Payday Loans

Archived Posts from How To’s and Guides

Ah, the holiday traveling seasons.  The time where we all begrudgingly pack up our suitcases and visit family and friends who for whatever reason doesn’t want to live anywhere near us.

I wouldn’t classify myself as a frequent flyer, but after flying over 20,000 miles this year alone, I do take certain steps to ensure that my flights are as painless and trouble-free as possible.

Here are a couple tips on how you too, can be a travel superstar:

1. Use price comparison engines to find the best prices.

Search sites like Kayak.com makes looking for flight fairly easy.  The great thing about kayak is its ability to let you further refine and filter your results – from early morning flights to the midnight dash to the airport, you can pick and choose base on your traveling preferences.  Tweak the near-by airports and find the cheapest option for your location region.

2. Pack and travel as light as possible.

If it’s not a long trip (shorter than a week), I would do my best to fit everything I need in a carry-on luggage (duffel bag, small suitcase, whatever).   Although I do understand why we sometime over pack — after all, it’s safer to have everything you need than to be sorry — traveling with excessive luggage is never fun.  The time you’d save in avoiding checking in luggage can sometimes be priceless.

3. Map out and inform yourself on the layout of the terminals and airport ahead of time.

It’s the age of the Internet and almost every major airport (and smaller regional airports) will have a website fully detailing the terminals and parking locations.  Efficient airports generally have great layouts and directories.  The main thing you should always look for when you check an airport’s website is which terminal your airline is located at, and where the gate is within the perspective terminal.

Knowing where you need to go ahead of time may sound like common sense, but if you’ve ever seen the group of people wandering around the airport – only to realize that their gate and terminal is on the other side of the airport — then you know how time consuming it can be when you’re ill prepared.

4. Check TSA website for security check point wait time.

This is actually a pretty handy site from our stellar transportation security government agency.  The TSA wait times page lets you check out the security line wait time ahead of time before you head to the airport.  Just pick your airport, traveling day, terminal, and flight hours and the TSA website will spit out historical data on the length of wait time for each terminal’s perspective security check point.

Of course the data can’t always be perfect or accurate, but from my experience, wait times listed are fairly accurate within +/- ten minutes.   Once you know how long the potential wait time could be, you can better plan when you should arrive at the airport (I personally hate waiting an excessively long time just to board my plane).

5. Use online check-in and SeatGuru to choose better seating.

Most websites will have the ability for you to print out a boarding pass from home.  If you travel light and won’t be checking in any luggage, you can simply print a boarding pass and head straight to the security check-in lines.

Using Seatguru.com ahead of time to pick a seat of your preference.  Although for many flights the choices are all the same for specific class of seating — with Seatguru, you can at least know the seats you should try to avoid (ones near bathroom, ones that don’t recline, one’s that are near gallery etc.).  An added benefit of checking in online is the option to choose better seating when a flight isn’t full.  Why sit upfront where it’s packed to the brink when you can leisurely sit in the back of the plane with 2-3 seats to yourself?

6. Familiarize yourself with TSA rules and procedures.

No matter what you think of their efficiency or viability, TSA security lines are here to stay.  As each airport better adjust their security lines, the wait and hassles are becoming less frequent.  Still, not everyone flies regularly and you can always spot an infrequent travelers easily as you’re slouching through the security line. The TSA website has a great breakdown of what you should be aware of, but here are a few simple tips:

  • Make life easier and use the 3-1-1 method. 3 ounce or smaller liquids in 1 quart-size plastic container bag, with 1 bag per traveler.
  • Have your laptops out and ready to put into the container bins for the X-ray machine. One laptop per container and be sure that you don’t put anything else in the container.
  • Have your jackets, belts, and shoes in another container.  Depending on the size of your carry-on bag, you may or may not need a container bin for it.
  • Use the smaller white round container bin for your smaller gadgets and accessories: watches, cell phones, keys, and wallets.

Once you’re through the metal detector, grab your belongings from the X-Ray machine and move along to the designated area to put on your shoes, belt, and repack any necessary belongings.  Most security lines at the terminals will have a wider, open area for passengers to gather their belongings.  Don’t clutter at the X-Ray machine just to slowly put away your belongings and accessories!

