Thanks to the unfortunate state of the housing market and the real estate boom and bust cycle that caused our nation’s housing woes, most Americans are more familiar than they were ten years ago with the basics of foreclosure.

But, as a recent edition of the National Public Radio program Fresh Air illuminated, mortgage-related financial distress is not the only thing that can lead to mortgage foreclosure. Unpaid tax liens, which many families may not even realize they owe, can also lead an otherwise financially stable family to foreclosure. Here’s what you need to know.

Unpaid Tax Liens and Foreclosure

Here’s a look at how missing a few simple payments to the government (or even to a utility company) can cause you to lose a home you own free and clear.

• You miss some payments: The process begins when a family misses some sort of payment. This can be taxes, a utility bill, or even membership fees to a homeowners’ organization.
• Someone tries to collect: At first, the collection process may seem benign: the government or utility company might send you a collections letter or two. But if you still don’t pay the money (whether because you can’t afford the amount or because you don’t realize the importance of the payment), your creditor may choose to involve lawyers.
• Legal representation is hired: An original tax debt or water bill of a couple hundred dollars could easily grow into a several-thousand-dollar debt when lawyers’ fees are added into the mix. If a creditor tries to legally compel you to pay your debt, the legal process requires plenty of work from a professional and whatever costs the creditor incurs from its lawyers are generally passed on to the debtor.
• The debt can be sold: If even lawyers are unable to get the debtor to pay (or if the creditor chooses not to hire legal representation), a creditor can choose to sell the debt – or, in the case of the story featured on Fresh Air, the tax lien. What can happen, then, is that whoever chooses to buy the debt has an incentive to collect on it because nonpayment of a tax debt can, in some cases, legally mean that a homeowner surrenders his property.

What Does This Mean for My House and My Taxes?

The Fresh Air story is chilling for two major reasons.

• You could lose a home you own: Even if you own your house free and clear, unpaid bills or tax debts could lead to mortgage foreclosure if the collection process gets out of control. The best way to avoid such a tragic fate is to read your mail carefully and to stay on top of even those taxes that seem “less” important. If you aren’t sure about whether you have to pay something, consult a legal professional so you don’t risk your family’s home.
• The “tax lien buying” market is growing: The other scary thing about this phenomenon is that there are infomercials that advertise how to buy tax liens as a shortcut to buying actual real estate.

The bottom line is to stay vigilant with payments and to always call and ask about something if you aren’t sure what your financial obligations are!

I’d like to take this post to highlight some stellar financial tips I’ve seen around the web in the past week or so. At a time when holiday stress is beginning to ratchet up, I thought a light reminder of how to keep financially sane would be welcome. So here’s a look at a few tips and tricks to help bolster your finances.

Your Credit: Why It Keeps Mattering

Not to be a Grinch, but it can be easy during the holidays to give into the “holiday cheer” mentality of buying stuff we can’t afford (for others!) on credit, telling ourselves that we’re doing it in the spirit of the season.

But this recent post from WalletPop.com reminds us why it’s always important to keep your credit health in mind.

• Landlords like to check: Because it’s difficult to evict tenants (even those who don’t pay their rent), landlords may be less willing to rent to you if you have poor credit, which can make finding a good apartment tough.
• Utility companies might want more money: If you have a history of late or missed payments, utility companies may ask for a larger security deposit upfront (ouch).
• Car costs can skyrocket: Bad credit can make a car loan more expensive and cause you to pay extra for car insurance.

Keep this in mind as you cruise the mall this holiday season!

Credit Card Transfers: Could They Help Your Credit?

On a related note, another post from WalletPop.com explores the question of when and how a credit card balance transfer might help (or hurt) your credit score.

Here’s a brief overview – the full article is lengthy and very helpful:

• What is a balance transfer? It’s exactly what it sounds like: when you transfer the money you owe on one credit card onto another credit card.
• Why do people transfer balances? In a worst-case scenario, someone struggling with debt might transfer a balance from one card to another without being able to make significant progress in paying down the debt. In some cases, though, balance transfers can be used strategically to lower the total dollar amount a person pays and even (according to the post) to improve a credit score.
• Should I consider a balance transfer? Again, the best way to answer that question is to read the article linked to above. Keep in mind that you should be absolutely sure you understand your long-term plan for paying down the debt if you do choose to transfer a credit card balance.

