My utility bills go way up in the hot summer months. Part of the cost increase is probably because my three college-age sons come home for the summer, but part of it is also our desire to keep our home cool. One hot evening recently I was motivated to rethink our household habits to try and find ways to keep our home cool and save money. The Environmental Protection Agency (EPA) has some good suggestions that I found helpful, and I hope you do too.

First, change to more efficient light bulbs. Energy Star qualified  (such as CFLs and LEDs) produce about 75% less heat than incandescent bulbs. Thus, when you use Energy Star qualified light bulbs you use less energy to light your home AND less energy to cool your home. This is a definite win-win during our hot summers.

Next, raise your thermostat setting when you leave your home. I love having a programmable thermostat that I can set for a higher temperature when I leave for work as well as being able to cool our home down a few degrees by the time I return home.

Sometimes feeling cooler is as good as cooling your home. Fans create a cooling breeze. If you raise your thermostat by only two degrees and use your ceiling fan, you can lower your cooling costs by up to 14%, according to the EPA.

Do you have a room facing west that the afternoon sun tends to heat up? I do, and that's why I planted a deciduous tree to block the sun rays in the summer. Another option is to close curtains or shades on the sunny windows to block some of the heat from coming into your home.

If you haven't checked your air conditioner filter lately, now is the time to check your filter. Dirty filters can make it hard for your air conditioner to work efficiently. Follow the manufacturer's instructions on how often to change or clean your air conditioner filter.

This tip may seem obvious but you now have "my permission" to not cook dinner tonight! Reduce oven time to help keep your home cool. Consider alternative meals such as salads or using your microwave oven to cook.

And, last but not least, plug duct system leaks. Make sure cooled air is getting where you want it and not leaking out through poor connections. Seal duct work and insulate all ducts that you can access. Make sure duct connections at vents and registers are well-sealed where they meet floors and walls as well. Many homes could benefit from this home improvement. In fact, this might be a good task for home-for-the-summer sons and daughters ....

These seven tips for keeping our homes cool are relatively simple to implement. Do you realize that the average home spends almost 20% of its utility bill on cooling, according to the EPA? That means that a change in habits can mean a real change in how much we spend to cool our home. I challenge you to pick a tip or two or three, and see if it makes a difference.

If you have an energy and money saving tip you'd like to share, please click on the "Leave a comment" link below. This hot weather is predicted to last and I'd appreciate new ways to keep my home cool!

"Everybody likes more cash," according to a current TV commercial. No surprise there. And most people get excited about a tax refund, even though it's their own money they're getting back. But it feels like "found money" – money that isn't part of our usual budget and isn't already earmarked for dull things like groceries or rent. It's a lump sum that we feel that we have complete control over. We can use it to achieve a goal like paying off a debt, jump-starting saving , or making a major purchase.

What would you do if you came into some extra money? Seriously, stop and think for a second. What would you do if you had an unexpected $50? $100? $1000? Write that idea down. Or better yet, click the comment button at the end of this post and commit to that idea by sharing it with me and with other readers of this blog.

Now, let's talk about ways that you could generate the income to put toward that goal.

I recently led a brainstorming exercise about ways to increase income. Here are some of the ideas they came up with:

• Have a yard sale
• Take clothing to a resale shop
• Recycle aluminum cans
• Sell old gold
• Teach something you know
• Be an election judge
• Be an extra in a movie
• File an amended tax return to claim deduction or credits you missed
• Jury duty
• Sell plasma
• Participate in a marketing focus group
• Be in a medical study
• Look around the house and in the car for loose change
• Make crafts to sell
• Pet sit
• Sell items on Craigslist, Ebay, etc.
• Help older adults with activities of daily living
• Provide adult care
• Trade services – barter
• Tutor
• Apply for food stamps or public aid
• Make invitations, stationery
• Collect money other people owe you
• Contribute to you 401(k) and get the company matching money

I bet there's at least one thing on this list that you could do. And there are lots more ideas where those came from. For years, I've done this brainstorming activity as part of a train-the-trainer program from University of Illinois Extension called All My Money. I've collected more than 300 ideas – and that's after I eliminated the ones I was pretty sure were illegal. Check the complete list to get more ideas.

Don't forget to click "Leave a Comment" below to tell me how you want to use that extra money. Then, go for it!

Stop by my favorite coffee shop on the way to work: swipe, debit card pays for the purchase painlessly and quickly. Quick run through the store on the way home for one item, end up with seven things in my cart: swipe, debit card pays for the purchase – no signature or counting out cash required. Where does my money go?

Debit cards are wonderful for their convenience, and typically safer than carrying a lot of cash. But, research suggests that we may spend money more easily when we swipe that electronic card!

If you feel like money is slipping through your fingers, perhaps you'd like to try one of these strategies to change how you think (and act) when spending money.

First, consider using cash for expenses you'd like to regain control of. For example, perhaps you'd like to take control of your spending for food eaten away from your home.

• Estimate how much you want to spend for a week.
• Put this much cash into an envelope at the beginning of the week.
• Every time you buy food to eat outside of your home, pay with the cash from the envelope.
• When you run out of money in the envelope, you're done spending – at least, until the beginning of the next week when you can reload your envelope.

Don't want to carry cash? You can modify this envelope budgeting strategy.

• Write the amount you want to spend on the envelope.
• After each purchase, put the receipt in the envelope and subtract from the total allowed.
• When you reach $0.00, you're done spending for the week.

There are free phone apps, such as "Easy Envelope Budget Aid (EEBA)" where money is taken away from virtual envelopes. This might fit your style if you're more likely to carry a smart phone than an envelope.

Whichever technique works for you, the important feature is to slow down your purchasing and to feel the "loss" when you spend money – right then, not at the end of the month.

