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10/27/2019

How to get a utility bill credit for outage or damage - 3 types are available

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Power outages and interruptions happen. If they happen often enough or for long enough you could be eligible for compensation from DTE and Consumers Energy. The Michigan Public Service Commission (MPSC) Service Quality and Reliability Standards requires utility companies to compensate customers for losses associated with power outages. Rules regarding outage service credits and eligibility requirements can be found in the MPSC’s Service Quality and Reliability Standards. These standards provide customers a $25 credit upon request if the utility’s investigation of your request determines you have experienced a qualifying outage.
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There are 3 types of available credits:
  1. Catastrophic conditions A customer is eligible for a credit under catastrophic conditions if the utility fails to restore service within 120 hours. A catastrophic condition is defined as an event that results in an official state of emergency or an event that results in an interruption, of 10 percent or more, of a utility’s customers. Customers need to notify their electric utilities of the outage. 
  2. Normal conditions A customer is eligible for a credit under normal conditions if the utility fails to restore service within 16 hours after an outage resulting from conditions other than catastrophic conditions. Customers need to notify their electric utility of the outage. 
  3. Frequent repetitive interruptions A customer is eligible for a credit for repetitive interruptions if experiencing more than seven interruptions in a 12-month period. Customers need to notify their electric utility of all service outages.
As a customer you need to complete the following steps:
  • record the date and time of each outage
  • record when the company was notified of the outage, and how the company was notified
  • document when the service was restored.
  • File your claim with DTE or Consumers Energy 
​To file a claim for damages caused by an outage with DTE you need a different claim form. Consumers Energy may use the same form as for outages. When the damage is caused by an act of nature—such as a storm, wind or lightning—the utility is not legally responsible. Check with your homeowner’s, renter’s or business insurance policy to see if your losses are covered. Most are, minus the deductible.
An investigation will be conducted and a decision will be rendered within 30 days. Your claim will be summarily denied if: 
  • You are not the customer of record or the owner of the damaged property.
  • Storms/Outside Interference - the utility will not be responsible for damages or losses resulting from weather-related conditions.
  • Equipment Failure - The utility will not be responsible for damages or losses beyond their control unless it fails to exercise reasonable care and skill in furnishing the service.
You don’t have to wait for an outage to save on your utility bills. Here are some “semi-secret” discounts available, if you ask.

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10/21/2019

Emergency Fund part of your safety net

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Safety Net
Financial shocks are inevitable during a lifetime. “Stuff happens,” according to the PG-rated version of that cliche. When it does, my language is more NC-17. Nevertheless, happen it does. The most common financial shocks for working-class families are:
  • Medical
  • Major household and automotive repairs
  • Family emergencies, meaning anybody you would choose to help rather than pay your rent.
  • Criminal justice system interactions always cost money to win, lose, or draw.
  • Temporary loss of income through reduced hours or layoff.
An emergency fund is foundational for achieving financial well-being. Having one increases your capacity to absorb a financial shock. It enhances your resilience or ability to recover from the shock. To torture an analogy, in the prizefight of life, it is not that you got knockdown. Instead, it is how long you stay down and what you do after you get up that determines the outcome. An emergency fund can provide more solution options.
What is an emergency fund? It is a “liquidity buffer” between you and ruin. If you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship. It can be any of these items. Some are decidedly better options than others:
  •  Cash on hand
  • Liquid savings 
  • Readily sold assets such as jewelry, stocks, bonds, guns, collectibles, 401(k), your body and time, etc.
  • Credit Card Cash Advances
  • Food on hand
  • Family
  • Accounts receivables or anybody who owes you money and who is good for it now.
  • Credit Score
How much is enough for an emergency fund? Emergency funds are highly individualized. The answer depends on a variety of factors, including your health, your age, your temperament, dependents, housing situation, the stability of your job, your risk tolerance, and more. Just be mindful of the truism, “It’s better to have money and not need it; than to need it and not have it.” Your emergency fund can’t be too big. Its size may determine how it is stored but not its existence.
Forget the 3 to 6 months of take-home pay that is commonly parroted throughout financial media and literature. This goal is often unattainable for low-income wage earners. A more realistic minimum target is $2,467. A fund of this amount will be sufficient for most emergencies. Having such a fund stops you from getting stuck with short term remedies with long term consequences like being late on rent or borrowing from a payday lender. Often creating a cycle of cash draining late fees and prolonged financial insecurity.
Building an emergency fund is your #1 priority. You should well establish an emergency fund before you divert resources to the very prudent debt reduction strategy necessary for your long term success. You should continue or start making all minimum payments on time and continue to do so until your emergency is well funded.
Debt reduction is achieved by consistent application of payment to the principal balance. Having an emergency fund will let you maintain a good payment history so you won’t have to “rob Peter to pay Paul” when the inevitable happens. One missed credit card minimum payment can close off what may be a critical asset during a financial emergency and put a big hole in your safety net. Modified universal default terms may render a late payment to one lender a catastrophe in your creditworthiness regardless of your actual payment history.
​Your ability to borrow should be viewed as part of your safety net. It creates capacity and demonstrates financial capability. Your credit card cash advances and spending limits are critical components that can help mitigate some of the impacts of an emergency while buying you time. An excellent credit score can give you immediate access to additional money during an emergency. It is a MoneySmartLife strategy to responsibly and proactively expand your borrowing capacity annually. Just as your net worth expands annually, so should your credit capacity. They weave your safety net tighter and softer.

