Monthly Archives: July 2011

Would You Have Given Away Derek Jeter’s 3,000th Hit Ball For Nothing?

Written by in Student Loans, Taxes
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For all you baseball fans out there, I’m sure you’re aware that Derek Jeter got his 3,000th hit last weekend. While I’m a big Yankee fan and I could rant and rave about Jeter all day long, I’m going to focus on someone on the other side of the fence: the fan who could his 3,000th hit, which happened to be a home run.

The man’s name is Christian Lopez, a 23 year old cell phone salesman. First, let’s lay out his financial situation and then we’ll discuss this young man’s decision making skills. Christian has over $100,000 in student loan debt. As a cell phone salesman in New York, I doubt he’s able to support a crazy lifestyle and paying off that debt is many years away.

Now, when Christian caught that home run ball, he didn’t realize that estimates were that the ball was worth $250,000. He didn’t think about the fact that he could sell it, erase his student loan debt and then some.

Nope, Christian instead gave the ball back, hoping to get a couple of autographed bats and balls. Instead, the Yankees generously gave him not only the signed baseballs and bats he wished for, but signed jerseys plus luxury box tickets for the rest of the season (and playoffs), all because he was generous and gave the ball back to Jeter. He could have sold that ball for a ton of money, but he did what he thought was the right thing.

Would you have given the ball back if you were in Christian’s situation? I definitely would not have! $250,000 is a ton of money. If you won the lottery, would you give it all away simply because it was the right thing to do? I’d be taking that thing to the bank faster than I’d be selling a gold watch I found on the street at one of those cash for gold sites that are always on tv (especially with the price of gold being what it is today). I’m sure a lot of people have said ‘yah, it’s a nice gesture, I would have done it too if they asked me.’ That’s crazy!

To add insult to injury, Christian has to pay taxes on all the gifts he receives, which means at the end of the year, he’ll owe the IRS an estimated $14,000. Damn!

As it turns out, several companies have come to Christian’s aid. Miller High Life is rewarding him by covering his tax bill, and both Modell and Steiner Stports have guaranteed at least $25,000 to help pay off his student loan debt.

So in the end Christian Lopez got paid handsomely for his kind gesture, without having to pay any taxes or fees. I’m not sure it was a wise decision (he would have made more selling it), but it definitely paid off in the end.

This isn’t the first time we’ve talked about people giving up big money in sports, but this time it wasn’t an athlete who already had big bucks, it was a fan who could definitely have used that money.

Readers, What would you have done?

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A Quick Way to Improve Your FICO Score

Written by in Credit
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When applying for a home loan or personal short term loans, having the highest FICO credit score possible helps you get the lowest possible interest rate.a personal loan, having the highest FICO credit score possible helps you get the lowest possible interest rate. Many factors are considered to create each person’s FICO score including available credit, outstanding credit, timeliness of payments, and length of credit among other things. Many of these factors are created through years of credit history and are not easily changed.

However, before applying for a home loan or personal loan, pull a copy of your credit report. You can get a free credit report once a year from each of the three credit bureaus (Experian, Equifax, and TransUnion) at Annual Credit Report. Carefully look through your credit report for any errors; unfortunately, the majority of credit reports do contain errors.

To fix an error on your credit report, send a certified letter to the offending credit reporting agency and identify the mistake; you may even want to include a copy of your credit report with the error circled. Make sure to give your full name and address. Include copies of documentation to prove that the credit report is indeed in error. Under law, the credit reporting agency must respond to your claim within 30 days. If the credit agency agrees that your report is incorrect, they must fix the mistake and notify the other two credit bureaus. In addition, make sure you contact the creditor directly with the same letter and information so they can correct your records.

The simple act of making sure your credit report is correct and cleaning up any errors if it is incorrect can save you a great deal of money in interest when applying for a home loan or a personal loan. Doing so is usually well worth the time it takes.

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How to Save on Staples in the City

Written by in Saving, Spending, Spending Wisely
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I was in New York a few weeks ago, and on Friday afternoon, I took a trip to the supermarket to stock up on food for the weekend. What I found was unlike any other supermarket in any other city I’ve been in. Cereal was almost $6 for a box. A bag of chips that’s typically $3.50 was no less than $5.50, and a bottle of soda, often 99 cents, turned into a $1.50 2-liter.