7. Don’t be in a rush to board the plane.

If you’re at the gate already, the plane’s not going to leave without you. I’m usually one of the last few people to board a flight.  Why rush when you’ll just be standing in the aisle waiting for people to sit themselves or store their carry-ons in the overhead compartments?  Because I pack light and travel light, I’m generally not too concern about not having an overhead storage space available to me.

If you used the previous tip and checked in online, you’ll be able to see if a flight is full or not and decided if you want to duke it out for a storage space (since having your carry-on thrown to the cargo bay can be quite a hassle).

So there you have it.  Seven tips from yours truly, typed up through the short hour flight from SFO to LGB.  Got your own smashing tip?  Share your tips or I’ll brand you as a selfish reader.  Or not.  Or will. Whatever.  Cap out.

photo credit: geekmojo, Jaako, and alist

FICO or FICA Score
Monkey Confused about Financial Terms

Did you came here searching for information on FICA score?  What you’re looking for is actually a FICO score, which can be found at sites such as Equifax Score Watch.

It was Friday night and I was browsing the web, reading financial tidbits and news (yeah this is how every cool 20-something rolls during the weekend) — I noticed that there was a large confusion online between the financial terms of FICO and FICA.

To make matters worse, a quick search on Google shows that many websites use the term FICA score interchangeably with the term FICO score, without clearing up the difference between these two completely unrelated financial terms.

As my weekend web trolling is already going so well, why not write a post to clear up the misconception? This will for sure make the weekend extra cool. After all, who needs to go out when there’s blogging to be done!?

What is FICA?

FICA stands for Federal Insurance Contribution Act.  Without going into too much history about Social Security and Medicare, FICA basically mandates that you and your employer contribute a percentage of your income to this tax, in order to fund the aforementioned Social Security and Medicare.

For those that may not know, Social Security provides income to retirees, people with disability, and some other select groups of people, while Medicare provides for medical insurance coverage to persons over age of 65 and again, other select groups of people.

And that’s what the 6.2% of your paycheck goes to (your employer pays the other 6.2%).  If you’re a student being employed by the educational institution you’re attending, rejoice, you’re an exception to the FICA tax!

If you happen to be self-employed, your FICA contribution will be split to 12.4% for Social Security and 2.9% for Medicare. There are of course exceptions to this rule, whether you’re self-employed or a regular wage-earner. You can read more about these exceptions in the resource of links below.

But that’s about the gist of the term “FICA” and how it matters to you.  So does FICA have anything to do with credit score or is there even such a thing as a FICA score?

Nope!

To clear the acronym confusion up, read on.

What is a FICO Score?

A FICO score is a credit score, which in short is a score providing a grade on your overall credit worthiness.  A true, legitimate FICO score can be purchased from Fair Issac Corporation at myFICO.com or with the Equifax Score Watch monthly plan.  The score ranges from 300 to 850 — the higher your score the better your overall creditworthiness and likelihood to receive favorably interest rate when applying for a loan (home, auto, etc.).

These scores are formulated with data from your credit reports. Because you have three major credit reports from three different major credit reporting agencies (TransUnion, Equifax, and Experian), you may have three slightly different FICO scores.

Factors in your FICO score:

  • 35% – Payment history
  • 30% – Amounts owed
  • 15% – Length of credit history
  • 10% – New type of credit
  • 10% – Types of credit used

In short, if you have a positive payment history (never paying late), your amounts of balances on your accounts are low, and you have a long history of positive accounts — then you most likely have a super credit score.

Those are the only factors of your FICO credit score. Your sex, race, color, religion, national origin, marital status, age, salary, occupation, and residency location will NOT be factors determining your score.  If its not in your credit report, then it’s not a factor.

Importance of FICO Scores

So why are FICO scores important and why are there so many people online searching about “FICA score?”

A good FICO score increases your chances of receiving favorable interest rate.  With current interest rates, that means when you compare between an excellent FICO score of 760 and a poor FICO score of 580, there will be a difference of $780 in monthly mortgage payment for a 30 year fixed, $300,000 loan.

If that didn’t get your attention, the interest difference is a low 5.63% APR versus a high 9.451% APR. This is a significant impact as when the mortgage is paid off, the difference in total interest paid will be about $280,000!