What strategies have you used to slow down your spending in one expense category or another?  I'd love to hear what's worked for you!

When the leaves start to change color, it seems as though the holiday season starts up and keeps going into the New Year. While the holidays can be a wonderful time, it also can be a time of high expenses. This year, start the holiday season by deciding how much you can comfortably spend and set-up a spending plan. Enjoy the holidays by planning your spending wisely.

Traditionally we talk about saving money in terms of gift-buying. But for many people costs include many things beyond gifts. Consider the results from a recent PriceGrabber's survey: household costs for Halloween include brand-new costumes (48% of respondents with children), home decorations (70% plan new purchases), and 18% of respondents plan to dress up their pets. Halloween has always been a fun holiday at our home, and I know that many years my Halloween expenses included candy, party treats, and adult costumes too.

Perhaps you're thinking, "Sure, I have Halloween expenses, but they really aren't much." Well, you might want to consider tracking your expenses this year. According to a Savers, Inc. survey, the average family is expected to spend $300 on Halloween this year.

After Halloween comes Thanksgiving (food, travel, and decorating expenses) and then winter holidays such as Christmas, Hanukkah, and Kwanzaa with other expenses. By the time the credit card bills arrive in January, we will have New Year's celebration expenses too. While I look forward to all the good times to come in the next few months, I also want to be sure that my January is not depressing!

To avoid a January with too many bills, plan now how much you want to spend in the next few months. Then stick to your plan.

The holiday season is a good time to stay organized. Make a list of all your expenses for each holiday and estimate how much you will spend. If you need help thinking of expense categories, University of Illinois Extension's worksheet, "Control Your Holiday Debt," at http://ow.ly/6JaZO is useful. For example, don't forget flowers and holiday plants -- and did you remember postage and shipping costs?

I think one of the tricks to using money wisely is to be conscious of where my money goes – how I spend, save and invest it. To be conscious, I need to slow down. This is one of my financial goals for 2011 – and I have "found" money in places I didn't expect it. For example, looking over credit card statements I have found reoccurring charges for services we no longer want (such as online video games no one is still playing, online newspaper subscriptions to newspapers no one is reading, etc.). By canceling these subscriptions, I've saved quite a bit of money! Even $3.99 a month adds up to almost $48 a year, and even more if it continues year after year.

As much as I've tried to slow down with my money, it's hard to change habits. My paycheck is direct deposited. In a recent blog post, A New Financial World, I talk about how technology can help you save time and manage finances more easily. Direct deposit is a good example of how technology has simplified our lives; no more driving to the bank Friday after work and waiting in line to make a deposit.

But, using technology requires learning new good habits ... I have a bad habit of looking at a bill or earnings statement quickly, and saying to myself "this looks about right." The other day I finally (after obviously months of moving too quickly with finances) took a close look at my paycheck earnings statement. (In my defense, I do want to say that I have to log onto a website with a password, and click through several pages before I can see my statement – not a quick task.) Well, it turns out that I have been charged for a parking permit – which I don't have – for several months! What a waste of money! I feel stupid for not noticing this; I obviously still need to work on being conscious of my money.

Here's one more example of why it's important to read our financial papers carefully. FCC Chairman Julius Genachowski is warning people to watch out for "phone cramming" – the illegal practice of mysterious, unauthorized fees added to people's monthly phone bills. Crammers often try to go undetected by submitting $1.99 or $2.99 charges to tens of thousands of consumers. A recent survey showed that 95% of consumers affected by one cramming company were not aware of the charges. That's a lot of money going down the drain! For more information about phone cramming, read the FCC Cramming Tip Sheet.

http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0620/DOC-307732A1.pdf

What tips do you have to help raise people's consciousness about their money use? Have you ever found expenses on your bills that you didn't want? I'd like to hear about your experiences.

WOW! Gas prices are over $4.00 a gallon now in my town, and I spent $4.19 a gallon driving to Chicago last week. It looks like we're in for high prices for awhile. Now is a great time to rethink how and when we use our vehicles, and if there are some changes we can make to keep our costs down.

Everyone has their "tricks" for saving fuel and some are more effective than others. According to Consumer Reports' studies, here are two myths related to fuel savings.

1. Opening the windows – even when going 65 miles per hour (mph) – does not reduce your gas mileage. However, using your air conditioner (at 65 mph) reduces your gas mileage by over three miles per gallon (mpg).

2. Driving with a dirty air filer does not affect gas mileage on new cars that use computers to control air and fuel ratio. (There are other reasons to have a clean air filter, though.)

What does work? One of the most effective things you can do to use less fuel is to slow down. Driving at 55 mph instead of 65 mph or more can save you five to ten mpg. Also, try to drive smoothly. Frequent bursts of acceleration and braking can reduce your mileage by two to three mpg.

As a society and as individuals we need to rethink how we use vehicles. Consider using your car for transportation as the exception rather than the common practice. Here are some tips to help you get started:

1. Walk or bike to your destination. For shorter trips that don't require the use of a car, walking or biking can save on gasoline and provide exercise as a bonus.

2. Explore public transportation – and help your kids learn how to use it too.

3. Plan your trips. Instead of making several small trips, maximize your gas usage by mapping out your trip to include several stops along the way.

4. Increase the amount you carpool. Not just to work, but also to your child's soccer games or other events, and your social activities.

For more fuel saving tips, visit U of I Extension's Spend Smart Tips.

Budgeting. Tracking expenses. Sounds about as exciting as doing laundry. But I track expenses and do a budget because they give me the data to answer tough questions and make good financial decisions, such as:

• Could we survive on one income if my husband or I got laid off?
• If we put new flooring and counter tops in the kitchen, where will the money come from?
• How much did it cost me to drive my nine-year-old car last year?
• How much of our income is unaccounted for? In other words, I do not know where it went?
• How much did we save last year?