Tips to Save Money Around the House

Last but not least, a post at Bargaineering.com offers some great tips for saving money around the house. If you’ve had enough of spending and donating (and who hasn’t at this time of year?), these might provide you with some welcome financial relief.

The tips aren’t groundbreaking, but they’re all pretty easy to enact, which means you stand to save some money without working too hard – and I think we can all agree that that sounds good.

The Texas Attorney General’s office has announced a court order against the now-bankrupt company Debt Relief USA. The order means that the company will have to pay about $3.7 million to customers it cheated out of debt settlement services.

Here’s a look at some of the details of the case.

• Company promised debt settlement services. During its prime, Debt Relief USA reportedly collected various fees and deposits from customers with the promise of settling their debts with their creditors. Some of the money collected was labeled “set-aside” money, and was apparently intended for creditor repayment. But sources note that much of that money might have been collected illegally.
• Debt Relief USA filed for bankruptcy. According to sources, the company entered bankruptcy protection in July of last year, which meant that thousands of its customers who had been making payments into their “set-aside” funds were unable to access their money.
• Texas AG took action. But, as sources report, the Texas Attorney General took on the case and secured a payment of $3.7 million to consumers wronged by the company, with an additional one million to follow once the bankruptcy concludes. (In other good news, victims will not have to apply for refunds, as records for all affected customers and the amount of money they set aside are included in the bankruptcy filing.)

How to Spot a Debt Settlement Scam

While there are reliable debt settlement firms out there, there are also plenty of less-than-trustworthy outfits. Here are some practices that signal a scam (many of which were in place at Debt Relief USA):

• Large up-front fees: Though recent legislation has outlawed the charging of hefty up-front fees, some companies may still try to get away with this. Or, they may disguise such fees as something else…
• Large administrative fees: Charges for “account maintenance,” “negotiation,” or similar services are signs of a scam, particularly if those charges seem overly burdensome.
• Advice to stop paying bills: It’s almost never a good idea to stop paying your bills without at least contacting your creditor and explaining your situation. Companies that advise you to do so could lead you to an unpleasant financial situation.
• Serious pressure to sign up: Some debt settlement scams pay their employees by how many customers they can sign on, so if you’re feeling overly pressured during your initial consultation, get up and walk away.
• A bad BBB rating: Many people don’t think to research companies with the Better Business Bureau, but the BBB’s web site is a great place to start when you’re looking for a place to do business.

Remember: you are the one who most fully be affected by your debt, so take some time to do your homework before you make any major financial decision. You owe it to yourself.

Clearly, I like to write about saving money during the holiday season – and with good reason. After all, the holidays are loaded with financial temptations and what seem like financial obligations, and having strategies in place to minimize spending is essential to sticking to a budget once Thanksgiving is over.

Keep Your Finances on Track This Holiday Season

So, extracted from various places around the web, here are some top tips for sticking to your best budgetary intentions during the holiday season.

• Just say no to credit. It may sound like a no-brainer, but it’s all too easy to fall into the buy-now-pay-later trap during the holidays. And trust me, there are very few gifts so perfect that they’re worth paying for long into next year (and beyond). So spend some time now to figure out what you can afford to spend and stick to cash on your holiday excursions.
• Think outside the gift box. So how can you limit your spending without coming off like a Grinch? Re-think your present-giving strategy, suggests a recent post from WalletPop.com. Instead of buying stuff for everyone, consider offering your time (to babysit, clean, or share with whatever skills you have). Most super-busy people in your life will appreciate the spirit and help.
• Try a new strategy with your family. Rather than having every adult in your family exchange gifts, suggest a secret-Santa style gift system – or better yet, a truce on gifts. Alternately, you could all contribute to a nice night out together – the goal is to spend money only if you truly want to (that is, if doing so can lead to some meaningful development of your relationships).
• Proceed as planned with charities. In the next few weeks, charities will likely start peppering you with requests for donations, and there will be no shortage of worthy causes to support. In order to help the world and keep your budget on track, map out a plan for how much money you plan to donate (and to which groups) and stick to it as the solicitations pour in.
• Resist the holiday sale hype. While sales like those on Black Friday can be exciting, most retail insiders admit that Black Friday prices are not necessarily the lowest of the year. Careful, well-researched shopping (whether online or in stores) can yield bargains in the same league as those offered on major shopping days.
• Focus on experiences. While your kids or coworkers may not remember in five years any of the stuff they receive for the holidays, they’ll have a hard time forgetting memorable experiences you helped them have (think holiday walks to look at neighborhood lights, a cozy cup of coffee at a local bakery, time spent making ornaments, etc.)

