Do you know someone that’s a “yes” person? Someone that’s always saying yes to other people until they are completely exhausted? Most likely, if you’re reading this, that person is you. On the other hand have you ever known someone that’s a “no” person and everyone around them is afraid to ask for anything. In life it’s probably best to have a happy medium in this area and give what you can (when you can) and say no before you hit your breaking point. Saying yes to someone feels good and saying no feels bad. This behavior is wired deep into our brains and we hate telling anyone no. But what about personal finances? Well, we’ve been trained as consumers to say yes to everything. Would you like a mortgage? Yes, please. Student debt? Don’t mind if I do. New car? Absolutely. Consumer debt? Oh yeah. Shinny new iGizmo? Heck yes! Popular culture hates people that say no to all these financial traps. People that say no are labeled misers, penny pinchers, tightwads, and usually considered crazy to some degree. When everyone is drinking the kool-aid it’s easy to make fun of people that don’t have a goofy kool-aid mustache. But we know better. Being laughed at by people with dysfunctional brain wiring doesn’t seem so bad, especially in the long run.

Saying no takes courage and vision. Living in a house you can afford and driving a car that’s paid for isn’t glamorous. But either is feeding a fat little monkey on your back until your 70 and putting off retirement indefinitely (that fat little monkey is interest by the way).

Saying no means you’re in control. Instead of living paycheck to paycheck you control your money instead of your money controlling you.

Saying no means you stand out as a target for ridicule and as an inspiration to others. The more radical your actions the more people get nervous. They like the idea of them having everything equal as everyone else and acting differently means you’ve changed the rules and they can’t judge you easily, which makes them feel threatened.

Saying no means you get to spend your retirement doing things you love and doing it when you’re still young.

So dash that kool-aid to the floor and say no to senseless spending and mindless consumption.

I’ve had my perkstreet rewards card for almost a year and I really like it.  It has all the features you’re used to with a standard credit card or debit check card but with one key difference…they huge 1-2% cashback rewards for using the card.  The standard rate is 1% but if you maintain $5,000 in the account they will bump your rewards up to 2% on everything.

A 1% reward on everything you purchase is pretty rare in even the best credit cards.  Most of the times those cards will have specific categories you’ll get 1% but most of the time you get a substandard rate.

5% cashback rewards are also fairly common for certain purchases during certain times of year but the 1% isn’t adversly affected by this change.

Signing Up
Perkstreets’ online application is pretty easy and straight forward.  They use secure encrypted data transfer when you set up your account and they’ve tried to make it as simple as possible. The only downside to setting up and account is sending back a signature card via snail mail.  A signature is required for everyone on the account that wants to use the card.

Things to Remember
With any debit reward card you need to run the transaction as a credit card, making sure not to use your debit PIN.  Most stores will automatically try to run the card as debit. You need to get int he habit of pushing ‘cancel’ when the PIN prompt comes up on the screen.  You will then be able to run the card as credit.  The other option is to tell the merchant ‘credit’ when they ask credit or debit.

Advantages

• Great perks and cashback (the best anywhere).
• No credit card debt or interest fees
• Won’t allow things to go through if you run out of money on the account (they just deny the purchase instead of charging you heinous fees for the pack of gum you bought)
• No fees on minimum balance, or using your card.
• Introductory rate of 2% for the first 3 months
• Special cashback offers with up to 5% cashback
• Perks for music, coffee, and other areas
• Get the same protection from fraudulent charges like you would with a standard credit card.

Drawbacks

• Customer service seems to be a problem for some people.  When I called they seemed helpful but didn’t actually do what I needed them to do (they never got the signature card I sent them and when I requested another one they didn’t send it, I’ll call again).

• It’s difficult to add a new person to the card – After getting the card I wanted to add my wife but perkstreet’s customer service said she could use the card (by sending back a signature card) but the name on the card would only be my name.  Due to lax security and the debit option on the card my wife wouldn’t be completely stranded.
• They don’t support business expenses and will shut down your account if you’re using it for business.

Oomas come in all shapes and sizes.

See All the Ooma Products

I’m a big VoIP fan and haven’t paid a regular phone bill in four years or more. If you’re wanting to save money on your phone bill and have free long distance you should really consider VOIP (or Voice Over IP) services. I’ve tried every VoIP service from MagicJack, to Vonage, to Skype. After trying out each of those services I can confidently say Ooma takes the cake for many reasons.

