So you don’t buy a lot of expensive stuff, you buy groceries and pay your bills, purchase school supplies and clothes for your kids.  Once in a while you might go out to eat or take the family to McDonald’s.

So where has all the money gone?  You deserve a little pleasure in life but is it these few, small luxuries that are eating up all of your hard earned money?

You might think that your rent, student loans, mortgage or utility bills are the reason, but actually your biggest expense is your taxes.  If you don’t think that can be true, give it a little thought…  You have to pay federal and in some cases state income tax, there is property tax, payroll tax, sales tax, tax at the gas pump and it seems to go on forever.

Here are a few tips to help you change your largest expense to your largest saving opportunity:

Use your taxes to save money? — Using your taxes to actually save money is undoubtedly a new idea for you. There’s a good chance that you have missed out on ways to save on your income taxes in years past. Don’t worry, there’s some good news for you: Those savings you missed out on, they aren’t lost forever.

Let’s say find out that you have not taken advantage of some deductions or tax credits that you were entitled to, no sweat, all you have to do is file an amended return to claim an additional refund. By and large, you have three years from the date you filed your tax return to file an amended return. So, it’s possible to file a claim for refund for the last three years of tax returns if you find an error. This is a great way to improve your cash flow, and it’s a great example of why you should meet with your tax advisor throughout the year. (hitchedmag)

Seek the advice of a financial counselor. — Everyone can benefit from a trusted advisor, someone to guide them through the good times and bad.  An advisor can help you with your main goal, becoming as debt free as possible and becoming financially responsible. …that’s not your goal?  Well, it should be!

Remember, the professionals at DebtHelper.com can explain the benefits of a debt management program and provide you with a fresh start.

One of the biggest long-term benefits of the debt management plan is the reduction in interest. Reduced interest allows you to pay off your principal balances faster while saving you possibly thousands of dollars in finance charges.

In order to determine if you are eligible for a debt management program, you can fill out an online budget application form now and then you can contact one of their Certified Personal Finance Counselors© at (800) 920-2262.

Don’t forget the credits for your kids. — Gather up all of the expenses related to your kids, childcare medical expenses, 529 plan contributions, tuition payments, whatever.  Then when tax time rolls around, have your tax preparer explore every tax credit that might be available to you, such as the child care credit, child tax credit, and the earned income credit. For older children who are in college, you must consider the education tax credits, such as the Lifetime Learning Credit and the American Opportunity Tax Credit.

If you have young kids and are seeking the best savings option available, consider a 529 plan. Although you do not receive any federal tax deduction for the contributions you make to these plans, the distributions are generally tax free to the extent that you use them to pay for qualified higher education expenses. For example, assuming you contribute $10,000 to a 529 plan in the year your child is born and this amount accumulates to $30,000 by the time the child is ready to attend college, this entire amount can be used free of tax if used for qualified higher education expenses. Neither you nor your child will be taxed on the profit made with this money. (hitchedmag)

Gift giving. —You can take advantage of gift giving to help prevent losing some of the value of your estate to taxes. For 2013, the gift tax exclusion is $14,000 per year. This means you can make a $14k gift to anyone – and to as many people as you want, every year, and that money will not be subject to gift tax. This amount can be increased to $28,000 per year if a non-donor spouse agrees to split the gift.

This can be a great method to transfer assets to children, grandchildren, and other intended heirs while you’re still alive. Ultimately, this will reduce the taxable value of your estate and, at the same time, your ultimate estate tax liability.

Keep in mind that just because we have to pay taxes, that doesn’t mean that we have to give a huge part of our income away.  When you know how the taxes work and know where to look for breaks, you can actually minimize your tax payout, and as a result, save a lot more of your money.

Those savings can lead you to the much coveted financial independence.

Don’t let Your College Degree Leave you in Debt

Growing up we were all coached and mentored by someone who constantly drilled us on the importance of a college education. In today’s world, with the ever increasing technology and advancements in the science and medical fields it is becoming even more important for people to earn degrees in their fields.

Courtesy of Ken Ilungas

While we all know how important and beneficial college can be there is one important detail that people usually fail to mention: college is expensive! Reality seems to suddenly sink in when you notice the tuition prices of the college or university that you are applying for. So of course, the majority of people take the only option they have and get student loans.

