Holiday shoppers, be wary of these sales pitches

If you visited a mall or discount store last weekend, you might come to the conclusion that shoppers are just cavemen with better fitting outfits. The grabbing, the grunting, the dashing, the darting--you'd think we were fighting for survival, not the last pair of cashmere socks on the rack. Oddly enough, you're right on target, and so are retailers.

Here are several sales pitches aimed at tricking our hunter-and-gatherer brains (SmartMoney.com Nov. 10).

• Spend $50 today; get $10 off later. This now-and-later technique is geared to bring you back into the store to see the newest merchandise and overspend your budget. Think twice before heading to checkout. Perhaps you can hold off on a few items until your next trip.
• Limit two. This brings out the competitor in us all. If the store is setting limits, it must be a great deal. Or is it? Before scooping up one for Uncle Chuck and another for cousin Bill, compare to ensure it's really worth the asking price.
• Five-hour-only sale. Yes, some retailers are aiming to scare you into buying. Limited-time sales are meant to move you now on the fear that all the bargains will be gone tomorrow. While this may be a great sale, it's clearly not the last and may not even be the best.
• Get 23% off. What happened to "save 20%"? It became invisible. Odd numbers grab our attention, suggesting a bargain that has already been marked down. This is just an attention-getting device, so go ahead and give it your attention--then your scrutiny.
• Save $150! Who doesn't want to save $150? By drawing our attention to the savings (rather than the price), a retailer creates the illusion that the actual price is more reasonable. So if you're shopping for a Blu-ray player and find one you like for $99, stick to your guns--even if you can save $60 on another model for $119.

Happy Thanksgiving

This Thanksgiving may your home be filled with the Lord's loving presence and bountiful blessings.

Happy Thanksgiving from the staff of LifeWay Credit Union!

Home prices not done falling

Look for home prices to slide perhaps another 7% between now and midyear 2011, according to FiServ, a market analytics company based in Brookfield, Wis.

If that forecast is right, home prices nationally will have dropped 34% from their peak by the time they hit bottom.

For as many as three million Americans, the dream of owning a home has faded. Home ownership has declined from its peak of 69.1% in 2005 to 66.9% today (CNNMoney.com Nov. 2). Additionally, the vacancy rate among homes designated owner-occupied is 2.5%. Housing starts are at 600,000 a year, well below the normal replacement rate; few new homes are being built.

Despite low mortgage rates, which averaged 4.3% in September for a 30-year fixed rate and 3.8% for a 15-year rate, "people aren't going to be in the market if they can't find jobs--or feel insecure about keeping their jobs," says Susan Tiffany, CUNA's director of consumer periodicals.

Young people have been hit hardest by the economic turmoil. For those younger than age 35, home ownership dropped 9%, with 39% owning homes, compared with 43% at the beginning of 2005. Also hit hard, Americans 35 to 44 saw their ownership rate fall 7%, from 70% to 65.2%; 45- to 54-year olds saw ownership drop 5%, to 73% from 76.5%; and homeowners 55 to 64 saw a 3% decline to 79% from 81.8%.

If you're in position to leverage today's low rates, Tiffany has these suggestions:

• Shorten the term of your mortgage. You'll probably need a strong credit score and at least 20% equity.
• Look to free up some cash. Refinancing can reduce your monthly payments or help you save money with a lower interest rate and/or shorter term for repayment.
• Expand your real-estate holdings. If you are looking for a second home, or an investment property, it looks like a buyer's market over the next year.

Tiffany offers one caveat: "Most forecasters are saying mortgage rates may rise gradually through 2011."

Fresh saving ideas as holiday season approaches

Air fares and gas prices take their toll on consumers' wallets as the 2010 holiday season approaches.

Airline travelers are spending nearly 50% more this year than in 2009 for Thanksgiving holiday fares. And the price at the pump offers little relief for those planning to skip the airport. The cost of a regular gallon of gas increased 6% during the first week of November (moneywatch.bnet.com Nov. 10).

