Live Real, Now

The no-pants guide to spending, saving, and thriving in the real world.

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A Problem With Life Insurance

Finance

It’s pretty common for someone to buy a life insurance policy and make a minor child or grandchild the beneficiary.

English: $10,000 life insurance policy for Pre...
English: $10,000 life insurance policy for President James A. Garfield, the twentieth President of the United States. Discovered in a family scrap album dating from the late 1800’s. (Photo credit: Wikipedia)

Bad idea.

The reasoning is usually something along the lines of making sure the money goes with the kid, no matter where he ends up, but that money is mostly worthless until the kids grows up.   With the UGMA/UTMA (Universal Gift/Transfer to Minors Act) laws, depending on your state, it can be nearly impossible to access that money or use it for the support of the child.

  1. For example, in Minnesota, I would have to go through the following steps:
  2. Complete a Petition for Appointment of Guardian and Conservator with a $322 filing fee and request it be reviewed without a hearing.
  3. Notify any interested parties.
  4. Consent to and pay for a background study.
  5. Establish a custodial account at the bank and maintain separate accounting for the money.

That’s just to access the money.  As a conservator, I’d be able to use the money for “support, maintenance, and education”, but that does not include investing in a 529 college fund.   I could theoretically invest in ultra-conservative growth funds, but if the investments shrink, I could be on the hook for the difference.   I’d be a “conservator”, charged with conserving the asset.

After all of that, when the kid turns 18 (or 21 depending on the setup), the money is his to do with as he pleases.

Have you ever met an 18 year old who made really good decisions about money?   I had a friend who had a settlement trust pay her a lump sum at 18, 21, and 25.   Each time, she bought a new car and partied with her friends for a month before the money was gone.    That was nearly $100,000 down the drain.

It’s a much better idea to visit an attorney and set up a trust.  Make the trust the beneficiary of your life insurance policies.  Then, define who will be the trustee under what circumstances.   That way, you can make sure your kids and grandkids can actually be supported by your money.

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Selling Your Car

Finance

English: Jalopy car in Joshua Tree National Pa...

English: Jalopy car in Joshua Tree National Park in Hidden Valley Campground (Photo credit: Wikipedia)

When it’s time to replace your car, most people focus on the new car, instead of the old, but that is ignoring real money.  Your old car–unless it has disintegrated–still has value.  Sometimes, it’s just time to ask yourself, “When should I sell my car?”

When you’re looking to sell your car (like with We Will Buy Your Car), you generally have several options:

  1. Tow & crush. If your car has been wrecked, doesn’t run, or is just old and beat up, you may be stuck with calling a junkyard and accepting $50 for them to pick up your car and crush it for scrap.
  2. Trade it in. This is probably the least hassle, but–other than #1–doesn’t pay well.  Dealerships are willing to pay something under what they will get at a wholesale auction, which is quite a bit less than the blue book value.
  3. Sell it yourself. Now you’re thinking, “He’s going to buy my car! Oh, bother.”  It can be a pain, but it’s also the best way to get a decent price for your wheels.

When you sell your car, there are a few things to keep in mind, much like when you sell something on Craigslist.

  • Don’t be alone. There are bad people in the world, but they don’t like witnesses.  Bad things are much less likely to happen if you have company.
  • Know your price. Specifically, know three price: your dream price, the price that would make you happy, and the absolute lowest price you are willing to accept.  Make sure you figure these numbers out ahead of time.  Know what you are comfortable with before it comes time to close the deal.
  • Check IDs. The buyer is going to want to test-drive your car.  That’s fine, but you want to make sure you know who is driving off in your car.  “Officer, Sumdood took my car.  He was wearing jeans.”  That won’t get your car back.
  • Clean it up. Get the car detailed before you show it to a potential buyer.   A sparkling-clean car will almost always bring in a few hundred extra dollars.  It’s well worth the expense.

Following this plan should make the sale go as smoothly as possible and bring you the most possible money.

Readers, what have you done to dispose of an old car?

This is a sponsored post written to provide some insight into the world of used car retail.

 

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10 Ways to (re)Use Shopping Bags

Finance, Parenting

Shadows over the pooper-scooper bin
Image by publicenergy via Flickr

When I go shopping, I don’t bring my own grocery bags…mostly because I’m not a hippy.  I do tend to double-bag my groceries just so I can bring more shiny plastic bags home to play with.  What do I do with them, you ask?   I’m glad you asked, because that is why I am writing this post.  Thank you for cooperating.

