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8 More Ways to Save Money Using the Web

By now, most people know that shopping online can literally save you hundreds of dollars, if not thousands, each year. It’s estimated that the average web-savvy shopper saves over $7,000 a year by using the internet to their advantage! But, I bet a lot of you don’t know exactly how to search for the best deals. Today, we’re going to talk about some of the techniques that you can use to save yourself lots of cash, just by taking extra time to use the internet!

  1. Always check before you go to the store. Even if you are planning on going to a brick-and-mortar store, make sure you compare prices between stores. That MP3 player that is $75 at Wal-Mart may be on sale at Target for $50.
  2. Buy in advance. Tickets for movies, airplanes, and sports events are a ton cheaper when they’re bought way ahead of time. Also, getting a hotel room or renting a trailer, truck, or car end up cheaper. Now, I’m not saying buy like two years before you do whatever you’re doing (most websites only allow for up to a year ahead of time).
  3. Or wait till the last minute! Do you have a weekend free that you didn’t expect? You can get tickets and hotel rooms for a lot cheaper days before you need it because those places are trying to fill rooms up. Think about it: Empty rooms equal no money; they at least want to make something out of those rooms.
  4. Use E-bay and other auction sites. A lot of people get worried about this one. But, you don’t have to. Most websites (E-bay is the most reputable) have a lot of policies to keep buyers safe. You can find almost anything on these websites for much cheaper than you would anywhere else. You just have to be willing to take the time to do the research
  5. Online Bill Pay. Do you realize how much you pay for in stamps in a year? The Post Office may not like me to say that, but consider the following. You have 4 bills that you mail out in a month. Each stamp is 44 cents. You’re saving 1.76/month. That doesn’t seem like a lot, but when that adds up to 21.12 a year or 105.60 in 5 years, then you start to see the savings.
  6. Get your news online. Most newspapers have everything you’ll need on the internet. The advertising on their sites help give their writers and editors revenue. You can also use RSS feeds to get news from the sites that you want to get news from. And the best part? It’s free!
  7. Watch TV/Movies online. I currently don’t have cable. Why? Because honestly, I don’t need it. I don’t watch a ton of TV, and any TV or movies that I want to see are online legally. Now, I’m not saying bootleg, and I never would. I’m on a Netflix plan with my family where I can stream as many movies on my Wii as I want, and it costs us $7.99/month.
  8. Shop for Holidays and birthdays. My best friend and her husband live about 2 hours away- close enough for a weekend trip, but too far to go regularly. So, if I don’t get to see them around their birthdays or Christmas, I’ll buy their gifts on Amazon or another website and get them sent straight to their house. Some websites even offer gift wrapping! You save yourself shipping and a lot of headache.

So, if you didn’t know how to shop for deals online before, now you do! These tips can help you save lots of money and time in the long run, just by sitting at your computer and doing a little leg work!

Real Problem in Real Estate

A friend of mine bought a house in early 2010. He moved last week due to a change in career. In between that, though, was an inspection mess that no one saw coming: the electrical fixtures in the house were not up to standard

Now, this happens all of the time. Most times, it’s agreed that the person selling the house is the one to take care of the financial end of inspection failures. And that’s what had supposedly happened when the house was sold to my friend.  The same electrical issues that had caused the house to not pass inspection before my friend bought it were the ones that came up when he went to sell the house less than a year later.

Luckily, my friend (we’ll name him Bill so I don’t have to keep saying ‘my friend’) knew what avenues to take in order to get things straightened out. He paid the $200 to fix all of the electrical problems, but went through the channels necessary in order to let the person who had sold the house that he’d been caught in his fraud.

I actually don’t know the outcome of this story, but here are a couple of things that we can learn from Bill’s story.

  • When closing on your house, make sure that you double check your contingencies. Contingencies are the parts of your contract that have to happen before the house can be closed on. Bill found out that the electrician that had supposedly fixed the issue had only given the seller an estimate, and not actually fixed it. They had no idea what happened after that. So make sure you check everything once again. You don’t necessarily have to get a another full out inspection, but just check over what you can.
  • Avoid dual agency when you can. Dual agency is when one agent (or once real estate agency) represents both the buyer and the seller. Sadly, even though there are laws to protect the buyer and the seller in states that allow dual agency (not all do), stuff like this could still fall between the cracks. Bill and the seller were with different agencies, and had they not been, this may have been more difficult to resolve.
  • Always expect the unexpected. Until October, Bill thought that he and his wife would raise their kids in that house. Then, he realized that it was time for a change in his life, and the house they’d bought about 6 months earlier was going to have to go back on the market. Luckily, they were able to find a buyer quickly, but what if they hadn’t? Paying on two homes is not ideal for anyone.
  • Be respectful. Bill ended up talking to a lot of different people to discover what had happened. He had to be careful, because there was always a possibility of invading privacy and breaking rules regarding confidentiality, but he was able to do what he had to without that. Bill was fine with paying the $200, but he just wanted the guy that had wronged him to know that he had.
  • Don’t cut corners. Thankfully, Bill is a guy with a lot of integrity, and got the electrical issues fixed. But the guy before got busted. So, don’t cut corners ever, even if you think you won’t get caught. The guy that sold the house to Bill did, and you probably will too.

