The Future of Credit Scoring

Click image to see a clip from my appearance on ABC News discussing “secret” credit scores you need to know!

The Future of Credit Scoring

Did you know that there are competitors emerging to the FICO score? Click on this image to learn more.

3 Steps to Back-to-School Clothes Shopping on a Dime

Found on the Racks of Crossroads Trading Co., July 11 in Sacramento: "Anchor Blue" shirt: $10.50; "BDG" shorts, $11.50; Herringbone hat, $8.50; Nike Dunks shoes, $26.50.

Unless your child attends a private or parochial school with mandatory uniforms, you’re probably clothes shopping right about now to find new outfits for the kids to wear this school season.

Discount stores such as Target and Wal-Mart are a good place to head, however, consignment and resale shops are even better if you’re looking to save a buck. Here’s how to get the most for your money in three easy steps.

1. Get Rid of the Old. If your children are need of new clothes this Fall, that could be in part because they outgrew last year’s clothes. Raid your child’s closet to find those items that are too small, but don’t contain tears or several missing buttons or broken zippers. The same goes for shoes. Pile as many of these items into bags and boxes as you can.

This "Moth" sweater was priced at $13.50 on Aug. 6 at the Crossroads Trading Co resale shop in Chicago's Lincoln Park

2. Find a resale shop near you. Whether it’s a consignment or exchange shop, look for a store near you that sells and buys gently used clothing. These places will determine the resale value of the items you just pulled from your closets and storage and will offer you a percentage of that value in cash or as store credit in exchange for your items. Some shops with locations nationwide include Buffalo Exchange, Plato’s Closet, Once Upon a Child, or Crossroads Trading Co.

3. Purchase Gently-Used Items. With the cash you earned from your trade-ins, purchase stylish clothes that fit from these same shops. Some, like Plato’s Closet and Crossroads, carry a lot of name brand items.

Involving children in the resale shopping experience teaches them about the importance of budgeting.

Tip: Involve your child in the process. Whether it is a young school-ager or a teenager, have your child help select items to sell. Set a shopping budget based on the money they receive from the store, supplemented by a few dollars from their allowance or money you paid them for participating. Let them go shopping within this budget. You’re not only teaching them a valuable lesson, but quickly you’ll see how unimportant certain items become when they have to spend their own cash.

Back-to-School Season Sees Cautious Spenders

Americans are expected to spend $47.50 billion to send kids K-12 and college-bound back-to-school equipped with essentials, gadgets and clothing.

The Back-to-School shopping season is underway. Americans are expected to spend $47.50 billion to send kids K-12 and college-bound back-to-school equipped with essentials, gadgets and clothing.

The average family with students in grades Kindergarten through 12 is expected to spend $548.72 on school merchandise, a decline of 7.7 percent from $594.24 in 2008, according to the National Retail Federation.

The economy is having a major impact on back-to-school spending. Four out of five Americans (85%) have made some changes to their back-to-school plans this year as a result, according to a consumer survey released by the National Retail Federation.

Some of those changes impact spending:

• 56.2 percent of back-to-school shoppers are hunting for sales more often
• 49.6 percent are planning to spend less overall
• 41.7 percent purchase more store brand/generic products
• 40.0 percent are planning to increase their use of coupons.

In looking for deals, Americans are heading mostly to discount stores and drug stores.

• 74.5% are shopping discount stores
• 54.4% are shopping drug stores
• 41.2% are shopping office supply stores
• 22.2% are shopping online
• 18.2% are shopping a thrift store

Although 18 percent is a fairly good number for those who are more budget-conscious, I do believe there are more deals to be had of quality merchandise at thrift stores than many people realize.

But whether it’s a thrift store deal or not, for the next two weeks I will post several articles about back-to-school shopping and saving. So check back next week for tips for the K-12 children or college bound.

4 Tips for Avoiding Airline Baggage Fees

Airlines seem to be going ala carte. They are charging passengers for every bag they check, if they exceed the 40 lb or 50 lb weight limit, or bulge beyond the 40 linear inches allowed. Some are even charging extra if you check a bag at the gate.

If you learn to pack lighter when you fly, you’ll be able to save money in more ways than one. For example, if you travel with just one carry-on, you will not have to worry about tipping a bell hop for carrying your bags or holding them in storage after you check out. You will be more free to take a bus or train to and from the airport rather than the more expensive taxi or shuttle service.

