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					                  June 2006 A Newsletter from Novadebt A Garden State Consumer Credit Counseling Organization



“First Home Club” Program Makes Homeownership
 a Reality for Approved Applicants
 Source: Becky Winters, Education Developer for Novadebt



N        ovadebt is pleased to announce that our agency is working with Investors Savings Bank in conjunction with their First Home Club
         program. The First Home Club is a matched savings program offered by the Federal Home Loan Bank of New York member
         banks, which assists low and moderate income, first-time homebuyers with funds for down payment and closing costs. The
 participant must be a resident of the geographical area or district of the Federal Home Loan Bank of New York at the time of enrollment
 and agree to obtain mortgage financing from Investors.
 The savings match offered through the program is 3 to 1, with a maximum of $5,000.00 in matching funds available per enrollee. After
 enrollment by Investors Savings Bank, each participant establishes their “equity goal”, which is the estimated amount of money the
 enrollee will need for a mortgage down payment and closing costs. The First Home Club participant establishes a designated savings
 account with Investors and commits to saving a fixed dollar amount per month for a minimum of 10 months and a maximum of 30 months.
 In order to receive the maximum $5,000.00 in matching funds from Investors, the enrollee would have to save $1,667.00 of their own funds
 over the course of the savings period agreed to. Investors will determine the income eligibility as a “first time” homebuyer.
 An additional required component of this program is homebuyer education, which will be administered by accredited Novadebt Housing
 Counselors and housing industry guest speakers. Participants will complete a six month structured program.
 An orientation class for the first group of First Home Club participants took place in May. A representative from Investors Savings Bank
 discussed the program requirements and answered questions. The monthly homebuyer education classes will begin in June. This is a
 perfect opportunity for those who meet the income requirements to begin working towards owning their own home. If you would like more
 information regarding this program, contact us at 1-866-472-4557. I
Novadebt’s Affiliation With Jumpstart Coalition
Supports Our Mission
Source: Becky Winters, Education Developer for Novadebt


H       ow many of us received formal financial literacy education
        when we were high school students? When did you learn
        how to balance a checkbook, budget your expenses based
on what your earnings were, or save for something special that you
                                                                                            • If a student answered, “Bad luck, such as unexpected illness or
                                                                                              job loss”, they scored 49% on the Jumpstart Survey.
                                                                                            • If they answered, “Not enough savings”, they obtained a score
                                                                                              of 48.1%.
just “had to have”? How does this compare to what our children
are learning, or in most cases, NOT learning? Many young people                             • Those students who selected the response, “Buying too
fail in the management of their first consumer credit experience,                              much on credit”, answered 55% of the questions correctly.
establish bad financial management habits, and stumble through their                         • Students who selected the answer, “Not following a financial
lives learning by trial and error. Yet, increasingly, personal financial                       plan”, scored 53.8%.
security requires the ability to understand and navigate the financial                       • And finally, students who answered, “Not being able to earn
marketplace. For example, buying a home, saving for retirement or                             enough money”, received a score of 50.6%
for children’s education, or even effectively managing the family
                                                                                            First convened in December 1995, the Jumpstart Coalition for Personal
budget, now requires more financial sophistication than ever before.
                                                                                            Financial Literacy determined that the average student who graduates
Financially literate consumers make better informed citizens.
                                                                                            from high school lacks basic skills in the management of personal
One national organization, Jumpstart Coalition for Personal Financial                       financial affairs. Many are unable to balance a checkbook and most
Literacy, is a leader among organizations seeking to improve the                            simply have no insight into the basic survival principles involved
financial knowledge of students from kindergarten to the university                          with earning, spending, saving and investing. The coalition’s direct
level. And in New Jersey, we take it one step further, as we approach                       objective is to encourage curriculum enrichment to ensure that basic
financial literacy from “cradle to grave”.                                                   personal financial management skills are attained during the K-12
Recent results of the 2006 biennial national survey of selected high                        educational experience. The wheels of education do not need to be
school seniors shed some light on the seriousness of this issue. Only                       reinvented, they simply require balance.
52.4% of the survey questions administered were answered correctly                          Novadebt is an active participant in the New Jersey Coalition for
by the participants. Family income of the participating students made                       Financial Education, which is an affiliate of the national Jumpstart
little difference as students of families with an income between                            Coalition. It is our belief that without financial education, financial
$20,000 and $40,000 correctly answered 50.8% of the questions                               stability cannot be achieved or maintained. Through our participation
asked, while students from families of incomes between $40,000 and                          in educator conferences, training seminars to help educators teach
$80,000 answered 53.7% correctly. And, believe it or not, the split                         personal finance in their classrooms, statewide financial health days
was almost 50/50 between male and female. Males answered 52.6%                              and promotion of awareness of resources available on the national
correctly and females answered 52.3% correctly. Twenty-two percent                          Jumpstart web site, Novadebt helps to ensure that the development
understood that interest on their savings accounts could be taxable.                        of resources and programs devoted to this important endeavor
Forty percent realized they could lose their health insurance, if their                     is ongoing. We work closely with representatives from the entire
parents become unemployed, and fifty percent knew that the law                               financial service industry to afford students the tools that they
allows them to check their credit rating for free once a year. When                         will need as they make the financial workplace work better. For
asked the question “Which of the following do you feel is the greatest                      additional information, please feel free to visit Jumpstart’s web site
cause of serious financial difficulty, where families can’t pay their                         at www.jumpstart.org. Knowledge is the power to succeed. I
bills?” the following responses were noted:




                                   If you have any comments or suggestions for future newsletters, please write to:
                                                           225 Willowbrook Road, Freehold, NJ 07728
                                                               email: newsletter@novadebt.org
                                                                 Editor: Jaime Nalepka
                                                Proofreaders: Becky Winters, Gina McCullough, Diane Gray
       “The Penny Pincher” does not assume responsibility for any advice given. It is up to the reader to determine if advice is safe and suitable for their own situation.
 2
Dear Housing Department…
Source: Darla Keegan, Senior Housing Counselor for Novadebt



I  ’m thinking of buying a home but can I afford it? I’m already in a home, but finding it hard to make the monthly payments. I’m looking
   to retire and want to remain in my home but can use some help. These are some of the questions that can be answered in Novadebt’s
   Housing Department. In addition to providing financial education and counseling, Novadebt can help provide assistance with many
housing related issues.
Novadebt is a HUD certified, non-profit, financial agency that can pro-      FHA (government-backed) loans have additional rights when they are
vide Pre-purchase, Default and Reverse Mortgage (HECM) counseling.        in default on their mortgages. Lenders must follow a certain model
Our certified counselors are very knowledgeable and experienced in         when working with FHA borrowers. We can help guide you through
the many facets of homeownership.                                         the process to ensure the right steps are being taken.
Are you looking to purchase your first home? Our housing counselors        Are you a senior and looking to use the equity in your home to
will help you through one of the most important decisions you will ever   help cover expenses? New Jersey borrowers seeking a home equity
make. We will go through a step by step process to make sure you are      conversion mortgage (HECM) must complete counseling by a HUD-
ready, willing and able to purchase your first home and maintain living    approved agency in order to qualify for a loan. The main purpose
there for many years to come. The counseling will cover everything        of the HECM counseling session is to provide homeowners with all
from analyzing your budget to the “final walk-through”. We can also        of the information they need to make their own decision as to whether
help you research any type of government based programs that may fit       or not a HECM is a good option for them.
your financial profile, as well as provide referrals to reputable lending   As you can see, Novadebt’s primary focus is to provide financial
institutions that will look out for your best interest.                   education, as well as free housing counseling and credit counseling
Have you already purchased a home but are having a hard time keep-        services to families and individuals in need. Novadebt is available
ing up with the monthly payments? Our counselors are experienced          to provide counseling nation-wide. Face-to-face counseling is also
in foreclosure prevention counseling. Our goal is to provide overall      provided at specific locations. Information on Novadebt’s services can
financial counseling and solutions to one’s situation with the focus       be found on our website at www.novadebt.org and www.HUD.gov.
on preventing foreclosure. Our counselors will provide the tools and      For additional information or to complete a financial counseling session
resources needed for you to make the best decision for your personal      on any of your housing issues, please contact our Housing Department
situation. Novadebt can initiate the lines of communication between       at 1-866-472-4557. I
you and your lender, should the situation arise. Borrowers who have




                                                                                                                                             3
It’s the little things…
Source: Sandy Shore, Senior Counselor for Novadebt



W
           hen consumers try to cut expenses, they usually look at the big items. Forgoing the purchase of a new appliance, keeping a car
           for another year, or searching for cheaper insurance can be a major help in freeing up money to meet your goals. Often over-
           looked are the small, recurring expenses that can really add up. Many of these are not necessities.
For example, the cost of a double latte at your favorite coffee shop. Suppose you currently spend $5 per
day, five days a week. It doesn’t seem like much, but that is $100 at the end of the month. If you are
saving to buy a house, in five years you would have $7,348 towards the down payment. In twenty
years, you could have $58,902 towards your baby’s college education. If you put the money in
your 401k and you retire in 30 years, you would have over $149,000.
To get these items under control, the first thing you want to do is know what you are spend-
ing. You can track your expenses using a tracking book. Novadebt will be happy to provide
you with one. If you make a change, it will be very easy for the saved money to get absorbed
into your regular budget. Have the savings transferred automatically to a savings account. Once
you know what you are spending, it doesn’t mean that you have to give up everything. You
may choose to give up some things, cut back on others, or find substitutes. It is about being in
control.
Here are some items that may be a problem and substitutions that may help you:


