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
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
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.
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
It’s the little things…
Source: Sandy Shore, Senior Counselor for Novadebt
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
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
Cigarettes In the long run, the medication to stop is cheaper.
Cook ahead, so you aren’t making last minute decisions. Have a list
of simple meals that you can prepare quickly.
If you really need it, buy in bulk. It is much cheaper. Do you really
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
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
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!!”
How To Beneﬁt From Your Bankruptcy Credit
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:
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
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
How To Budget For Elder Care
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.
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.
11 Ways To Cut Phone Expenses
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
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
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
The Penny Pincher Newsletter
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
You Can Get Out Of Debt !
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