If you’re new to VoIP services or are just looking around you’ll want to keep a couple things in mind. First is reliability and second is cost.

The best VoIP services are directly tied to your router, not your computer.
Some of the cheapest services (e.g. MagicJack and Skype) are computer based.   What this means is that your computer has to be on, all the time, for you to receive phone calls.  For out going calls this wasn’t really a problem for our family.   The problem with computer based VOIP is the incoming calls.  People call at random times and the computer will be off or something will have happened to the software or hardware to have the call go through.  It was kind of nice not having people call me for a while.  If it was really important they would call my cell or email me.  The computer based software just wasn’t dependable like router based software.  Router based software is where the hardware runs directly from your router and doesn’t need a computer to operate.  Reliability is much better and is always on no matter what happens to your fickle computers.

The best VoIP services only charge you ONCE and don’t have a recurring bill.
Now that we’ve established that router based services are best it’s time to separate the services in this field again.  There are two types of VOIP services that run through your router.  The first charges every you every month and requires a credit card to bill from.  These cost around $20-$30 a month.  The OOMA on the other hand only has one cost for buying the hardware up front (you can pick up Ooma Units on Amazon and get free shipping too!).

Ooma Units just work, right of the box.
Setting up my unit was very easy.  Basically plug it in to my router, plug in my phones, and start making calls.  I needed to go online to get my phone number established but the information provided in the box (and on their) website was clear as could be and didn’t require any thinking (which is a good thing when you’re trying something new).

Things to remember
No matter what service you use (except MagicJack or Skype, since they’re computer based) you’ll still need to pay the $3-$5 each month in government fees (state and federal tax for having a phone line).  This fee varies by area and state but it’s still not too bad.  Ooma will still need to have a credit card on file to bill you for these taxes each month.  But you’ll be paying these no matter what router based VoIP service you use.

Recommendation
I would highly recommend Ooma to anyone wanting a reliable, low cost, phone service.  I’ve been using mine for a while now and I honestly can say it’s the best option out there (until they find a way to make and receive calls from your Android or iPhone over Wi-fi for free).

1. They are linked up directly to your router (so you don’t need to have a computer on continually).
2. They don’t have a recurring annual or monthly fee (with exception of the Federal and State fees which is around $5.00/Month.  There is no getting away from that.)
3. There is a one time hardware purchase fee with NOTHING to buy ever again.
4. It works with your regular phone.
5. It’s easy to setup and the sound quality is excellent.
6. They can “Port” your existing phone number (for $40 or so) but they also provide a free number with any setup.
7. A bundle of other services like call waiting, caller ID, web portal, phone number blocking,

This video highlights some of the points from two of histories famous economists Keynes and Heyek. Keynes famously said “We will not have any more crashes in our time.” a few years before the great depression.

Notice how the media and politicians ran to interview and congratulate Lord Keynes’ after he lost. How many times do we have to see the systemic failure of Keynesian economics before we discount those theories as fairy tales.

One of the best books on the subject of basic fallacies in economics is Economics in One Lesson by Henry Hazlitt . It’s very well written and entertaining.

Download Free PDF of Economics in One Lesson | Get it on Amazon

What can we learn from this irrational behavior? Try to buy your cars when they have barely passed the next 10K mark on the odometer (ask for a discount!) and plan to sell your car when it approaches the next 10K mark on the odometer (but doesn’t cross over that mark).

This over-payment effect is the strongest from the first 10,000 miles to around the 90,000 mile mark. After 90K miles buyers seem to be more rational and pay less as the miles increase.

Investing in yourself is one of the best investments you can make. Warren Buffet makes the point that when you graduate from college (or anything else) you should hypothetically bet on the person you think will make the most money in their life. He argues that the person you should place all your money on is YOU. You have the best chance of making money as compared to anyone else. When you approach education and your career in those terms it places the responsibility on your own shoulders to be the best you can.

Tip 1 – Never Take a Job You Hate to Build Your Career.
“It’s crazy to take little in between jobs just because they look good on your resume. That’s like saving sex for your old age. Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.” – Warren Buffet. If you aren’t singing and tap dancing coming to work each day you are wasting your life. Quit your job today and start doing what you love. If you have any kind of work ethic you will make money doing what you love. The problem with most ‘starving artists’ is that laziness and the creative process are one in the same to them. Most of the people that make it doing something they love are incredibly driven, hard working people.

