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									             September 2007              A Newsletter from Novadebt - A Garden State Consumer Credit Counseling Organization

Bankruptcy Law Revisited Two Years Later
Source: Becky Winters, Education Developer for Novadebt

According to a recent USA Today                   counseling firms might pressure debtors      maintained our status as a result of the
article, when the new Bankruptcy                  to rely on a debt-repayment plan instead     caring and professional staff that is here
Abuse Prevention and Consumer                     of filing for bankruptcy, but in the first   to assist you. Individual debtors
Protection Act of 2005 became effective,          year of the enacted law, most debtors        considering bankruptcy must undergo
some people assumed the worst; that the           continued to file for Chapter 7 bankruptcy   credit counseling within six months
tougher rules meant it was now next to            and only about 3% ended up with a            before they file and then successfully
impossible to get a fresh start by filing for     debt-repayment plan. Required post           complete a financial management
bankruptcy. The new law tightened                 petition bankruptcy education then           instructional course before the debt
income limits, raised filing fees and made        helped to reinforce the steps needed to      can be discharged. Our agency offers
the process a little more complicated.            reestablish financial stability.             counseling and the debtor education
Many people tried to sidestep the new                                                          course either by phone or in person and
changes by rushing into a bankruptcy              Novadebt is approved by the United           on-line for counseling. If you are in
filing before the law took effect. As a           States Trustees Office to provide            need of pre-filing credit counseling, just
result, initially the rate of filings was lower   counseling and Personal Financial            contact us at 1-877-892-4557. If you are
than in 2005. However, bankruptcy still           Education courses under the new              in need of debtor education, one of our
remained a realistic option for most              bankruptcy law. We are proud to have         certified counselors can help you at
debtors. Two years later, most people             been one of the initial groups of agencies   1-866-254-2660. You can also visit our
have been able to manage the tougher              to receive such approval and have            website at I
rules and, in fact, have benefited
from them. Filers have found the credit
counseling requirement instructive by
giving them a picture of where they are,
and more importantly, how they got
there. A credit counselor, approved by
the U.S. Trustees Office, reviews their
assets and liabilities and explains their
options, including Chapter 7 bankruptcy,
often called liquidation, and Chapter
13, which is reorganization. Early on,
there was some concern that credit
Raising Awareness Helps to Promote the Need and
Importance of Financial Literacy
Source: Becky Winters, Education Developer for Novadebt

Financial education is the most               A 2007 survey by The                        The 2006 annual back-to-
important component of our                    Hartford Financial Services                 school survey from
                                              Group, Inc. found that:                     Capital One found that:
agency mission. It is incorporated
                                              •The majority of college students say      •49% of teens are eager to learn more
into every aspect of our agency
                                              they learn the most about personal         about money management, but only
services. Clients who enroll in               finance from their parents, but less       14% have taken a class on the topic -
                                              than half of students say their parents    35% would like to learn from their parents.
Novadebt’s Debt Management                    make a consistent conscientious effort     When asked about the topics they'd
                                              to teach them.                             most like to learn about, teens express
Program are required to complete
                                                                                         interest in checking accounts, budgeting,
a financial literacy course titled            •Nearly two-thirds (63%) of the parents    investing, saving, and financing for
                                              surveyed say they definitely see           large purchases.
Credit When Credit Is Due. Our                personal finance education as their
                                              responsibility and consistently make       •Only 18% of parents are discussing
agency maintains a comprehensive
                                              the effort to teach their children about   back to school budgeting - a decline
library of written material covering          it, compared to the only 41% of            from the 24% who did so last year.
                                              students who say their parents did.
a myriad of financial and money                                                          •79% of parents see themselves as
                                              •About 70% of college students cite        positive money role models for their
management related topics to
                                              parents as their primary source of         kids, yet only a small percentage are
best serve our diverse client base.           information.                               taking advantage of day-to-day learning
                                                                                         opportunities to arm their teens with
This helps to teach the importance            •Students and parents agree that           practical money skills.
                                              college students are not well prepared
of financial responsibility and
                                              to deal with the financial challenges      •Only 43% of parents have discussed
illustrate the importance of positive         that lie ahead. Less than one-quarter      the importance of needs versus wants,
                                              of students (24%) and only 20% of          compared to 64% who did so last year;
spending and saving habits.                   parents say students are very well         and a surprising 42% of parents have
                                              prepared to deal with the financial        not taken any steps whatsoever to
Financial education goes hand in
                                              challenges that await them after           discuss financial basics.
hand with financial counseling                graduation.