As a result, consumers who combine travel plans with holiday gift-giving are left searching for new ways to tighten their belts and still spread the holiday cheer. Here are three alternative methods from Yahoo! Finance to help you save some cash this holiday season:

1. Share your skills. Are you handy with computers, a do-it-yourselfer, or a master chef? Whatever your skill set, deliver your talents and expertise as a gift. It's a thoughtful present that also helps both giver and receiver save money.
2. Move the holiday. Agreeing with others to celebrate shortly after a holiday allows you to share the season and the savings. You'll be able to take advantage of after-holiday sales, enjoy festivities with others, and possibly avoid hectic travel days.
3. Check your supplies. Inventory supplies before stocking up this holiday season. You may find you have plenty of wrapping paper, cooking ingredients, and gift boxes to satisfy your needs and prevent unnecessary purchases. Besides, who needs four rolls of half-used transparent tape?

Don't be tricked by Medicare scams

Medicare scams cost taxpayers billions of dollars every year, and the schemes are not always big and obvious (The New York Times Oct. 29).

Yes, large crime groups do get arrested and charged for Medicare fraud. In October, a 40-plus member crime syndicate stole the identities of doctors and thousands of patients and used them at bogus health clinics in 25 states to bill Medicare for more than $100 million.

But, thieves work other schemes on a smaller scale. A criminal may offer you medical supplies or diabetes screenings, simply to collect your Medicare number. Then he will bill you for other supplies and services you never receive. Of course, the swindler pockets the reimbursements.

You might think you can relax, knowing that you probably won't have to pay--but guess what? Your medical and insurance records could be compromised and the problems show up later. It could be the day you need a wheelchair, and Medicare denies it because you've "already had one for five years."

Here's what you can do to protect yourself or a loved one from Medicare fraud:

• Guard your card. Protect your Medicare card the same way you guard a credit card or Social Security card. Likewise, never give your Medicare number over the phone to a stranger or allow a friend or relative to use it. Report a lost or stolen card immediately.
• Beware of free services. If someone offers you medical service, equipment, or supplies for free, he or she doesn't need your insurance information. Walk away. If you're offered something you don't need or you already have, let it go. It could be a scam to collect your Medicare number.
• Examine your statements. When you get your monthly Medicare Part D and/or regular Medicare quarterly statements, look for doctor visits that never happened, unfamiliar provider names, and supplies and equipment you never received. Call your medical provider first to clear up a possible error. If it's more than that, report it immediately.
• Be cautious during enrollment. On Nov. 15 you can sign up for or change plans. This is also high-crime time when scammers offer bogus plans, services and products to unwary seniors. Before you sign up for a plan, check the Medicare plan finder to see if you can find it. If you can't, the plan may not be real.
• Review your credit report annually. Look for unpaid medical bills and make sure they're legitimate.

It's always a good idea to keep a record of all medical services you receive so you can compare your records with unexplained charges. If you find errors, double-check them with your medical provider first. Then, if you still can't explain the discrepancies:

• Go online. Visit the fraud section of the Medicare website to find out how to report your findings.
• Contact your state Senior Medicare Patrol office. The staff will help you determine if you've been a victim of fraud and facilitate your complaint to government investigators.

If you're a Medicare recipient and want more information about preventing and reporting Medicare fraud, check the fraud section of the "Medicare and You" handbook that you should have received in the mail recently. You also can order the handbook online.

Limit the expense of teenage car insurance

On the plus side, your new teenage driver will be eager to run all those errands that eat up so much of your free time. Unfortunately, adding your young "gofer" to your car insurance policy is going to cost you--about $621 more a year on average (Insurance.com Oct. 27).

Insurance premiums reflect the company's assessment of risk. Inexperience makes teenage drivers the highest risk group compared with any other age, including drivers aged 75 and older. In fact, teenagers are four times more likely to crash than older drivers, according to the Centers for Disease Control and Prevention.

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So you're going to have to adjust the family budget for your new driver. Your auto insurance premiums will jump by an average of 44% if you're a one-car family, 58% if you own two cars, and 63% if you have three cars (see chart).