Tip 2 – Get an education early in life.
People that go back to school when they are 50 kind of missed the boat (although it’s better than not finishing). Take AP classes in high school, take hard classes, and get your bachelors degree early in life. A bachelors degree used to mean a lot more 30 years ago but you almost need an masters degree and 10 years experience before most high paying jobs are available to you. Make education your top priority early in life and reap the rewards the rest of your life.

Tip 3 – Choose the most challenging paths.
When you’re choosing your degree always opt for the hardest option that will challenge you. The same holds true in your career. Don’t take easy projects or try to take the easy way out all the time. Do things that are difficult for you. Remember that history and english majors are never paid as much as engineers and physic majors.

Tip 4 – Manage your career.
Too many college graduates think that all their problems will go away once they graduate. A successful career takes careful planning, hard work, and sacrifice. Think ahead and take steps today that will help your career in the future. Your career is one of your most important assets.

Tip 5 – Start Saving Early for Your Kids College.
Some experts suggest saving for your kids college only after your retirement funds have been secured. The reasoning behind that is the options for funding education are plentiful while funding for your retirement don’t exist. Once you’re on track with your retirement try to save at least 30% of your kids’ projected college expenses.

Tip 6 – Consider public schools.
Many public or state schools have very good programs in certain areas. Finding a public university that specializes in your area of study can be just as good as attending a private school in many cases.

Tip 7 – Get your Associates Degree and then Transfer
Many universities will accept all your credits if you transfer with an associates degree. You can usually transfer from an online school or a community college but you’ll want to check before you commit to this idea. Start your first two years with a less expensive college and get your Bachelors with a more prestigious or well know university.

Tip 8 – Ask for raises and promotions.
Make sure you’ve done your homework, tracked your achievements, and deserve a raise. If so, don’t hesitate to ask for a raise. Most managers and companies will be happy to try to make sure you’re being paid the current market value of the position your filling.

Tip 9 – Become a Lifelong Learner
Commit to always be improving, educating, and advancing your knowledge in and outside your field of study and career. Getting professional certificates are a great way to keep your skills polished. You should always strive to be reading good books and attending classes on subjects that you’re interested in (and subjects you don’t know anything about). Try to attend seminars, classes, and listen to podcasts. Audio books are a great way to read the classics and career related material. Turn off the TV and stimulate your brain meat as often as you can.

Tip 10 – Take Time and Cherish the Simple Moments in Life
Playing peek-a-boo with your new child, cuddling with your spouse, and feeling the grass under your toes is what life is all about. Be very protective of the time you spend with the people you love and never let money, your career, or being a top achiever get in the way of that.

This last month I was able to pay off all my credit card debt. I’m not paying a single penny to the credit card companies anymore. It’s the first really big goal I’ve been able to achieve with my finances. It feels great and this is how I did it.

Step 1) Be really annoyed by interest (and fees) you are paying. This was the foundation of the goal to pay off all my balances. Every month I would look at my statement or check my personal finance software and see INTEREST PAYMENT or FEE coming from my credit card company. These words started really annoying me. The amount I paid in interest payments was the equivalent to doing something nice every month. When I calculated how much interest I was paying it made my resolution even stronger to pay off all my cards.

Step 2) Switch to an all cash budget. There is no question this step took the biggest bite out of our credit card debt. We used the envelope method of budgeting and it worked. One consideration to switching to cash is losing out on the credit card points. When I tallyed the sigh-up bonuses and other rewards I was actually in the red at the end of it all. Saying good-bye to using credit cards regularly was an adjustment but it feels good to use cash again. Another thing with envelope budgeting is that when the money is gone it’s gone. Prioritizing is something I haven’t done in a while and it feels good. I generally get the stuff I really need and don’t miss out on too many things.

Step 3) Sell Junk Laying Around. You would be surprised at how much valuable stuff you have laying around your house. Think about all the old things you don’t use anymore and make a list. Post your items on craigslist and put the cash you make towards your debt. This exercise helped me realize how much crap I’ve bought over the years and makes me think twice before I buy anything else.