Even though I don’t know the exact outcome of Bill’s story, you can change the end of your own by using this advice. Always be cautious; never be afraid to do too much, because in the end, it could result in a happy ending for everyone that’s involved.

Credit Card Debt Consolidation – The Why’s and How’s

I was in debt for a long time. It was absolutely miserable. It wasn’t a lot based on today’s standards; for a college kid though, the $3,000 I was suffering with was truly a burden. Before I paid it off I considered debt consolidation. Why would I consider such a thing? Today, we’re going to explore this concept a little bit more.

Why would I consider debt consolidation at all? Students consolidate their student loans after they graduate from school; if you’ve heard this term at all it’s usually been in that context.  Did you know that could you also consolidate your credit card debt? If you are paying off multiple credit cards, this may be a good option for you to consider.

Why shouldn’t I consider debt consolidation? If you don’t have a set budget or if your spending is out of control. If your money flow is already crazy, please deal with that before consolidating your debt. You could end up spending the money or using the new line of credit for a totally different purpose than the one you originally intended.

How do I do it? There are two ways that you can consolidate your credit card debt.

  • Another credit card. This is potentially risky, considering that if you already have a spending problem, you are more likely to max that card out as well. The good thing? A lot of credit card companies offer a lower interest rate if you transfer a balance. One of your current credit card companies can also assist you with this, so always check with all of them before making a decision. A family member of mine ended up getting 0% interest for hers because she’d been a loyal and dependable customer for years.
  • A loan from your bank or other financial institution. Many banks offer loans for credit card consolidation to encourage paying off debts. The people who work at your bank can help you make the best decision for your situation. My institution, for example, offers these where the payment time can be anywhere from 12 to 60 months. The interest rates then fluctuate based on the amount of time you schedule to pay off your loan. Most banks work similarly.

Always make sure that you do your research before you use any resource for consolidating your debt. Read contracts carefully, and make sure you ask questions like the following:

  • How much is the interest rate? Are there special rates for transferring other balances?What happens if I miss a payment?
  • Will that increase my interest rate? (Especially with the credit card, your rate could go from the 3-5% you may have gotten as a special transfer rate up to the 15 or 16% that the company charges normally.)
  • If I pay more than the minimum, does that count toward the following month’s payment?
  • What if I pay it off before the suggested time?

Maybe debt consolidation is for you. One payment a month can make your life easier and help you to be debt-free quicker than you could have been before!

How do I know I have Debt Issues?

Debt issues run rampant in the United States. This is one of the main reasons that the US went into a bit of an economic mess throughout the beginning of the 21st century. Credit was incredibly easy to get, and because of that, people got a lot of it. As the stock market started to struggle, people were unable to pay their debts off, banks started to have issues because more and more people were not paying their loans off, and then the economy kept going down and down. People are slowly trying to get out of debt, so while the market struggles from a lack of new purchases, the economy is very slow on the upswing.

One of the biggest problems with this is that people didn’t realize that they had a debt issue. Since it became commonplace, people used the thought process that their debt wasn’t as bad as anyone else’s. I had this issue; I was only $3,000 in debt, not a big deal, right? Wrong! Here are some ways you can tell you have a debt problem.

  • Rotating minimum payments. I was $3,000 in debt for a long time. Why? Because I’d pay the minimum payment only, and on top of that, I’d normally put back on the card the amount of money I spent on a payment. If you’re doing this, the rest of your budget is obviously not working. You shouldn’t have to do this if your budget is balanced.
  • Your debt load is more than 20% of your income. This is the high end of the suggested average. If your debt is more than 20% of your annual income, think about all the money you’re wasting on interest and paying off your debt.
  • You use your card no matter what. Even if you have the money to buy groceries, you whip out the credit card. Not only is this bad practice, you may have an addiction to using credit.
  • You don’t know how much you owe. This is a huge problem. If you’re throwing out random numbers just to get inquisitive people off of your back, you may have a lot more than you think you do.
  • You have no savings. It makes sense doesn’t it? If you’re swimming in debt, you’re not going to be able to save a dime.
  • Necessities get pushed off because you’re too far in debt. I had this issue at one point; I had to go to the doctor for a severe knee injury, but I kept pushing it off because my debt controlled my life. Don’t let this happen to you; the last thing you need is for something horrible to happen and not be able to pay for it.
  • You’re borrowing a lot of money. At one point, I owed friends and family around $500. I would ask different people for that money so they wouldn’t suspect anything. Does your situation sound similar? If you can’t even afford to live and have to bum off everyone, it’s time to rethink things.
  • You’re barraged with phone calls and notices from creditors and collection agencies. This is probably the most obvious. If places that you owe money are stalking you to try and get it, you probably have a big issue with your credit.

There are lots of ways to get help with your debt. Make sure to check out any and all counseling agencies or debt reduction agencies before you use any of their paid services, but if you need help, don’t be afraid to go after it.