What the terrible title of this blog post cleverly hides is that I have found some excellent tips for keeping you on track with your budgets and lives this holiday season (and in the months that follow it… you know, the bill-arrival months).

Here’s a look at how some online gurus are helping me keep more of my money and sanity.

Online Shopping: Be Smarter about It

Because I hate crowds and parking, I am a sucker for online shopping. It saves me time and usually money (because I’m less likely to fall for impulse buys, though I’m sure online retailers will soon find a way to sell me overpriced candy bars when I check out). But there are definitely dangers to shopping on the web. Here are some ways to avoid them (adapted from Kiplinger.com):

• Go where you know:You wouldn’t wander into a dark and out-of-the-way store without good reason, and you shouldn’t click blindly onto unknown web sites either. Be especially wary of links in emails from strangers and links that take you off a merchant’s page. There was an identity theft case a while back that the FTC caught, but that doesn’t mean the Internet is completely safe now. Do some research before you visit a site, and especially before you enter credit card information.
• Choose credit: I admit that I tend to favor my debit card over my credit card, but when shopping online, that’s generally not a good idea. Most credit cards come with more extensive protection for users (ranging from refunds for defective goods to better protection against identity theft). Remember that purchases with a stolen credit card can be canceled, but a drained bank account resulting from a stolen debit card cannot.
• Shop at home and check your statements: Using public computers or even public WiFi connections can be dicey, and invites more potential identity theft and fraud than staying in the security of your abode. And, to make sure nothing’s getting past you, be sure to check your credit and debit card statements every month with an eye for unfamiliar transactions.
• Don’t wire money: Just don’t do it to pay for something. It’s usually a scam.

Convenience: How Much Do You Need?

When things get hectic around the holidays, it can be easy to choose convenience over cost-effectiveness. But, as this post from WiseBread.com reminds us, convenience can cost big time – do you really need as much as you have? Consider these places to trim your spending to make more room for holiday travel and gifts.

• Cell phones: You don’t have to give yours up, but you probably don’t need every available upgrade – and check your bill each month. Is there a cheaper plan available? Could you catch up with more people via email or when minutes cost less?
• Televisions: How many do you have in your house? How much electricity do they use? How much do your channel subscriptions cost? I’m not preaching, but TV ownership is one area most of us could afford to cut back. (Bonus: the less TV you watch, the less you’ll “need” all the things advertised thereon.)
• Food: No, I’m not advocating starvation as a budget tool. But do you eat out a lot? Do you throw away food because it’s gone bad? Try a “food budget” for your house: track your usage for a month and look for areas to cut spending.

Any other tips? Let me know! Hooray for the Holidays and savings!

I guess the holiday shopping season “officially” begins after Halloween, which seems early to me, but then I look down and realize November is already half over, Thanksgiving is a week away, and a post about shopping and spending smart for the holidays is overdue.

So here’s a look at what you need to know for making sure your good, gift-giving intentions have the best possible results.

Check out Your Charities

While donating money can be both in tune with the holiday season and a nice gift for folks who have it all, it’s important to make sure your donated dollars are making the largest impact possible. Here’s how.

• Check out the Charity Navigator. This site allows you to figure out how charitable organizations spend the money they collect.
• Enter the name of your favorite charity. You can search by name and learn various statistics about how an organization spends its money and what percentage of funds go to which operations.
• Browse for a charity to suit you. The other way to work the site is to browse charities by location, impact or concentration. This can allow you to target your charitable donations to causes you care about but may not have known how to connect with.

This site is wonderful for people who are happy to give but tired of worrying about getting duped by promoters of less-than-honorable causes.

Understand Gift Cards

While gift cards are generally viewed as a convenient and welcome gift by both givers and receivers, an article from the New York Times reminds us what to watch out for when buying or giving gift cards (even though they were made more consumer friendly with the introduction of new credit card rules).

• Know the expiration date: While the Credit CARD Act requires gift cards to display their expiration information, that particular provision won’t become effective until after the holiday season, so be sure to ask at the checkout how long the card will be good.
• Keep track of your cards: Sources note that most gift card issuers are not legally responsible for refunding money on lost or stolen gift cards, so set up a system for yourself (and recommend that any recipients do the same).
• Realize there might be fees: While inactivity fees can’t take effect for a year or more after the card was last used, they still exist and can eat into a card’s value (or deplete it altogether). So make sure those bits of plastic don’t get buried under all the wrappings, or else they will have been an expensive and useless gift indeed.