and is the first step in achieving            •More than three-quarters of students
                                              (76%) wish they had more help
and maintaining financial stability
                                              preparing for their financial future.
and becoming better prepared to
                                             Through our financial education outreach,   of all ages. The Coalition believes that
face life’s unexpected challenges.           Novadebt works hard to provide the          all citizens of New Jersey must have the
When does the need for this                  financial literacy resources to assist      financial literacy necessary to make
                                             those students and parents referenced       informed financial decisions.
knowledge begin? When does it end?           above. In recent years, our membership
                                             with the New Jersey Coalition for           Grant funding and sponsorship by
                                             Financial Education has become an           member organizations helped to fund
                                             important component of this. The goal       the development and publication of
                                             of the New Jersey Coalition for             two New Jersey Coalition financial
                                             Financial Education is to improve the       education newspaper inserts, Money…
                                             personal financial literacy of New          What Young Adults Need to Know and
                                             Jersey's citizens by promoting the          Financial Fitness for the Best Rest of
                                             teaching of personal finance to people      Your Life: What Older Adults Need to

Know About Money. There is
a popular phrase that “knowl-
edge is power” and these                                                                                                Dear
publications provide valuable
resource information targeted                                                                                           Novadebt…
to their specific age groups.                                                                                           Source: A Novadebt Client
Novadebt has been involved
in the distribution of these
inserts, incorporating them into
                                                                                                                        “I don’t know what I would
our workshop curriculum.
Money… What Young Adults                                                                                                have done if it had not been for
Need to Know focuses on the
knowledge that is needed to help                                                                                        this program. I did not realize I
students navigate today’s
                                                                                                                        was $40,000 in debt and I could
increasingly complex economy.
Information has been brought together to                                                                                not pay enough to make a
                                                         self-quizzes, glossaries, resource lists
help them gain the power to manage
                                                         and action steps to help you turn                              difference. This program helped
credit cards, buy a car, protect yourself
                                                         knowledge into action. In summary,
from identity thieves, avoid overpriced
                                                         “Today is the first day of the REST of                         me to almost become debt free
lenders and credit practices and finally,
                                                         your life, so make the most of it!!”
how to make your money work for                                                                                         as far as credit cards. Hopefully,
you. By teaching to save rather than to
                                                         In addition to our own library of                              by 2008, this will happen.
borrow, students learn how to make
                                                         resources, our Education Department
interest work for them rather than
                                                         continuously researches other sources                          At present, I have no cards and
against them. In other words, “make
                                                         of financial topics that assist those who
the most of the FIRST day of your                                                                                       if I can’t pay cash, I don’t
                                                         contact Novadebt. The two publications
financial life.”
                                                         previously mentioned, are just two that                        bother. I believe now that I can
                                                         provide excellent tools and information
Life’s financial decisions change
                                                         to both students and adults alike. To                          control what I charge and not
dramatically after individuals reach the
                                                         download a copy, just visit the New Jersey
age of 50. At no other time in our lives                                                                                let credit cards control me and
                                                         Coalition web site at
do people have to make as many
                                                         Through our membership and work in                             that is because of the service
financial decisions as we do at this
                                                         organizations such as this one,
point. The second publication for older
                                                         Novadebt is able to extend our reach                           you have provided to get me to
adults addresses five of those issues:
                                                         to provide the tools and resources for
Social Security, health and long term                                                                                   this point. I truly thank you for
                                                         individuals to help map their financial
care insurance, later-life investing,
                                                         future. I                                                      the help.”
creating a retirement “paycheck” and
estate planning. The most important
information that you need to know is
detailed in the publication. It includes                                                                                   ,
                                                                                                                        ACP North Carolina

                           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.