It is too easy, and growing too common, for students to rack up $25,000 or more in student loans while trying to obtain their college education. Even after they earn their degree they typically have to spend the next several years paying off the loans.

The Street recently wrote an article about a man that dedicated two years of his post-college life to paying off the student loans he had accumulated. He actually ended up working various jobs that were completely unrelated to the degree he had just received in order to get rid of his debt.

He was not satisfied with one degree though and when he decided to go back for more schooling he wanted to be wiser when it came to funding his education. He ended up deciding to attend Duke University because the degree he was seeking was only $2,500 a semester. Ken Ilgunas also knew that he would have to find somewhere near the campus to live. Recalling the time that he had spent in Alaska and the people that he had met that lived out of vehicles Ilgunas decided to save the money on rent and went and purchased an old van where he would live throughout the remainder of his college career.

“I don’t think there was a specific turning point,” he said. “The decision was the result of a very gradual change in character. It was all very novel and new to me, and being exposed to these new ways of living was enlightening.” (The Street)

Most students are woefully unaware of the ballooning effect of student loans or credit card debt, how interested is calculated or why they should keep their borrowing to a minimum, Ilgunas said.

“Going into college, I knew almost nothing about these things,” he said. “I didn’t even know what ‘interest’ was. I’d had minimum wage jobs, so I wasn’t completely unfamiliar with the value of a dollar. But that didn’t at all prepare me to think through taking out a five-digit loan. My priority at the time was to get into the best school I could, no matter the cost, which is not advice I’d give to young folks now.”

With funding to state college and universities being reduced and the cost of tuition being increased since many institutions are building “lavish new facilities,” students need to learn the basics of finance, Ilgunas said. (The Street)

The best advice out there when it comes to seeking an education is to be financially aware of what you are getting yourself into. There are ways to pursue a college education without breaking the bank, accruing student loans, and forcing yourself into debt before you even have a degree. Use scholarships and grants to your advantage. Also, if taking out a student loan is an absolute must then limit the loan amount to the lowest possible figure. It is far too easy to convince yourself that you need the extra money right now and that you will pay it back in no time at all. This is the fastest way to find yourself in debt.

Ilgunas also says that if you are already one of many who has found themselves deep in student loan debt it is not too late to remedy the situation.

Even students who have amassed a large amount of student loans can become debt free, Ilgunas said. Changing the outlook on how you view debt is the most critical element.

“Think of your debt as a sworn enemy and indebtedness as a life and death situation,” he said. “You need to reframe the way you think about debt. You need to hate your debt. You need to get obsessed with it. Despise it. Anthropomorphize it.” (The Street)

Living debt free should be a personal challenge for everyone, Ilgunas said.

Using Plastic for Purchases may not be as Convenient as we Think

In the past decade we have witnessed the use of credit and debit cards increase significantly. In the 90’s over sixty percent of people used cash for the majority of their transactions and studies are showing that today that number is half what it was back then.

As people are beginning to become so much more reliant on plastic for purchases we have to start asking questions regarding the safety of this relatively new payment technique. Are our purchases really secure or are we just blindly walking into trouble without realizing it? As the use of debit and credit cards increases, it is imperative that we consumers stay on the lookout for the hidden costs and fees and the possibly security pitfalls that can we associated with these cards. Here are some common questions.

Is there more than one type of debit card?

Unbeknownst to most people there are actually two different types of debit cards, deferred and direct. The deferred card – or signature-based – is similar to a credit card minus the credit. This card requires you to sign for the purchase and then the money will be debited from your checking account within two to three days. A direct – or PIN-based – debit card requires that you punch in your PIN number every time you buy something and the money is immediately withdrawn from your account.

Which one is smarter to use?

Similar to ATM surcharges, direct debit card purchases may come with charges that will show up on your bank statement. Hidden fees, the result of the battle between retailers on one side and banks and credit card issuers on the other, can add up significantly. As a result, to reduce their expenses, many stores encourage PIN-based transactions and some stores no longer accept debit card purchases that require signatures. (ABC News)

When the consumer uses their personal identification number to make a purchase, the retailer usually pays a flat fee to the bank. However, when the purchaser opts to use their debit card as a credit card, which typically requires a signature, the retailer generally has to pay a percentage fee based on the amount of your purchase. Therefore, it is becoming more common for the retailers to encourage PIN-based transactions, and several are no longer accepting debit card purchases that require a signature at all.

