Remember my blog a few months ago toting about all of the money I am saving by getting rid of cable and just using Hulu and Netflix? Well it’s a good thing I have created the savings in my budget because I ended up having a huge expense on my TV last week. A couple of weeks ago we heard the dreaded POP while we were watching TV. It was immediately apparent that the picture bulb blew out on the TV.

I purchased this TV in 2006 and was told that the bulbs usually go out about every two years. They encouraged me to purchase the few hundred dollar warranty because I was bound to need to replace a bulb within the three year warranty period. Well either the salesman severally underestimated the average bulb life or I watch less TV than most people. Quite honestly both are plausible reasons.

Josh’s asked his friend who repairs TV if he’d be willing to help. Within five minutes sitting in my inbox was a link to where to purchase the bulb and a copy of the owner’s manual. The bad thing was that the part was almost $200 dollars. Josh said that my husband or he could easily install it, but that since it was so old maybe I should just go buy a new TV. Old? It’s only six years old! I remember a few years ago I gave away a TV that was over 20 years old and still working perfectly fine (well except that it didn’t have a remote). How could I even consider buying a new TV?

The following Sunday when I was sitting down looking at the advertisements in the Sunday Oregonian I understood why Josh suggested I buy a new TV. The TV that I purchased six years ago could be replaced by a newer, thinner, clearer (all together better) model for about a third of the cost that I paid for my current TV. So I was faced with either spending $200 to repair my existing TV or spend about $800 for a totally new one that was way better. Tempting right?

It seems we have become a disposable society. When it almost costs as much to replace an item as it does to repair it then people are not motivated to keep it and repair it and then we are left with disposing of the old item. What a waste.

So I sucked up the $200 cost of the bulb and it took a whopping 5 minutes for my husband to replace it and hopefully I am good for another six years. Do you think it was the right decision?

A few weeks ago Josh talked about the web and social discounts available and I thought I’d expend on it with my own personal experience. Yesterday I realized that I had six deals that I had purchased through Groupon, Living Social and Travel Zoo that I had not yet used. I was determined to utilize these deals which I had purchased over the last several months.

So yesterday I:
• ordered $40 of personalized stationary which I purchased for $20,
• ordered five bottles of wine which I had purchased a $75 certificate for $25, but I ended up paying an additional $20 because of shipping and the cost of the wine, and
• Went out to a 4 course meal with wine which I had paid $50 for. I left a $20 tip.

I still have yet to use:
• 3 sessions of kickboxing which I purchased for $15,
• 20 fitness sessions at a women’s gym, and
• $60 of ceramic painting which I paid $30 for

There have been numerous other deals which I have purchased over the last several months like lodging, golf, yoga accessories, tea, hot yoga, and the list goes on and on. But now I’m wondering was it worth it? It has been great trying out new businesses and experiences, but am I really getting a good deal? Many times yes, but many times no.

For example with the work out sessions, many times they only give a short period of time to use the sessions. Over Christmas I purchased 20 sessions of Bikram yoga for $25, the only caveat to that was that they had to be used within 60 days which meant that I would have had to go 2-3 times per week. Do you know how hot it is in there? It took me a good week just to get up the nerve to go again so I ended up only going about 4 times. Still, a reasonable deal averaging just over $6 per session, but still I may have stuck with it had I more time to get use to the excruciating experience.

I’ve also been burned by some of the online retailers because of the shipping. I purchased $25 worth of yoga accessories for $12. I figured this was good because I could purchase a new yoga mat which I was in need of. Well, what I did not know was that the shipping was going to be over $10 so I likely ended up paying the same price as I would have if I had just gone to a shop here locally.

The thing that is important to pay attention to with these deals is that we are still spending money out of our budget. Most of the deals I have purchased are extras in my budget. Some do give me good deals on things that I would have purchased anyway like the wine, or golfing. But many just sound fun and like a good deal so I purchase them, like the ceramic painting.

So now the questions is do I purchase the $20 certificate for $10 to Old Navy which is on Groupon today?

Student Loan Consolidation- Dispute Letter

It’s been a long time since I’ve had to write a dispute letter, but I’m quite experienced in it since I worked in collections for several years. I finally had some time today to sit down and sift through the notices I’ve received over the last several months regarding my student loan consolidation. Unfortunately the more I dug into the paperwork the more it scared me how unorganized they were during this whole process. In March they sent me a notice telling me that they were planning to complete the consolidation 09/01/10, but that they sent it in 02/25/11. They didn’t bother to call the previous loan company to get a new payoff amount since I had still been making my regular monthly payments. It’s important that anytime you are doing a consolidation, refinance or any type of loan change that you continue to make your regular monthly payments on time.