Here's how the Credit Union National Association's Center for Personal Finance editors say you can minimize the increased expense:

• Buy adequate coverage. Experts recommend coverage amounts much higher than those typically required by state law. And considering your potential liability for the medical and legal consequences of an accident, you're wise to buy more than the minimum protection. Consider at least $100,000 bodily injury coverage per person for each accident, $300,000 bodily injury an accident, and $100,000 property damage for each accident.
• Ask about discounts. Many car insurance companies offer "good student" discounts for grade point averages above a certain level or membership in some civic organizations. Certain driver-training classes or installation of a monitoring device in the car may qualify for other discounts. In addition, safety features such as anti-lock brakes and anti-theft devices can reduce insurance premiums.
• Hold your teenager accountable. Of course, the best way to save on insurance is to make sure your teenager keeps his driving record clean. John E. Whitcomb, author of "Capitate Your Kids: Teaching Your Teens Financial Independence," recommends making your child responsible for his driving behavior by means of a written agreement with mutually agreed-upon provisions, such as curfews or passenger limits. In addition, you might agree to pay a bonus for each accident-free year if your child agrees to pay some portion of the damage, including increased insurance premiums, for an accident. By spelling out what you expect of your teenager behind the wheel, and the consequences of misbehavior, you're more likely to make your child a willing partner in managing family car costs.

Check credit record before future employers do

If you're looking for a job, chances are you've spent a lot of time making sure your résumé is perfect. You should pay close attention to your credit record as well (USAToday.com Oct. 26).

While only 13% of companies conduct credit checks on all job applicants, almost half check credit histories for employees with financial responsibilities and senior executives, according to the Society for Human Resource Management, Alexandria, Va.

Many employers believe that credit reports contain relevant information about applicants--especially those applying for jobs where they'll have access to large sums of money or merchandise.

Here's help understanding your credit history:

• Realize the difference between credit score and credit report. Your credit score is a three-digit number that summarizes your credit history, and in many cases is the most influential factor in a lender's decision to grant you credit and at what rate, according to editors from the Credit Union National Association's Center for Personal Finance. A credit report shows a record of your past borrowing and repaying habits.
• Check your credit report yourself. You're eligible for a free credit report annually from each of the three major credit bureaus--Equifax, TransUnion and Experian--at annualcreditreport.com. Use the website to request one or call 877-322-8228.
• Know your rights. The Fair Credit Reporting Act requires employers to obtain your consent before reviewing your credit report. While you can say no, if you decline giving an employer authorization to pull your report, your chances of getting the job may decrease.

New rules affect 2011 flex spending accounts

Fall means football games to watch, maybe some raking, and, for those of us with flexible spending accounts (FSAs), it's time to plan how much to set aside for 2011.

While contributing to a health-care FSA is a great way to use tax-free payroll deductions to cover medical expenses, health-care reform will change the ways you can use funds in 2011 (Kiplinger Oct. 15).

Here are some examples:

• Over-the-counter drugs no longer qualify without a prescription. Starting in 2011, you'll no longer be able to use FSA money for non-prescription drugs, except insulin. Further, if your employer gives you until March 15, 2011, to use up the money in your account from 2010, you still won't be able to spend it on over-the-counter drugs without a prescription after Dec. 31.If you regularly use over-the-counter medications, such as pain relievers or allergy medications, ask your physician for a prescription. You may qualify for reimbursement in 2011 by submitting the prescription number along with the receipt.
• New rules may cover adult children's expenses. Since many employers have expanded the definition of dependent to include any child younger than 27 at the end of the year, you may be able to use money in your FSA for adult children's out-of-pocket expenses. Previously, this worked only if the child was a dependent for tax purposes.
• FSA limits will be lower in the future. FSA limits aren't changing next year, but the maximum limit will shrink to $2,500 in 2013. So if you're considering a medical procedure that isn't covered by insurance--such as laser eye surgery--you might want to schedule it in 2011 or 2012.