This tactic results in $3.5 billion in lost processing fees for banks. To recoup this revenue, some banks have started to charge consumers a fee, generally between 25 cents and $1.50, for every PIN-based purchase. These fees are subtracted from your checking account along with your purchase. (ABC News)

What kind of protection do you have?

If your debit card gets lost or stolen (which has happened to the majority of us at one point or another), what kind of protection do we as consumers have? Unfortunately when it comes to our financial security debit cards do not provide the same piece of mind that credit cards typically do. The main difference has to do with the federal regulations regarding fraud liability. For most credit cards there is usually a liability cap of $50, which means that the consumer is responsible for the first $50 in damages and then the company will cover the rest of the damagers. However, when it comes to bank debit cards the liability cap can be as high as $500, requiring the customer to pay that amount out of pocket before the liability insurance kicks in for the remaining balance.

Will a debit card prevent you from over drafting?

Not all cards. Some debit cards will actually allow the users to overdraw and then hit then with overdraft fees that usually range around $35 a transaction. If you use a deferred debit card and simply sign for your purchases, many banks will let you exceed the checking account balance. The tip here is to balance your bank account like you do your check book. Keep track of your balance and your purchases. Do not depend on the mobile banking app to stay updated for you.

For more information on how using debit cards can actually have a negative impact on you financially visit ABCNews.com.

…a multi-part series

Part 2: Durable Power of Attorney and Protecting Your Parent’s Finances

In our first segment of “How to Care for Your Aging Parents without Losing Your Sanity” we looked at planning for the inevitable and the guilt some of us feel when we are forced into the role of caregiver.  In this installment we will delve deeper into specific financial information, protecting your parent’s finances and an important document, the Durable Power of Attorney.

Talking to your elderly parents about their finances might pose quite a challenge.  The World War II generation likes to guard their independence and financial information.  This pride in independence can lead to seniors taking unwise financial measures to avoid asking for help.  Kenneth Kamen, president of Mercadien Asset Management in Princeton, N.J., writes of an older woman he knows who racked up $31,000 in credit-card debt before her family found out.  This huge debt was the result of household expenses that were beyond her fixed income.

Some of our ageing parents have more money and assets than we ever knew about.  This too is important information that needs to be discovered, keeping in mind that with age, the risk of financial abuse increases.   It is important to know what assets your parents have and equally important to know where the corresponding documentation for these assets is kept.

How are you supposed to handle you parent’s assets if you are not named on the accounts?  Well, that’s where the durable power of attorney comes into play.  Let’s take a look at the durable power of attorney, what it is for and some tips for when you have one created.

A durable power of attorney is often chosen as a way to plan for those times when you are incapacitated.  It is a written document that remains valid even if the person should later become unable to make their own decisions. With a durable power of attorney, you are able to appoint an agent to manage your financial affairs, make health care decisions, or conduct other business for you during your incapacitation.

A durable power of attorney may be general or limited. A general durable power of attorney may allow your agent to do every act which may legally be done by you. A limited durable power of attorney covers specific events, like selling property, making investments, or making health care decisions. (ATG.SD.gov)

Add a caveat to the durable power of attorney.  It is important to add an additional requirement to the durable power of attorney to help in the process of fending off financial elder abuse.  It is recommended to add a detailed paragraph that assigns a second person, whether it’s an accountant or personal friend, someone who will take a look at bank statements monthly and do an in-depth analysis of all financial records yearly.  Unfortunately the majority of financial elder abuse is committed by a relative — occasionally it’s by the one holding the power of attorney.