It's always good to have a budget, to know how much you spend and bring in. But there are times in your life when it's more important than others. Anytime you go through a major life change, your expenses or your income (or both) are going to change. If one of these life events has happened to you recently – or if you think it might happen in the near future – this is a good time to get serious about keeping track of where your money goes:

• Marriage or divorce
• Having a child
• A child starting college
• Moving
• Changing jobs
• Retiring
• Caring for an elderly parent
• Deciding that you will get your finances on track

There are lots of different ways to go about tracking your expenses. In my opinion, the most important thing is that you do it, not what tool you use. Here are some ideas.

• Save all your receipts and paid bills. Collect them in an envelope or box. Write the category at the top of the receipt (i.e, food, entertainment, gas). Once a week, add up the expenses in each category.
• Carry a small notebook in your pocket or purse and write down everything you spend. Tally it up once a week.
• Use a checkbook register; draw extra columns in it so that you have a column for each major spending category. Give yourself a budget for the week or month in the first line. Then record and subtract each expense to keep a running total of how much you have left in each category.
• Use an online program or software on your computer to download transactions from your checking account and credit cards. Manually enter expenses paid by cash. Categorize your expenses. Generate an expense report and let the program do the math for you.

You might try one method and decide it just doesn't work for you. That's OK. Maybe you can adapt it so it works better for you. Switch to another technique. Or try one method for cash expenses and another for things you pay by debit or credit card. You may not track your expenses forever, but doing it for a few months will give you a good sense of what's going on. When another life event strikes, you can do it again.

There's an old saying that knowledge is power. Knowing where your money goes can give you the power to reach your goals and to change your habits. It's definitely worth a try.

Have you noticed your grocery bill increasing? In February 2011, food prices increased 3.9% over prices in January , and food prices continued to increase in March with the eighth straight monthly increase. Overall, world food prices have reached a record high this year. OUCH! Rising food costs are pinching our already tight budgets.

Why are food prices going up? Economists seem to agree that it is a combination of factors.

1) As populations grow worldwide, there is more demand for food. And, as countries develop, there is a tendency for people to want to eat more meat. For example, urban Chinese increased their consumption of chicken 219% per capita from 1983 to 2006. It takes more resources to produce meat calories than grain calories – something to think about the next time you order a roast beef sandwich versus a humus wrap.

2) Typically when the price of a commodity – like corn – goes up, the demand goes down. However, the current high demand for biofuels keeps demand and prices high.

3) Worldwide we have less stockpiles of food. When disasters affect food supplies we see prices increase.

4) Unusual weather patterns worldwide have affected these food supplies. We have seen floods in Australia and droughts in China and Russia. The droughts last summer started the crop price increase. Global wheat prices more than doubled during the second half of 2010. Unusual winter freezes this year in Florida, Texas and other southern U.S. states caused a decrease in our supply of fruits and vegetables, and prices to increase.

What does this mean in our neighborhood – and throughout the world?

Prices of staple food items like wheat, corn and sugar have risen by more than 50% in recent months. But our food prices haven't increase that much at all. Why? Food prices in the U.S. are largely driven by other costs (such as labor, marketing, and other overhead costs) rather than the price of the ingredients or commodity. For example, according to food economist Abdolreza Abbassian at UN Food and Agriculture Organization, 2% of the price of a loaf of bread in the US may be the flour price. In developing world countries, it might be 70% of the price.

The World Bank has reported that as many as 44 million more people have been forced into hunger because of the rising costs of food. This is fueling conflicts in Libya, Tunisia, and Egypt. Time magazine has a very cool image showing how much people pay (as a percent of their income) for food in different counties. Take a look and see if you notice any correlation between the countries in purple (those spending over 36% of household consumption on food) and headlines in the news.

People in the U.S. also feel the impact of food price increases. A study reported in the Chicago Fed Letter, found that those the hardest hit with food price increases are people in the bottom income quartile and food stamp recipients. People with low-incomes eat more food at home and less in restaurants, compared to other income groups. The food item cost affects the price of food more at grocery stores than at restaurants.

I think it's amazing how global changes become important when I'm shopping for food in my hometown grocery store. Stay tuned to future blogs about tips on how we can manage the increases in food prices, and keep our grocery bills manageable.

If you have tips to share, click on my name below and send them to me please. I will include them in future blogs.

The new unemployment numbers for last week came out this morning, and the news was disappointing: There were 412,000 applications for unemployment benefits last week, an increase of 27,000 over the previous week. It is a reminder that many of us are still in financially difficult times. Maybe this is a good time to review some of the things we can do to minimize the financial fallout from layoffs, reduced hours, and other events that hit us in the wallet.

