It’s official! Our government has approved tax rebates that we can expect to start seeing around late May to early June. Those who are single, with no children, can expect around $600.00 and married couples with children can expect about $1,200.00 plus an additional $300.00 per child. Credit counseling agencies are urging their clients to spend their money wisely.

Here are some suggestions to stimulate the economy if you decide to use this extra money as it is intended:

• Are you currently spending money every day on expensive coffee? Investing in a gourmet coffee maker should save you in the long run if you use it instead of purchasing a $3.00 cup of coffee from Starbucks or Caribou everyday.
• If you go out to the movies frequently, invest in a home theater system and watch movies at home instead of going to the movie theater.
• Home improvements are another good investment and could help to lower your utility bills if you purchase new windows or insulation.
• With gasoline prices at an all-time high, perhaps getting some vehicle maintenance done will improve your car’s performance, which should improve gas mileage.

Credit counselors also suggest saving your money or reducing debt as an option.

• Always pay off credit cards with high interest rates first. The idea is to pay down debt that could increase due to fees and high finance charges.
• Deposit the money for an emergency fund. Credit counselors suggest having at least 3 months worth of saved income set aside for emergencies.
• Start a college fund. This is an opportune time to start a college fund, especially since you may be receiving an additional $300.00 per child.
• Have you started saving for retirement? If not, this is a perfect time to start, especially if your employer offers something like a 401(k) plan that matches a part of your contribution.

Opportunities like this are not likely to be offered again so we should make sure we make the most of this one-time payment from the government. Credit counselors warn that there are scams already out there. As always, be careful anytime someone asks for personal information like bank account info or your social security number as the IRS has announced that they will not be contacting you for this information through email or telephone. If you receive a questionable e-mail, do not open it! Be sure to forward any questionable e-mails to phishing@irs.gov.

Sure, we’re all looking forward to our tax returns this year but would you be willing to pay a triple-digit interest rate to get your own money about 10 days earlier? Well any credit counselor will tell you, that’s exactly what you will be doing if you take out a Refund Anticipation Loan or RAL.

Many of the advertisements that you see that claim to be “Instant Refunds” or “Rapid Refunds” are really RALs and are mainly targeted to those with lower incomes. If you are struggling financially but are still thinking you might need to take out a Refund Anticipation Loan, ask yourself this first: “Why would I pay someone to loan me my own money?”

Don’t give a large chunk of your hard-earned cash to someone else to get your tax refund a few days earlier than you would if you file with the IRS directly. Most credit counselors advise it pays to be patient and wait for just a few more days. You can try speeding up the process by filing your tax return electronically with E-file or have your tax return sent directly to your bank account with direct deposit.

You may also want to consider reducing the amount of taxes withheld from your paycheck but it is highly recommended that you see a tax professional before doing so. This may enable you to put more money in your pocket each pay period, rather than receiving a large refund at the end of the year. This may prevent you from relying so heavily on your tax return in the first place.

If that isn’t enough to sway you from taking out a Refund Anticipation Loan, credit counselors warn: this is a loan that must be repaid. If your refund is denied, delayed or if your return is smaller than expected, you will still be expected to pay the loan back. If you are unable to pay, the lender might send you to collections, hurting your credit as a result.

Bottom line: Refund Anticipation Loans just aren’t worth it!

It’s a new year once again! Every January you get a fresh start. This is the time of year to put yourself to the test. So what is your New Year’s resolution this year? Whether you want to lose 15 pounds or to stop smoking, have you considered it might be so hard to stick to your resolution because of holiday debt? Are those holiday credit card bills pouring in on a daily basis tempting you to maybe light up a cigarette or eat a half gallon of ice cream resulting in another failed New Year’s resolution? Maybe your New Year’s resolution should be to avoid accumulating holiday credit card debt again this year.

Don’t let those holiday bills get out of control!

All of that holiday debt will not go away if you avoid opening your credit card statements. If anything, you should get ahead of the game by checking your bank and credit card accounts online before your bills even come. Don’t ignore your bills! You could incur late fees, which may cost you up to $40.00 and your interest rates could increase up to 30% annually. Avoid this by making sure you at least pay the minimum amount on each card and mail it out the same day it arrives if possible. Furthermore, be aware that your credit card companies watch how you pay your other credit cards. If your card company sees you are late paying on another credit card, they could increase your interest rate, so paying at least the minimum on all your accounts is paramount.