OK, so now you have a power of attorney and are able to manage your parent’s finances.  The first thing to do is to round up all of the documents pertaining to all of the assets and all of the bills.  Below is a list to get you thinking of what you might have to gather up:

• Bank statements and check book
• Credit card statements
• Utility bills
• Actually all monthly bills you can find
• Property and mortgage paperwork, the note, deed, statements and payment information
• Car titles and / or car loan information
• Health insurance information
• Auto insurance information and billing information
• End-of-life paperwork, including a living will, will, that power of attorney you got and any letters spelling out their wishes
• Birth certificate, marriage license or divorce decree
• Passport
• Investment information, including stocks and bonds
• Military records
• At least 3 years of Income tax records
• Retirement plan information
• Credit card statements
• All of your parent’s personal information such as: Full name, date of birth, Social Security Number, phone number and address, names and phone numbers for your parent’s physician, attorney, doctors, and other important people, phone numbers for other family members and your parent’s close friends.  You will be surprised how much of their personal information you don’t know.

Now it’s time to go through all of this information and make sure everything is up to date and be sure you know how to contact a representative or where the payments need to go.

While reviewing your parent’s financial information there are a few issues that you should address:

• Do your parents have a will? Is it up-to-date?
• Have you prepared all advanced directives?
• Has your parent prepared proper letters of instruction?
• Does your parent have a living will? Do you know where they stand on a DNR?
• If your parent’s assets will be subject to estate tax, have you spoken with an attorney on how to minimize these expenses?
• Have you discussed funeral arrangement?

While initially difficult, it is important that you talk with your parents and gather all of this information. Making critical decisions for an aging parent is nerve-racking when things going well. You have a big job ahead of you and at times you will wonder if you will ever get through it with your sanity intact, but hang in there and be prepared as possible and you will find you will be able to through the tough times a little easier.  Remember that your main objective is to take care of your parents.

In the installment of this continuing series we will look at the difficulties and hopefully some solutions to the most difficult type of caregiving…  Long distance caretaking.

read part 1

The Federal Trade Commission announced this month 191 actions to stop fraudulent operations hawking timeshare property resale services and travel prizes, including three FTC cases, 83 civil actions brought by 28 states, and 25 actions brought by law enforcement agencies in 10 other countries.  More than 184 individuals face criminal prosecution by U.S. Attorneys and local law enforcement. FTC

“They persuade owners to pay fat up-front fees…”

These timeshare con artists are taking advantage of owners of timeshares that are having financial difficulties.  “They persuade owners to pay fat up-front fees by saying they have someone ready to buy the property, but that’s a lie.” Says the Acting Director of the FTC’s Bureau of Consumer Protection. 

This should go without saying but never pay someone for a promise.  If the timeshare sales representative says that they have a buyer ready to buy your timeshare, make sure you get a contract.  Also, you should never have to pay an up-front fee to sell your timeshare, or any real estate for that matter.  Only pay after your unit is sold.

“We will continue to pursue scam artists who attempt to essentially steal from timeshare owners,” said Florida Attorney General Pam Bondi. During a press conference in Miami, Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida reiterated that sentiment stating that “We cannot allow our elderly and vulnerable real property owners to continue to be the target of fraud schemes,” “For that reason, our respective offices – federal and state, criminal and civil – have joined forces to combat Florida-based fraud schemes,”  

Victimizing timeshare unit owners across the country, these scammers find their easiest prey in the elderly or in financially distressed owners. With overwhelming debt of a financial crisis, timeshare owners looked to sell their units to help make ends meet or pay other bills.  Unfortunately all that happened was that they were defrauded out of more than $14 million in total.

How do you know if the reseller you are dealing with is a scam artist?  Well, the FTC has put together a great info graphic that shows you how the timeshare selling scam works.

What can you do to avoid being scammed when trying to sell your timeshare?  Below are a few steps to take to avoid being scammed:

– Do not pay any money up-front or before the sale closes!

– Do not agree to anything over the phone or online.

– Do not pay any money up-front or before the sale closes!

– Ask your sales person for all information in writing.

-Be sure to check out the reseller with the Better Business Bureau or the State Attorney General.

– Do not pay any money up-front or before the sale closes!

– Ask about fees and how long it will take to close, and get it all in writing.

– Do not pay any money up-front or before the sale closes!

Did I mention “Do not pay any money up-front or before the sale closes?” 

If you don’t give them any money, you can’t be scammed, plain and simple.

If you find yourself in dire financial straits, you would be well served to contact a debt management professional before doing anything.  It is possible that they can help you restructure your debt, take control of your finances and avoid the urgency you feel to sell your timeshare.

