What happens if a credit card balance goes unpaid? If you aren’t receiving collection calls, does it mean the debt is no longer a problem?
All states have statute of limitation laws setting a time when a debt can no longer be collected. Credit card debt is considered open account debt because the lender has the option to change the terms of the agreement at any time. Iowa law states open account balances can no longer be collected after 5 years from the last charge, payment, or admission of ownership of the debt in writing.
Once the original lender has exhausted their attempts to collect and elects to discharge the balance, the debt is sold to collection agencies. Timelines vary for when an account is sold, typically at 180 days. Collection agencies will contact you and attempt to collect a settlement. If the agency is unsuccessful they may bundle the uncollected debts and sell it again to a different agency. Attempts to collect your debt can occur at any time in the five year period and can result in court action. If the debt results in a court judgement to pay, it is valid for 20 years. Iowa allows actions to be taken to renew judgements extending the time when active collection can take place.
Ignoring unpaid debt won’t make it go away. Resources that may help are available through the Iowa Attorney General’s office, the Consumer Finance Protection Bureau, the National Consumer Law Center, and local attorneys.
I just completed a pilot series online for a financial class called Small Change. How many of you pick up coins off the ground or from pockets in the laundry? With each dime or quarter, money starts to add up! Starting with small change can pay off a small debt or help you save for one of your goals like a vacation, a down payment for a vehicle or your child’s higher education.
These small coins can make a big difference. Twelve years ago my friends found out their daughter-in-law was expecting twins and during the six months, they saved their coins from purchases and emptied out their pockets: they were able to buy a piece of furniture – a dresser -for the grandsons.
I have participated in a group where part of our fund raising for scholarships is to save the coins. We each have a nifty little box with a lid to transport our coins. During a month’s time, the treasurer collects between $50-$60 dollars. When an I-Pass, (prepaid electronic toll collection system) was needed because of daily travel on the tollway, my coin collection started to flourish. When I moved to Iowa, I am in a community that has parking meters where I now use many a quarter.
What are you doing with your small change?
In Iowa, this coming Friday and Saturday (Aug 3-4 2018) offers a chance to buy qualifying clothing items without paying any sales tax. For most Iowans, (depending on local sales tax), that’s a savings of 7% — not a huge windfall, but still an advantage. That savings is magnified by the many retailers who offer clothing sales on the same weekend.
Sounds like a winning proposition, right? It can be. But like anything else, it requires consumers to use good judgment! Why?
Well, if you’re like me, you’ve had experience with the risks involved in shopping simply because there’s a sale. Who among us hasn’t made a purchase because it was such a “great deal” and then never (or rarely) used it? Hopefully we learn from those experiences, but it always pays to exercise caution when shopping sales. Here are some ideas to help us avoid regrets:
- Have a list and prioritize.
- Plan a dollar limit that lets you fit your purchases into your budget without borrowing. When purchases are paid off over months of credit card payments, the benefit of the sale price quickly disappears.
- Know what the “regular” prices are, and consider whether items will be on a bigger sale later in the fall. In other words, ask yourself “Are they just giving a small discount to tempt me to buy now rather than waiting for later when bigger discounts will be offered?”
- Keep all receipts. If you pick something up and later decide it wasn’t that important or that great of a bargain, you’ll simply be able to return it! Be sure to have the self-discipline to follow through on that… it may be “only” $10 or $20, but that adds up over time.
- If you are buying for people other than yourself (especially growing children) check out their current clothing stock before you make your list — find out what fits and what doesn’t. This will help you make sure that the items on your list are the most important items.
Iowa’s Sales Tax Holiday applies to most clothing and footwear items priced below $100. Most accessories are not exempt (such as jewelry or watches), but some items do qualify for the exemption (such as scarves). Certain specialty clothing items, such as clothing specific to a particular sport, are excluded as well. For a full list of items that are taxable vs. exempt, go to https://tax.iowa.gov/iowas-annual-sales-tax-holiday.
Happy shopping! Good planning means no regrets!
Many of Iowa’s County Extension Districts are celebrating their 100-year anniversary this year. Wayne County, where my office is located, is one of them. Starting in January a team of county staff have developed plans for a special day.
Lending a hand with the effort has raised my awareness of how fortunate you can be when someone at work or in your family takes on the responsibility to preserve history. Staff at the office have had some fun “aha” moments sorting through papers, pictures, annual reports, and other archived materials. It has also exposed flaws and errors.