Thus knowing and keeping your FICO score can be pretty important.  As long as you properly manage your credit usage, your FICO score should be top-notch and a non-issue.

This concludes a brief primer on FICA scores. Woops , I mean FICO scores.

top photo credit: QuitoCarela

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You would think after over a decade on the Interweb, I would have a photographic memory of all the top entertainment websites from the world. But alas, till this day I still get astonished looks from people as they ask: “What? You’ve never heard of Google?”

Well I’m sorry that I’m not well-versed on the fast pace viral world of Web 2.0 — you freaking ass. (There was also this matter of living in a dungeon for most of the 21st century).

Here’s seven websites for some fast, free, and easy entertainment, presented to you via pictures and links — Web 1.0 style. Woot woot.

TV, Flicks, and Videos

1.  Hulu.com

Hulu.com

With a recent sneak peek of 30 Rock’s Season 3 premiere, one has to wonder how much more joygasm Hulu can provide.  A joint venture from NBC Universal and News Corp, Hulu.com has been be on the web for just a little over a year. You’ll find the majority of NBC, FOX, and other cable network shows on Hulu, along with plenty of blockbuster movies from years past. Who needs basic cable when there’s Hulu.com?

2.  Joost.com

Joost.com is a website that allows users to distribute videos and TV shows using peer-to-peer TV technology (whatever the hell that means) — like Hulu, you’ll find TV shows, music videos, films from national television networks and big time studios on Joost.  The interface feels a bit more clunky than Hulu’s, and you’ll also need to sign up to use the service (takes only a few seconds).  Video quality seems a bit worse than Hulu’s, especially since many of Hulu’s content are available in 480p.

3.  Crunchyroll.com

For our anime, Japanese and Korean soap loving crowd, Crunchyroll is the source to go for semi-legitimate (heh) Asian media.  Although not as refined as Hulu, as a video portal site Crunchyroll is full of content and contains a robust, active community.  Crunchyroll has also been providing more studio supported content in recent months. With show titles such as “I Love My Younger Sister,” how can you go wrong?

Uh…

Spiffy Music

4. Pandora.com

Fresh off its recent royalties payment battles, Pandora.com is one of the most popular music recommendation and Internet radio service website on the web (now limited to US residents only). Simply type in an artist or genre of your liking, and Pandora will start playing select piece that you may be interested in.  Thumbs up to play more like it, or thumbs down to skip and avoid similar type of music. A recent application for the iPhone now allows you to stream music from Pandora straight to your iPhone from any location.  Pretty sweet except I’m an iPhone hater.

5. Last.fm

Just in case you feel jaded by the US-only Pandora, in comes Last.fm, most likely the largest Internet radio and music community website on the Internet. The UK based service claims over 20 million active users from over 200 countries, and was recently acquired by CBS. Like Pandora, Last.fm sports a recommendation engine that lets you choose and stream the type of music you may like. Fairly easy to use and no registeration is required (but a profile saving your musical preference can be quite helpful).

Quick and Easy Games

6. Yahoo Games

Ah, the classic Yahoo Games. Don’t even get me started on how many hours I wasted playing Yahoo Pool during freshmen year in college. Oh, if only that translate into real billiard skills at the tables, I wouldn’t have to sell off my puppy.  From Scrabble, Monopoly, Spade, Bejeweled, to Chess and Go, test your mettle against others across the world. Just remember that no matter how good you think you are, there will always be some bratty 12 year-old kid from South Korea that can pummel you without breaking a sweat.

7. PopCap Games

The ultimate casual gaming publisher, PopCap Games’s flagship title Bejeweled has wasted away thousands of productivity hours.  If you love casual puzzle games, PopCap is the place to go.  The site is fairly easy to use, choose the game you’re interested in, install the plugin, and game on.  As an extra bonus, Steve Notley, the creator of one of my favorite web comics Bob the Angry Flower, works at PopCap.  I believe Steve’s website is as popular as this very blog — haha, zing!

This obviously isn’t a definitive guide to all the free resources on the web for music, videos, and games.  If you have a favorite site or service that you frequent, do share.