1. Figure out how much you spend and how much income you have. You can't plan changes until you understand the current situation. So pull out the bills, receipts, and checking account statement from the last month or two. Use that paper trail to make a guesstimate of how much you've been spending in different categories. Then, project how much you will spend going forward. The budget sheet from our Getting Through Tough Financial Times website gives you columns for "before" and "after."
2. Know what you can change, and what you can't. Fixed expenses – ones that are the same every month like your car loan payment and the cable TV bill – often involve a contract and are harder to change than flexible expenses such as groceries, clothing, and entertainment. So tackle the flexible expenses first. For ideas about how to reduce different types of expenses, check 66 Ways to Reduce Expenses or 101 Ways to Save Money from the Alabama Cooperative Extension System.
3. Don't get caught off guard. Not all expenses come monthly. My water bill comes every other month; my car registration comes once a year; auto insurance is once every six months. Then there are seasonal expenses, like holiday gifts and back-to-school clothes and fees. The real killers are unexpected car repairs and the like. Make yourself an annual calendar of seasonal and periodic expenses, and a guess about "unexpected" expenses using this simple form. Post it where you can see it, so these upcoming expenses won't be surprises.
4. Know how much you owe. For each debt, make a simple chart of who you owe, the payment amount, the total owed, the interest rate, and whether or not the loan is secured by one of your assets. For example, your car loan is secured by the car; the lender can take the care if you don't pay. Use the online PowerPay tool to figure out how long it will take you to pay off those debts. PowerPay will help you map out a plan to pay your debts off faster. See how much faster you'll pay off bills by paying just a few dollars more per month. When you pay off one bill, add the amount of that payment to the debt with the highest interest rate.
5. Decide which bills are most important to pay. If you can't pay all your bills, prioritize. Compare the consequences of not paying different bills. Top priority is usually protecting your family and keeping a roof overhead. If you need your car to get to work, your car loan may come first. While most debts can be resolved through bankruptcy, child support, income taxes, and student loan payments cannot
6. Contact creditors if you can' pay. First, figure out how much you could pay. Then, call the creditor and ask them to work with you. Not all creditors will give you a break, but some will.
7. Get help if you need it. Credit counseling can help you work out agreements with lenders and get things back on track. Look for a credit counseling agency by contacting the National Foundation for Consumer Credit at 1-800-388-2227 or www.debtadvice.com.

It's easy to put off making changes in our spending. You may be thinking, Maybe we'll find work soon, or, I don't want the family to suffer. But the sooner you make adjustments, the better it will be for your family down the road.

How have you adjusted to get through tough financial times? Click on my name below to send me an email with your best tip. I'll share those in a future post. In the meantime, check our website for more detail on the ideas I've shared here, plus lots more about Getting Through Tough Financial Times.

Finances can be complex. It's easy to become overwhelmed with choices, economic theories, financial forecasters, and news reports. At times it's tempting to throw up your hands and feel like you have no control over your financial security.

Life is complex too. And yet, "All I Really Need to Know I Learned in Kindergarten" by Robert Fulghum" has quite a bit of common sense and validity to it. Is there an "all I need to know ..." version for finances?

I was listening to a recent financial wellness presentation by a college student lately, and she presented Five Tips to Financial Wellness (designed for college students):

• Track your expenses
• Create and maintain a budget
• SAVE!
• Pay your bills on time
• Seek help if you have questions

Do these tips apply to others as well as college students? I think so.

• Tracking your expenses means you will know where your money is going.
• Budgeting allows you to direct your money towards the things in life that are important to you, and helps you spend less than your income.
• Savings provide you with flexibility when opportunities arise and when you have unexpected expenses – not to mention future financial security in retirement!
• Paying your bills on time is the best way possible to build a good credit history.
• And seeking help if you have questions is always a good idea.

University of Illinois Extension has lots of unbiased, research-based sources of information to help you maintain your financial wellness. Here are some resources you may find helpful:

• More for Your Money: Using Money Wisely for help with tracking expenses and budgeting;
• Plan Well, Retire Well: Your how-to guide for tips and strategies for saving and investing;
• Getting through Tough Financial Times if you're having trouble paying your bills on time; and
• Choosing a Financial Professional so that you can find a professional who can help you best.

Is financial wellness really this simple? What is missing? Let me know your thoughts about this!

Perhaps when our national economic situation seems to be too complex to predict what might happen tomorrow, next year, or in twenty years, we need to refocus our energies on those financial aspects of our life that we can control. And what can we control?

The five tips to financial wellness is a good place to start. Once these areas are under control we can think about other aspects of our financial life where we can make positive changes. Although I can't control whether I will be employed (and have an income) come January or not, I CAN complete job applications and submit them. I can sign up for continuing education so that I continue to be employable. I can cut back on family expenses. I can continue to save money for retirement now while I am employed. I can rebalance my investment portfolio.

What CAN YOU do now to control your future financial security?

When I was a kid, I can't tell you how many times I heard my dad utter that phrase. Is that how you feel? Are you always late getting things done, and short when the rent or car payment is due? Just thinking about that, I can feel my neck and shoulders tensing up and my heart rate increasing. It's not a fun way to live, is it?

In contrast to that picture, I think of my cousin. (He was old enough that I felt like I should call him uncle, so I never called him much of anything.) He was a dairy farmer and he certainly had more than enough work to do. But people would comment about how he never seemed to rush, but he always got his work done and often helped others. Amazing! How did he do that? And didn't you get a good feeling just reading that?

Wouldn't it be nice if we could feel that relaxed and confident when it comes to our finances? I'm no expert on human nature, but it seems to me that there are some parallels between how we manage our time and how we manage our money.

It seems like good time management to make use of every second, to treat each minute like it's too valuable to waste. But look at where that thinking gets you:

I can still make my appointment if I leave in a few minutes. I'll just reply to these last two emails...

Next thing you know, you're racing out the door, knowing that you will be late unless EVERYTHING works in your favor. Then you start hitting red lights or the bus pulls away before you get there. You start looking at your watch every few seconds.

Was that really good time management? What did it do to your emotional state? (If that level of stress felt normal, maybe you're not conscious of how much pressure you're constantly putting on yourself.)

I would contend that managing your money is very much the same. If you commit every penny of your income before your paycheck has even arrived, you're certain to face financial stress.

I was going to pay all the bills from this Friday's paycheck, but my auto insurance went up this month. And my little girl was counting on new shoes for the first day of school. Maybe the landlord will let me slide a few days.