Glue, is definitely an enemy to pictures and paper. So is lack of duplication. At one point, the files containing 50 and 75-year histories were misplaced, much to the consternation of a former employee who had invested sweat equity putting them together.
Guidance for doing a better job can be found at the National Archives:
- Use a 3-2-1 back-up plan. Make three copies, use two different forms of media, and store one copy off site.
- Metadata to record includes Who, What, Where, and When.
- Use picture mounting tabs and plastics that are stable – polyester, polypropylene or polyethylene.
- When a very important paper needs restored, find a Conservator.
As landmark celebrations end or you finish family reunions, time improving maintenance of special papers, pictures, and history would be a nice gesture for the future.
I recently participated in a meal prep event where a dozen women met at a local grocery store to make and take meals ready to cook. We came with empty coolers and each left with coolers filled with 12 meals in Ziploc bags and a copy of the recipe and cooking instructions. Each meal would serve 4 to 6 people. Each of the 12 women would assemble twelve of one meal. When everyone was done dumping all the ingredients for their meal, into a large gallon Ziploc, we walked around the room and grabbed one bag of each meal. Some of the meals were meant to be grilled; others were ready for the crockpot. These meals were healthy with lots of flavor. And…it was a fun social evening for us.
At first, I felt the per-serving cost was a little pricey. But, if you consider all the ingredients AND all the left overs of each ingredient I would have had to store (or toss because I didn’t use them) it wasn’t bad. For example, I paid for only the 1 cup of rice that was needed for the recipe…not the other 3 cups in the bag. The same is true for all the herbs and seasonings.
I recently helped a Veteran who was blind, figure out ways to stretch his budget. We talked about his struggle to shop and cook. He took advantage of the Meals On Wheels for one meal a day during the week; but what about the other meals of the week?
After a little research, I found that in Iowa, there are several businesses that prepare and delivers refrigerated meal. Naomi’s Kitchen, Mom’s Meals and Sisters Entrees are just a few.
A thought did cross my mind…what if I and a dozen of my friends volunteered our time to assemble meals for him. It would be a fun and he would benefit greatly. If we made only crockpot meals, it would make meal prep easy for him…just dump it a crockpot, and put it on high for 2 hours.
What other inexpensive ideas or options do you have access to for easy meal prep for individuals that have physical challenges in the kitchen?
Some messages are very direct. For example, many parents have a rule against cellphones at the dinner table. The message is clear, and everyone follows the rule. On the other hand, if your parents say they do not want cellphones at the dinner table but they break the rule themselves, this sends a confusing message.
When it comes to money management, children learn through direct teaching from their parents and teachers. They also learn by watching. They see how their parents and guardians manage money. They see how their friends and friends’ families spend money. They receive messages from TV, movies, advertisements and many other sources.
Hidden or mixed messages about money in childhood can turn into adult habits.
- If your parents encouraged you to save money, but your actual experiences in childhood convinced you that saving money was impossible because you are just “not a saver,” then the saving message from your parents didn’t hit its mark. When parents want to teach children to save, it is wise to go beyond verbal encouragement; ideally, they create situations in which children are successful in saving to reach short or longer-term goals.
- As an adult, if you look at your actions and wonder why you are unable to reach your goals, it may be worthwhile to think back to your childhood and teen years. Perhaps you’ll find that when you were a teen, spending money was a way for you to rebel, or a way to find comfort. Those long-ago subconscious motives may have created habits that still haunt you as an adult, causing you to sabotage your own financial goals.
Understand your habits and values and their hidden meanings.
I read an article last week in the popular press (based on a legitimate research brief) that offered encouragement for those who are worried they haven’t saved enough for retirement. The research project demonstrated that if you delay retirement 3-6 months, it provides the same benefit as if you had saved an additional 1% of your income for 30 years.
If you are: a) wishing you could save more, but really can’t; or b) wishing you could go back in time and start saving more, sooner, this research is encouraging because it says you can partly make up for a savings shortfall by delaying your retirement date. To be clear, delaying a few months doesn’t “magically” double the balance in your 401(k) or IRA account. The delay affects your retirement income security in several ways:
- It means additional months of contributions to your retirement account.
- It gives your money more time to grow.
- It reduces the number of months you’ll need to support yourself in retirement.
- Delaying Social Security benefits beyond full retirement age results in a larger monthly benefit. (under current law).
The fourth benefit accounts for most of the mathematical advantage of delaying retirement, but all four factors contribute. The first two actually DO increase the size of your nest egg; the third one means your money doesn’t need to be stretched so thin.