Avoid Holiday Debt

Finally, take a moment to read this post from WalletPop.com about avoiding holiday debt.

The holiday season can trick us into spending more than we can afford (and it’s always for a good cause, isn’t it?), but if we enter the season armed with the right tools, we can hopefully salvage the financial stability we work so hard for during the rest of the year.

Happy holidays, everyone!

Now that retailers are stringing lights and piping Christmas music for shoppers to enjoy, it’s time to give some thought to your house’s ability to withstand colder weather. Taking a little time now to tune everything up can save you money on heating costs for the next few months.

Here are some basic winterizing measures to consider to help you stay on budget this winter (adapted from WalletPop.com).

Making Sure the Heat Stays In

• Tune up your furnace: Call in an expert to make sure your heating system is in fine working order. There’s nothing less pleasant (trust me) than waiting until the first really chilly day to find out something’s gone wrong with your house’s heat system. This will cost a little money up front, but hopefully save you from unexpected, more major repairs down the road.
• Batten the hatches: Patch holes and air leaks in your windows and doors with caulking or weather stripping. You may even want to seal your windows with plastic (available at most hardware stores) to keep heat in.
• Check your insulation: This handy guide to insulation can help you figure out what kind of insulation you need, based on where in the country you live. Padding your home now can save you serious money on your monthly energy bill.
• Prevent ice damage: If you have water spigots outside of your home, turn off water going to them if there’s a chance of a freeze. Even if you don’t use that water all winter, ice could cause a backup and pipe bursting for your entire house (which is never fun in freezing weather).
• Clean your gutters: Too much weight in a gutter (from snow and ice) can lead to detachment and breaking-off; a loose gutter can lead to sneaky water freezing in nefarious ways to parts of your house meant to be snug. Take some time to empty your gutters so the winter weather doesn’t cause long-term damage.
• Do a fireplace inspection: If you have a fireplace, now might be a good time to get your chimney cleaned, double-check your fire extinguishers and make sure the flue is clear. A small obstruction can lead to serious fire damage if unnoticed.
• Check your thermostat: If you don’t already have a programmable thermostat, consider investing in one. You can set your house to a lower temperature when the family is away or sleeping under warm covers, and a higher temp for when everyone’s home. This can lead to significant heating cost reductions.
• Stock up on supplies: Whether you need a snow blower, a shovel, salt or just a few extra pairs of socks for the season, make sure you have them around and in working order. It’s better to remember that your only winter coat has a broken zipper now, before you need to wear it to the tailor’s.

It has come to the Debtress’s attention that certain commercial outlets are trying to lure their shoppers in (and pry our wallets open) with all-new “savings events” that really amount to nothing more than over-hyped regular weekly sales.

This recent post from CreditBloggers.com discusses the shopping scheme known as “Black October,” which seems to be just a premature version of Black Friday and not really a very good deal at all.

Avoiding the Hype

The rush of getting a really good bargain is pretty great, and part of the reason for that is because true bargains generally take a little legwork to find. Here are some pointers for distinguishing between real bargains and hyped-up quasi-sales:

• If it’s heavily advertised, it’s probably hype: Guess what, bargain seekers. Advertising costs money. If a store or company is exerting a lot of energy to create a new “sales event” or coin a new savings term (like “Black October”), proceed with caution. Many consumers will likely be drawn by the novelty, but if too much money goes into promoting something, you probably won’t be saving much at the register. These companies have their bottom lines to think about, after all.
• If you feel that “buy now or forever lose your chance” feeling, it’s probably hype: One way marketers trick us into spending more than we intend to is to create a false sense of urgency (which might involve making up new sales events, as mentioned above) and thus convince us that we must buy now or forever regret not doing so. But usually, you’ll have another chance. We all make worse financial decisions when we’re under stress or experiencing strong emotions.

So how can a consumer who’s just looking to save some money navigate the world of hype?

Tips for Finding Bargains Consistently

This smart shopping post from WiseBread.com offers some pointers for people interested in saving money on their everyday purchases.