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10/7/2019

Stop spending leaks 5 fees to never pay again

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Money spending
Where does the money go? Answer: holes in your spending plan or spending leaks. 
A spending leak is an uncontrolled expenditure of resources. Spending leaks are caused by a variety of reasons, both personal and economic. Common examples of spending leaks are susceptibility to impulse purchases, routinely paying credit card interest, or using energy inefficiently. Whether small or large, leaks add up and reduce the chances of achieving your goals.  Sometimes spending leaks are hidden or camouflaged. So they have to be discovered. Others are more apparent. Once discovered spending leaks must be fixed.
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Fixing a spending leak may be quick or require a long term behavior change. All are repairable with varying degrees of difficulty. Here is one spending leak repair that is sustainable. It is a behavior change that eliminates a leak for a lifetime. Make a quality decision to Stop Paying Fees. A quality decision is one from which there is no retreat. Most people don’t make a lot of those in their lives. Nor should they.  But you can on this one. Just set your jaw, head down, and just do it.

Fees are not interest. They are other charges for privileges or penalties you have accessed through your actions. If you don’t access them, you don’t pay. It may take a strategy and some time to sustainably eliminate all fees but it can be done.I have for decades. 

Here are 5 fees to never pay again. When it comes to my money I see paying these fees as a self-inflicted wound. Those are the worse kind. I decided to stop hurting myself on purpose.
  1. Late payment fees Stop paying your mortgage, rent, insurance, and utilities (cell phone, cable, electric, gas, etc.) late enough to incur a late fee. Yes, paying before the next billing cycle and not getting delinquency on your credit report is a very good thing. But paying an extra fee for being late is not. Credit cards not only have interest but late fees. Most credit card interest rates are usurious already so paying to be late makes “worse matters worst.” Another benefit of not paying late fees is your monthly cash flow and disposable income increase. This provides for a greater sense of financial well-being.
  2. Traffic, parking, and civil fines The behaviors that cause these fees are generally under our control. Simply, obey the laws. Even in a high-enforcement area, if you don’t break the law, you shouldn't be cited. However, no one is naive enough to believe that. The next step is to challenge all civil citations. Have your day in court. (MINOR CIVIL NON-CRIMINAL INFRACTIONS ONLY. IF YOU NEED A LAWYER. GET ONE. NOT FOR DUI) Taking the matter to this level is an investment of your time as a citizen to interact with your local government. If efficient, the worst that happens is going to be whatever the best deal that you can negotiate for yourself. If your local government is inefficient, then you may win a default judgment and owe nothing. Be mindful, there could be collateral damage to your insurance premiums and credit rating after a traffic conviction.
  3. Overdue rental fees on video, cars, libraries, etc. Just get the item back on time. 
  4. Bank fees require vigilance because for most banks they produce significant revenues. Always be on the lookout for no-fee checking and savings account relationships appropriate to your household income. Some bank’s fee structure may be hostile to “low volume, low activity accounts.” The translation is: “you can’t maintain a minimum balance or have sufficient account activity for the bank to make a profit on your money.” Once you have the right-sized bank relationship, be proactive in eliminating all fees such as overdraft, ATM, and cash advances. Make sure checking and savings remain free or you are actually using most of the benefits of the “premium” relationship. You can change financial services product options and maintain the relationship’s longevity. Longevity is often a positive factor when accessing financial services.
  5. Convenience fees for tickets or meal delivery. This one is more fluid. But my default position is no fee. If I am hungry, I pick it up or cook. Is there another cheaper way to get that ticket? Do I even have to go? My fee aversion has saved a me ton of money by forcing me to an more cost effective option. 
Stop paying fees. It’s like giving away your money without any of the benefits of philanthropy.


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    Mansa Musa is a homeownership counselor and homebuyer educator. He is currently the Principal at MoneySmartLife.org. He blogs and speaks on subjects of financial well-being and financial capability. Helping working class families live a sustainable MoneySmartLife through pragmatic solutions and behavior changes.

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  • MoneySmartLife.org and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. 
  • The views, thoughts, and opinions expressed belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual; either in the past or future. 
  • This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.” MoneySmartLife.org states that they’re using this material as part of their “efforts to advance understanding of issues of “financial well-being” and that they believe that this constitutes a “fair use” of the material in accordance with title 17 U.S.C. Section 107. ​
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