Here are 4 tips on how to avoid airline baggage fees:

1. Use small, light luggage. Pack everything in one bag that is at or less than 40 linear feet (width + height + length). Most airlines limit carry-on sizes to 40 linear feet. If you choose a bag at this size be aware, however, that if you over stuff the external pockets by even an inch, your bag can be sent to the belly of the plane, with a charge to you.
2. Weigh your bags. Airlines will also charge you extra if your bag is too heavy. Check on the weight limits for your airline and before you head to the airport make sure you stay within the guidelines, which is typically a 40- or 50-pound limit for most airlines.You can try setting a bag on a bathroom scale, or hold it in your arms while you step on, and then weigh yourself again without the bag. The difference is numbers is the weight of the bag. If you don’t trust your bathroom scale, there are portable scales available just for this purpose. You can find such scales at travelonbags.com, magellans.com).
3. Board early. It is quite frustrating to have all of your belongings squeezed into the possible smallest bag so that you can avoid chcking luggage, only to board the plane and learn that the groups that boarded ahead of you used up all of the available overhead compartments and there is no space there for your bag. You then turn to slide the bag under the seat at your feet, but it just won’t fit. Feel the panic as the airline attendant approaches you and says, “Sorry, it seems we’re going to have to check your bag because there just isn’t any more room.”
   The easiest way to avoid the “cabin’s too full” issue, is to be among the first to board. Some airlines determine your boarding order by how early you confirm your flight. If you confirm your flight online within seconds of the time the airline says you may do so online, you’re apt to be one of the first for your boarding section. So, often the key to getting on board early is to reserve your seat online, and confirm your seat online as early as you can, and then arrive to the gate early enough so that you’re able to be first in line for your section.
4. Choose the dreaded middle seat. Most people prefer window or aisle, but when it comes to assuring you make it on with your luggage in hand, choose the middle. Middle seats have more under-the-seat storage. Window seat under-seat floor space is smaller because the sides of the planes are curved, and the aisle seats are smaller because over the years aisles have been made larger. So just in case all the overhead bins are taken by time you board, you’ll be assured enough space under the seat for a medium bag if you seat in the middle.

Couch Crashing is a Money Saver for Travelers

 

Couch Crasher: Getting accommodations on someone's couch is a very low-cost alternative to a hotel stay.

Hotel costs can be the biggest expense of any trip, even trumping airfare based on the length of your trip.  One way to eliminate the hotel is to sleep on the couch of a friend or even distant relative.  But what if you don’t have a couch connection in the town on your vacation list?  Make one.  

Sites such as couchsurfing.com are connecting hosts with travelers for a cheap to no-cost alternative to hotels. You simply sleep on the couch of willing hosts, for free. All most hosts expect in return is a gift from your home town or a treat to dinner, and of course respect for their home (i.e. cleanup after yourself).

Couchsurfing.com verifies its members and home addresses through credit card verification and members rate each other and vouch for their credibility. If someone had a bad experience with a host or visitor, you’ll see it posted online, which takes some of the worry out of what type of host you’re getting. Simply opt for those with positive comments and high ratings.

Here are a few sites to consider when you’re looking for a host for international travel, or even within the U.S.:

• couchsurfing.com A popular site that aims to “create deep and meaningful connections that cross oceans, continents and cultures.” Members post their photos and a little something about themselves and their home or travels. You can browse member entries without becoming a member.
• www.globalfreeloaders.com Is an Australian-based hospitality network connecting people worldwide.  You have to become a member before you can the details on hosts. Free membership is renewable in 12-month blocks.
• hospitalityclub.org Is one of the first to offer this service on the Web.  Each member fills out details on a web form that other members may view. Sample pages are available for viewing before you join. Duration of stay and specifics (such as how food will be shared or not) are set out before your arrival.
• stay4free.com A global “free accommodation network” based in Holland allows options that lets members swap their entire home with someone else in another location, or you can opt to just be a guest or just be a host.

Disclaimer: I cannot vouch for the members on any of these sites. For the adventurous who would like a real-town experience versus just a tourist view, I think it’s a great alternative to a hotel stay. However, I still urge you to use your own best judgment before accepting accommodations from someone you don’t know.

Airfare: How Getting Bumped Saves You Money

Watching your flight take off without you because you were just bumped isn't all bad: With the right negotiating skills you can walk away with free travel.

Have you ever been at the airport waiting for your flight to board when the attendants announced that their are too many passengers booked and some will have to wait for another flight? Well, “getting bumped” to another flight may seem like a bummer, but it is a great way to save on airfare — minus the inconvenience.