• Learn to haggle: Negotiation, while not always fun, can lead to lower prices and better savings. The art of haggling requires a little chutzpah, a willingness to pay cash, and a friendly demeanor.
• Shop in the off-season: End-of-season sales are tough to beat, but they generally mean buying stuff that you won’t be able to use for several months. Learn to bear the pain of postponing enjoyment of your purchases, and you can end up a richer person.
• Look for secondhand goods: The double-whammy savings here is that hunting for clothes and other necessities at secondhand stores provides free entertainment and the potential to save serious money on stuff you need. If you don’t like the secondhand offerings in your neighborhood, do some research – areas with higher income levels tend to have higher quality goods in the “used” section.
• Learn to comparison shop smartly: The Internet is a valuable tool for comparison shoppers because it allows us to compare prices without burning valuable gasoline or wasting our precious hours. So commit to researching purchases before making them. That way, you’ll be confident in pulling the trigger when you see a good deal.

Bill paying can be a stressful event if you’re struggling to stretch your dollars and/or constantly worried about a financial shortfall. And most of us know that we absolutely must pay for some things, while others could maybe be eliminated from our expenses – but how can you tell which is which?

Luckily, you don’t have to. Two great posts from WalletPop.com outline household expenses that you absolutely must pay for (or else they’ll cost you far more in the future) and some that you can cut out for major savings.

Maintain Security and Cut Costs

Here’s a look at WalletPop.com’s suggestions, with a few of my own nuggets of finance savvy.

• Major insurance: Pay it. Car insurance, home insurance and life insurance (if you have dependents) are three payments that you shouldn’t feel guilty about. Losing everything in a fire or other natural disaster tends to cost far more than the monthly price of insuring what you own. And, as far as auto insurance goes, paying can protect you not only from theft but also from other drivers who don’t have insurance and wouldn’t be able to afford paying for accidents that they caused.
• A second (or third car): Get rid of it. Of course, this won’t work for everyone. But, sources note that the annual cost of owning a car (on top of any loan payments) exceeds $9,000. Does that make carpooling, biking, walking, taking public transportation, telecommuting or joining a car-sharing program any more appealing? Clearly, some areas of the country require individual vehicles more than others. But think about what you could do with all the money you’d save…
• Health care: Pay it. If you are not insured through your employer, the cost of providing your own health insurance can be overwhelming. But putting off doctor’s visits can lead to serious (and more expensive) health problems; failing to take medicine (like birth control) can lead to much more costly conditions (like having children); and, in worst-case scenarios, you might end up dead because of a reluctance to pay for doctor’s visits. So see what you can afford and figure out a system to make sure you aren’t neglecting your health.
• Fancy TV package: Get rid of it. In the days of Hulu and NetFlix, there’s really no reason to pay for super-duper television packages, unless you really have the money to do so. And don’t forget the wealth of DVD-viewing options at many libraries. Besides, unless you have some serious time on your hands, you probably aren’t watching all those channels enough to justify paying for them – and if you are watching that much TV, maybe now’s the time to take up a new hobby.
• Car repairs: Pay for them. Brakes and tires should be near the top of your worthwhile spending list – accidents that result from bad brakes or bald tires can lead to thousands of dollars of damage to your car, serious injuries and even death. As most people would agree, the potential risks just aren’t worth the small savings.
• Landline phone: Get rid of it. In the days of Skype and cell phones, why are you still dialing the house line? One source suggests you could save $600 per year by dropping your house phone – I think I’d rather have the money.

For more suggestions about what you do and do not need to spend your money on, check out the original posts (tagged above)!

After filing for bankruptcy or otherwise taking steps to turn your life around financially, it may seem like the final step toward financial independence is to close your old credit cards – after all, credit cards are what get many people into serious trouble with debt in the first place.

But closing old cards is often not a good long-term strategy, as this post about hanging onto old credit lines reminds us. So why bother keeping open a card you don’t plan to use? Here are a few reasons.

The Big Picture: Your Credit Profile

• Keep your credit ratio strong: One of the factors that affects your credit score is the ratio of credit you have available to the amount you’re using. Having access to more credit than you use increases your credit score – so leaving open accounts that you never touch will make you seem like a better credit risk. If you don’t think you can trust yourself to not use a credit card that you keep open, try literally freezing the card in a bag of ice.
• Have access to that money: These days, it’s common for people to make all kinds of purchases online, from clothing to automobiles. And, while online shopping is wildly convenient, it’s practically impossible without a credit card. So keep the card around in case you need to make a purchase from a vendor who won’t accept cash – and just know that you’ll pay the full balance any time you do use the card.
• Prepare for an emergency: This is one of the most important reasons to hang onto at least one credit card. Emergency situations are called that because we never expect them – which means we might not be prepared with adequate cash on hand, even if we’ve saved that cash in a bank account. Knowing you have a way out of true emergencies can mean the difference between a nagging sense of worry and a calm mind.