                Double latte                         Find a cheaper place or buy a machine and make it yourself.
                                                     Have a glass of wine when you cook a special dinner at home
                Glass of wine in a restaurant
                                                     instead.
                Cigarettes                           In the long run, the medication to stop is cheaper.
                                                     Cook ahead, so you aren’t making last minute decisions. Have a list
                Fast food
                                                     of simple meals that you can prepare quickly.
                                                     If you really need it, buy in bulk. It is much cheaper. Do you really
                Vending machines
                                                     need it?
                Your child wants $5                  Put them on an allowance and stick to it.
                Refreshments at the movies           Bring your own.
                Going to the movies                  Video rental or a monthly service.
                Soft drinks                          Buy in the supermarket or wholesale club, not one at a time.
                Lunch at work or school              Brown bag it.
                                                     You have a better chance of getting struck by lightening. When was
                Lottery tickets
                                                     the last time you had even one number right?
                                                     Pay them off. The few dollars in interest is just like anything else on
                Small credit card balances
                                                     this list. It adds up. And this one doesn’t even taste good.

Remember, it is not about giving up all the little pleasures, it is about making choices, so you can have the big things you really want. I


Dear Novadebt…
Source: A Novadebt Client
“I ‘bless’ Novadebt each and every month! I wish I had been aware of this excellent company many years ago. If so, I would already be out
of debt. But, I am grateful that a customer service rep from VISA suggested your company. I called the number and was immediately on my
way to ‘financial freedom’. I wasn’t prepared to give all my bills and account numbers in my initial phone call, but your client
service rep was patient and helpful. The enrollment process started with my initial phone call. Novadebt had an agreement
with each of my debtors. Having my monthly payment directly withdrawn out of my checking account is convenient
and because Novadebt makes all eight of my credit card payments, I don’t go through as many checks
each month! No checks and less postage has also been a savings for me. I love Novadebt!!”
JK, Illinois



 4
How To Benefit From Your Bankruptcy Credit
Counseling
Source: www.bankrate.com


I
    f you want to get the most out of your credit counseling session,      Watch those typos. Common mistakes include adding too many
    you should prepare properly and make arrangements to avoid             numbers or inverting numbers. Be cautious when entering your
    distractions that will detract from the presentation. Try to find       information. You can avoid extra zeros by simply double-checking
a quiet place if you’re consulting on the phone. Arrange for some          what you have typed before moving on to the next screen.
privacy and avoid interruptions if you’re getting your consultation        WEIGHING THE PROS AND CONS:
on the Web. That means no screaming kids, honking horns or loud
televisions in the background.                                             Counselors suggest receiving the bankruptcy counseling sooner
                                                                           rather than later. That way they can provide you with more
You’ll want to do all you can to avoid a bad phone connection.             options. If you’re not sure whether to pick up the phone, surf the
Credit counselors also point out the necessity of avoiding misin-          internet, or hop in the car and drive on over, you might want to
formation online through inaccurate typing.                                consider the pros and cons. Thinking them through will help you
All of these troubling occurrences, and more, make it difficult for         discover what might best suit you, in order to get what you need
counselors to proceed with their jobs. So here are a few tips on           out of your time spent. Here’s a guide:
how to best benefit from your bankruptcy counseling, no matter
which method you choose:
PROPER ETIQUETTE:
Prepare a list. Counselors say it helps them to know the following:
gross income, take-home pay, household living expenses, and
secured and unsecured debts. Also, don’t forget major documents
such as your mortgage and medical correspondence, especially if
you’re meeting with the counselor in person. Monthly statements
and one or two recent pay stubs are also items you’ll want to bring
when you sit down with the counselor one on one. Be prepared to
spend more than 90 minutes talking with the adviser, if you have
questions and want to take advantage of the opportunity.
Cut down on those distractions. If you are on the phone or the
Internet, make sure you are in a quiet spot with your prepared list
and documents. Schedule enough time so you can give the briefing
your full attention. If the counseling is done at your attorney’s
office, ask to be placed in a private room.



