Money. Purpose. Joy.

In this Issue:

• When Cake and Ice Cream Just Won't Do
• Removing that Lemony Old Car Smell
• Tear and Toss Not Enough to Prevent ID Theft
• Moving Toward a More Secure Financial Life

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When Cake and Ice Cream Just Won't Do

A recent birthday bash for a five-year-old California girl included professional catering, 150 guests, ponies, and a magician. The tab? $6,000. According to a recent MSN.com story, it's a growing trend, with parents trucking in fake snow for an afternoon of front yard sledding, spending months planning Harry Potter-themed parties, or hiring horse-drawn Cinderella carriages.

For those interested in a saner (and less expensive) approach, the article suggested replacing strolling jugglers with old-fashioned games like tug of war. A related story in the Chicago Tribune on 6/4 offered more ideas like keeping kids' parties to a manageable size by allowing the birthday boy or girl to invite one friend for every year of the child's age. Feel the need to include all of your child's classmates? Team up with parents of other children whose birthdays are in the same month and hold one party that includes all of the kids in the class.

Matt's View

As parents go further and further over the top with their children's birthday parties, other parents often feel pressured to keep up. However, a small but reportedly growing number of parents are at the forefront of a countertrend: throwing birthday parties with a larger purpose. They encourage invitees of their kids' parties to bring reasonably priced gifts and let them know that all of the gifts will be donated to a local children's hospital or other charity. Now that sounds like having a good time while doing good.

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Removing that Lemony Old Car Smell

Used car buyers often struggle to balance the benefits of saving money with the risk of buying a lemon. To lessen the risk, a growing number of dealers are certifying their used cars. According to an article in the 6/11 Chicago Tribune, half of all used cars sold today carry the certification stamp—up from one in three in 2002. Such cars typically have been thoroughly inspected and come with an extended warranty. However, certified cars cost from $500 to $2,000 more than non-certified cars, depending on mileage, and there's no standard for what "certified" really means.

Some tips: look for vehicles that are certified by the manufacturer rather than an independent dealer and be sure you understand the terms of the warranty (what's covered and where can it be serviced for warranty-related repairs?).

A recent MarketWatch.com article strongly recommended buying the vehicle's history report as well, which indicates whether the car has a clean title, has ever been in an accident, and has been maintained. Carfax.com and AutoCheck.com offer a single report for $20, or 30-60 days of unlimited reports for $25.

Matt's View

When trying to decide what type of car to buy, another great source of information is Edmunds.com. Click here to see the organization's "Used Car Best Bets" and its analysis of which cars offer the "Lowest True Cost to Own."

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Tear and Toss Not Enough to Prevent ID Theft

Think that tearing up your credit card offers and tossing them in the trash is enough to keep identity thieves at bay? Think again. A 6/16 ABC News 20/20 story reported on a man who tore a credit card offer into tiny pieces and then, as an experiment, taped it back together, completed the application using his father's address, and mailed it in. A few weeks later a credit card in his name was mailed to his father's house. Apparently, the electronic scanners used by some credit card issuers don't care what shape an application is in, as long as it's readable.

What to do? Instead of tearing offers by hand, use a shredder; keep tabs on your credit report by ordering it for free at www.annualcreditreport.com ; and stem the flow of credit card (and insurance) offers flooding your mailbox by calling 888-5-OPTOUT or going to www.optoutprescreen.com . A related article in the Dallas Morning News on 6/18 notes, however, that to opt out you have to provide you Social Security number. A Federal Trade Commission official quoted in the article said, "In general, consumers need to be careful about giving out their Social Security Number, but in this particular case, they need to."

Matt's View

Today, a paper shredder has become an essential household appliance. Just make sure yours uses a "cross cut" or "confetti cut." Older models slice paper straight down, tempting the most patient ID thieves to view your shredded documents as nothing but challenging, solvable jigsaw puzzles.

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Moving Toward a More Secure Financial Life

In the aftermath of Hurricane Katrina and with the growing problem of identity theft, much advice has been given about securing our financial records. Most of it goes something like this: Back up all of your most important computer-based financial files on DVDs and send them to a trusted out-of-state relative, make a video recording of everything you own, copy all important documents, and, well, you get the idea. We tell ourselves, "Yeah, right, we'll get to all of that someday."

For a more realistic approach, agree to take one small step today. A great first one, as suggested on the Motley Fool's web site, is to photocopy the contents of your wallet—both sides of your credit cards and other important items. Then stash that copy in a secure place–a safe deposit box, for example. That way, if your wallet disappears you'll know exactly what was in there and who to call.

Matt's View

Should you ever entertain the thought of eating an elephant, experts on such matters usually suggest one bite at a time. The principle applies to organizing your financial records as well: Take it one small step at a time—starting today.

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