Learning Not to Spend

Of course, keeping your credit cards open will only benefit you financially if you can commit to not charging more than you can afford to repay month by month. To get into that habit:

• Take some time off: While you’re paying off your initial credit card debt, you’ll want to stop racking up new charges. This period without plastic should get you in the mindset of not using plastic once you’ve paid off the cards.
• Keep them at home: Besides a single emergencies-only card, leave your plastic at home when you’re out – especially if you’ll be in a place where you’ll be tempted to spend money on non-essentials.
• Reward yourself: Every month you pay your credit card bill in full (or don’t have any balance to pay), congratulate yourself and celebrate in a small, inexpensive way.

Hopefully, we all know by now that free stuff can be great – but isn’t always. After all, we’ve probably all found our homes or cars cluttered with free giveaways from fairs or promotions and ended up throwing most or all of it away.

But free stuff can also be the ultimate bargain – and Kiplinger.com’s annual list of quality giveaways includes just those types. Here’s a look at how some of the highlights can help you & your finances (but check out the complete list for yourself).

Spending Nothing to Improve Your Finances

The Kiplinger.com list has a wide variety of products and services. Here are some of my favorites.

• Free workouts: Any financially conscious person should realize the long-term savings potential of staying healthy. Fewer sick days, fewer doctors’ visits, fewer medical bills – the list goes on. So ditch the gym membership and take advantage of the great outdoors to walk, run, or cycle; visit your library to check out a workout DVD; or check online for free yoga or martial arts classes in your area.
• Free financial advice or help: Between free smart-phone apps, free online investing advice, and even live online chatters ready to dole out wisdom to small business owners, there are a bevy of options available to those looking to make sure they’re on the right financial track. This is especially handy for people recovering from bankruptcy or serious debt who want to keep moving forward.
• Free tech support and virus protection: Kiplinger.com suggests visiting TechGuy.org, 5starsupport.com or your manufacturer’s web site to take advantage of free computer and gadget help for the less tech-savvy among us. Plus, if you don’t feel like shelling out for anti-virus software, the article recommends online varieties you can download for (you guessed it) free!
• Free travel help: Leaving the country? Visit ePassportPhoto.com for free passport photos that use your own digital camera, and visit one of the many web destinations that offer free foreign language lessons. As a bonus, many language lessons mentioned in the article are downloadable as mp3s, so you can listen to them while you’re going about your everyday life.
• Free entertainment: Yes, I’ve said it before, but I’ll say it again and add a new twist: your local library is an excellent place to find free entertainment. Books, CDs, DVDs, classes, children’s activities – the list goes on. But now you can even download free ebooks to entertain yourself and your family in the car (or wherever). So if you’re still forking over cash to keep yourself occupied on long car trips or vacations, it’s time to change your tune.

The Kiplinger.com list has 33 exciting items, so take some time to review them and then enjoy all the money you can save by taking advantage of our glorious, freebie-filled world!

A fascinating article from the blog FiveCentNickel.com looks at the phenomenon of people who file for bankruptcy after winning the lottery. And, in case that last sentence blew by you: it’s true. People who win the lottery still end up filing for bankruptcy.

So how can you avoid the rags-to-riches-to-rags trap? The article suggests that financial health may be more about your attitude toward money and less about how much of it you have.

The Link Between Lottery Winnings and Bankruptcy Filings

Here’s a summary of a study conducted to determine what impact lottery winnings had on people’s finances.

• Size doesn’t matter: In the study, which looked at 35,000 people who won between $600 and $150,000 in the lottery, researchers found that the amount of money a person won had no effect on their chances of filing for bankruptcy. In other words, the $1,000 winners were just as likely to need bankruptcy protection as the $150,000 winners.
• Time will tell: The other interesting finding was that those who won smaller jackpots were more likely to declare bankruptcy within two years of winning; but during a five-year period, winners of all amounts of money had the same likelihood of filing.
• Net worth didn’t change much: Finally, the study showed that, at the time of the bankruptcy filings, the people who won the largest jackpots ($25,000 to $150,000) had only $8,000 more to their name in cash and assets at the time of their filing than those who received the smallest winnings.