I sifted through all of the paperwork and tried to outline as clear as possible my situation of them receiving a refund from my previous service provider, which then caused my principle balance to go down and somehow caused my payment to go up.

Some important things to know about sending dispute letters:
• Always send dispute letters via certified mail and save the delivery receipt,
• Send the notice to multiple departments if you think it will help,
• Send copies of any documents you are referring to,
• Document and cite names and dates of conversation you have had with the company,
• Clearly state the problem and what you want to know or what your suggested resolve is, and
• Be sure to follow up!

I will be sending the disputer letter out today. I’m sending it to the processing center Texas and the Consolidation Department in Kentucky. Cross your fingers on my getting a response.

When Cameron Vondrachek was a young boy he struggled with a severe stutter. With the help of hard work, a loving mom and a special device, he overcame much of the stutter, but still has trouble with articulation. But this does not hold Cameron back one bit.

Now a senior in high school Cameron recently visited his 5th grade teacher and her current class to teach the Banking on Our Future program. The teacher and the students loved it. Cameron did an amazing job.

He mixed the important lessons with fun activities and games. The class was hooked. Cameron’s proud mom, Diane Vondracheck from Bank of America, is also a volunteer presenter in Oregon. She said that this opportunity helped Cameron “gain so much confidence and he had a good time teaching the kids. Thank you for giving him the opportunity to do this for his senior project.”

Though I was able to get through my undergraduate with very few student loans, my graduate education was a different story. I am the type to say that one should invest in their education, but I must admit that my going back to school to get my masters was truly to fuel my own ego. I was already running Financial Beginnings so obtaining the masters did not further my career or pay. I just really love school and quite honestly if I felt I could afford it I would continue on to get my PhD.

After finishing my masters I was left with paying for three student loans to three different companies. Last year I received an offer to consolidate from one of my loan providers and I proceeded with it. Not only would it lower my payments, but it also would make it easier for me by only having to make one payment each month instead of three.

I completed the loan consolidation paperwork early last summer. For some reason the loan servicer only brought over one of the loans now leaving me with two student loans. I contacted them and they asked me to provide the information again in order to consolidate the third loan, which I did late last summer. Since then there’s been little information until early this year when I started hearing more from the finance company that my other loan would soon be paid off and estimating the monthly payment.

In the middle of March my loans were paid and the payment was then recalculated. Unfortunately I had since moved and did not receive the notice of this until after the new payment date had already passed. This was unfortunate for me because my payment went from $80 to $280 and the three week notice they provided for this was not enough time to go through the mail forwarding process and they attempted to take an additional $200 out of my account which I was not expecting. Still this is a moot point to my story.

In mid-April another notice was sent informing me that the loan payment had changed again and increased by $21 because they had received a refund from my previous lender of approximately $1800. What? They received money back which resulted in my loan amount being less and that caused my payment to go up? They said this was my fault because I kept making payments on the other loan. Well of course I would continue to make payments because if I had not then my loan would have been in default for 7 months. It didn’t make sense to me and quite honestly to many of the six people I spoke with during a 1 ½ hour conversation on Thursday that the decreased principle would result in a higher payment. I was assured that all of the loan terms stayed the same, but because the principle balance went down it caused my payment to go up. I assured them that my Master in Finance (which the loan paid for) taught me enough to know that was not mathematically possible. Unfortunately the answer I received from them was that the calculator says it’s so, so it must be so. I went round and round with six people, getting bumped from department to department because nobody was willing to explain the calculation only to find that I had wasted a huge portion of my day.

So now what? My husband says it’s only $21 and we can afford it, but that’s not the point. One of the examples I gave to the loan representative was that if the previous lender would have sent me the $1800 I could have sent them the amount as a payment and my payment would not have gone up. She agreed, yet did not understand why I was laughing when she agreed.

Now I will be sending a dispute letter via certified mail. I will have to dig through the paperwork they sent to me (which is surprisingly little for a $50,000 loan) and see if I can find any information to help to explain why my loan payment would go up when the principle amount went down.

My worry is that because the loan is through the U.S. Department of Education and from what I know about student loans they don’t have the same rules as other loans that nothing is going to happen. So if the rules are different for student loans do they bare the same responsibility to the Truth in Lending Act? I guess I’ll be doing some research this week.

