There's a new scam going on right now for identity theft against children which I just read about. you can read the full story here. This story brought back all kinds of bad memories and some anger over our own nasty experience with identity theft. Social Security numbers are used either by illegal immigrants to receive benefits or by those with poor credit scores to get credit. There are companies out there actually selling social security numbers, many of them social security numbers of children, because they are unused.

Masked Woman, Venice Carn... Kristin Piljay

Several years ago, right before our son was born (late 1994), I received a strange phone call. Sears was calling, asking if I had just purchased by phone (no internet just yet back then), because the young lady taking the order thought it was odd that (1) we rarely used our Sears card for anything but appliances and  (2) the shipping address was Detroit. Of course we hadn't used the card, and we were thankful that she caught that. We naturally reported this to the police (after all, I thought she was dumb--she had given her address!), and thought all was well. The truth is, we had only uncovered the tip of a disasterous iceberg.

What happened was this: back then, in 1994, your social security number was all over everything...including medical bills, and your full account number was on your billing statements for everything. This evil person put in a change of address for us (which back then you could also do without ID), having our mail sent to her house for about a week. In that time, she got most of our credit card statements and medical bills, and thus had my husband's social security number. She quickly got a Driver's license with his name (he is Martin, she changed it to Marti), bought a car on his credit, had us pay for her car insurance (they didn't alert us that we added a third car), and bought things on our few credit cards, while applying for a bunch more credit cards (and getting approved).

Because it was a federal crime to tamper with mail, that was what she had to be prosecuted for, but it was unprovable in court so this wicked person was let off the hook. Seriously. We spent several days finding babysitters, skipping work (without pay) for court dates, and paying for a lawyer to fight some of the charges against us that some companies wouldn't forgive (because she was found innocent), and enduring stress just as our baby was about to be born...and she walked. We weren't the first of her victims, and we'd likely not be the last. She looked at me and laughed and flipped me off as she walked out.

We on the other hand still endure the lasting effects of her actions. Though we were not responsible for most of what she bought on our credit, some of it remained, and we lost lots of money...money from missed work for court dates, money for a lawyer to fight some of this, money for my husband nearly getting arrested for unpaid tickets (she was using his name after all, and they shared a driver's license number), money to go through the process of getting a new social security number (They don't just give those away, friends...but with his being sold on the black market, it was no longer any good). I can't tell you how much time I spent on the phone and writing letters to clear our credit score of all of the erroneous charges. It took years.

To say this was a nightmare is the understatement of the century.

I got a copy of my own credit report, and it was 10 pages long, as a family member had fraudulently used my social security number too. That same family later wanted my kids' social security numbers to open accounts for them (uh, no, I don't think so).

How do you protect yourself and your family?

1. Don't ever give out your social security number for anything but tax purposes. No one needs it, and you and your kids certainly don't need their social security # laying around on a piece of paper somewhere. Treat it like gold. Trust me, it's more expensive to deal with the after effects of someone getting it.

This may sound horrible, but even for camp, when they need my kids' social number, I will not ever give it. I make up a number off the top of my head.  They don't need it.

This new scam (in the article I linked to above) uses a different technique than finding a stray social security number somewhere, so it's important to also check your credit report too:

2. Get regular copies of their credit report and yours (annually) and quickly dispute anything on there that isn't correct.This is a long process, and it is aggravating, but it has to be done. Doing it annually is easier than have 10-20 pages to clean up after not looking at it for a decade. You can read more about that here.

Coins Spilling Out Of Broken Piggy Bank Paul Katz

A few days ago, I went on a semi-rant about the high cost of college, and more specifically, the high amounts of college loans commonly taken out. Today is a more practical follow up to that.

Since that day when our financial planner guy caused me a few weeks worth of lost sleep, and several dozen panic attacks by telling us we should be putting aside $1,000 a month to save for retirement and college for our then-three children, I tried to develop a plan. Naturally, after those tidings from Mr. Financial Planner, it took some time for me to calm down, chill out, and take a deep breath, and realize the world was not going to end if I didn't put $1000 in the bank every month as the financial planner said. I had to refocus....on what was important...on who God is....and how He provides...and develop a plan that worked for us.

