament is a reality television star: Jennifer Lyons was a participant in the show Survivor, who battled breast cancer for five difficult years. I am a fan of the show, and was saddened by her passing. It is especially tragic to learn that she may have had a much better chance of survival, had she not deferred medical treatment due to having no insurance. Her words:

Asked why she delayed seeing a doctor, Lyon said, “I didn’t have insurance, which is a big part of it. And it really wasn’t changing much. But a year later, I felt another lump, and then I felt something under my armpit.”

There’s something wrong here, when people are putting their lives at great risk because they are unable to afford basic medical care. A simple check up may have saved her life. I just wish that somehow, someday, our government gets their act together on this soon. In the meantime, let’s stay as healthy as we can be.

Personal Financial Articles

For more financial stories, please take a look at the following:

• Out of Debt Again: Tips To Qualify For A Mortgage After Foreclosure
• Studenomics: The Downside Of Discount Shopping
• Mr. Money Bags: Got debt? Get a budget!
• Len Penzo: My 2009 State of the Household Financial Report
• Credit Karma: Big Banks Lend a Hand In Haiti Relief Efforts
• Lazy Man and Money: Get Paid for Getting in Shape
• Ultimate Money Blog: Festival of Frugality
• Ultimate Money Blog: Money Hacks Carnival
• My Journey To Millions: Carnival of Personal Finance

This is a post from The Smarter Wallet.

No Medical Insurance, No Health Care: The Roundup

For many of the unemployed (actually, around 1 million people), there’s the worry that when January 2010 rolls along, they will be losing their unemployment benefits. This is because extended unemployment benefits are scheduled to expire by the end of the year unless the government does something about it. What to do then?

A while ago, I wrote a post that discusses what to do if your unemployment check runs out. Here are some general ideas:

(1) Turn to your community, local shelters and churches for possible resources.
(2) Try to conserve your funds as best as you can by limiting your expenses to only necessary expenditures. Perhaps you need a budget!
(3) Keep your eyes out for any job opportunity that opens up; even if a job is not in your line of work, you never know if it can eventually lead to something else that works out for you later.
(4) Explore various ways to generate income and be resourceful (for example, why not consider a pink slip party?).

Right now, people are making do with any kind of work that earns them an income. It’s hard to be picky right now — and you shouldn’t be, especially if you’ve been hitting the pavement (for a job) for a while now. But keep the faith as this economy *should* turn around….eventually.

Let’s keep up with our financial education with these great reads for the week:

Personal Finance Articles

• The New Parents’ Guide: To get our finances in order, it’s important to develop a financial plan and set financial goals as a starting point.
• Wise Bread: What if you can’t get a bank loan? Well here are 8 other ways and schemes you can try, to help finance your fledgling business.
• Weakonomics: Here’s a comprehensive piece about money, gold and the FED, and why we should be concerned about the US dollar. Very compelling!
• Len Penzo: Is LifeLock’s $1 million guarantee a sham? Len explores what Lifelock offers and also shares some do-it-yourself identity theft prevention tips.

Recent Carnivals

• Festival of Frugality
• Carnival of Debt Reduction
• Festival of Stocks

This is a post from The Smarter Wallet.

Unemployment Benefits Set To Expire Soon. What Next?

Bye bye financial bailouts?

Cartoon frm MattFlies

Executive Pay Cuts at Troubled Companies Are A-Comin’

Yeah that’s it. This is the kind of news I want to hear: finally, we’re getting the pay cuts that we all wanted for them and what they justly deserve. I’m talking about how the Obama administration is taking steps to get back some of the taxpayers’ money that have kept certain troubled financial and auto manufacturing companies afloat. What the Feds giveth, they now taketh away. Here’s how the plan is being described (from this ABC News article):

The plan calls for halving overall compensation (of executives at companies that received bailouts), and cutting cash salary payouts by an average of 90 percent.

This will radically cut pay packages for about 175 key executives at companies that were granted TARP funds.