This is a question we all ask when planning educational events. Though its common knowledge there is a huge need for financial education usually the people who need the information are not going to seek it out. One of the struggles many of our partners who serve adults face is getting people to attend their events. Financial Beginnings is fortunate we don’t need to recruit our audience because our classes are in the in schools or community groups where are audience is already gathered. They are stuck hearing form us if they want to or not.

Last week was Money Smart Week in Oregon. Financial Beginnings and Operation HOPE decided that we wanted to expend our efforts beyond our youth in school programs during Money Smart Week. I have always wanted to have an open forum for adults to be able to ask their questions regarding personal finance. With laws and industry norms changing so frequently in addition to money always being viewed as a taboo subject I thought people have a forum to where they can ask questions would be wonderful. Money Smart Week gave me the push I needed to finally organize one of these forums and we named it Unraveling the Mysteries of Your Money. You’d be surprised how long it took us to come up with the name.

At Portland State University we brought together experts within the financial industry including; Jim Hunt from OnPoint Community Credit Union, Michael Parker from the Oregon College Saving Plan, Nelson Rutherford from Alten, Sakai & Co, and Diane Childs and Fernando Velez from the Oregon Division of Finance and Corporate Securities. The moderator of the panel was Brent Hunsberger, It’s Only Money columnist for the Oregonian Newspaper. Brent’s diverse knowledge in personal finance combined with his reputation in the community really helped to bring exposure and credibility to this event. You would think that with this great group this would have been the hard part of my task, but this was easy.

The hard part was the promotion and getting people to come to the event. I hear it time and time again from event organizers that it is so hard to get people to come. Having the event be free may even make it more difficult in some respects because of the perceived value. If people pay for attendance to an event they may tie a higher value to it and may be more likely to attend.

As of the three days before the event we had less than 10 people registered to attend. My anxiety level was high and I was so worried I was going to waste the panel’s time because nobody would show up. So we marketed it hard. All of the panel members helped to promote the event. Brent wrote about it in the paper and Nick Allard from KGW brought us on the bricks to promote it. We ramped up our social media and contacted all of the business professors at Portland State.

The registrations started flooding in, we maxed out the registration. We even added more seats because our experience has shown that usually only 2/3 of those that register end up attending free events. Our predictions were correct and we ended up with about 2/3 of those who registered attending.

I was so pleasantly surprised by the diversity of the crowd and their eagerness to hear from the panel. We had several planned questions in case the audience did not have questions right away, but Brent was only able to get one of the planned questions out and the audience took over from there. I saw several individuals in the crowd filling out multiple pages of notes. When time ran out several audience members flocked the panel for additional questions. It was like they were rock stars.

Aspects I see attributing to the success of the event:
• Having Brent Hunsberger of the Oregonian as the moderator added a lot of credibility to the event and his writing about it gave the event more exposure.
• Holding the event at Portland State University also added credibility to the and highlighted the educational component of the event.
• The panel was made up of high level and respected individuals.
• The varied marketing proved to be successful based on a pole of those attending reporting how they heard about the event.

We will definitely hold the event again next year during Money Smart Week. We have created a great foundation for the event and will be able to build upon this more next year.

Turns out my poor tax planning hurt me more than I had expected.  On Friday we went to pick up our returns in the best of moods because we assumed we would be getting a couple of thousand returned to us.  We were already starting to plan the vacation we would take with the money we got back.  Well….turns out we owe a couple of thousand.  Both of us were dumbfounded when the tax preparer told us.

How could this be?

• Getting married hurt us- In 2009 I was able to file head of household and deduct more.
• Not owning a home- In 2010 we rented our home so we did not have home mortgage interest that we could deduct which both of us had in previous years.
• 401k rollover- I rolled over a 401k from a previous job into my Roth IRA.  It was only about $6000, but that’s $6000 that I now needed to pay taxes on.
• Charitable contributions- We did a poor job keeping track of our charitable contributions.  We both volunteer a lot outside of our nonprofit jobs and we could have deducted mileage and other expenses that we incur when volunteering.  We also donated several loads of items to Goodwill, but never collected the receipts.  You’d be surprised by how much you can deduct when you itemize these donations.
• Rental expenses- Though we do a good job of keeping track of the direct costs we put into repairs on the homes we rent out, we did not track the mileage for driving to and from the homes and smaller costs like paint brushes or cleaning supplies.