Step 4) Use all extra income towards your debt. Paying the minimum payment won’t cut it anymore. When you get a bonus, raise, or cash put it towards your debt.

Step 5) Cancel your cards. Pull your free credit report and look over all your accounts. Pay off and close all your credit cards as soon as you can. Some people will argue that keeping your accounts open will help improve your credit score but Dave Ramsey would counter by saying you don’t really need a credit score because you’re not going to use debt like a junkie anymore.

In Summary
This is a big deal for us because we had a lot of credit card debt. We bought a fixer upper home and put all the improvement costs on our credit cards. In retrospect that wasn’t the best idea but we’ve learned what not to do in the future. We are now using all the extra money we would have made on credit card payments and are applying it to our student loan, second mortgage, and other debt.

Please share you experiences in the comments if you’re actively paying down debt or are living a debt free lifestyle.

Avoiding Current Phone Scams

That’s not to say there aren’t valid ways companies using telephones to contact prospects and customers. Keep in mind that phone companies sell your phone number to telemarketers. We set up a land line for the first time in years. Once we had a dial tone, and before anybody knew our phone number, we were getting telemarketers calling within the hours. The calls came frequently until we added our name to the do not call list.

Identifying Fraud
Never give out your credit card number on the phone.
Fraud on the phone usually are after one thing, your credit card number. They will use a number of techniques to extract this number for you. One tactic involves postcards and letters that indicate you’ve won a prize. When you call the 800 or 900 number you will be asked for your credit card number to claim your prize. Once they have your credit card number it goes down from there. Now that they have your credit card they have all the power and will use all kinds of pressure to close the sale. If you do end up buying something there is a good chance you’ll never receive it. If you do receive the product it will be extremely poor quality. The worst part is that the scammers have your credit card number and will likely change you multiple times. How can you avoid this problem?

Always Ask for written Information before you agree to anything.
The quickest way to shut down a scam is to ask them to send you some written information. If they are a legitimate charity or company they likely have whole departments that can fulfill your request. Scammers and high-pressure salesmen hate when you request things in writing. When things are in writing you can make sound decisions, which isn’t what they want.

If you suspect something fishy, get off the phone right away.
Be polite but assertive. If something doesn’t feel right about the call tell them no thank you (maybe a couple times) and get off the phone.

Call them back
If your bank or credit card calls you and asks for your credit card number or social security number tell them you’ll need to call them back. The the actuall customer service number from their website, phone book, or back of your credit card and call them back. Most financial institutions wont ask for your social (unless you’ve called them and have forgotten your account number). They won’t ask you for your credit card number out of the blue either.

Don’t tell them anything
Don’t tell them anything they should already know. If it’s your credit card company they should have everything in front of them. The exception to this rule is if you called them.

Avoid High Pressure Sells
If you feel you’re getting any type of pressure remember you have control. If you use a free phone service like Google voice you can send the sales calls to the disconnected message.

The Most Common Types of Scams

You’ve won a deluxe vaction!
These involve a combination of mail and phone fraud. First you will receive a letter saying you have won a vacation but you need to be a member to claim the prize. You’ll have to join with your credit card. Once they have you’re credit card… I think you know the rest.

Help us catch a bank scammer
This scam involves someone posing as a bank security examiner. They’ll ask you to withdraw some money and give it to someone that comes to your home. The persons job is to re-deposit it into your bank account. Once they have your cash…I think you know the rest.

Only smart investors are buying
…and if you’re smart, you’ll be buying too. Senior citizens are particularly vulnerable to these types of scams. Most likely there will be a ‘window of opportunity’ or ‘extremly limited time’ to take advantage of the investment. The investment will be described as a ‘sure thing’ with returns well in excess of normal returns. Remember, excess profits come with excess risk. Some of these scams can go on for months before the scammer leaves town. Other times these scams can be ‘fly by night’ operations that hit and run. If something is too good to be true, it always is.

Magazine and newspaper subscriptions
Con artists will offer you a very low price on the magazine or newspaper subscription if you buy today with your credit card. Use one of the tactics described above and tell them to get a real job.