Getting bumped happens because airlines allow overbooking for flights, counting on no shows so that they can still take off at full, or near-full capacity. However, if more passengers check-in than they had anticipated, the airline has to ask if their are any volunteers to wait for the next available flight. If there are not enough volunteers, then they will start bumping passengers themselves.

Freebies for being bumped
Here are some things passengers have been offered:

• free meal if the wait for the next flight or a delay is 2 hours or more
• a free hotel stay that night if the next available flight is for the next day
• admission to the VIP club
• discounted airfare for your next trip
• travel voucher giving you a free flight (note, this doesn’t always cover round-trip, so be prepared to purchase your one-way ticket back)
• a discount or refund on your current flight

The latter is particularly a good deal for passengers who do not fly that frequently or have a low likelihood of using that same airline for their next travels if they’re headed to a location the airline doesn’t cover. Also, some of the coupons or travel vouchers have expiration dates. If you don’t use them in time, it’s as if you were never compensated for your inconvenience.

Volunteer to be bumped
A way to save money on your flight and to negotiate better terms is to volunteer to be bumped. Here’s how to do it:

Call the airline the morning of your flight or the night before if it leaves early in the a.m. Ask the airline if the flight is overbooked. If they say yes, arrive at the terminal 90 minutes to 2 hours early for domestic flights and tell the ticket clerk that you are willing to be bumped should the need arise. Volunteers are taking in the order they volunteer, so that earlier you arrive at the airport the better your chances. You still can ask to be put on the volunteer list if you arrive later, but your chances of getting bumped decreases.

You can always back out from the list when the time comes and their airlines are not offering you the best freebie deal. Only take the bump if you’re happy with what you’re being offered. Also, only take the bump if your time is flexible. If you have a connecting flight or are trying to make it to a boat launch for a cruise, you’ll probably be better off if you hold on to your seat.

3 Smart Tips for Wallet-Friendly Vacations: What to Do

Regardless of your finances, it never hurts to spend time during your vacation doing low-cost and free activities, or finding other ways to cutback. To learn how to save money while still enjoying your vacation, read below my “What to Do” tips. For other tips, click these links to read “Where to Go” and “Where to Stay.”

What to Do
Regardless of where you go on your vacation, you can also cut costs by what you choose to do while taking time away from home. The more time you spend doing free or low-cost activities, the less time you have to shop or do more expensive activities. Here are just a few ideas:

Biking, hiking, camping, or just taking time to stop at scenic overlooks are great low-cost ways to spend part of your wallet-friendly vacation.

Go Biking: In most cities there are parks, hotels or lake front shops that do bike rentals fairly cheap (or bring your own), allowing you to do a self-guided pedal tour around town, or simply take in the scenery.

View the scenic overlooks: If you’re driving to your destination, allow time to stop at many of the scenic overlooks or historical markers off the Interstate. Too often we drive past these as we’re in a hurry to get to where we’re going, but the views are often a nice no-cost pause to our day.

Take a hike: You don’t have to climb a mountain with granola in your knapsack to enjoy a nice hike. Take a walk through a forest reserve or nature preserve, or along a wooded trail. There’s one in almost every area and if you walk right in, your cost is often free.

Spend a night camping

Pitch a tent: Spend one night of your trip camping outdoors instead of in a hotel and shave $100 or more off your vacation. Even if you’re not a camper, one night under the stars is a nice break from the hustle and bustle. If you don’t want to pitch a tent and sleep in a bag, if the space in your mini-van or SUV allows, just let the seats back for a night, and relax. Bring pillows and a blanket to add to your comfort. You’ll enjoy watching the sun rise after your night of rest.

Looking for a low-cost vacation? Take a trip to the beach. (Photo courtesy of Joaquim Alves Gaspar)

Hit the beach: Feeling the soft sand between your toes, listening to the sounds of the waves crashing and the seagulls cawing can be relaxing and inexpensive, when you choose a public beach instead of a private resort.

3 Smart Tips for Wallet-Friendly Vacations: Where to Stay

Looking for ways to save money on your summer vacation? I have three wallet-friendly tips for you on where to go, where to stay and what to do. Today I present “Where to Stay”:

Save on cab rides by having a shorter stay at a nicer hotel closer to the center of activities than a longer stay at a less expensive hotel farther away. You'll also feel more rested.