It doesn’t take a brand new sports car, a tropical vacation, or a well furnished house to make you feel “rich.”  Here’s ten simple ways to feel rich without extravagant materialistic means:

1.  Cook dinner with friends, family and loved ones. Try something simple like lasagna.  Use the time it takes to prepare and cook to catch up or reminiscence.

Lasagna dinner
photo credit: flit

2.  Take the dog, little ones, nephew, niece, kids from the neighborhood to the park.
Fly a kite, play b-ball, soccer, football, or tell Chuck Norris jokes.

Kite
photo credit: Ingorrr

3.  Hug someone you truly care about. When they wither in disgust or surprise, hug tighter.

Hug
photo credit: Tom@HK

4.  Write a hand written letter to your parents or loved one of choice. List all of your accomplishments, goals, and dreams — and before they start thinking you’re too full of yourself, thank them and tell them it couldn’t have happened without their love and support.

Writing My Letters
photo credit: barnabywasson

5.  Bake cookies. Hand deliver them to people you care about.

Fresh-Baked Cookies
photo credit: druzziel

6.  Volunteer your time. Help an organization or someone in need.

Family Volunteer Day
photo credit: blossominc

7.  Get outdoors. If you’re near one of the 58 national parks, grab some friends & rock on.

Capitol Reef National Park
photo credit: Wolfgang Staudt

8.  Get some family time in. Picnics, broad games, or a good flick from the library.

Family Time
photo credit: John Thron

9.  Read a great book. Don’t do it alone, read it with your partner, friends, or family.

Early Morning Reading
photo credit: Luis Fabres

10.  Watch a beautiful sunset.

Utah Sunset - Zion
photo credit: Timothy Hamilton

You’ll notice that most of the list entails some form of interaction with friends, family, and loved ones.  The election, market turmoil and other headlines can sometimes make our head spin and grab our attention, but don’t forget what truly matters, what easily make us smile, feel loved, and feel “rich” — the people around us.

If you liked this post, please share it on del.icio.us, StumbleUpon, or other bookmarking sites below. I’d appreciate it, thanks!

Credit card fever... tonight!

Post Highlight:

  • Find out your credit score and history to know where you stand.
  • Check credit pulls database to see common approval pattern.
  • Apply for cards that you most closely matched with in credit scores and history.

Lately, I’ve been thinking of getting a new credit card — specifically the True Earning Costco Card from American Express, for its kick-ass 3% cash-back on gas and dinning cash-back.

“But Cap, you have a gazillion credit cards, why do you need more?”

That’s none of your business!!

Okay… okay. I’m sorry, I shouldn’t have yelled. Its the stress at work, you know? Look, listen — I’m sorry. How about we go out for dinner next Tuesday night? That’s right. Just the two of us.

The problem with applying for a credit card is that many times, you won’t know whether you’ll be approved or denied credit. Rejection isn’t fun, but to add insult to injury, you’re not only denied credit, your credit score will take a few dings due to the hard inquiry imposed on your credit history when you apply for the credit card.

Thankfully with the help of other credit-rejection-fearing Internet denizens, there are resources you can access on the web that allows you to see if your credit score and history can qualify you for the credit card in question.

Step One: Know Your Credit Score and History

Decent credit scores. Too bad it's 3 years old.

If you know your real FICO credit score, credit history, and you’re positive that it hasn’t changed recently, you can skip this step. If not, head over to myFICO.com and buy all three of your FICO score. Use this myFICO promotional code to get a 20% discount on your purchase.

Unfortunately purchasing your FICO score can get a bit pricey, as even with the discount, all three FICO scores will cost you about $38. An alternative is if you know your recent credit history well, you can try the free FICO score estimator. This will give you a ballpark ranges of where your scores may be at. Remember that you can always get your credit reports for free at AnnualCreditReport to help you answer the FICO score estimator’s questions.

Step Two: Check Credit Pulls Databases

When you apply for a credit card, the issuer pulls one (or more) of your credit report to help determine your credit worthiness. Knowing which credit reporting agency the card issuer in question uses will help you narrow down the credit card you should or shouldn’t apply for.

For example, if you have a delinquency on your Experian credit report, but not your TransUnion credit report, you should avoid credit card issuers that pulls Experian, and try to apply for card issuers that pulls TransUnion.