Leaving a cushion of 10 minutes to make that important meeting, or having an extra $50 in your bank account to cover a surprise makes things so much more comfortable: less stress, no angry boss because you were late, no late fees or overdrawn bank account.

If you could borrow time from tomorrow and use it today, would you do it? What would that make tomorrow feel like? Can you see how crazy you'd become when you used 25 or 26 hours today, and only had 22 or 23 hours tomorrow?

It's no different when you borrow money, whether you're using a credit card or buying something using a 6-months-with-no-interest offer. You're not going to be earning any more next month than you did this month, and you've already spent a big part of it! How can that be sustainable? How much more will you have to borrow next month? Eventually, the interest will drain you dry.

Try something different this week. Instead of operating on my dad's mantra, try out this new one: A Day Early and a Dollar Gained. Leave five minutes earlier when you have an appointment. Allow 15 minutes for the phone call you think will only take 10. Skip the $15 menu item and go for the $10 one, even though you've got $20 in your wallet or bank account. (Almost forgot about tax and tip, didn't you?) Transfer a little money from your checking account to savings each month, and try to forget it's there.

Visualize how it will feel. I'm smiling just thinking about it! It's worth a try. Come up with your own mantra and repeat it to yourself when you're tempted to fall back into your old ways.

Tomorrow can be a better day.

Do you overshop? I came back from the Association for Financial Planning and Counseling Education's conference energized and excited about everything I learned. One of the best presentations was about stopping overshopping. Dr. April Lane Benson spoke about the difficulties people have with overshopping. With the holiday season upon us, now is good time for us all to think about what drives our shopping behaviors. Being conscious of how and why we shop can help us change our behavior.

In a recent Psychology Today blog, Dr. Benson suggests that people who are trying to change their shopping behavior carry a card with them and answer these six questions before any purchase:

1. Why am I here?
2. How do I feel?
3. Do I need this?
4. What if I wait?
5. How will I pay for it?
6. Where will I put it?

For some people, shopping is an addiction. More and more people are recognizing this, and professional help is available.

While I am not addicted to shopping, at the holidays I find it hard to not overspend. My personal action plan as a result of Dr. Benson's message is to:

1) Know how much I want to spend before I go shopping.

2) Happily enjoy spending this money without any guilt as it will be money I know I can afford to spend.

3) Avoid purchasing those "extras" for myself while I'm out shopping. This tends to be my downfall during the holidays!

What steps do you use to manage your holiday shopping? Send a comment by clicking on my name below.

The holiday season is upon us. Believe it or not, Thanksgiving is here and Christmas, Hanukkah, and Kwanzaa are right around the corner. This is usually the time that some of the most sensible people throw caution to the wind and charge it! Amidst all the joyous festivities, many unfortunately rack up a ton of debt. In case you didn't know, on average it takes about nine years to pay off a $1000 balance at 18% interest. That's 2018! Is the sweater really that cute?

Recently, I have received a lot of requests for credit management workshops. I normally talk about what a credit report is. I always jokingly say that a credit report is a "grown up report card." I usually get a lot of nodding heads and nervous laughs. I think most people know that it's true. We are judged based on our current and past credit history. I then ask why we need credit. Some of the responses I hear include: to buy a home, a car or get a job; all of these answers are correct. With the shortage of "good jobs", something like a blemish on your credit report could be the difference between getting the job and remaining unemployed.

Next, I normally talk about why everyone should check their report. I get a variety of answers. There are a number of reasons to check your credit report. The best reason I can think of is to make sure the information on the credit report is correct. Besides verifying accounts and balances on file, it is just as important to verify your name, date of birth, social security number, current and past addresses and employers. If any of this information is incorrect, it's probably a good idea to dig deeper and file a dispute, if necessary. I always suggest to workshop participants to get a free copy of their credit report from all three credit bureaus because there is always the possibility that the information is not the same. To obtain a free copy of your credit report, visit www.annualcreditreport.com.

Towards the end of the workshop, I usually talk about the components that make up the credit score such as payment history, amount owed, length of credit history, new credit, and types of credit. If you are holiday shopping and opening credit cards at every store you patronize to get the discount on your purchases, beware that it might cost you a dip in your credit score and inevitable a higher cost for borrowing money.

If you want to keep your spending under control during the holidays, consider establishing a holiday budget. The budget can include gifts, food, decorations and supplies, holiday cards, and other miscellaneous items. Lists will be an important part of creating your budget. Create a list for holiday gifts that include what you plan to purchase, the estimated cost and where you plan to purchase it, if possible. This will help you stay focused during your shopping trip. Your food list should include everything on your menu, including ingredients. Check your refrigerator and cabinets before your shopping trip so that ingredients are not purchased unnecessarily.

Finally, reflect on the year we have had. It's been a pretty rough time this year. We have worried about plummeting stock portfolios, foreclosures, and our healthcare coverage. Now, it's time for us to be thankful for the things that we have. If your 401(k) took a dive, be thankful you even had one; many employees don't. If your home went into foreclosure this year, be thankful you had somewhere else to go; someone ended up homeless. Finally, if your HMO or PPO wasn't the greatest, at least you had coverage; millions of Americans are without any coverage at all. During this holiday season, be thankful for the people and the things that are important to you. In the final analysis, that's what really matters. Have a wonderful Thanksgiving. Happy Holidays!!!

Who couldn't use a little more cash each month! Refinancing your home mortgage might be the solution.

Given today's economy, interest rates on home loans are relatively low. It may make sense for you to refinance your existing home loan. Or, it might not! Like most financial decisions, you need to think about the costs and benefits.

Why do people take the time to refinance home loans? You might be asking yourself, "The loan I have now is working fine ... why should I change it?"

