Aid For Haiti
It's heartbreaking to see the photos and videos out of Haiti, which was hit with a magnitude 7.0 earthquake. According to Red Cross estimates, between 45,0000 and 50,000 people may be dead, pushing the already impoverished Caribbean nation further into crisis.
Given the generosity so often shown during these types of crises, I have no doubt many will want to give. But please give responsibly. Make sure your donations count, and don't be duped by scams.
Finding Money To Give
Some of you will want to give to the relief aid but can't afford to. Or, if you do donate, you know you'll be letting go of money that could have been used to pay down debt. Perhaps you will redirect what little you can afford to give away from a charity you already support or wanted to support.
There is a way for you to begin to get your finances straight so that you are able to make giving a regular part of your budget. You can handle your finances better so that you don't have to give up giving to one charity to support people during a crisis like the one that has hit Haiti.
In "The Power to Prosper: 21 Days to Financial Freedom", I challenge you to go 21 days without spending money on anything but necessities. You can't use credit or debit cards.
The victims of the massive quake are in great need, but guess what? Every day there is need in this country and abroad. The recession has hit charities hard. Two-thirds of public charities receiving donations saw decreases in 2008, according to Giving USA 2009. The 2008 number is the first decline in giving in current dollars since 1987. The 21-day financial fast is about turning the focus off wasteful spending. And by helping you become a better money manager, it enables you to do more for your family, community and others, such as those suffering in Haiti.
I will be following some readers on their journey to a better financial life. E-mail me at email@example.com. Put "21 Days To Financial Freedom" in the subject line. I'll choose a few people and post updates on their progress during the three weeks they are fasting. I'm looking for folks who are not afraid to be candid. Next week, look for the first posts from people participating in the fast.
If you would like to talk to me directly about the financial fast and you live in the Washington metro area, come to my book signing at the Potomac Adventist Book and Health Food Store on Sunday, Jan. 17th from 4 to 6 p.m. The shop is located at 2004 Cherry Hill Road in Silver Spring, Md. For more information, call 301-572-0700, 800-325-8492 or visit Potomac Adventist's site.
You can hear me on the radio discussing the fast on WGTS 91.9 FM on Jan. 15 and 16. The segments will air on Friday at 7:30 p.m. and repeat at 9 a.m. Saturday.
Store Credit Cards
Trying to get that extra 10 percent off at the register will be a bit harder under the new Credit Card Accountability and Responsibility Disclosure Act that goes into effect Feb. 22.
Under the new regulation, consumers are required to provide proof of income and ability to pay before credit card issuers can provide approval for store credit cards, reports Post staff writer Ylan Q. Mui in On top of credit score, retail credit lines now ask for income, asset data. (Jan. 13)
While the new conditions are being implemented to combat a repeat of the current economic crisis, retailers are concerned people will shop less.
"If this practice discourages use of consumer credit, it will have a negative impact on retail sales and will result in a slower rate of recovery from the ongoing recession," Macy's senior counsel Steven L. Franks told Mui.
The move to verify people's income could drastically cut instant credit deals. And why might that be a good thing? Well, more people with retail credit cards don't pay their bills. About 12.6 percent of retail cards were charged off in December, compared with 10.7 percent of prime cards.
Big Bank or Small Bank?
Where is your money?
Arianna Huffington, the founder of Huffington Post, is urging consumers to take their money out of the Big Four banks --Bank of America, Citi, J.P Morgan Chase, and Wells Fargo-- and open accounts at small community banks, reports Martha C. White in Ordinary Americans lack the power to hurt the big banks. (Jan. 10)
Huffington says the Big Four "are not too big to feel the impact of hundreds of thousands of people taking action to change a broken financial and political system."
Huffington hopes to incite a mass exodus from big to small. She's created a new Web site called Move Your Money, which includes clips from "It's a Wonderful Life" and a tool for finding a new bank.
But will switching banks make the big boys play fair?
And even if it would, studies show many people are just too comfortable staying put. White reports that in a 2007 study, 22 percent of the bank customers surveyed admitted that they were staying with their current bank solely because switching was too much of a hassle.
That said, here's the Color Of Money Question of the Week: Are you willing to switch from your current financial institution to punish the big banks for helping drive us into a recession? Please send comments to firstname.lastname@example.org and put "Big vs. Small" in the subject line.
Tia Lewis contributed to this e-letter.
You are welcome to e-mail comments and questions to email@example.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.