Here are my favorite 10 things to do with shopping bags:

  1. Garbage bag. When I’m cooking, I hang a shopping bag on the drawer handle where I’m working, so all the scraps can go straight into the trash.   I just slide the onion skins or pepper cores off the counter right into the bag.
  2. Garbage bag II. Why buy small garbage bags for that tiny can in the bathroom?  A plastic shopping bag works just as well.
  3. Pooper scooper. Instead of buying some gadget or even a little roll of bags, just tuck one of these into your pocket when you take the dog for a walk.  Instant poop removal.
  4. Paint brush saver. When you are painting, if you have to stop for the night, wrap your brush in a plastic bag and put it in the refrigerator.  It will be ready to use in the morning, without have to clean it or pick out dried paint flakes.
  5. Halloween mask. Draw a lipstick mouth on the bag, pull it down and you are an instant “bag lady”.   Seriously, this is bad advice.  Don’t put a plastic bag over your face, no matter what some jerk on the internet says.
  6. Power-strip water-resistor. I go a bit crazy decorating for Halloween.   Right now, there is a lighted path, 2 coffins, a few full-sized monsters, 30-40 tombstones, and over 100 skulls in my yard.   Some of that is animated.   I wraps power strips and extension cord connections in plastic bags, then duct-tape the bag-seams.   I’m not an electrician, or a code-compliance officer, so don’t take this as advice, but it has worked well for me.
  7. Recycling bin. This requires paper bags, not plastic, and it makes me a bit of a hippy.   I keep a paper bag next to the garbage can just for the recycling.  I keep another handy just to use to collect junk-mail for  my primitive alternative to a paper shredder.
  8. Dirty laundry. I’ve got 2 kids in different stages of potty-training.   When fit hits the shan, so to speak, the dirty/wet clothes go into a bag that I conveniently keep in the diaper bag.   I knot that sucker tight and the scents and stains don’t get all over the stroller or the car.
  9. Dandelion torture chamber. If you’re the kind of person who likes to roam around your yard with a scissors, cutting the heads off of dandelions while they are still pretty, there is no better place to store the mutilated remains of your victims than a shopping bag from Target.   Show those other weeds what happens to trespassers!  I wish I was making this up.
  10. Car kits for kids. Before we go on a trip, we have the kids fill up a small bag with books and toys to keep themselves occupied for the drive.   This isn’t recommended if your kids have to taste everything they touch, but it’s been a simple-yet-elegant solution for us.

Do you use shopping bags for more than just a way to transport clutter from the store to your house?

Carnivals

Finance

I’ve been a bit of a slacker when it comes to posting the carnivals I’ve been included in.   This is me playing catch-up.

Live Real, Now was included in five carnivals last week:

Prior to last week, I was included in:
Thanks to all of the hosts for including my posts and my apologies for not posting the links sooner.  If I missed you, please let me know.

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Have a great week!

5 Ds of Identity Theft

Finance

Scanned image of author's US Social Security card.
Scanned image of author's US Social Security card. (Photo credit: Wikipedia)

Identity theft is, at its most basic level, the act of using someone else’s identity or credit without permission.   From a stolen credit card to a forged phone bill in Moscow, it all involves your good money paying for the bad habits of another.    Thankfully, there are ways to reduce the odds of having your identity stolen.  LTC David Grossman reviews the “5 Ds of Survival” in his seminars and books.   Today, I bring you the 5 Ds of Identity Theft.

In the words of the master, “Denial has no survival value.” Denying the possibility of identity theft will not keep it from happening.  You have to take steps to keep yourself safe.  “It could never happen to me” is not a valid defense mechanism in any situation, financial or otherwise.

Deterrence means keeping the information away from identity thieves. The harder it is for the criminals to get your information, the more likely it is that they will move on to an easier target.  And yes, a kid stealing Grandma’s credit card is a criminal and needs to be treated as such.