The professionals at DebtHelper.com can explain the benefits of a debt management program and provide you with a fresh start.

One of the biggest long-term benefits of the debt management plan is the reduction in interest. Reduced interest allows you to pay off your principal balances faster while saving you possibly thousands of dollars in finance charges.

In order to determine if you are eligible for a debt management program, you can fill out an online budget application form now and then you can contact one of their Certified Personal Finance Counselors© at (800) 920-2262.

DebtHelper.com can currently accept clients from the states listed here. DebtHelper.com is licensed, insured and complies with all state licensing requirements to ensure mandated regulations are followed. They are diligently working on becoming licensed in every state and are opening new states monthly.

Please call (800) 920-2262 if you have any questions. DebtHelper.com’s consultations are free, call them any time.

Every year, more than 26,000 kids in the United States age out of foster care. Remember how difficult it was to navigate through the world when you were 18? Now imagine you had to do it with nearly no support system – and with a mountain of debt in your name, thanks to identity theft. (FTC)

In the past there were no specific laws that protected kids’ credit, particularly the often exploited foster kids.  Well, that changed in 2011 when Congress passed legislation requiring child welfare agencies to get the foster kids’ credit report when they turn 16.  If there are any problems with their report, typically due to identity theft, they will be assisted by child welfare services in the process of clearing it up.

The FTC in conjunction with ChildFocus Inc. and the Annie E. Casey Foundation have put together a free and helpful guide to help deal with protecting foster kids’ credit.  Youth and Credit: Protecting the Credit of Youth in Foster Care.

Child identity theft is not a problem that is only happens with foster children, every child is at risk.  If you are a parent you know the list of worries seems never-ending.  We worry about kid’s physical safety, their education, their futures and a whole laundry list of other things.

Most parents think that at least there is one thing they don’t have to worry about, their child’s financial reputation. Well, unfortunately, they are not out of harm’s way.  Regrettably, from the time our kids get a Social Security number, usually within days of being born, their personal information needs to be protected and watched so they don’t become the target of identity thieves.

You might think it’s ridiculous to worry about the credit of your preschooler, but according to protectmyid.com, “…children and adolescents have become the fastest growing sector of identity fraud victims.” You would think that these kids are unlikely victims however; identity thieves consider them easy targets.

With clean credit histories they are the perfect candidate for criminals to open new credit accounts.  Since kids don’t normally check their credit, the identity theft can go on for years without ever being noticed.  Many of these kids that are victims of identity theft don’t find out until they apply for their first credit card or auto loan.

How horrible would this be for a young adult just starting out in life, to now have to deal with bad credit before they have had the opportunity to mess it up for themselves.  Seriously though, as you may know bad credit could mean they are unable to get a job, financing for a car, obtain a credit card or even denied the ability to purchase a home.

So what can you do to protect your child’s identity and credit?  Well, there are a few simple things you can do to thwart off the identity thief or at least make it much more difficult for your child to become a victim.

Protect your child’s Social Security number like it was your own.  The easiest way for criminals to steal an identity is by obtaining a Social Security number.  There is no need for you to carry your kid’s Social Security card in your wallet.  Keep it in a safe place at home.

Your child’s Social Security number is likely on file at the hospital, their school, and certainly the doctor’s office. But other than these places, do you best to keep your child’s personal information private.

When you sign up you kids for soccer or little league you might be asked for their Social Security number. Be cautious, remember that you have options. If a business, individual, or organization asks for your child’s Social Security number, be proactive and ask them a few questions:

• Just how will my child’s Social Security number be used?
• Why do you need it in the first place?
• What are you going to do to keep it from getting stolen?  Where is it kept?
• What will happen if I decide not to give it to you?

Many places will agree to go on without getting your child’s Social Security number.  There are many minors who don’t even have a Social Security number yet, and if the organization is reputable, they will want to protect your child’s information.

OK, you have taken every precaution you could think of to protect your child’s identity and credit however, they have still fallen victim.  If this happens, you must take action immediately:

Begin by immediately canceling each account that has been opened.

Contact each credit card company by phone and with a letter sending copies of supporting documents.