Here’s two credit pulls database:

By using the credit pulls database from Creditboards, you can search for the credit card issuer you’re interested in applying for, and see a result of approved or denied credit profiles. Here’s a snapshot to give you an idea:

The approved and the rejected. teehe
click to enlarge

As you can see from the picture above, most of the credit pulls for the American Express SimplyCash card was on Experian, with a few on Equifax. Most approved scores are in the 700+ ranges, and those with lower scores generally got a lower credit limit upon approval.

Whenever a credit card company denies you credit, they are required by law to state the reasons for the denial of credit. You’ll also often see these reasons noted in the comment field from the credit pulls search results.

Knowing these types of information can help you in the decision process of whether or not if you should attempt to apply for a certain card. If you see a credit pull result with many higher credit scores than yours getting denied credit, or a large number of seemingly random rejection, you may want to think twice before you apply for the credit card in question.

Step Three: Apply and Rejoice at Approval or Rage at Rejection

Now that you know where your credit is being pulled from, and have confirmed that your score and profile is indeed much better than others on the listed result, should you apply immediately and expect instant approval?

Not quite.

Although these credit pull database can certainly help narrow down your chances, at the end, credit approval goes beyond credit scores and income level. Your past history, the mix of your credit profile, your usage pattern, your utilization ratio and many other factors all comes into play. No one can know for sure what type of criteria a certain issuer may have for certain cards.

What these databases can do, however, is to supplement you with more information, so you can go from “I have no idea if I’ll get approved” to “I think I’ll get approved… maybe if the stars aligned favorably tonight.”

Creative Commons License top photo credit: orphanjones

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We care so much about your privacy, we'll tell you about it in fine prints!

You know how it goes.

You rush home at 12:45 PM from your lunch break; not because you’re a savvy frugal person that bags their own lunch, but more so because you ate too many donuts this morning and you really have to use the restroom (for whatever reason, a tidy and clean washroom is always the last priority at your office building).

You pull into the garage, hop out of your car, unzip your pants, flung the keys onto the sofa and dash toward the downstairs restroom (because let’s face it, you won’t make it upstairs safely) — all of a sudden, a call on your home phone.

“Oh crap, is work calling?” you thought to yourself, “is lunch already over?”

A split second decision, you grab the phone and continue on towards the restroom.

“Hi, this is James from Region X Bank, Baker, Missouri Branch,” says the scripted voice, “Please don’t hang up on me as this is my—”

*click*

No time to be angry. This is going to be one of those replay finish. You kick the door down, turned around and sat right down — only to fall right into the toilet and touch the toilet water (yummy). Your insensitive significant other has forgot to put the toilet seat down.

Oh, the rage.

And who’s fault is this? Of course, the ill-timed telemarketer from Region X Bank (and maybe your upcoming ex-husband). Had they not called you, you would not have been distracted and you might have noticed that the toilet seat was left up.

So how does a savvy consumer keep what’s left of their consumer privacy? How do you reduce unsolicited telemarketing calls, junk mails, and general annoyance from people with products you just don’t care about?

Head Straight to the Offending Source

Most reputable (or nation-wide) financial institutions will have a clear privacy policy. When you apply for their service (such as a credit card or bank account), you will always receive the privacy policy set forth by the specific company. When these privacy policy have been changed or updated, by law, you will also receive an updated version of the same copy.

Most people don’t read these little privacy fold outs (as pictured above). What most people don’t realize is, many of these leaflets contain information on how to avoid direct marketing from the specific company and how the company shares your information.

You will generally have a few options:

  1. Yes/No: Sharing of your information and direct marketing within said company
  2. Yes/No: Sharing of your information and indirect marketing with other companies
  3. Remove name from telemarketing and/or mailing list.

Here are some privacy policy information from national banks, with steps you can take to choose your preferences:

Bank of America:

  • Privacy Policy Site – You can read the policy here and set your preferences online.
  • Call 1-888-341-5000 (recommend using the site instead)
  • Some marketing programs are already in progress, so even if you opt-out, it may take up to 12 weeks for the opt-out to be fully effective. When you opt-out of direct marketing programs via postal mail or telephone, your opt-out will last for five years.