  • Some people use a shredder, but not me.  I have a fire pit that catches all of my personal documents.  I’d like to see an thief get my social security number from the ashes in the bottom of the pit.
  • Don’t carry your social security card.  If you lose your wallet, your driver’s license and social security card contain all of the information needed to steal your identity.  Keep it locked up at home and don’t give the number out unless absolutely necessary.
  • Don’t use stupid passwords.  Anything listed on yourFacebook profile or otherwise available on Google in association with your name is a stupid password.  Don’t make life easy for the people looking to screw you.  Your birthdate, maiden name, and “password” all qualify as stupid passwords.  Use KeePass to securely generate and store your passwords.
  • Lock up your personal information.  I throw two large parties every year.   Purses and wallets get stored in a locked bedroom, so nobody can grab them.  That was a lesson learned the hard way.  If there’s someone in your home you don’t trust absolutely, lock up anything that can be used against you.
  • Don’t release personal information to anyone, for any reason, unless you have initiated the contact.  Don’t give a credit card number to a telemarketer.  Don’t give a spammer your personal information.  It’s your privacy, use it.
  • Don’t click anything in an email.  If it’s a company you have a relationship with, type the address in your browser by hand.

Detection is up to you. Some credit card companies will alert you to suspicious purchases, but you can’t rely on it.  I was once called because I went to the gas station and Best Buy, which is apparently a common pattern for a stolen credit card.

  • Examine your credit card statements.  If there’s a purchase you don’t recognize, find out what it is.
  • Watch for bills to arrive as expected.  You do know when you pay the gas bill every month, right?
  • Watch for unexpected bills to arrive.  If you get a statement for a credit card you don’t have, it’s a problem.
  • Check your credit report three times per year.  AnnualCreditReport.com will let you see each of the three major credit reports each year.  Space them out so you see your report every 4 months.

Defending your identity happens after you’ve detected a theft. This involves getting your credit and sometimes, your money, back.

  • File a fraud report with the credit bureaus.  This will force potential creditor to follow certain procedures before opening new credit accounts for your identity, including calling your cell phone, if you choose.  Stop the identity theft in its tracks.
  • Close the fraudulent accounts.   Don’t leave them open for abuse.
  • File a police report and report the fraud to the FTC at ftc.gov/idtheft .  This may or may not help catch the criminal, but without it, there will never be a punishment.  Make stealing your identity an expensive proposition.   Hopefully, 1o years of his life will be wasted in jail in return for the theft.

Destroy.  Unfortunately, fraud and identity theft are not yet capital crimes.   Maybe someday.

Deter, detect, defend.  These are the secrets to avoiding, and recovering from, identity theft.

 

Magical Thinking

Life

dark alley 8698
Image by korafotomorgana via Flickr

A few weeks ago, on my way to work, while merging onto the highway, a soccer mommy in an SUV decided that she was going to accelerate to fill the opening I was going to use.  Not before I got there, which would have left her in the right, if still a jerk, but as I was moving into the lane.

The entire reasoning was that she could be rude and dangerous under the assumption that I would be more civilized and back down, allowing her to indulge her little fantasy about how the world works.  Luckily I saw her speed up, and had time to move out of the way.  Physics very nearly taught her an expensive lesson.

This is similar to the people who think they’ll be safe because “nothing has happened before” or think “He won’t hurt me because I;m a good person” when confronted with a mugger.

This is magical thinking. Basing assumptions of other people’s actions on nothing more than your personal hopes and biases.  The truth is,  your halo does not provide a shield.  Your luck at dodging criminals while strolling through bad neighborhoods does not circumvent statistical likelihood and your jerkface attempt to run me into a  guard rail had better be backed by the stones to deal with a wreck.

Magical thinking, wishful thinking, and baseless hope are not rational methods of running your life.  Criminals hunt for victims who wrap themselves in a smug, yet naïve, superiority.  Murphy’s Law is waiting for someone arrogant enough to think that the laws of physics don’t apply when you’re commuting.  The only rational means of predicting the behavior of others is to look at the signals they are actually producing.

Someone tentatively trying to squeeze into an opening in traffic is far more likely to submit to your passive aggression than the guy who merges with a  turn signal and the gas pedal.

Someone in the park after hours in a hoody is more likely to hurt you than the guy in running shorts.

The guy lurking in the shadows of the parking ramp, refusing to make eye contact is a more likely mugger than the suit trying to find his Lexus.

A million years of evolution have given us an incredible ability to detect danger.  A few hundred years of relative peace at the end of a few thousand years of relative civilization have not erased that ability, it has just convinced us to ignore our instincts under the mistaken assumption that all predators live in the jungle.

Fear has survival value.  Don’t allow your rational brain to override your lizard brain completely.  Let your fear keep you safe.

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