Refinancing a home loan can help people who have different goals. Refinancing can allow people to:

• get a lower loan interest rate,
• change from an adjustable rate mortgage (ARM) to a fixed rate mortgage,
• change from an ARM loan to a different ARM but one with better terms, or
• change the number of years on a loan.

To decide if refinancing a loan makes financial sense for you, you need to start by asking yourself these questions:

• What are the initial refinancing loan costs? (It's important to ask about all costs. Costs can vary depending on the lender.)
• How long do you expect to own this home?
• When will savings from a lower interest rate loan pay for the refinancing costs?

For example, let's assume refinancing a home loan costs $3,000. In this example, the homeowner will have a mortgage payment of $50 less per month after refinancing. Then we know ($3,000 divided by $50) that it will take 60 months (or 5 years) for the savings to pay for the refinancing costs.

You can use a mortgage calculator, like the one at Bankrate.com, to help you calculate whether or not refinancing your home makes sense to you.

For more information about refinancing a home loan, visit the U of I Extension website, Opening Doors to Housing Success.

And, if you do decide that it makes sense to refinance your home mortgage loan, what should you do with that extra cash? Why, invest it for your retirement! What else would I recommend?! For ideas about how to effectively save for retirement, visit the Plan Well, Retire Well website.

Comments? Click on my name below and send me your thoughts!

I was a little surprised to see an article in the August issue of Money Magazine titled "Cure the Summer Landscape Blues." But it reminded me that I've been a true cheapskate when it comes to my garden. So I thought I'd share a few of my strategies with you.

I have re-used or repurposed so many things in my garden- plants, hardscape, even sod and dirt.

• If I'm removing sod in one place to expand a flower bed, I take it up carefully and look around to see where I need to improve the grass, and plop it down - after a little prep of the site, of course.
• When we replaced our paved driveway with concrete, they removed the existing gravel and sand base. I save a few wheelbarrows full and used them as the base for my paved landings at the foot of the stairs from my deck.
• The first owners of our house had a sandbox for the kids. The next owners poured soil into it and turned it into a not-very-functional planter. I finally tore it down, and used that wonderful topsoil/sand mix to top dress an area of my lawn where the soil is absolutely horrible. That grass has looked better this summer than ever before.

I'm careful with gardening expenses in other ways too. If I'm not sure a new plant will like my site - or that the rabbits will like it too much - I start small, often one from an even an end-of-season sale.

Many store closings are not places to find deals. It's made the news about how the liquidators may charge more for an item than you could have bought it for on sale before the store closing. But I have been fortunate in the past with landscaping materials. When a K-Mart closed a few years ago, I stocked up on bagged mulch at 50% off. And as far as I know, mulch NEVER goes on sale.

But later, I found an even cheaper way to mulch my flower beds and trees. My village (in any other state, it would be called either a town or a city) chips trees and branches that are downed in storms, pruned limbs from parkway trees, or brush placed on the curb by homeowners during seasonal pick-up days. All those chips are available free for the hauling. Actually, if I wanted an entire truck load, they would deliver. But I'd have no control over the quality of the load.

How to get this stuff home? I use the large paper yard waste bags that we are required to use if we dispose of yard waste. They cost about $.50 each. Wait, you say, that's a waste of money! It would be, if I used the bags once for this purpose and threw them away. But I don't. I can usually use the same bag for 2 or 3 trips to the chip pile if I don't fill them too full. Then I dry them and put them away, to use when I have yard waste that I can't dispose of on my own property.

And speaking of paying to have yard waste hauled away: I keep that to an absolute minimum. We almost always mulch our grass clippings and let them fall back onto the lawn. I shred and save my leaves each fall, corraling them with hardware cloth or other spare items. Next year, when I'm putting down new wood chips, I'll spread a layer of leaves first, then the wood chips.

Right now, I've got my eye on a pallet of bagged top soil at the local grocery store. The price has already been reduced. But I'm trying to wait until they've given up on selling it, in hopes they'll accept my offer for an even lower price. Keep your fingers crossed for me.

I'll bet any of you who are gardeners have tips about how you've kept costs down. Click on my name below and tell me about it. We'll share those ideas in a future post.

Lay-away and barter -- are these "old-fashioned concepts" back in fashion?

Dr. Elizabeth Warren reports, in the blog Credit Slips, "If we needed evidence of the constriction of consumer credit, here it is. K-Mart is advertising the layaway plan that department stores used for decades before the free flow of credit turned the layaway plan into a relic. "

As she points out, "With Mastercard and Visa cards handed out like cheap candy, layaway plans had nearly disappeared. The old-fashioned method for budgeting--pay a few bucks each week on your purchases--made no sense to millions of customers who could take the goods home and pay a little each month forever after."

Lay-away plans may make sense for many people this holiday season. And, wouldn't it be nice to have your holiday purchases paid for rather than receive large credit card bills in 2009?

With dollars tight, bartering is another option to consider to stretch your dollars.

Family members, including those who don't have a paid job, can contribute to the family's resources by bartering. Be creative. List your skills, talents, and interests. Next, try to match your skills and talents to community needs.

Think about what you'd like help with as well as what you do well. Do you have a bountiful summer garden? Perhaps you can trade fresh flowers and vegetables for help with car maintenance? Are you handy with home repairs, but hate doing taxes. Here's an opportunity to barter.

Over the years, I've bartered for child care, haircuts, bicycle repairs, yard work, and more. What types of things have you bartered for in the past? What could you do now? Click on my name below and let me know if bartering has been successful for you, or not.

For other money-saving tips, go to Plan Well, Retire Well and visit the Start Savings section. Online calculators and ideas for saving money will jumpstart your efforts.