Wherever you are in your pre-retirement saving journey, it always pays to save more starting now if you can. But even a modest delay of retirement can provide a retirement lifestyle as if you’d saved more all along.
Geocaching is an electronic treasure hunt. It is a great low-cost activity, and can be fun year-round. It is easy to catch on to and there are caches all over – literally around the world (2 million to be exact).
To get started set up a free account at geocaching.com, then download the free app to your smartphone or purchase a GPS unit. Search near you for a cache, use your app or plug the coordinates into the GPS to start hunting.
Many geocaches are found in safe places like rest areas, parks and cemeteries or near landmarks. What you will find may be very small like a pill fob OR it may be larger, like an ammo box. Some will be harder to find than others but they are never buried. Inside will be a log to sign. There may also be “swag” like geodes, stickers, patches, pins, marbles, key chains, lanyards, and geocoins.
- Dress appropriately.
- Let someone know where you are going or enjoy navigating with someone else – perhaps a child or grandchild.
- The caches are secret so don’t let passersby know what you are doing.
- If you take something, you should leave something of equal or greater value.
- Always return the cache to its hiding place.
- Bring your own pen to sign the log, then enter your find at https://www.geocaching.com.
Discover what is hiding near you today! How many will you find?
Written by Sandra McKinnon, Human Sciences Extension and Outreach family finance specialist and geocacher since 2009
(Photo by Christopher Gannon/Iowa State University)
Many students recently marked a big milestone by graduating from school. Looking back, what words of wisdom regarding personal finance would you like to have received when you left high school?
Personal finance does not have to be boring! The National Endowment Financial Education – www.nefe.org has a couple resources to help your graduate be an independent young adult.
On Your Own –is a blog with a range from credit score calculated, making better money decisions, and the pros and cons of college? This is a trustworthy site.
Another option is Smart About Money (SAM) is an in-depth, guided learning experience. There are five sections with valuable tools, worksheets, calculators and quizzes. Each course is about 45 minutes.
Cash Course targets college students. Some colleges and universities offer it especially for their students, but any student can enroll independently. It’s free, with no strings attached, but you do need to create a user account.
Forty Money Management Tips Every College Student Should Know – this Cash Course resource helps young people learn how to take control of their money instead of letting their money control them.
Several years ago I wrote a MoneyTip$ post extolling the virtues of dry milk. Since June is Dairy Month, it occurred to me that now would be a good time to revisit that topic, because things have changed. Dry milk is no longer the same bargain that it used to be. I’m sure this varies regionally, but where I live I can no longer buy the bargain-sized (20-quart) box of dry milk, and the store-brand liquid milk is so inexpensive that it’s usually a cheaper product per quart compared to dry milk.
Why is this blog-worthy? Two reasons:
- It’s a valuable reminder to re-examine your consumer habits periodically. I resisted giving up dry milk — it was a habit ingrained from childhood, built in to how I work in the kitchen. I kept buying it for a while even after I realized it was no longer the cheapest deal.
- It’s also a reminder that cost is not the only consideration when shopping. After being without dry milk for several weeks, I realized it was a product I still wanted in my pantry, for several reasons.
I’m back to using dry milk, though not as much as before; these days, if I’m making pudding or pancakes I’ll probably use liquid milk, unless my supply is running low. I still use dry milk though, for more reasons than I could possibly include here; I’ll list a few to give you a general idea:
- I can add milk nutrients without adding liquid. By adding extra dry milk to casseroles, meat loaf, soups, baked goods, and mashed potatoes, I can boost my intake of calcium and other key nutrients without making my product too runny.
- It doesn’t need to be stored in the refrigerator. At holidays or with company, frig space is at a premium; by using dry milk for cooking, I can make extra space for refrigerated foods – after all, an extra gallon of milk takes a lot of space!
- If you make yeast bread (I know not many people do), using dry milk means you don’t need to “scald” milk before adding it to the bread dough. (Scalding deactivates an enzyme that interferes with yeast action – with dry milk that enzyme is already gone).
The main reason for this post is not to let you in on all my kitchen habits, even though that is fun to talk about. The main reason was to share one story of how things that are true at one time may not stay true indefinitely. This applies to specific products we buy, and it also applies to questions like how high should an insurance deductible be, or how much to keep in a savings account.
What habits, beliefs or assumptions affect your consumer decisions? When is the last time you revisited them to make sure they were still on target?