                                                           Pros and Cons

    Consultation                                                    Pros                                                     Cons

  In Person                 The consumer can see that the credit counseling is a legitimate busi-                  May have to travel
                            ness and trust the counselor more.                                                     and can be lengthy
                            Documents can be brought in to further interact with the counselor.                    if the consumer isn’t
                                                                                                                   prepared.
                            The consumer is better-focused.


  On The Phone              Empathy and encouragement can come through the phone.                                  Less interactive and
                            The briefings are more efficient when scheduling.                                        can be lengthy if the
                                                                                                                   person isn’t prepared.


  Over The Internet         Can be quicker and provides further anonymity.                                         Impersonal and hard
                            Can participate at any time.                                                           to catch common
                                                                                                                   mistakes.




                                                                                                                                            5
How To Budget For Elder Care
Source: www.ehow.com



W        hether your aging parents live independently, with you, or in extended care, finances – theirs and yours – are important. Here are
         some thoughts on budgeting for elder care, no matter what your family living arrangements are.
1. Help your parents protect their assets. This will almost certainly    TIPS:
   mean having a serious discussion with them about money.               • Consult your accountant and your lawyer about issues related
2. Help them sort out their savings and investments – and get              to finances and estate planning for elderly parents. These
   power of attorney if necessary – so that their money will               professionals can give you and your parents the information you
   be there for them when they need it and so that you will be             need to maximize their pensions and retirement funds, and to
   able to protect it, if they are unable to care for themselves.          protect all their assets both now and later.
3. Talk over long-term plans with your parents (and your siblings,       • Research the various health-care options very carefully before
   if you have them). If possible, get your parents to make a              making any decisions; there are many different levels and types
   Living Will, so that their wishes can be followed even if they          of health insurance, and you need to make sure that your parents
   are unable to communicate. Find out how – and where – they              will get the care they need, when they need it.
   want to spend their golden years, and let them know how               • Remember that there are lots of discounts out there for senior
   much you are willing and able to help them financially.                  citizens, and encourage your parents to take advantage of them.
4. Make sure your parents’ health-care costs will be covered.
                                                                         WARNINGS:
   They may need to purchase basic or extended health
   insurance or take over the payments on an existing                    • Don’t wait for a financial crisis to develop. Deal with family
   plan. A good health-care plan means that your parents                   finances and budgeting as early as possible, even though they
   may get better, faster care when they need it most.                     can be awkward subjects.
5. Work out a budget with your parents, if they will be living with      • Ask your parents to let you know where all their important
   you. It’s important to discuss this before you all move in together     papers and financial documents are kept, so that you can help
   to avoid conflict later on. Will your parents contribute to your         quickly in the event of a medical or financial emergency.
   household expenses, or are you willing and able to pay for            • Seniors are often the targets of scams designed to cheat them out
   everything? If they need in-home care, will the payments come           of their money. Remind your parents never to give out financial
   out of their retirement fund or your family budget? Will you            information over the phone or at the door, and ask them to talk
   take family vacations together and, if so, will they contribute?        to you before making any large expenditures or donations.
6. Help your parents work out their own budget if they                   • Don’t avoid financial discussions, even though they can be
   live independently. List their current expenses as well                 difficult. It’s important to get everything out in the open so that
   as any expenses anticipated in the future, and don’t                    there is no potential for misunderstanding or conflict later on.
   forget to consider inflation. It can be difficult for seniors             Just be tactful, sensitive and respectful. I
   to adjust to life on a fixed income even though work-
   related expenses drop dramatically after retirement.
7. Discuss joint ownership. If your parents would like you to help
   them handle their finances, it may be advisable to get your
   name added to property deeds and bank accounts. This means
   that you will be able to act swiftly in a financial emergency. It
   may also protect you from heavy inheritance taxes later on.
8. Talk over all the options with your parents. Try to avoid making
   unilateral decisions if your parents are of sound mind and able
   to share in decisions that affect their personal and financial
   lives. Whether your parents will be moving in with you,
   entering a nursing home or extended care facility, or staying
   in their own home for as long as possible, they should still
   retain control of their own finances for as long as possible.
9. Remember to allow for some travel and entertainment “mad
   money” in their budget. Life is about much more than paying
   bills and managing investments, so try to make sure your
   parents will be able to have some fun in their golden years.