Though I know we were new clients and we came to the firm towards the end of the season I also felt that our return was rushed.  If it had been brought to our attention that we were going to owe we could have worked to gather more of the documentations some of the charitable contributions or rental expenses.  Also, we hosted an exchange student and were surprised when I asked what our deduction for that was and she said nothing.  I came home and researched it and found that in there in fact was a deduction of at least $50 a month we could have taken.

So do I gather more information and pay them to restate it?

Last Friday I had my annual tax preparation appointment which meant we had to have all of our tax information gathered before the 2pm Friday appointment.  I have never had such a hard time gathering my taxes before!

I imagine that based on my work in the financial education sector you would expect me to be fully prepared for my taxes.  You might even think I’d do my own.  Well, this year that was far from the truth.  I stopped doing my own taxes several years ago when I decided the hours I spent and the unease of knowing if I was actually doing them correctly was not worth it and sought out a tax professional.  I did what most of us do, asked around and got a referral.  I blindly took the referral and brought him all of my financial information.  I didn’t interview him or even question if he was right for me because I really didn’t know how to figure that out.

I wasn’t highly impressed by my CPA’s abilities since there were a couple of occasions where he made mistakes on my rental homes, but he always fixed the mistakes and it never financial affected me so I kept using him.  I used him until the year of my divorce.  You know how you get the packet from you tax preparer for you to fill out before they complete you taxes?  Well, due to the stress of going through a divorce I decided for the first time in my life to file for an extension.  A few months later when things calmed down I finally got around to opening the tax packet only to find a very sad letter informing me that my CPA had passed away.  Boy did I feel stupid for not opening the packet sooner.  I continued to use someone else at the firm until this year after I got remarried.

My husband utilized a firm down in California to do his taxes and I didn’t really have a connection or was really impressed by the firm doing my taxes so we decided to find a new CPA.  Once again we asked around for a referral and took the recommendation of our financial advisor.  And once again I had no idea what to ask or what would indicate if this person was right for us.  I just handed over the financials, expect that I’ll get my returns and bill in a couple of weeks and then do the same thing again year after year.

It wasn’t until yesterday when I was talking with a supporter of Financial Beginnings, Nelson Rutherford from Alten, Sakai & Co, that I realized I really have been going about this all wrong. He is joining us as our tax and financial planning expert at our panel discussion, Unraveling the Mysteries of Your Money, this week and we were discussing some talking points.  He told me how so many consumers wait until the last minute, throw everything together and take it to any CPA that will take them, but they forget one key aspect.  PLANNING!

Now I did not admit to Nelson that I was one of those people and quite honestly always have been.  You might be wondering why I didn’t go to Nelson since I know him and think highly enough to consider him an “expert” for my panel.  I felt like it was mixing business and personal too much.  Though I don’t imagine him seeing my nonprofit salary would scare him away from continuing to be a donor.  I did however refer my grandmother to Nelson.  She too had gone to the same tax preparer for 30 years and every year complained how she made mistakes, but never did anything about it until the tax preparer retired this year.

So I’m taking a new approach for the future!  I’m going to try out this whole planning thing that Nelson was talking about.  More to come on how I’ll go about it.

While I was moving into my new home I found a box with some of old notebooks from about 10 years ago which I used to keep track of my finances in. It was an eye opener for me how differently I managed my money then. I used to spend hours planning out money for the coming months, writing down each paycheck and the bills that would be paid out of it, logging my loans and deducting the principle each time I made a payment, and hand writing out my budget.

In addition to the notebook I would also enter every transaction into Microsoft Money, categorize it appropriately and carefully watch how I was tracking to my budget during the month. This made it incredibly easy for me to do my taxes at the end of the year or identify areas that I could cut back on to create more funds in my budget. It was Microsoft Money that informed me that I was spending $80 a month at the coffee cart by my house and that I should kick my coffee habit.

It made me think how my money management has changed over the years. I no longer keep a notebook or use Microsoft Money. Being recently married we still are working to find the groove in how to handle our money and we’ve been able to create some processes and find some tools that have really helped us. Still, I am realizing that possibly due to having time and a larger comfort level in what I’m doing I am not spending the time and keeping the same level of details I did 10 years ago. Since I’m one of those that really enjoys working out my budget and scrutinizing over where each penny I spend goes I wonder if I should maybe revert back to my old ways a bit?