Where to Stay
If your dream vacation spot seems out of your reach because it is a bit on the pricey side, don’t let that deter you. Sure some people opt to stay at hotels farther away from the beach or center of attraction in order to save money while still hitting their desired location. However, sometimes that option zaps the fun right out of the trip because the schlepping back and forth is tiring you out, or you can’t take a quick refresher in your hotel room so easily. Or, it actually eats up more money than you realize because, say, you forgot your sunglasses back in your hotel room, or the evening became chillier than you thought and you wish you had brought along long sleeves. So, instead of making a trip back to the room, you opt to buy a new pair of sunglasses or a sweater, or you hop in a cab to get make the round trip to your room and back to the festivities more quickly. You don’t want that hassle, so just get a room with a view closer to the activities.

I know some of you may be thinking: “But how can I do that, I can’t afford that, Lynnette.” Well, I’ll tell you how.

Tip: Shorten your trip so you can afford a better hotel. To solve the hotel-stay dilemma, instead of a 7- or 10-night stay at a subpar hotel a distance from the festivities, opt for a 3-day or 5-day vacation in the center of it all. After 3 days relaxing nearby everything, you’ll probably feel more relaxed than you would after 7 days with a lot schlepping back and forth to your room.

3 Smart Tips for Wallet-Friendly Vacations: Where to Go

Whether you’re wanting to take your first trip, second or third this summer, you do not have to let low funds get in the way of your taking a good, fun summer vacation. Although the often-hyped “staycation” is a great way to enjoy a vacation without necessarily spending so much since you’re staying close to home, there are other ways to take a low-cost vacation and still get away. Over the next few days I will post 3 tips for a wallet-friendly vacation if you need to know where to go, where to stay and what to do. Let’s start with “Where to Go“:

Being flexible in your vacation destinations and departure dates will allow you to take advantage of discount deals.

Where to Go
You’re dreaming of a European vacation, or perhaps an island cruise, or backpacking through the wilderness, but the airfare to your preferred destination is a bit steep for your pocketbook. You juggle the dates, hoping to find a better deal, but you’re just not finding one good enough in the narrow window that you have to take the vacation. You’re frustrated and thinking of canceling an away-vacation this year until you can save more money. Well, there are actually other options. Here’s one:

Tip: Be flexible with your location. Instead of letting the destination decide your trip by locking yourself into that dream locale, let the airfare be your guide. Know what it really is you want from the vacation. Is it the hike up a mountain, snorkeling along a coral reef, or enjoying the sea breeze and deck games on a cruise? Once you know, look for discount airfares and hotel rates to destinations that will give you those experiences.

You can check for last-minute deals directly at airline websites, through places such as:

• Priceline,
• kayak.com,
• vacationstogo.com,
• smartertravel.com or
• Airfarewatchdog.com

The latter recently listed round-trip flights from Chicago to Rio de Janeiro for $487 roundtrip, Atlanta to Honolulu for $276 roundtrip, and Phoenix to the Bahamas for $219 roundtrip.

Also, check Travelocity’s Low Fare Finder by clicking “my dates are flexible.” It’s a good way to check for lower prices between two cities if you don’t have firm travel dates.

Online Appraisals: Are They Accurate?

Zillow.com and its competitors offer readers recent sales history and market value estimates. The estimates can vary widely and are not the best way to determine a list price or at what price to make an offer on a home for sale.

The popular Zillow.com and Trulia.com and a slew of other websites, have emerged over the years to reveal sale history of a given home, median averages for the neighborhood, to week-by-week price appreciation, or depreciation. These are fun sites for tracking sales history, but do not rely on the estimates from these sites to determine what you should list a home for or your starting point for an offer. One any given day, their numbers can fluctuate widely from each other, or even from themselves. One site, realestate.com, changed its estimate on one home three times in 5 hours!

A quarter million dollar range of $300,400 to $552,210 was found from the lowest to the highest estimate of a friend’s home, a 5 bedroom, 4 bath home in a Minneapolis suburb, that is currently on the market for $425,000 and last appraised by a certified appraiser in October 2008 for $450,000. Below are the median estimates for this home from four sites.

• Zillow.com – $492,000
• Cyberhomes.com – $417,287
• Realestate.com -$$375,500
• Eppraisal.com – $409,153

As you can see, the estimates vary quite a bit and wouldn’t be reliable enough to inform you as to what price you should make an offer. That’s where your agent can help you!

Your First Home: The Smart Way to Get It and Keep It

For more real estate tips see my book “Your First Home: The Smart Way to Get It and Keep It.