My eyes bugged out. I wanted to believe that I was in a bad dream. I wanted to run out of the store crying and sit in a corner for two days until it was time to leave. $6 for a box of cereal? Ridiculous.

As my friends making low wages continue to struggle to make it in the Big Apple, I couldn’t imagine that they were being forced to pay such ridiculous prices. And worse, they go along with it as if there are no other alternatives.

However, there are some easy ways to cut costs. Let’s go through some alternatives to paying big bucks for basic groceries.

I’ve discussed Amazon’s subscribe and save options before, but here it has a very real world application.

That almost $6 box of cereal? A quick look at a non-special shows 3 boxes of Honey Nut Cheerios for just $8.45. Already that’s a fantastic deal, and with subscribe and save, the price drops to just $7.18 for three boxes, which is less than $2.40 a box! That’s more than 50% off, and you can cancel whenever you want (I suggest immediately after the order goes through so you don’t get charged if the price rises later after you forget about it!)

Feel free to check out the other breakfast foods, I’m positive that these prices beat your supermarket prices.

Breakfast not your thing? Let’s look at pasta sauce: A 4 pack of 45 ounce bottle of Ragu on Amazon is just $9.08 with subscribe an save. For reference, I’m used to paying $2.50 for ONE 24-ounce bottle on pasta sauce! It’s not even close.

We could do this all day. I have no idea what the specials look like, but I’m sure if you check out Amazon once in a while, you’ll find some great deals.

Disclaimer: I don’t get paid for anything you buy. I just know that this information can help lower the costs of living in expensive cities.

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Tips for Combining Finances

Written by in Budget
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The following is a post from staff writer Crystal from Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.

Daniel’s engagement led me to think about my own engagement about 9 years ago. Mr. BFS and I were pretty much living together already and had already made plans for our future, so the engagement itself was more a formality than anything else. We also started looking at combining financed but were waiting until my name was officially changed to make everything easier. Here are a few tips for anybody looking to combine their finances.

Ground Rules

It is important for newly married couples to establish the ground rules for banking transactions that occur when combining finances. One spouse may be accustomed to relaxed spending while the other is used to itemized budgets. That is why it is so important to create a joint plan that both parties agree to.

My husband was not a spendthrift, but he wasn’t as detail-oriented (aka anal) as me either. When we decided to combine our finances, we agreed that I would run the budget since I cared and we picked out our target amounts together. We also eventually started giving ourselves fun money allowances so he could spend on hobbies without me freaking out all the time. It has worked out great!

Joint Accounts

I know some couples prefer to keep things separate, but I lean towards fully combining a couple’s finances. It makes it easier for me to budget. Joint accounts will also give both partners equal access to all of the money to write checks, make deposits, and conduct business. A joint account usually means less paperwork and makes keeping up with transactions much easier.

Whether you prefer joint accounts or not, the key is to simply agree on a plan together. Everything else is just details.

Insurance Policies

Having the same automobile, life, and health insurance policies can mean that both of you will spend much less out of pocket on premiums. You can qualify for multiple vehicle coverage if you have two or more cars. Being married can also mean lower rates because married people statistically have longer life spans and are deemed more stable by insurance companies.

My husband and I got married young. I was 22 and he was 21. His car insurance premiums plummeted when we got our joint policy. Apparently, a 21 year old male is high risk but a married 21 year old male is not. I doubt his driving improved overnight, but we appreciated the savings.

Taxes

Most married couples can save on tax liabilities by filing their taxes jointly. A couple with a combined household income of $80,000 will pay less in taxes than two single taxpayers who make $40,000 each. It makes sense to file separately if one spouse makes significantly more money than the other or if your combined adjusted gross income is incredibly high. Otherwise, it makes sense to use the same accountant or tax software and file your return together.

I personally loved this part since it meant I never had to file another return again. My husband enjoys doing our taxes, and I think it completely stinks, so I happily print out the necessary documentation, make lists of the numbers he needs, and then I can just let it go. It’s a fantastic part of being married in my opinion.

What other tips do you have for a couple combining their finances for the first time?

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