Paying Back The Taxpayer

Happy happy joy joy, it’s a big triumph for the little taxpayer in the midst of a downturn where unemployment rates are shooting up through the roof. The companies impacted by this development are the big banks and financial institutions: Bank of America, Citigroup, GMAC and AIG, and the auto companies: General Motors, Chrysler and Chrysler Financial. All these companies were recipients of bailout funds; and I remember thinking just how incomprehensible it was that they got a hold of billions of dollars of our money. I just never understood the “too big to fail argument”: so they’re big…. so what if they fail? I believe in letting “the chips fall where they may”. Something’s messed up here if we allow people to pick the pockets of the downtrodden taxpayer in order to neutralize some colossal screw ups.

Unfortunately, the big corporate players don’t see things like you and me do. You see, even as they made mistakes and failed at their jobs (by compromising the health of their companies), some of these people continued to feel a warped sense of entitlement and continued to request rewards and absolution of all wrongdoing. Now that some of these executives will have pay capped at $200,000 — that’s just too bad. That must hurt.

Let me just remind everyone just how outrageous some of these executives are, as they fight tooth and nail to defend their lofty positions and fat paychecks. Here’s some dirt on AIG:

• Its employees were receiving $165 million in retention bonuses, after taxpayers had pledged up to $180 billion to keep the company afloat.
• The bailed out companies have delivered a “consistent message” that they need to keep their pay competitive.
• A lawyer in defense of the big companies feels discouraged, saying “Taxpayers have a big stake in them. Don’t we want them to be nourished rather than seeking retribution, which is what this seems to be.”

No, Mr. Lawyer, this is NOT retribution, but rather, reclamation of funds that belong to the multitude who’ve been hurt by the very actions of those who’ve almost caused the collapse of our economy. We’re simply taking back what is rightfully ours.

P.S. I’m not condemning these troubled companies, just criticizing certain policies that were executed and which make no sense to me. I’m all for supporting these companies in their quest for success — minus any kind of government assistance.

Personal Finance Articles

• BillShrink: Seven Financial Mistakes That Ended Disastrously
• Len Penzo: A Layman’s Guide to Mortgage Application Junk Fees
• Intelligent Speculator: Proof That Compensation Limits Don’t Make Sense
• Carnival of Money Stories

This is a post from The Smarter Wallet.

Executive Pay Cuts at Troubled Companies: Paying Back The Taxpayer

Dealing with a bad economy.

Image from San Francisco Sentinel

From gas to milk to toilet paper, the cost of everything we need seems to have soared in the past three years. As the economy continues to waiver, more people are struggling to make ends meet. And when basic necessities become luxuries, major manufacturers start to notice. Recently, industry giant Proctor and Gamble lowered prices in response to a stagnating economy. Elance and Toys R Us also have unique offers to offset the pressure of the recession. For a change, I’d like to showcase what it is that big business is doing to help alleviate the burden that a down economy has imposed on consumers lately.

People Can’t Afford The Basics!

As salaries jog in place and housing values tumble, people are struggling to cover basic expenses such as utilities, food and household items. In response to this crisis, people aren’t buying designer clothes and brand name products; mass merchants such as Walmart have experienced an array of new buyers; generic and store brand products are now the top choice for many frugal shoppers as money saving ideas dominate our collective consciousness. As a result, brand name products and designers feel the crunch and are forced to respond.

Let’s take a look at some examples in the marketplace, where changes have occurred due to the slowdown in the economy:

Big Business Lowers Consumer Prices Due To Recession

#1 Proctor & Gamble Lowers Prices On Essential Items

Proctor & Gamble, Co., the makers of popular products such as Gilette shavers and Tide laundry, have been introducing new value versions of their consumer products. The recession has hurt this industry giant as buyers have turned to store brand and generic products. This company has reduced overall prices about 10 percent by cutting the cost of Cheer laundry detergent and introducing a basic version of Tide.