Instead of asking "Is this going to be enough?" I had to ask "Am I doing what I am able to do with what I have?" The answer is sometimes yes, and sometimes now. We had a lot of bad financial habits to break from, as many people do.

I'm not saying this is the one and only perfect plan. I suppose ideal would be to sock away $2000 a month, if only I had that. But, we have to do what we can do with what we have, instead of worrying about all the things we don't have. My husband and I almost feel like the kind and queen of the land of unfortuate circumstances, having gotten off on the wrong foot from the start with debt (due to some bad advice from family), and having had no financial education at all until we experienced our own trial by fire.

Obviously, all of this starts by saving as much money on your various bills as you can possibly save, starting with the biggest items first. As you slowly (or quickly) get spending under control, you'll have more to save, right?

Here's my top ten favorite methods of helping my pennies, nickels and dimes add up when saving for the future:

1. The Change Jar

Ah, the old change jar. This one works so well for so many different things. Here's how I use it: When I come home from grocery shopping, I empty all change from my pockets into a large container ("the change jar"). Sometimes I round up to the nearest $10 and put all $1 or $5 bills in there too, though as of late, I am putting all extra bills towards various debt items as I said in this post. You may be surprised how this adds up.

I had one change jar that was all pennies. I put all of my pennies in there only, because I am very lazy, and I hated having to sort through the pennies when rolling coin from the other jar. From the time Ruth was a baby, I threw pennies in there. It was a large glass pig, several feet long and wide. I didn't have it completely full but one day it got broken by a metal Tonka truck (another story altogether). Husband and I sifted out the tempered glass from the pennies, and rolled pennies until we realized we had several hundred dollars in pennies.

Coin ads up, ladies, and it adds up fairly painlessly.

2. Savings Bonds (US)

One of the ways I started saving for my kids was to buy them savings bonds. A $50 US treasury bond costs only $25 and in time accrues interest and can be worth a lot more. I only realized this after my grandfather died, leaving me with several savings bonds he bought for me. I flipped through them...$50 here and there. I figured it'd be enough to buy groceries for a couple of weeks. I was wrong. I cashed them in, not knowing anything about them, and realized they had hit some kind of maximum maturity, and all together I got over $2000. I was sold.

I encouraged the grandparents to also buy bonds for the kids too. Ruth's have mostly reached maturity, and are worth more than their face value.

You can find out more here about savings bonds.

3. Christmas Club Accounts

Many banks have Christmas accounts, and they don't have to be used for Christmas. No one is going to follow you around and make sure that you only buy Christmas presents. ;)

By putting away, for example, $10 a week, or even less, you'll get a check sometime in October for the full amount, plus interest. For us, it was a great way to save towards the inevitable and unfortuate "December layoff without pay" that we've grown accustomed to.

4. UGMA Accounts

UGMA stands for Uniform Gifts to Minors Account. That means, you as an adult are giving money to a child. There's lots of tax code related to these kinds of accounts (do research it, as I'm not a CPA, and don't want to give out accounting advice). Generally, the name of an adult and of a child are both on the account, and withdrawls can only be made for things that directly benefit the child. There's more information here. Our children all have UGMA accounts, which are invested in "safe" Mutual Funds. It's not much, but it's something, and any little bit you save is better than nothing at all.

6. CD's

No, I'm not talking about your investment in your music collection (though you may be able to earn some quick cash by selling some of it on Amazon, Ebay, and other sites....people are really into collecting Vinyl these days too). I'm referring to Certificates of Deposit, rather than Compact Discs.

A Certificate of Deposit is a kind of investment known as a time deposit. You are lending the bank your money for a very set amount of time, so you shouldn't put it in a CD unless you are able to live without it for that set amount of time. The longer the period of time on the CD, the higher the interest rate you'll earn, usually. Unlike other savings accounts, a CD isn't something that you are constantly depositing money into. Instead, after you've saved up a certain amount of money (say, $500) you deposit it into a CD for a set amount of time (say, like 2 years), and you earn a specific percentage rate back on your money when that time is up. You also have to pay taxes on the interest earned, by the way (the bank will issue a 1099 for this purpose if you live in the US).