 6
11 Ways To Cut Phone Expenses
Source: www.bankrate.com
1. Every few months, comparison shop to see if you’re paying too much for your telephone calling plan. If you find a better deal, contact
   your phone company and negotiate – or switch.
2. Cancel all the extra services you don’t use such as call waiting, caller ID, voice mail, call forwarding and three-way calling.
3. Switch to a smaller, lower profile company for long-distance service. Not only is the service cheaper, but usually there are fewer fees.
4. Check your long-distance carrier’s call-rounding policy. Many smaller long-distance companies offer six-second call
   rounding, rather than rounding up to the next minute. The more short calls made or faxes you send, the more you save
   with six-second rounding.
5. Some low-cost carriers may charge a fee if you receive a paper bill. Sidestep this fee by paying your bills
   online.
6. If you make a lot of long-distance calls within your state, choose a calling plan with a low intrastate rate.
7. Drop your long-distance carrier altogether if you make infrequent long-distance phone calls. Instead, use a
   prepaid phone card, a dial-around service or even your cell phone if you’ve got the minutes.
8. If you’re always on the run, consider swapping a land line for a cell phone. You’ll save on the monthly
   service fee, taxes and long-distance fees for a land phone that’s rarely used.
9. Don’t exceed your allotted monthly cell phone minutes. Zero in on your calling needs to find the best
   plan for you.
10. Cell phones can be expensive, especially if you’re footing the bill for a houseful of users. Do a
    “needs analysis”. Dump the phones that aren’t absolutely necessary.
11. Go wireless at your weekend and vacation home. Occasional but pricey cell phone calls may still be
    cheaper than the cost of installing and maintaining a bare-bones land line. I



6 Safety Tips For Online Job Seekers
Source: www.bankrate.com



W
           ith a click of our mouse, you can post your resume for         an immediate position…stop, read and listen. Are you online job
           millions to see. You can store five different cover letters     board-savvy?
           at once and send out different versions without print-
                                                                          SCAMMERS LIKE TO GO PHISHING:
ing a single page. You can apply to hundreds of employers without
ever getting in a car or picking up the phone. You can also expose        “A good rule of thumb is to never give out anything over the Inter-
yourself to scammers.                                                     net or telephone that you wouldn’t want a criminal to have,” says
                                                                          Jim Stickley, co-founder, CTO and Vice President of engineering
There’s no doubt about it, if you want to join the online job search
                                                                          at TraceSecurity, a company that works with corporations to help
bandwagon, there are plenty of places to park your resume. Some
                                                                          them secure their data and meet security-industry standards. If the
attract quite a crowd: Careerbuilder.com, for instance, says it has
                                                                          company offering your dream needs your confidential information,
more than 1 million jobs and 15 million resumes on its site.
                                                                          you should visit with them face-to-face to make sure they are a real
Unfortunately, some con artists use the popularity of online job          company. If they are remote, then you need to take steps to verify
boards to find victims for their financial schemes. By scouring             their legitimacy, says Stickley. While e-mails demanding personal
through resumes and sending e-mails to job seekers or posting their       or financial information such as credit card numbers, bank account
own ads, scammers can lure job sites: Monster.com states in its “Be       numbers or your Social Security number should raise red flags and
Safe” section that fraudulent job listings are sometimes posted to        tip you off to job scams, e-mails from employers expressing real
collect sensitive data from unwitting job seekers. With the plethora      interest in you as a job candidate are less cut and dried.
of job boards on the Web, experts advise that consumers should
stay on top of the latest online employment scams and take steps to       ONLINE JOB HUNTING – HERE ARE SIX SIMPLE WAYS TO
post their resume safely.                                                 PROTECT YOUR PERSONAL DATA FROM THIEVING EYES.
Scams such as emails from phony employers and bogus requests              1. Know what scammers want.
for background checks can bring disastrous consequences to con-           2. Find a job board you trust.
sumers who aren’t careful with their personal information. Armed          3. Sniff ads for phishiness.
with your Social Security number, a driver’s license number or
date of birth, a scammer can have a field day. You could be saying         4. Apply to a handful of employers.
goodbye to your identity and your credit – and still be unemployed.       5. Depersonalize your resume.
Before you post that resume or respond to that e-mail offering            6. Protect your computer. I

                                                                                                                                            7
The Penny Pincher Newsletter
NOVADEBT
A GARDEN STATE CONSUMER CREDIT COUNSELING ORGANIZATION
225 WILLOWBROOK ROAD
FREEHOLD, NJ 07728




                                       A GARDEN STATE CONSUMER CREDIT COUNSELING ORGANIZATION
                                                                 A Non-Profit Social Service Agency




                                     1-800-99-BILLS
                 You Can Get Out Of Debt !
                         If you are not already receiving NOVADEBT’S FREE newsletter, The Penny Pincher...
                                            Please fill out the following form and return to:
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                                 I Please send me all future issues of The Penny Pincher
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