According to Jon Moeller,the chief financial officer, sales will increase as a result of marketing, innovations and better pricing despite the grim market conditions. He stated, “We firmly believe we’ve made the right choices in the past year to deal with the global economic crisis, but we also know we can and must deliver better overall results.”

#2 Elance Contest Offers A Lucky Freelancer Free Health Insurance For A Year

While freelancers enjoy flexibility, they also have difficulty finding affordable health insurance. As government leaders hash out the details of getting health care for all Americans, freelancers worry about how to cut their medication costs and pay for doctor and hospital expenses.

Elance, a website offering opportunities for freelancers and the people hiring them, is currently conducting a contest offering free health insurance for a year. These contests bring more attention to the number of freelance workers struggling to obtain health insurance and to make a living.

#3 Toys R Us Makes Luxury Purchases A Little Easier

Toys R Us has been working to help parents get rid of potentially unsafe cribs, car seats and high chairs in favor of safer new models. Between August 28 and September 20, all Toys R Us and Babies R Us locations accepted returns of used cribs, bassinets, play yards, high chairs, car seats, strollers and travel systems in exchange for 20 percent off the purchase of a new item in these product categories.

Chief executive Jerry Storch said, “We are all looking for ways to stretch our dollars, but in doing so, children’s safety should not be compromised.” He encourages buyers and retailers to be “vigilant about potentially unsafe children’s items that might still be in the marketplace.” The trade in helps get faulty products out of commission and puts kids in a safer new setup.

Bottom Line: Consumer Actions ARE Powerful!

In a difficult economy, we often feel powerless but in actuality, we’re NOT. We have the power to make educated choices about what we buy. We can recycle and Freecycle to give something away or get something we really need. Choosing store brand and generic products helps drive down the cost of equivalent brand name items. Raising awareness about major concerns such as health care brings national attention to this important issue. When consumers refuse to fall into financial traps and decide to spend their money more wisely, they help govern the nature of the current marketplace.

This is a post from The Smarter Wallet.

Big Business Lowers Consumer Prices Due To Recession

Planning to buy a car? Nowadays, you can own a car for cheap — a new car at that!

If you’re in the market for a new car, you’re pretty much in luck. According to Comerica Bank’s Auto Affordability Index (an index that gauges how cars cost across the nation), new autos are at their cheapest point (okay, most affordable) since 1979. What they’re reporting is that the average new vehicle now costs $1,700 less than in the beginning of last year. And this is just the beginning because apparently, more price cuts are along the way due to a supply glut in the auto industry.

So the recommendation by some talking heads is that you should consider adding new cars to your car shopping list, if you’re looking to pick up some new wheels. Here’s what this CNN article says about this phenomenon:

It’s really just a classic case of supply and demand. The used car market is up about 23 percent, and new car sales are down 34 percent, according to CNW, a highly regarded marketing research firm. More new cars on dealer lots mean more deals for you.

That’s just sweet! But there’s a warning attached to this advice — you need to act fast since this is not a permanent trend. Just like anything else about the economy — this market can shift like the wind with the balance of supply and demand changing at anytime. The rule of thumb is that it’s better to buy used rather than new when it comes to motor vehicles. However, there can be reversals in the market like this on occasion, which consumers can take advantage of.

So if you’re set on buying a car, get your financing lined up (unless you’ve got enough money saved up), then visit sites like CarsDirect.com and Zag.com to receive price quotes on the car(s) that interest you. When you’re armed with these quotes, you’ll be able to comparison shop at brick and mortar car dealers more effectively (and the sales agents can’t waste your time as easily).

My family actually has a couple of cars that are both getting long in the tooth, but we’re following our financial rule here to try to “drive them into the ground” in order to save money by deferring new car costs. We’ll continue to drive our cars as long as they can still function. It’s sure tempting to start looking around for their replacements now, but I’m going to cross my fingers and hope that the car market will still have cheap new cars for sale (and waiting for us) come next year, when we’ll be ready to shop around.

This is a post from The Smarter Wallet.

Cheap New Cars Are Now Cheaper than Used Autos!