     5 Ways to Jump-start Your Retirement Fund
     Get a number. Just start. Tools, such as online                     How do you eat an elephant? One bite at a time.” Pay
     calculators available at the Social Security                        yourself now, stick to it and be patient.
     Administration web site and other educational sites
     can help wage earners determine how much their                      Join your employer’s plan. The good news is
     benefits will be and how much they need to save for                 there’s lots of incentive and help to save. Many
     the retirement of their dreams.                                     employers are stepping up plans to automatically enroll
                                                                         employees in a 401(k) or other retirement plan.
     Be smart with spending. Make decisions today                        Financial products, such as the so-called lifestyle or
     about how you spend, save and invest. Doing this, will              age-targeted mutual funds, can make it simpler to
     impact what you have tomorrow. Capitalize on resources              choose investments that are designed to meet your
     available to you at your workplace, or talk with your               retirement goals. Check with your company’s human
     parents or someone who you respect. Many companies                  resources department for guidance.
     offer free financial-planning education and investment
     guidance to help individuals take charge of their                   Start an IRA. Individual Retirement Accounts, or
     retirement savings. Find out what’s available to you.               IRAs, give people a way to build tax-deferred savings
                                                                         for retirement. An IRA is an account, not an investment.
     Start saving now. “One of the biggest mistakes                      You can put just about whatever investments you want
     people make is that they’re so overwhelmed they do                  into your IRA – stocks, CDs, mutual funds, cash and
     nothing. They look at their number and think, ‘I can’t              bonds – anything except options and other derivatives.
     ever save that,’ so they do nothing,” says Dick Bellmer,
                                                                         You may be eligible to open an IRA even if you have a
     chairman of National Association of Professional
                                                                         plan at work. I
     Financial Administrators. “But it’s like the old saying:

    Better Meals Ahead: Making Menus
    Source: American Center for Credit Education (ACCE)

    It’s five o’clock and the
    proverbial call rings out,
                                     • Take note of what’s on sale by
                                     reviewing the weekly flyers tucked TO DO:                        oven and are great to have on
                                                                                                      hand for last-minute guests. You
    “What’s for dinner?” Do          into your local newspaper or                                     can toss cooked meatballs with
    you make a mad dash to the       available at the front of the grocery store.        your favorite tomato sauce, fresh parmesan,
    grocery store? Or perhaps        Shopping sale items is one surefire way of          and angel hair pasta. Make crockpot Swedish
    you make a quick call to the     saving money and can help spark menu ideas.         meatballs served over brown rice. Serve up
    pizza joint whose number is                                                          meatball subs or Italian Wedding Soup. Or
                                     • Next, take a peek in your pantry, refrigerator,
    plastered on the side of your                                                        you can boil inexpensive chicken thighs and
                                     and freezer to look for missing staples. Think
    refrigerator. And there’s                                                            shred them to make soups, enchiladas, or
                                     simple: eggs, butter, parmesan cheese, bread,
    always the old standby: a                                                            barbequed chicken sandwiches.
                                     pre-made piecrusts, jars of roasted red
    bowl of cereal. While you
                                     peppers, olive oil, a bunch of parsley, and fresh   • With list in hand, head off to the grocery store.
    might be able to satisfy your
                                     lemons. An accurate inventory can help you          Don’t freeze up or head for the old standbys.
    hunger these ways, chances
                                     decide what meals you can prepare and gives         While you’re at the store, remain flexible. If
    are you are sacrificing taste,
                                     you a clear idea of what you need to make your      you planned pork roast for one night, but find
    nutrition, and money for the
                                     dinner complete.                                    that whole chicken fryers are $.49 a pound, you
    quick fix.
                                                                                         can easily make a substitution. Changes are
    The solution to harried trips    • Making your menu is your next step. If you’re
                                                                                         okay and sometimes work to your advantage.
    to the store and yet another     new to menu planning, don’t get over zealous
    night of takeout? A menu         with the seafood soufflé this month. Instead,       • Post your menu in an easily accessible place
    plan. Yes, it sounds tedious     think seven simple meals with sides and look for    for quick reference. As you put away groceries,
    and can even seem over-          recipes with a few easy-to-follow steps. Look       take out the menu plan. Match it up with the
    whelming if you’ve never         through cookbooks, magazines, or even online.       family's calendar, saving the oven roast for a
    done it before, but the key to   Websites such as can be a        lazy Sunday afternoon, the turkey and cheese
    menu planning is to tackle it    big help for getting simple recipes for dishes      stromboli for soccer night.
    one step at a time.              you love.
                                                                                         You might not ever rival the likes of Rachel Ray,
                                     • Think double-duty. If hamburger is on sale,       but by following these steps, better, cheaper
                                     you can make and freeze meatballs for half a        meals are ahead. I
4                                    dozen different meals. They cook quickly in the
Budget Travel in the Fall

