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Make sure to move automatic payments to new card.

By Teresa Mears Oct 19, 2009 5:35PM

When you’re a victim of identity theft, one of the first things you should do is cancel all the credit cards that have been compromised. If you have regular payments charged automatically to a card, don’t forget to change those payments to another card.


Forgetting to set up new automatic payments for a bill can have serious consequences, as my late partner and I learned. She was the victim of identity theft in 2003, when several of her cards were taken over by another person, who charged a lot of items and had the bills diverted to another address in the next county.


Falling prices mean Social Security recipients will get no cost-of-living increase next year.

By Karen Datko Oct 19, 2009 4:39PM

Under the time-honored formula used to calculate Social Security payments, recipients will get no increase AT ALL next year -- for the first time since the automatic cost-of-living adjustment was adopted in 1975. Prices have actually gone down, you may or may not have noticed.


Social Security payments cannot, by law, decrease when the cost of living declines, but neither are they supposed to go up when there is no inflation. And, the Los Angeles Times notes, "The decline in prices means that seniors will be able to buy more with the dollars they're already receiving."

But President Obama and many in Congress want Social Security recipients to get an increase anyway -- in the form of a $250 bonus.


Is this fair or even reasonable?


Online high-end shopping sites can throw the sage shopper off his or her game.

By Karen Datko Oct 19, 2009 12:15PM

This guest post comes from Frank Curmudgeon at Bad Money Advice.


I have a favorite, although rather obscure, Monty Python sketch. An older housewife type (a "pepperpot") sits on a park bench. Another approaches dragging a car engine on a cart, saying she's been shopping.


"Did you buy anything?" asks the first.


"A piston engine!"


"What d’you buy that for?"


"Oooh! It was a bargain."


It's not their most memorable bit. But it deftly sums up a way in which we can short-circuit our own thinking when we shop.

As I've written here several times, when we shop we are not creatures of cold calculation. We can't be. There are just too many choices at the mall and not enough time to find the one optimal allocation of our money over everything we could buy. Instead, we operate on a set of learned behaviors that approximate the optimal outcome. One of those is bargain hunting.


I sometimes feel ashamed that I can afford things that others can't.

By Karen Datko Oct 19, 2009 10:39AM

This post comes from J.D. Roth at partner blog Get Rich Slowly.


Recently I shared a guest post from Leo Babauta of Zen Habits. His guide to minimalist money was a sort of overview of good financial skills, useful information for those in the first stage of personal finance. But some longtime GRS readers couldn’t relate to Leo's post.


Today's post goes in the opposite direction. It's a meditation for those in the third stage of personal finance (or beyond), and it's probably going to seem foreign to those who are still struggling to get debt under control.


The evolution of spending
Before I developed smart money skills, I spent without thinking. I accumulated debt because I had no self-control. I bought what I wanted, even when I couldn't afford it.


Candor the best option, blogger says.

By Karen Datko Oct 19, 2009 2:44AM

This post comes from Trent Hamm at partner blog The Simple Dollar.

I received a heart-wrenching e-mail from a reader I'm going to call "Peggy." 

This e-mail (which I edited to protect the family's privacy) was the most painful I've read since I started writing The Simple Dollar. I look at my almost 3-year-old son and I can't imagine having to explain to him in a few years why we have to move out of the house he's grown up in.

Here are a few excerpts from that e-mail:


Retirees cite fear that the public safety net won't last.

By Karen Datko Oct 19, 2009 2:31AM

Although it's a questionable decision for many, almost half of 61-year-olds surveyed recently said they'll begin collecting Social Security when they reach 62, the earliest people can apply.

The survey by Fidelity Investments shows that surprising result -- as well as a widespread lack of understanding of how Social Security works. For instance, "56% do not know when they will be eligible for full Social Security benefits (age 66 for those born 1943-54)," Fidelity said. About a third wrongly think that all benefits are exempt from taxes.

Applying at age 62 locks you in at a lower benefit for life (with one exception we'll describe below.) Is it really worth settling for a lower standard of living just to increase the chances that you'll collect Social Security for a few extra years?


If you landed an interview, you did better than most.

By Karen Datko Oct 19, 2009 2:13AM

This post comes from partner blog Blueprint for Financial Prosperity.

When I first graduated, the job market was bleak. It was so bleak, I opted to start attending graduate school even before I was accepted. (I graduated early in December and wanted to take classes immediately, so I attended while applying.) In the few months I did look for a job, I received rejection letters from all types of companies. The worst ones were from the companies I didn't even want to work for, but would accept just to have a job.

It wasn't a pleasant time for me or my graduating friends, but it taught me a lot about dealing with rejection.


If you need to feed a family, no work is beneath you.

By Karen Datko Oct 19, 2009 2:04AM

This post comes from Jim at partner blog Bargaineering (formerly Blueprint for Financial Prosperity).

Mrs. Micah recently tackled the topic of whether it's a good idea to take a low-paying job (she phrased it differently -- whether certain kinds of work are beneath you).

She gave three arguments for why it's a bad idea: It takes up valuable time while draining the energy you should be using to apply for jobs, it isn't a true solution and could cause complacency, and a less-skilled job doesn't look good on a resume.



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