Stop using your credit cards!

By using cash, debit and checks (provided your checkbook is balanced), you won’t be adding to the problem of accumulating additional debt. If you can’t resist using plastic, try putting your cards in a lockbox. If that doesn’t work, a more creative approach is to freeze those cards in a block of ice so you can’t get to them, the thaw time may help control impulse buying.

Set a goal.

You need to set a realistic timeframe to eliminate your holiday debt. By paying off your cards with the highest interest rates first, you will pay less towards interest and eliminate that holiday debt faster.

Don’t let this happen again next year!

Start saving now for the next holiday season. Free up some money by cutting out expenses like Starbucks coffee; try watching TV instead of going out to the movies and bring your own lunch to work. You can use this money saved to start a Christmas club account by setting aside $25.00 to $100.00 each month so you don’t burden yourself with holiday debt next year.

Most people would say that you should only consider bankruptcy as a last resort. While its important to consider all of your options first, there are instances where bankruptcy is appropriate and can provide you with the fresh start that you need. My concern with bankruptcy is when people file.

On average, one third of bankruptcy filers made the decision to file after being pushed over the proverbial edge by a credit collector; they couldn’t take the constant harassment and threw their hands up in the air. The problem with this – if you file bankruptcy today and, God forbid, you should find yourself with tens of thousands of dollars in medical debt next month, what will you do then? You can’t file again.

Bottom Line: If you have come through a financial crisis and are not still in the middle of it and could say, “If I could just get rid of this financial burden, I would be fine with my current employment, housing and transportation situation” then you might be a candidate for bankruptcy. Take the time to seek legal advice and explore your options. BEWARE: Most bankruptcy attorneys don’t get paid unless you file bankruptcy. Therefore, there may be special incentive to encourage you to file even if there are alternative options that are more beneficial.

Want to know why most household budgets fail? Because most Americans approach budgeting the same way the approach dieting: Cut out everything I enjoy to accomplish my goal (losing weight or financial freedom.)

What’s the problem with going on a diet in which I say I’m never going to eat chocolate again? That will probably last about three days (provided those are three REALLY good days!) and then I will “fall off the wagon” and probably eat more chocolate afterwards than I would have eaten on all the days of my diet combined. This is why more people gain weight when dieting and also why people get further into debt when budgeting.

Financial goals and spending habits require a commitment to lifestyle change just the same way as proper eating and exercise deal with issues of weight loss. Don’t expect to create a budget and cut out every thing you enjoy. No one can survive life without a little bit of enjoyment! Try to find creative ways to either reduce the frequency of spending or what you’re purchasing without cutting out your motivations for getting out of debt and setting healthy financial goals.

Bottom Line: Don’t sabotage your budget by starting out unrealistically. Take the time to create an initial budget, then spend some additional time (usually 30 days) monitoring some fluctuating budget categories like fuel, groceries and entertainment expenses to get a realistic idea of your spending habits. Then be creative in finding ways you can reduce expenses to meet some of your long term financial goals like retirement, purchasing a home or taking a vacation!

I talk to individuals all the time who ask questions like, "I co-signed for a loan and need to figure out how to get my name off now because collectors are calling me." Let me take a moment to educate on what it means to co-sign.

When you co-sign for a loan you are essentially a co-applicant. The reason your friend or family member needs a co-signer is because they have poor or insufficient credit. The bottom line is they are a bad credit risk for the lending institution who has decided to deny their credit application unless someone else joins the equation. The whole point of a co-signer is so the creditor has another person to go after for payments in case the primary applicant lives up to their credit history and defaults on payments.

There are only two ways a creditor is going to let you out of your obligation as a co-signor: The primary applicant might decide to make good on payments and create a good enough payment history that the financial institution is willing to refinance the account in only the individual’s name. Otherwise you’re out of luck unless you can find another lender to refinance without you. Don’t hold your breath here!