Learn from Their Mistakes: How to Make Your Money Stick Around

Because these numbers are so intriguing (and depressing), financial analysts of all stripes have been proposing reasons for the findings. The explanation that most people are coming up with is that money alone will not solve anyone’s financial problems. In order to take control of your finances and live a debt-free life, it’s important to do lots of things, including these.

• Don’t distinguish between “types” of money In other studies, researchers have discovered that people spend “found” money (i.e. money we don’t have to work to earn) more quickly and easily than “earned” money. In order for a windfall to make a substantive difference in your finances, you need to ignore where it came from.
• Learn the financial ropes: Unfortunately, lottery jackpots don’t come with financial management manuals – if they did, fewer people might end up in financial trouble after winning. But developing your financial knowhow can prepare you for a variety of financial upsets, of both the good and bad variety, and set you up for a life where you don’t need the lottery to stay afloat.
• Know your limits: In general, we tend to overestimate our levels of competence and knowhow in a variety of areas. And, as the article points out, winning the lottery is only likely to boost a person’s confidence. But, whether or not you have millions coming your way, recognize your limits and seek help from professionals in areas you aren’t sure about (whether that’s investing, saving, bargain shopping, or somewhere else).

Remember, debt-busters: the lottery is not a cure-all for financial woes. More importantly, you can take control of your finances without a huge windfall – you just have to be willing to work for it.

The Credit CARD Act, which took full effect earlier this year, is generally lauded as a victory for consumers (hooray!), but, despite its welcome protections, the law doesn’t mean we’re now fully protected against questionable practices by people who issue us plastic.

While the CARD Act includes many welcome reforms for debit and credit cards (including a limit to abusive overdraft loans), its protection is far from total. It may have expanded our rights as consumers, but it didn’t create a bubble of consumer safety around all credit products.

This post about understanding gift cards from Mint.com offers an important reminder about just costly some cards can be. Here’s a summary of what you need to know if you’re thinking about giving gift cards this year – or if you have some parked in your wallet.

Spend Your Money Wisely

Sources note that, as a nation, we drop about $87 billion on gift cards every year – and far too much of that money never goes to actually making purchases. Here’s a primer on what the CARD Act requires from gift card issuers.

• Expiration limits: The new limits on expiration dates state that a gift card cannot expire earlier than five years after its purchase. You may want to mark this date on any cards you buy.
• Fee limits: Card issuers can only impose fees on unused cards after they have been idle for a full year; further, such fees can only be charged once per month. Also, card issuers are prohibited from charging replacement fees for lost or stolen cards.
• Fee disclosures: Somewhere on the card or its packaging, all fees must be detailed in full.

This is all good news, but keep in mind that reloadable plastic cards (which are often non-gift items) are not covered, and neither are promotional gift cards.

Watch Out for Bankruptcy Filings

The other tricky thing to consider if you’re buying gift cards is the financial state of the company. In many cases, if a company files for bankruptcy or goes out of business, its gift cards are no longer valid. And, according to sources, this can be a big deal: it seems Sharper Image’s customers had about $20 million in unused gift cards when it went under.

A License to Overspend?

We all know that one of the most important parts of maintaining financial health is saving money when we can by bargain shopping. But, according to Mint.com, when we shop with gift cards, we’re 2.5 times more likely to pay full price than when we’re paying with cash.

This is understandable, but can be frustrating for budget-conscious folks. So remember: an informed consumer is a better consumer. Spend well!

With recent Census Bureau figures showing that more Americans are living at the poverty level, I figured we could all use some hints and tips for saving money and stretching what we already have. So here, from around the Internet, are a few suggestions for making sure you hang onto more of the cash that you pull down.

Don’t Pay Too Much for Electronics!

Even the most frugal person sometimes needs to splurge – and, if you’re like me, when it’s time to make a major purchase, you always consider buying used first. Now, thanks to the web site WorthMonkey.com, you can take the guesswork out of bargain hunting.

Here’s how it works:

• You enter in the product you’d like to buy or sell.
• WorthMonkey.com collects data from around the Internet to see what similar products are being sold for. In addition, the search function brings up a current sale list for products that match the gadget you entered.
• You can use the information to price what you want to sell or to guide your buying process so you don’t overspend.