Citibank:

  • Privacy Policy Site – Only option is a mail in form, available in PDF.
  • You have four choices. Limit personal information to non-affiliates. Limit personal information to affiliates. Remove name from mailing lists. Remove name from telemarketing lists.

Chase:

  • Privacy Policy Site – You can read the policy here and set your preferences online.
  • Call 1-888-868-8618, or for the hearing impaired assistance, dial 7-1-1, then 1-888-868-8618 and wait for operator assistance.
  • Old fashion snail mail: P.O. Box 260185, Baton Rouge, LA 70826-0185
  • Chase has two simple choice: Yes/No to sharing information with others; Yes/No to sharing information within family of companies.

American Express:

  • Privacy Policy Site – One of the better ones. You can also set your preferences online.
  • Call 1-800-297-8378 or mail to: P.O. Box 299836 Ft. Lauderdale, FL 33329-9836
  • Four choices, much like others. Yes/No to other companies or affiliates. Yes/No to mail offers or phone offers.

Opt-Out of Everything Because You’re Sick of It

Specific companies not spicy enough for you? Opt-out (or for the different ones, opt-in) to all credit card and insurance offers! You can visit the official consumer credit reporting industry website to either opt-in or opt-out. Your choices are fairly simple, opt-in to all the goodies (and have enough paper to shred for a lifetime), opt-out for five years, or for the more extreme — opt-out permanently! When you opt-out permanently, you’re required to print and mail an opt-out form.

Utilize Some National Resources, kthx

Visit the National Do Not Call Registry and sign up the telephone numbers to avoid telemarketers. Most telemarketers should not call the submitted number once it has been on the registry for 31 days, but you may still receive some calls — and calls from businesses where you are already a customer.

  • National Do Not Call Registry – Fear the enforcement of the FCC & FTC (heh).
  • Call 1-888-382-1222 to register via phone.
  • You can also file a complain if a telemarketer cease to make calls even after you’ve been registered for over 31 days.
  • The more concise, specific, and complete a complaint, the more chance you’ll have for it to be acted on. Avoid long, pointless story such as the introduction to this post.

California and Vermont Residents, Rejoice!

Because our state legislatures (or consumer advocacy lobby groups) actually cares about us, California and Vermont residents have more privacy protection within the state laws compare to other states (although Vermont residents have a bit more protection).

If you’re a resident at either California or Vermont, you will usually have an automatic opt-out choice to sharing of your information with non-affiliated companies (basically, other companies you might not be doing business with). For Vermont residents, you will also be automatically opt-out of the sharing of information within the specific company’s affiliates.

You should note however that both of these automatic privacy choices don’t include the choice of removal from telemarketing list or mailing list, so if you want to opt-out of those too, you should still contact the specific company and specify those choices.

Related Links & Resources:

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Lending money to strangers online could be pretty silly or pretty awesome depending on which website you’re on.

I first read about Kiva.org from Ramit’s Friday Entrepreneurs back in August of 2006.

First impression? Pretty neat. Bookmarked it, fell asleep, and soon forgot about it.

Yesterday, with an In-N-Out burger in one hand and a greasy mouse in another, I trolled Bloglines and came across another pf blogger’s post on Prosper.com — which I promptly typed into Wikipedia’s search box to see how Prosper has changed since launch. (Anyone else type things into the Firefox search box while they read articles or watch TV?)

While reading about Propser’s shady handling of its online forum, I noticed the “See also” link to Kiva in the Wikipedia entry.

“Hmm, I wonder how’s Kiva coming along?” I thought to myself as I click on the link and flicked the onions out of my burger.

Minutes later, before I even finished my juicy burger and strawberry shake, I found myself lending money to strangers online — all it took was only a few minutes.

Microcredit what?

Kiva.org is a non-profit organization that partners with microfinance networks across the globe to provide microcredit to low-income entrepreneurs. In gist, microcredit is the lending of very small amount of loans. It’s like letting your friend Bob borrow $50. Except Bob isn’t going to use the $50 to buy a PS3 game — he’ll be using the $50 to further his business and create more wealth.

Easier than Buying that Beanie Baby Off eBay

Lending money to various entrepreneurs across the globe is incredibly easy. You browse through the list of lenders by clicking the “Lender” tab, pick the listing you want to lend to, select your amount, click “Loan Now” put in your PayPal info and you’re done.