Reply from Becky, Los Gatos, CA: I've done some bartering in my writing circle--as an editor, I feel like I have something to offer other writers. I tend to do critiques of manuscripts in "trade" (or usually thanks!) to another author who's let me pick their brain, who's given me time out of their busy day to braindump with me about marketing or teaching or publishing stuff. I find the best resources are from live people doing what I might want to do. And they never let me buy them lunch, so... :)

Stocks, mortgages, and food prices -- all my! Sometimes I find it helpful to step back from those things I can't control (like the stock market) and think about things I can control such as saving money while shopping for food.

Food costs increased by 4.8% in 2007, and increases in 2008 are expected to be greater. In the last year common food items that many of us buy all the time have seen even greater increases: milk, 13%; white bread, 16%; eggs, 35%, and bananas, 17%. With teenage boys in our house, these kind of food price increases definitely impact our grocery spending.

Americans spend about 13% of their income on food, on average. We spend about three times more on food than gas -- even though you'd think the way people monitor the price of gasoline that it was the other way around.

So, what can we do?

Shop smart! Look at your buying habits and see if there are changes that you can make easily that won't take too much time or leave you unsatisfied. Here are some tips that I think make a difference:

1) Plan your menus ahead of time. Sit down once a week (Saturday works best for me) and plan your major meals. If I come home from work and know what I will fix for dinner AND have the ingredients in the house, then it gets cooked. But otherwise I'm much more likely to order pizza -- which is not cost-effective.

2) Look at the grocery store ads for weekly specials. I find this helps me think of things to cook too! If something is on sale that 1) you use frequently and 2) store well, then buy extra.

3) Take your menu plan and make a shopping list. A shopping list lets you shop quickly and you're likely to spend less in the grocery store.

3) Try buying store brands instead of name brand products. I've been taste-testing store brands versus name brand products with people and many people find they like the store brand just fine.

4) Be aware of the cost of convenience food. Yes, it's nice to buy vegetables pre-cut but what is the cost difference?

5) When shopping check to see if which size (box or can) is the best buy. Sometimes it's the big bag, but sometimes it's not! This past weekend I bought two small bags of rice (rather than the large bag I usually reach for) because the price per pound was cheaper than the big bag.

Do you have food shopping tips to share? Click on my name below to send your tips to me. I'd love to hear your ideas!

A few years ago, I found myself in a grocery store where bags of snack sized candy bars were on sale for just $0.99 instead of the usual $2.50 or so. It wasn't on my list, but I put a bag in my cart. Then I thought to myself, That is a really good deal! And I put three more bags in my cart.

When I got home and was unpacking the grocery sack, I pulled out those bags of candy. I stood there with my mouth hanging open. What was I thinking, buying four bags of candy! They weren't even my favorite kind of candy bar! But I knew what would happen: I would eat them all, every single one of them.

Why did this happen? It took that event to make me realize that I could resist buying chocolate - my main food weakness - if it was full-price. But chocolate on sale was irresistible to me. It didn't matter what kind it was. If it was on sale, I had to have it.

Here's the good news. Once you identify the enemy, you at least have a chance of dealing with it. I realized that chocolate on sale was my major food weakness, and probably my major shopping weakness. It may have been on sale, but I spent money that I didn't need to spend on food that I didn't need to eat.

I've really had to work at it. But today, I can read a grocery add and be totally un-moved by huge sales on chocolate chip cookies, bags of M&Ms or Reese's Peanut Butter Cups. I probably save several dollars each week by avoiding just that one weakness. I also weigh less than I used to!

Do you have a shopping weakness? There are probably clues if you look for them. What do you have too many of? What do you end up giving away or throwing out because you never used it? Perhaps you'll see yourself in some of these examples.

• If you see a great piece of clothing on sale, do you have to have it - even if it doesn't go with anything in your closet?
• Have you convinced yourself that you're just too busy or too stressed, and that you deserve the convenience of buying breakfast on your way to work every morning? Or eating lunch out every day? Or picking up takeout most evenings?
• Will you buy anything that a kid knocks on your door to sell?
• Do catalogs leap into your lap and lure you to pick up the phone to place an order?
• Are yard sales and flea markets a form of entertainment that has turned into you into a shopping monster?
• Do you regularly check the internet sites that list the best deals on everything, and then order things that you end up never using?

Shopping weaknesses can take work to overcome. But recognizing them is the first step. Let me know how you're tackling your spending weaknesses!

We have all seen the price of gas go over $4.00 a gallon and the reality is setting in that gas may even reach $5.00 a gallon over the summer. So, where do you find the extra money to help pay for rising prices such as gasoline and food. A good place as Karen discussed last week is from an emergency account, however, you don't want to drain your emergency account for everyday spending. As prices rises your monthly household budget for items such as gasoline and food needs to be adjusted, this may mean finding ways to cut out unnecessary spending. I call this having fun being a cheapskate!

I have tried a few of the tricks below to help my household cut unnecessary spending. I hope you find something you might like to try for your family.

• Try not to spend anything for one week. Try to eat what you have in the pantry and freezer, you might try riding your bike to work, or go for a picnic in your backyard.
• Cut out unnecessary trips in the car. Think about and consolidate errands or consider car-pooling to work to save on fuel.
• Take advantage of low-cost entertainment in your community. Parks, zoos, community fairs and events usually offer low-cost or no cost fun family activities.
• Wait at least 3 days before buying any item over $20. This will make you think about the purchase and if you really need to have the item.
• Pay cash for everything. This helps you to think about purchases. Using a credit card often allows you to spend without thinking.
• Calculate how your little purchases add up over time. Do you need a $4.00 cup of coffee everyday? Check out http://www.retirewell.uiuc.edu/ for more information on how little purchases can add up to big savings over time.
• Instead of buying new toys, take your kids outside and play games you played as a child such as tag, hide and seek, or hopscotch.