It’s too late to start asking how to have your name removed from a loan or credit card when they account is in default - that’s the last thing the creditor is going to do for you. Don’t be surprised when they begin to call you to ask for payments when they’re unsuccessful at collecting from the primary borrower.

Bottom Line: Be very careful when co-signing for a loan or credit account. As a credit counselor I’ve seen it ruin the best of friendships and tear families apart. Never even consider co-signing unless you are certain you have the means to make those payments if your friend or family member decides to use their money on more important things than bills.

Isn’t it amazing what people will do to make a dollar? Organizations are shooting up all over the country promising to help you avoid foreclosure and turn around your financial situation. The problem - most of them are charging high up front fees and running away with your money without doing a thing to improve your situation. Worse than that, they are targeting low-income, minority and senior homeowners who are most vulnerable.

These organizations receive foreclosure information through public records and notices (which are readily available to anyone) and contact you. They will require you not contact your lender during this relief process, keeping you out of the loop with what is actually being done. Many are asking you to sign over the title (some don’t ask but just hide it within the paperwork) with the intention of selling it back once your payment arrears have been resolved. Most will strip any equity in the home through high, buried fees and make it next to impossible to get back on your feet.

Bottom Line: Never trust help that is unsolicited! If you’re having problems, contact your lender first to see if a workout plan can be arranged. If that doesn’t work, contact a HUD approved housing counselor to see what other alternatives might be available (a listing of approved counseling agencies can be obtained by clicking on http://www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm.) In most cases your mother’s advice still holds true: “If it’s too good to be true, it usually is!”

It seems there is nothing new under the sun when it comes to disaster and tragedy: global warming is blamed for devastating floods and wildfires, government is blamed for loss of lives from international conflicts and then you have the completely unexpected like last week’s tragedy on the I-35W bridge in Minneapolis, MN.

Something I’ve noticed (and I’m sure I’m not alone) when tragedy strikes is how quick people are to offer the standard, “Let me know if there is anything I can do to help.” For most, this statement is more of a common courtesy than an actual request to assist.

No one can completely understand the difficulties related to surviving these kinds of tragedies unless you’ve lived through them. What’s even more devastating is when life goes on after the loss of a loved one, life savings or personal property and the victim left standing is holding a mountain of problems that will stretch far into the future. Realistically, if you’re coping with grief, making sure a credit card bill is paid on time could easily be the least of your worries.

If you really want to help a friend or loved one facing a devastating crisis, pull them aside during a moment of quietness and offer to step in to take control of their household finances until they get back on their feet. Opening mail and writing checks for bills might seem insignificant but the amount of headache and frustration you’ll save them in the future will be immeasurable.

1. When using an ATM at night, bring a friend or find a machine in a well-lit area such as a bank, credit union, or grocery store. The risk of being robbed at an ATM increases after dark.
2. Take the time to memorize your PIN number. Carrying it with you will only increase the chance that your money will be stolen if a thief takes your purse or wallet.
3. Do not dispose of your receipt near the ATM. It could contain information that a theif may use to find out more about you and your accounts. Even the last four digits of your account number can pose a risk to your security.
4. Examine the ATM for unusual devices or attachments. Criminals can attach a card skimmer over the original skimmer to steal information from the magnetic strip on the back of your card. Hidden cameras can be positioned to record your PIN number.
5. Consider avoiding the ATM altogether by taking advantage of th cash-back option when using your debit card to make purchases at local grocery or convenience stores.

Have you seen the odd looking, spiral-shaped light bulbs known as CFLs (compact flourescent light bulbs)? According to the U.S. Environmental Protection Agency, they use up to 75% less energy and last up to 10 times longer than standard light bulbs.

What does that mean for us?
A six-pack of CFLs will save you about $200 over their lifetime on both energy and new light bulbs. According to Energystar.com, you could see a savings of about $30 per bulb.

What does that mean for the planet?
Jean Chatzky of Money Magazine writes “each bulb will keep a half-ton of carbon dioxide out of the air”. According to the U.S. Department of Energy, if every American home replaced just one standard bulb with a CFL, we could prevent greenhouse gases equivalent to the emissions of more than 800,000 cars.