This site can work as an excellent time-saver for people who want to bargain-hunt but don’t have the time to spend browsing lots of online outlets.

Spend Less on Groceries by Wasting Less Food

This article from FiscalGeek.com provides an important reminder that wasted food accounts for $600 of the average American family’s annual budget. Not interested in tossing that much money in the garbage? Consider these tips:

• Buy in bulk only if you can store properly. Setting the fridge too warm may save money on electricity, but if you have to keep tossing perishables, the savings is probably cancelling itself out.
• Eat leftovers. In fact, plan for leftovers. Freezing single servings of a meal is a great way to save money (it’s cheaper than buying single-serve dinners), and cooking stuff that can be “re-purposed” on the second night can keep this from seeming like a chore.
• Go by your nose, not the date. Expiration dates on foods are generally play-it-safe guidelines. If something is unopened and only slightly past the expiration date printed on the package, you’re probably okay to eat it. A better guide to a food’s edibility is the way it smells.
• Preserve. Now is the season of excellent bulk buys of delicious fresh produce at farmers’ markets, but it’s easy for so much food to spoil before you can eat it. Home canning and dehydrating (which is super-easy and takes very little skill) are great ways to stretch the harvest and make sure you don’t end up tossing what you buy.

Freebies: What Not to Pay For

Finally, this frugality post from PTMoney.com offers a list of 15 items you can get for free. While some of these are familiar, some may lead to unexpected savings. Here are some highlights:

• Music: Web sites like Pandora and 8tracks.com offer free music online, and your library lets you check out CDs – why pay?
• TV: Again, even if you don’t own a television, you can watch many TV shows for free on web sites like Hulu.com or check out entire seasons on DVD from the library.
• Books and DVDs: Again, the library comes into play. And it has so much to offer!
• Newspapers: There’s a reason the industry is dying: most content is available free online.

No matter how we manage to cut back our expenses, we’ll never be able to cut out paying for food—and most of us wouldn’t want to. Luckily, there are plenty of ways to spend less on what you eat, even if you don’t have the time or space for a home garden.

Study: Save Thousands with Store Brands

A recent study from Consumer Reports notes that the average household can save up to $1,500 per year by opting for store brand items at the grocery store. In addition, the study showed that:

• In taste tests of 21 name- and store-brand products, testers actually voted for the store brands three times. The name brands won seven times, and in the remaining 11 contests, the two items tied. This means that, for some items, you can save cash without sacrificing flavor or value.
• Many manufacturing companies actually make both the name brand and the generic version of a product, meaning you can basically choose how much you want to pay for some products.
• It’s important to always check per-unit prices. In some cases, name brands are actually cheaper, and other times there’s a third option that’s cheaper than even the store brand (for example, at my grocery store, Quaker Oats go for $4.89 per tube, the store brand costs $2.00 and the ValueTime brand costs only $1.83).

What Not to Order When Eating at a Restaurant

While dining out can be expensive, it doesn’t have to be a total no-no for budgeteers. But this post from WalletPop.com details some of the biggest markups restaurants put on food. In other words, here are some tips of what not to order when you’re eating out:

• Wine: Analysts apparently estimate that wine can be marked up from 200 to 600 percent at restaurants. Unless you’re a die-hard wine fan, consider waiting until you get home to have your tipple.
• Soda: There’s a reason restaurants are so eager to offer free refills on drinks like soda, coffee and tea: they cost only pennies on the dollar to buy, but sell for significantly more than that. If you must have a soft drink, you’re probably better off purchasing it by the two-liter bottle.
• Pasta: In the grocery store, this foodstuff costs mere cents per ounce, but in restaurants, pasta-based meals can get pretty steep, especially if they’re topped with fancy meats or seafood. Yes, you may love that alfredo dish, but compare what it would cost to make at home and you may be wincing with every bite.
• Pizza: Like pasta, this is one food item whose ingredients are much cheaper than the final result. But, considering that preparing and cooking high-quality pizza can be time-consuming, this may be an item worth spending on if you really love it.

Take (and Maintain) Control of Your Finances Today!

Whether you’re looking for ways to cut back spending or are considering a more drastic move like a bankruptcy filing, now is the time to commit to improving your finances. And, if you’re ready to see what kind of financial protection the government has to offer, you may want to talk with a bankruptcy lawyer about some of your options.