Conclusion
Hopefully this helps you avoid any future scams. If you feel you’ve been defrauded contact the following:

When investigating potential frauds, you should contact several of the following:

AARP (American Association for Retired Persons)
1909 K Street, NW
Washington, D.C. 20049

http://www.aarp.org

(800) 424-3410

The Federal Trade Commission
Bureau of Consumer Protection
600 Pennsylvania Avenue, NW
Washington, D.C. 20580

http://www.ftc.gov

(877) FTC-HELP

If you know of any more please leave a comment below.

Stop Pre-Screened Offers

Link: OptOutPreScreen
Opt out of pre-screened credit card and insurance offers. Companies can no longer peek at your credit score to see if you qualify for their services. The less mail you receive like this the less likely your identity will be stolen. Your free credit report will show you which companies have pulled your credit report for a pre-screened offer.

Stop TeleMarketers

Link: National Do Not Call Registry
Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at this Website. You can register your home or mobile phone for free.

Reduce JunkMail

Link: Direct Marketing Association
There are two kinds of junk mail, prospect junk mail and customer junk mail. If you’ve purchased something from a company you are forever considered a customer. You can opt out of prospect junk mail through the Direct Marketing Association (DMA) see the link above. Hint: Try the deceased person form in the right column. If you are a customer you need to contact each company directly to have your name removed.

Stay Anonymous

Link: iNumbr
Protecting Your Privacy. Talk without sharing your real phone number. Get a virtual phone number that will forward calls to any phone. Google Voice is also a good option if you don’t plan on using the number for a lot of transactions.

Link: 10 Minute Mail
Beat spam with the best disposable e-mail service.

Link: Fake Name Genorator
Gives you everything you need to fill out forms.

Bypass Compulsory Registration

Link: Bugmenot.com
Get access to restricted areas of websites with this service.

1) Pay off all your credit card balances. In 2009 all the credit card companies updated their terms and service agreements. Many of the changes had to do with new laws passed by congress. The laws were an attempt to help protect consumers that were trapped by credit card debt. The laws are also designed to protect consumers that are having financial hardship. But credit card companies are businesses that aim to make money. In the changes I’ve seen there are a few alarming changes: 1) Credit cards are moving to an adjustable rate on all new purchases, fixed rate cards are not very common any more 2) interest rates have increased across the board. This past week I had a credit card agreement increase the late payment APR to 29.99% variable. I haven’t seen that kind of rate in a long time. 2010 is the year to pay off all credit cards and switch to a cash lifestyle with pro-active budgeting.

2) Budget every dollar you spend. This is one thing we have done poorly on in year’s past. We been using Mint.com for 2009 and it’s opened our eyes to where our money is going. But budgeting is the next critical step for us.

3) Pay cash. When you buy your next car or new toy pay cash for it. Being able to save up and buy bigger ticket items with cash is a good way to get the best price on things you buy.

4) Start saving (automatically). Putting away $10 a paycheck is a good way to start saving if you haven’t already. It is suggested that you pay 10-20% of your income. Most banks will let you set up an automatic withdrawal if you need it. See this list of high interest savings accounts with updated rates for more information.

5) Setup an emergency fund. Learn how much is needed for an emergency fund an get started. Basically you’ll want to cover your basic expenses for three to six months.

6) Start another stream of income. The more sources of income you have the more stable you’re finances will be. In business if a company only has one big customer they are being exposed to a lot of risk. Expand your income streams in 2010 for an improved balance sheet. Ideally, you’ll want to start another stream of income that is low maintenance and something you enjoy doing.

7) Learn and/or Improve your skills and education. Learning a new skill or improving an existing skill is always a good investment. Invest in education, text books, audio books, lectures, and courses. Finish your degree or start an advanced degree. This is one of the best investments you could ever make. Subscribing to blogs is also another great activity (since they are free and have relevant, timely, information).

8 ) Help someone in need. It feels really good to help someone that needs help. Volunteer or give a neighbor a helping hand. Charities have been hit hard by the recession. Try to help where you can.

9) Grow a garden. If all you grow are a few plants a garden is a good way to save money and its good for the environment. Some people think its also therapeutic to take care of things and watch them grow.

10) Spend more time with family and friends. For the first time in many years families have pulled together during the recession. They have spent more time together and have gotten closer. As the economy improves keep that tradition alive in 2010.

11) Do some financial house cleaning. Visit the new year financial checklist and Dilbert’s guide to personal finance for some ideas. Some of the basics include: Update/write your will, get a free credit report, open an IRA with a discount broker,