1. File an Identity Theft Report with the police department. The police report will be useful if future problems arise from the theft.
2. File an Identity Theft Complaint with the Federal Trade Commission (FTC). The FTC can be contacted by phone at 1-877-438-4338 or in writing at:
   Identity Theft Clearinghouse
   Federal Trade Commission
   600 Pennsylvania Avenue, N.W.
   Washington D.C.  20580
3. Call and report the incident to the three national credit-reporting bureaus listed below. Let them know that the identity theft is associated with a minor who should not have a credit file.

• Experian, PO Box 1017, Allen, TX 75013; 1888-397-3742
• Equifax, P.O. Box 740250, Atlanta, GA 30374; 1-800-525-6285
• TransUnion, P.O. Box 6790, Fullerton, CA 92634; 1-800-680-7289

Be sure to send copies of the Identity Theft Report to each of the bureaus.

“Because most parents never consider identity theft a threat to their children, a criminal’s job is that much easier. Being proactive and regularly monitoring your child/children’s credit reports and/or personal information for the existence of a credit file allows your child to enter adulthood with a clean credit slate, which means you, can cross one worry off your list.” (Protectmyid)

Rebate offers can be irresistible to consumers, slashing the price of consumer goods at the time of purchase or promising partial or full reimbursements after the purchase.

Some manufacturers and retailers lure shoppers with immediate cash rebates that can be cashed in instantly at the checkout counter.

But most rebates are of the mail-in type. This is where you need to pay attention closely to the terms; they require consumers to pay the full cost of an item at the time purchase, then to send documentation to the manufacturer or retailer to receive a rebate by mail.

The documentation required commonly includes the original sales receipt, UPC code, rebate slip, and the customer’s name, address and telephone number. In most cases, this paperwork must be sent to the manufacturer or retailer within 30 days of the purchase. Consumers generally receive their rebates up to 12 weeks later.

But the Federal Trade Commission cautions consumers against being “baited” by rebates that never arrive or arrive far later than promised. By law, companies are required to send rebates within the time frame promised, or if no time is specified, within a “reasonable” time. “Reasonable” in this case often is interpreted as within 30 days.

When purchasing a product that offers a rebate, the FTC encourages consumers to:

– Follow the instructions on the rebate form and enclose all required documentation in the envelope when filing for a rebate.

– Make a copy of all paperwork to be mailed when applying for a rebate. It’s the only record a consumer will have of the transaction if anything goes wrong.

– Contact the company if the rebate doesn’t arrive within the time promised.

– If the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, the state Attorney General or the local Better Business Bureau. (FTC)

With the natural disasters of late many people are coming to the rescue of their fellow man with mostly financial donations.  Unfortunately, the scammers turn out in force when a disaster hit, attempting to relieve uninformed contributors of their money.

The legitimate charities have a lot of competition from scammers who either collect for a charity that either doesn’t exist or are dishonest about how your donations will be used or where they will be going.

Just like legitimate charities, they ask for donations by phone or mail, through social media, via email and websites or even in person.  In order to weed out these scammers and make sure you are donating to a legitimate charity, there are a few things you need to keep in mind:

• Be sure to donate to charities that you already know and trust. Be on the lookout for charities that seem to have just sprung up overnight right after a current event, like a natural disaster.
• If you receive a phone call soliciting for donations, ask the caller who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If they cannot provide you with a clear answer, or you don’t feel comfortable with the answer you get, the smart thing would be to look for a different organization to donate to.
• There is no reason to give out your personal or financial information. This includes your bank information or credit card or checking account numbers. Unless of course you know for sure the charity is reputable.
• Whatever you do, do not send cash.  You have no way to be sure the organization received your donation, not to mention you won’t have a receipt for tax purposes.
• If you are considering donating to a charity that you are not familiar with, you can check them out with the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
• To find out if the charity or fundraiser is or is required to be registered in your state, contact the National Association of State Charity Officials.