This is a good thing to do if you have saved up some money through other means, and now you'd like to maximize your return on your investment. I've bought a few CDs before to earn money towards specific goals that were a few years into the future.

7. Mutual Funds

Another long term investment possibility is a Mutual fund. Simply put, a mutual fund is a collection of stocks and bonds bundled together. Usually they are labled as being a growth (read: high risk) investment or a safer (read: lower return) investment, and everything in between. It all depends on how much risk you are willing and able to take with your money. Many times there is a high (for us! :-)) minimum deposit to open an account, but some companies allow you to sign up for a direct deposit program, where money is transferred from your bank account into the mutual fund every month (or week, or however often you set it up for). This is what we've done a few times too.

8. Money Market Accounts

Many of us mommies here in the online world have Paypal Accounts. Up until a year ago, my Paypal money market account was earning me a significant amount of interest (the peak rate was 5.25%). Not every Paypal account is a money market account. This was an option I was able to add to my Paypal business account, and I've been very grateful for it.

A money market account is similar to a mutual fund, except that you can withdraw money from it fairly easily. If you are undisciplined, this may not be a good way to save money, but it does earn you interest on your average daily balance each month. Regular savings accounts also earn interest too, of course, but a money market account usually earns you more than a normal savings account, depending on the exact investments.

Some banks also have money market accounts available. You can earn interest while writing checks off of the amount in the account, though you usually have a minimum balance to maintain. It's worth asking at your bank about this.

9. Regular Savings Account

Of course, there's also the regular old savings account option. Any savings account will earn a certain percentage of interest back on the money you've deposited, though it is generally lower than most mutual funds, money market accounts, and certainly less than a CD. Each of our children have savings accounts set up to save towards the future.

10. Smarty Pig 

Smarty Pig is last but not least. If you are the sort who needs some extra discipline with savings, who needs a little extra carrot dangling before you, and you want to save towards something specific, then Smarty Pig may be just the thing. This is an online banking program that allows you to save money, but also to set goals for yourself. For example, you can set upa  Smarty Pig account with a goal of saving $1000 towards fixing your hardwood floors (that's exactly what I'm doing on my Smarty Pig account!). You will receive reports as to how close you are getting to acheiving our goal, and others can donate to your goal using your email address. Smarty Pig also interfaces with Facebook, so you can let others know to send money your way. Okay, for us middle aged moms, that sounds pretty tacky, but for an 18 year old just out of high school, it's an easy way for long distance friends and relatives to give towards their goals.

In an effort to continue to plan our debt reduction strategy, I recently came across a very nifty tool that works for Microsoft Excel (or for Open Office Calc if you don't have Excel -- I use the free Open Office software all the time!). It's a debt reduction calculator, which will help you figure how much to pay towards debts, and what a difference paying down different bills first will make, etc. Normally, we are advised to pay down the bill with the lowest balance first (makes sense) but this one offers options for either paying down the lowest balance or the highest interest first, and shows you what each will accomplish and how quickly.

There's a great video tutorial for using this tool found below:

While browsing around, I also found these ten free household budget spreadsheetswhich you may also find helpful, from one of my favorite blogs, Christian PF.

Farmers Market, Hollywood, Los Angele...

I am always looking for ways to save more money, especially when shopping, and I always love to be able to show others how to save more money too. I was blessed to recently stumble across this Coupon Database, which will allow you to search for coupons for whatever you need to buy.

I've used it for a few weeks before formally introducing you to my new coupon database, only so that I could get used it using it myself, and write an intelligent sounding post about it. :-)

Here are some ways I've found to use it:

• Look for each item in your grocery list before you go shopping
• Keep your eye out for specials for something you will need later down the road
• Keep an eye out for specials on items you like to stock up on (one friend uses it to find deals on diapers).
• Browse through the most recent coupons to see if there's something you need.

You can visit my coupon database here, or by clicking on the tab at the top of the page.