The spiffy list of borrowers

Borrower Listing Page

The lender's profile page

Lender’s Profile Page

After you’ve extended the loan, you will receive email updates in regards to the status of the loan and the progress of the business in which you’ve extended the loan to.

The flow of money is fairly simple. You extend the loan via a credit card transaction; Kiva collects the fund (100% of which goes to borrower, since Paypal is waiving transaction fee); the funds are transfered to the field partners which administers and collects the loan repayment; you receive your repayment into your account and you can withdraw the amount or lend to another borrower.

Not Really a Handout

Loans extended on Kiva won’t generate interest for the lenders (although the microfinancing field partners of Kiva do charge interest to borrowers), thus if you lend money on Kiva — you will only get your principal amount back. There is of course the risk of the loan defaulting, in which case you may lose your money.

With those in mind, why should anyone lend money?

Kiva’s pitch: By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Hence, “loans that change lives.”

My opinion? Sounds good to me. On one hand, you’re helping someone. On another hand, you’re not exactly giving a handout — these are loans that should be repaid, after all. Plus, more often than not, these loans are a means for them to produce more wealth and value — not to pay off debt incurred from excessive shopping.

Thus far, Kiva has had a pretty amazing repayment rate of 100%, an on-time payment rate of +99%, and the microfinance institution that Kiva partners with are required to meet Kiva’s due diligence standard.

Microfinancing isn’t without problems, borrowers can easily use their funds on transactions other than the ones stated, and microfinance institutions can’t always find the perfect borrowers. Still, as a website that utilizes the Internet to increase the reach of funding for microfinancing institutions across the globe, Kiva is doing a pretty spiffy job.

Related Links

Finding that ultimate balance

The guide in helping you say “up yours” to Madison Avenue.

Maybe You’ll Pick up a Thing or Two (No Guarantees)

No matter if you’re a seasoned shopper who knows exactly what they want — or an impulsive buyer who grabs the $10 DVD at the check-out aisle — you can probably pick up a thing or two from reading this guide.

If not, be comforted on the fact that you’ll only waste about 17 minutes or so of your life (depending on your reading speed and tolerance for grammatically lacking writing).

One Man’s Crap is Another Man’s Han-Solo-Frozen-in-Carbonite

Solo-rificSpending $4,900 on a movie prop replica may seem like a ridiculous idea to most people, but try saying that to the 2,000 or so hardcore Star Wars fans that bought the limited production Han Solo in Carbonite replica.

Measuring at around 6 feet 8 inches long and weighing in at about 100 pounds, the Han Solo in Carbonite replica is one of the ultimate decorations for geeks across the globe (and a constant eyesore for their partner — if any).

As you can tell, what’s important to one person may be a complete waste of money to another person. In order to really “stop buying crap,” you must first figure out what’s truly important to you.

Perhaps you have a love for fine china? Or maybe you can’t get enough of your collectible lunch box? Whatever it may be, as long as it is important to you, or brings a value to you in a certain way, it is not “crap.”

Stop Buying Crap rule #22: It is perfectly acceptable to spend money on things that are important to you, as long as you can afford it.

It’s Not about Being Cheap, its About Being Sensible

Mmm.. swimming with hard solid coins If this is your first visit to the blog, you might get a wrong impression of the blog’s underlying message. You might even assume that the blog owner is a cheap person, with a deficient IQ, a questionable genital size, and thus enjoys making fun of people that spend money.

If that was the case, you would be 90% wrong. This isn’t about being cheap at all. This isn’t about hording up all your money so you can swim in it Scrooge McDuck style. This is about understanding your unlimited wants and needs, and how you may fulfill it with your limited resources. It’s about what you can and can’t afford, what’s realistic and what’s unrealistic.

Just because traveling around the globe is an important goal to you doesn’t mean you should max out your credit card to fulfill that particular need. Sure, you may be a hardcore Star Wars fan, but will it be practical for you to spend 90% of your income on Star Wars collectibles? Probably not.

Fitting the Non-Crap into the Budget

Creating a budget is the basic foundation of personal finance. It might be a bit boring (alright  it’s ridiculously boring) but budgeting is one of the most important step to gain control of your finances and the quickest way to know where you stand financially.