Be sure to avoid any charity or fundraiser that:

• Will not provide detailed information about its identity, mission, costs, or how the donation will be used.
• Is unable to provide you with proof that a contribution is tax deductible.
• Uses a name that closely resembles that of a better-known, reputable organization. i.e. “Big Red Cross”, “The Salutation Army”, “UNICEEF” …You get it.
• Thanks you for a pledge or previous donation that you don’t remember making.
• Uses high-pressure tactics like trying to get you to donate immediately, without giving you time to think about it and do your research.
• Asks for donations in cash or asks you to use Western Union or to wire them the money.
• Offers to send a courier or overnight delivery service to collect the donation immediately.

The IRS provides a “search” for IRS approved charities. Don’t stop there, however. Even if your charity is listed, you may need to hunt further to get information about how effective and efficient the charity is.

It is important to note that not all charitable causes are registered with the IRS. If you give to a small, local cause that does not enjoy tax-exempt status, just make sure that you know something about the people who are asking for your money.

Many causes spring up, run their course, and go away. That doesn’t mean that they are illegal or fraudulent. When you get your car washed by a group of local high school kids to help them take their band to the Rose Bowl Parade, that may be just fine. Just be sure that the group has the backing of its school or some other community organization.

It is our nature as Americans to give to those in need; it is a cherished American tradition. Just make sure you don’t get ripped off…make every effort to be sure your charitable donation is going where it can do the most good.

How to Spot Bogus Business Opportunities

Perhaps you have come across those ads that you can quit your regular job and stuff envelopes or assemble crafts at home. Maybe a company says it can help you set up a vending business.

Well before you before you put your John Hancock on the dotted line or send them your hard earned money; find out about the Business Opportunity Rule, enforced by the nation’s consumer protection agency, the FTC (Federal Trade Commission). The Rule has safeguards in place to make sure you have the information you need to determine whether a business opportunity is risky business.

The Business Opportunity Rule requires potential business opportunity sellers to give you a one-page statement disclosing important facts about the opportunity and secondly, if there are claims about how much money you might make, they have to give you a separate report with the specifics of that claim.

There are certain claims that business opportunity sellers cannot do:

• It is against the law for sellers of business opportunities to say anything that opposes what is in their disclosure and earnings statements.
• Under the Rule, sellers cannot advertise that they are giving you a job when in reality they are promoting a business opportunity.
• The Rule also makes it illegal for sellers to falsify the nature of the investment – for example, if they claim they’ll help you line up locations, accounts, or customers or that you’ll have an exclusive territory if it’s not absolutely true.

Even though the Rule is designed to protect you the buyer, take the time and due-diligence to make sure the seller is providing you with what is required by law.  Make sure they provide you with the disclosure document that includes the five key pieces of information required by law. If they make earnings claims, be sure they give you a separate statement with the specifics.  If you come across a seller who isn’t complying with the law, your radar should be going off: You could be dealing with a business opportunity scammer.

Here are a few things you can do to protect yourself when it comes to business opportunities:

— Be sure to carefully read, or have your attorney look over, the disclosure statement and the earnings claim statement in addition to the proposed business contract.

— Demand proof, real written proof, of the claims of earnings.  If they claim “Make up to $50,000 a Week!”  the “up-to” bit isn’t their way out.  This is an earnings claim therefore make them show you the proof.

— Find people who are doing the same business and talk to them.  Ask if they are indeed making the amount of money that advertising states.  Ask if the information that the seller provided in the disclosure document has been typical of their experiences.

— If a seller of a business opportunity fails to provide you with the disclosure and earning statements that you request, move on it’s likely a scam.

— If there is anything you are unsure of or don’t fully understand the contract, disclosure or earnings statements, seek the advice of an attorney, accountant or business advisor.

— Check with the Better Business Bureau to see if there have been any negative claims filed against the business opportunity or the seller.

— Hop on the ‘ole internet and do a few searches by entering the company’s name and “complaint” or “scam.” You might be surprised by what you get. But be cautious: Just because there are no complaints it doesn’t necessarily mean the company is legitimate. And remember, scammers have no problem making up phony testimonials and posting them online.

If you come across a possible business opportunity scam, be sure to report it.  Here are a few of the places that you can make your report:

• The state attorney general’s office both where you live and where the business opportunity promoter is based.
• Your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
• The Better Business Bureau in your area and the area where the seller is based.
• The FTC. File a complaint online or call toll-free 1-877-FTC-HELP (1-877-382-4357).