               For many people, autumn is
               the time of year when the
               nights get colder, the days
               get shorter, the leaves
      change color and the year heads rapidly toward the cold
      winter months. The fall of the year is the time when the
      kids are heading back to school and anxious travelers are
      no longer dreaming of beach resort towns.                               It is also important to check the weather, including
                                                                              average temperatures and average rainfall levels,
               For the small budget traveler, however, the                    for your fall travel destination. After all, lower
               autumn season offers some tremendous opportu-                  autumn prices will do you no good if rain or
               nities for lower prices, smaller crowds and an                 uncomfortable temperatures ruin your long
               overall better vacation value. The very items                  anticipated vacation.
               cited above make fall a great time for budget
      minded travelers to head to some of the best known                            If the average temperature and precipitation
      resorts and enjoy lower prices on airfares, rental cars,                      levels are to your liking, it is time to start
      food and hotel rooms. Every vacation destination has its                      searching for the perfect fall travel deals. The
      own high and low season, but the autumn of the year has                       obvious first place to start for many people is
      the advantage of being the off season for both summer                         the internet. There are a number of very good
      and winter destinations.                                         web sites and newsgroups devoted to the best in budget
                                                                       travel, and they are a great place to start.
                 For instance, while winter is the high season for
                 ski resort towns and other winter destinations,                     It is also important to start planning early for
                 the mountain locations of these resorts often                       your fall vacation. While the heat of summer
                 mean that skiing and other activities are available                 is still around, be sure to start shopping for
      in late autumn, while prices for lodging, meals and rental                     the best fall deals. Airlines often start
      cars are still much lower. Likewise, resorts and travel          promoting their lower fall airfares while summer is still in
      destinations that enjoy great popularity in the summer           full swing, and it is important to act fast to get the lowest
      months are still quite pleasurable, and often more so, in the    fares. The same goes for rental cars and hotel rooms, as
      fall of the year. For instance, autumn offers such benefits      those fall specials are often snapped up very quickly by
      as cooler temperatures and fewer crowds in addition to           other budget minded travelers. I
      lower prices. The same restaurant at
      which reservations were impossible to
      come by in the busy summer months
      may suddenly be available in the fall,
      and that pricey summer hotel room may
      be quite affordable once summer has

                When looking for the best
                possible deal on fall travel, it
                is important to thoroughly
                research your particular des-
      tination. While fall is the off season for
      most locations, this is not true for every
      destination. Be sure that there really
      are better values in the autumn season
      before booking your trip.

    Back to School Clothes on a Budget

           It is almost here again: time for the kids to head back to school. But before they set foot on
           the school bus, you’ll most likely be heading to the local mall to outfit them for that first day. For
           moms on a budget, the back to school wardrobe can be a frightening prospect. Here are some
           tips for getting the most out of your back-to-school buck while still giving kids what they want:

    Use this as an opportunity to Check out e-Bay.                                              Realize that brand names
    teach budgeting skills.       The online auction service often has great                    DO matter.
    Tell your kids how much money you have         deals on new or slightly worn clothing.      Kids can be cruel, and wearing the
    to spend, and let them participate in the      You can name your price, with nothing to     “wrong” labels can make your child the
    decision-making process. Even your chil-       lose. Most sellers offer a photo of the      target of unwanted teasing and bullying.
    dren understand the concept of money.          items being sold, and have a seller’s        Teach your kids that their clothes do not
    Older kids can be given a clothing             feedback rating indicating the number of     define them, but do allow them to wear
    allowance for them to spend as they wish.      positive comments they’ve received,          the brand names that are in demand.
    Anything they want over and above their        which can increase the first-time bidder’s
    allowance should be paid for by babysitting,   comfort level. Search by size, brand
    mowing lawns, etc.                             name, or description. A recent search on
                                                   “Tommy Hilfiger” came up with 4,394
                                                                                                      Happy shopping! I
    Buy only one outfit to start                   matches!
    with, saving most of your
                                         Have your religious group
    money for later on.
    Chances are your kids will come home
                                         or mom’s group sponsor a
    from school having seen all the new clothing swap.
    trends they missed out on and wished           Advertise in your local
    they had. With money left over, they can       paper for moms to bring
    get what they really want. Plus, retailers     their outgrown children’s
    will start marking down their fall clothes     clothing in good condition
    after all of the back-to-school shopping       to your specified location.
    has died down a little.                        You can use a “point” sys-
                                                   tem; whereby you receive
                                                   tokens in exchange for the
    Shop thrift stores.                            items      you     donate.
    Jeans, jackets, shoes, and shirts can be       Leftover items can be
    found for $1-$5 per item at your local         donated to charity.
    Goodwill or Salvation Army. Many times
    shops like these even have half-price or
    bag days where you can save even more.
    If you shop frequently, you most likely will
    be able to find the brand names your kids
    are looking for. No one will ever know that
    their “new” Gap sweatshirt was second-

Cut Your Future
Holiday Bills in Half

Most of us have a certain number of holidays that we
celebrate each and every year. That means quite a
number of extra “gifts” will need to be purchased for
family and friends. Here is how you can get the best
bargains on holiday merchandise, and how you can save
quite a bit off your “gift” bills.

Here’s What Happens:
Every single year, about a month and a half prior to any
“major” popular holiday, most retail and department
stores offer holiday related merchandise. As each holiday
approaches, the majority of the general public rush to buy
these high priced “holiday” gifts a few weeks or days
before the celebration. Stores expect this. They love the
holidays. Why? Simple. Hundreds and thousands of
eager shoppers will come through their door and spend,
spend, spend.

Key to Saving Money:                                               To Save Even More Money:
                                                                   When you go to a “post” holiday sale, check the prices
The “retailer’s tradition” is an incredible chance for you
                                                                   and quantities of the items you want. Ask the store
to save big money. What is the “retailer’s tradition”?
                                                                   manager if the merchandise isn’t sold within a week, if
Immediately AFTER any given holiday, retailers clear
                                                                   the price can be lowered even more. Generally, stores
out ALL leftover holiday related inventory in order to
                                                                   do not have much time to clear out inventory and if
make room for the next. Think of it this way, how many
                                                                   the merchandise isn’t selling, they will lower it to a
of you NEED to buy a Halloween costume after October
                                                                   price that will sell. If you have the time, check every
31st? Not many right? In addition, stores do not have
                                                                   other day to see if there are any more price reductions.
the time, space, or manpower to pack leftover holiday
                                                                   Better yet, ask the manager to call you if the prices get
merchandise and store it in a warehouse until next year.
                                                                   lowered. You might find the manager offering you an
There is little or no profit in it for them. Instead, stores
                                                                   additional 20% off just for inquiring about future price
advertise HUGE post-holiday sales with discounts gener-
ally ranging from 30%-80% off normal retail prices.
They need to get rid of the merchandise, and                       Conclusion:
depending on an item’s popularity, are willing to sell at a        When purchasing gifts throughout the year, you get to
very low price.                                                    put more thought into what you are buying for some-
                                                                   one. Your shopping will be done with ample time to
Here is your chance to stock up on gifts that you KNOW             spare, and you’ll avoid those overcrowded mall excur-
you can give to someone the following year. If at all possi-       sions. At the same time, you’ll get holiday related mer-
ble, designate a large plastic container as a “Gift Box”           chandise at 30%-80% off regular retail prices when
where you store all of the gifts that you buy throughout the       bought immediately after the celebration. By the time
year. To take this idea one step further, keep a list of all the   the holiday comes around again, you won’t find
people you exchange gifts with. When you come across a             yourself spending $900+ on presents that most likely
gift for someone in particular, you can then cross them off        will be forgotten in a month or two. Try this shopping
your list. This will save you a ton of time and help prevent       strategy after the next major holiday. You’ll be
multiple gifts being bought for the same person.                   surprised at how much $30 can buy you. 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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