If you have never created a budget before, you are strongly encouraged to spend a few minutes right now and write out a rough estimate of your budget. Creating a budget can be surprisingly easy to do; the gist of it involves you figuring out how much you make per month and how much you spend per month. Subtract the total income from the total expense and you’ll figure out where you stand. Yup, that’s pretty much it!

To find out how to create a budget, check out “How to Budget & Save” from the Federal Reserve Bank of Chicago. There is a simple worksheet available that you can follow to better determine other budgeting values such as fixed expenses and variable expenses.

Once you have figured out your budget, you can then figure out how much crap you can or can’t afford. This may sound entirely stupid and obvious, but one of the reasons why people spend more money than they have is because they don’t know how much money they really have.

Here’s a random example (picked for numeric simplicity). What’s easier to do: Spend $2,400 on a brand new, top-of-the-line HDTV when you know fully well that you only have an extra $200 to spend per month (thereby putting you $2,200 in debt), or spend $2,400 on a brand new TV because you think you can afford the new TV?

It is a lot easier to spend responsibly when you understand where you stand financially and know the numbers involved.

Delay Gratification is Your Friend

In the $2,400 TV scenario, if you only have an extra $200 to a month to spend, what can you do to get that TV?

Option #1: Save up $200 per month and buy the pricey TV after a year.

Option #2: Charge it on a credit card at the current average interest rate of 14.79% APR and pay it off by a monthly payment of $200. Actual cost via this method? About $2,800.

An extra $400 because you couldn’t wait. Is it worthwhile? *shrug* Sensible? Probably not.

Avoiding Those Wacky Impulses

One of the quickest ways to trash a budget is to spend money impulsively. In order for you to buy the crap you really care about, you must avoid the impulsive purchase of crap you don’t need. Mastering delay gratification and avoiding impulsive purchase are both acquirable skills!

If you have a habit with impulsive purchase, it will be worthwhile to examine the cause of the habit more carefully. Do you spend without careful consideration because it’s easy to do? If so, perhaps cutting up the credit card up may make it harder for you to spend. Try the frequently mentioned method of switching to cash or using a debit/check card, seeing the cash immediately disappear from your wallet (or checking account) just might do the trick.

Do you have trouble with buying unnecessary things during a shopping trip? Find out exactly what you need, how much it cost, and limit yourself by bringing a specific amount of cash (minus the credit cards) before you head into the store.  Limiting your purchasing power may help you against impulsive purchases.

Understanding Marketing Influences

It’s not that marketers are evil brainwasher bent on tricking you into buying their products.  Marketers are simply brainwasher bent on influencing you to buy their crap.

Let’s put it this way: you should be aware that many companies are spending millions of dollar so that they can have a better chance to earn or sway your spending dollars. Because you most likely don’t have the same millions to spend, it’s important for you to choose the right crap to buy on the first try — especially if said crap is an expensive item.

A savvy shopper should know if a brand of a product matters or not, and spend the extra time to distinguish actual product differences from marketed differences. With the wealth of information available online, everything you want to know about that toilet seat cover can be a few mouse click away.

Obviously, spending hours reading up on mundane things such as toilet papers may not be the most productive use of your time, so apply product research at your discretion.

Don’t Forget the Big Picture

Alright, so you’ve figured out what’s important to you, know how much you can spend on it and how much you can afford, time to buy everything you’ve ever wanted?

Not quite. Even if you can afford it now, and even if it won’t put you into debt — you will still need to be sensible about your purchases, because every dollar you spend today is a few dollars less you will have to spend in the future.

Most of us will want to retire in comfort, or maybe even pay for our children’s education (damn kids). In order to do either of these things, you will need to be mindful of how your current spending will impact your future spending — after all, retirement accounts don’t magically fund itself. Saving money might not be sexy or fun, but it’s a whole lot better than worrying about money during your retirement years.

Summing It All Up

  1. Understand what’s important to you
  2. Know your budget
  3. Be patient and save
  4. Don’t let some jerk tell you what to buy (and what not to buy)
  5. Spend sensibly and don’t spend like there’s no tomorrow

Have your own stop buying crap method? Sharing is caring.

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