I have had fun with my children trying to be a cheapskate. Trying to be creative and adjust our spending has helped my family reevaluate what is truly important and realize how much we really do have and don't need!

Between my husband and I, we have received three "terminal contracts" or "pink slips" over the last several years, giving us notice that we would be losing our jobs. We were both fortunate that we were able to transfer to different positions with our employers and remain employed. But nonetheless, we went through the gut wrenching process of reviewing every expense to figure out where we could cut.

University of Illinois Extension learned last month that our state funding would not be released and County Directors were to prepare a plan of what staff would be let go. I know exactly what those individuals will be thinking and feeling. My goal with this post is to share some ideas that people can use to prepare for a layoff.

As I'm writing this, we are just hearing news that Extension's funding may be restored. I sincerely hope that these reports are accurate. But layoffs happen on a regular basis, and you are likely reading this because you are at risk. Perhaps one of these ideas will help you put yourself prepare financially for that possibility.

All financial education programs and financial experts recommend having an emergency fund. There's nothing like the threat of a layoff to make you stop and think, How long would my cash-on-hand last? Do a quick, back-of-the-envelope calculation: How much do you spend in a month? And how much do you have in your checking and savings accounts? Perhaps you also have savings bonds, CDs at the bank, or a money market account. How many months would these funds support you?

The average job search lasts about six months. Could you make it that long without income? No? Your main focus should be to build up your emergency fund while you do have income. Make a plan for how to reduce expenses, and to increase income. It might keep you from losing your apartment or house.

Look at every expense and ask yourself, honestly, if it's a necessity. And even if it is a necessity, how could you reduce it? I really like watching Animal Planet and National Geographic on television, but that might be one of the first things to go if I get laid off. (Note: I have had the service more than a year and don't have any contractual obligations to keep it.) It may help to list each expense on a separate card or piece of paper and then prioritize them.

Be creative in looking for expenses you can cut. Are there purchases that you can "unwind"? For example, if you've ordered items that have not arrived or that you haven't used, think about returning them or cancelling the order. You may be able to cancel magazine subscriptions and get a refund.

Look for ways to increase your income to build up that emergency fund. Could you generate some cash by having a yard sale or selling clothing at a resale shop? Have you loaned money to others who have not yet paid you back?

Another source of spending money during a long layoff could be credit. Is your credit card at the limit, or do you have available credit that you could use as a last resort? While you're still earning an income, make paying down your credit card balance a top priority. You could need that credit line for groceries and kids' shoes in a few months.

This is probably the only time you'll ever hear me say, Stop contributing to a retirement plan. But until you get laid off, you could stop contributing to your retirement plan in order to increase your take-home pay and use the money to build up your emergency fund. If you're married or have a significant other, the same goes for them. (Note that your income taxes will also go up, unless you were contributing to a Roth.) Just make sure that the extra take-home pay goes straight into a savings account - no splurging on a special dinner or frittering it away on a depressed buying spree.

Stopping contributions to a retirement plan is usually a better idea than taking out money that you've already contributed. That should truly be a last resort. If you use money from a 401(k) plan, IRA, or other retirement plan, you will have to pay income tax on all of the money. You will also probably owe a 10% penalty. If you had $5000 in the account, you might only end up with $2950. That is a very expensive way to get money.

If you do lose your job, make sure to file for unemployement compensation right away. Your working spouse could fill out a new W-4 form to have less tax taken out of their paycheck based on your lower income. But be aware that you generally must have paid at least 90% of what you end up owing in taxes (through payroll withholding or estimated tax payments), or 100% of the amount you owed in the previous year, to avoid IRS penalties.

Worrying that you may lose your job is a terribly traumatic thing. Actually getting the notice is a horrible experience. But knowing that your financial house is in order and that you have a plan to deal with the lost income can take some of the panic out of the situation. I hope you never have to use the ideas in this post. But if you're at risk, please take action NOW. From time to time, my husband looks at me and says, What will happen if I lose my job? I think it takes some of the pressure off when I can honestly say to him, We'll be OK.

When I write this blog, I usually choose to write about something that's on my mind due to my family or a workshop I've done or something in the news. And, what's on my mind today is people losing jobs. As you may have heard, many University of Illinois Extension offices are looking at a 50% reduction in their resources – which translates to many, many people losing their jobs.

It's not just Extension. It seems that everywhere I look there is another headline about a company cutting back, closing down, and laying off employees.

Job loss has lots of implications – for the individual, their families, and the communities they work in. There is no easy fix or solution in this situation. But I want answers and I want to help. So, being the person I am, I look to University of Illinois Extension for resources and help.

What we do know from research, is that when someone loses their job it's important to quickly cut back on spending. To quote from Getting Through Tough Times: Strategies for Spending Less:

Studies have found that many families do not adjust their lifestyle for about six months after their income is reduced. That six months of ignoring the situation can bring disaster. When you take charge of your financial situation immediately, you are making a positive contribution to your family's well-being now and in the future.

The Getting Through Tough Times series is a good resource for families to help manage the stress of a job loss. This series of 19 fact sheets includes topics such as Communicating Under Pressure, Making the Most of What You Have, and Talking with Creditors.

While I'm still optimistic (and hopeful) that the financial crisis for U of I Extension will be resolved so that Extension offices do not have to cut back on services and staff, it is clear to me that our economy is suffering and many people throughout the country will be losing jobs this year. I wish I could stop this trend, but since I can't what I can offer is tips on managing finances in difficult times. Stay tuned for more in the future.

If you have experience managing finances after a job loss that you'd like to share, just click on my name below to reply to this blog.