Surprising Summer Savings – Act now!

As I look out my window, it’s really odd for me to even think about summer. 7 inches of snow earlier in the week, an extra inch or so today… will summer ever come? But, there are a lot of professional money-savers that want you to know that right now is the best time to buy a lot of things that you’ll use in the summer time. You’re probably thinking “Good. Because that rock salt was a lot more than I needed it to be.” Want to save before the warm weather hits? Then check out these categories of items now so that you save lots later.

  • Getting married? Over the past few years, I had several friends get married over the summer. Statistics say that it’s the most popular time to get married. Because of this, the cost of items such as champagne, party supplies, and gifts are lower than usual. Since the major holidays are over (the only other one that lends itself toward any of these items is Valentine’s Day in February), stores need to offload a bunch of this stuff to make room for summer stock.
  • Gardener or Yard Tender? Many items that you may use during the summer (lawn tools, seeds, and decorations) are usually thrown in the clearance section during the winter. They’re taking up valuable seasonal space, most people aren’t thinking ahead that far, and those same items may not be the “big hit” that next summer.
  • Vacations. In a way, this goes with getting married too. Booking your honeymoon or family vacation during the winter time is a great idea! Because travel isn’t as extensive this time of year, airlines will discount flights, even those that are scheduled for the summer, so they can get some sort of cash flow. Cruises will also drop prices to get the same thing. Family resorts and hotels also get booked up early, so the earlier you get these the better.
  • Clothes. I’m not someone who follows styles, so if I see something that I like on the clearance rack, I get it. It’s probably last year’s style, but who cares? Like everything I mentioned above, stores want to move old stock to make room for new stock. A lot of stores have their semi-annual sales during the winter as well. I have gotten jeans as cheap as 3-5 dollars each because of these sales!
  • Summer camp and classes. What? Yeah, I don’t have kids, but I know a lot that go to summer camps. A lot of them offer discounts for early enrollment. If you’re considering taking a summer class at a community college, a lot of schools will waiver or reduce your application fee and possibly give you a discount per credit.
  • Houses. You think I’m kidding! One of my best friends is moving today in the weather I described above. Not exactly the most pleasant experience. A lot of times, the cost of homes is cheaper because people really don’t want to move during the winter months. Also, if you are looking for a beach home or condo, it’s definitely a great idea to look during the winter when no one else is. You may find that diamond in the rough you want!

Spend a little more this winter to save a lot during the summer. Hot deals during the cold months are easy to find; if you’re snowed in, there are countless resources to help you look for any of these items on the internet.

Rental Run Around

I was in a tough spot. I’d had to move out of a place I was living for various reasons, and was bunking with a friend and her family until I could find somewhere else to live. Thankfully, as long as I was looking, they didn’t care how long I took, but I wanted to inconvenience them as little as possible.

I wasn’t employed yet, but I knew what I wanted to do and what I needed to do. So, before I even started to do anything, I made two lists: A list of things that had to happen and a list of things that I’d like to happen, but wouldn’t be deal breakers. You should always do this! Your expectations will help you make a good decision. Here’s what my lists looked like:

The apartment must:

  • Be within 5 miles of my church. I volunteer frequently at my church, so I wanted to cut down on gas costs.
  • Be in a safe part of town.
  • Cost $500 or less a month
  • Have a washer/dryer hookup or be really close to a laundromat
  • Be flexible with rental dates (I’d lived in a college town previously, where most places have set dates you can move in and out with little to no flexibility).

The apartment could, but doesn’t have to:

  • Be on the first floor (I have bad knees)
  • Allow pets
  • Include heat, water, sewer, and trash in the rent

I spent 4 days researching, writing emails, and calling people about potential rentals. Most people don’t know exactly where to look for rentals, so if you’re stuck, here’s some things you can do:

  • If there’s a college or university in your town, check out their website. A lot of times, they have rental guides that the students can use.
  • Drive around town and see if there are signs about apartments for rent.
  • Do research on Google to see if there are any apartment complexes or townhouses for rent.
  • Craigslist. Be careful with this, especially because some people who use this just want to get a couple bucks out of you.
  • Call local real estate agencies; many of them have rentals available or work with people who do.
  • Talk to your friends and family; some of them may know people who have rentals.

After I did all of these things, I looked at dozens of apartments. I have never driven so much in 2 days. Ironically, the place I ended up picking was an accidental find; I’d been driving by a house, saw a sign about an apartment for rent, and called the number. It hit everything on both of my lists except allowing pets, including trash in the rent, and being under $500 a month. Why did I compromise? Because I’m from PA and heat was included. The extra $25 a month I now pay is worth the fact that I don’t have to pay for my heat. When you talk to someone about your potential rental, make sure that you ask questions to find out these things! For example:

  • How much is rent? What is included?
  • When can I move in?
  • How much parking is there? Is it off street?
  • How long is my lease for? (some do monthly, some do every 6 months, some do yearly)
  • Do you allow animals?
  • What are my expectations?
  • How much is the security deposit?
  • Who takes care of turning on water and electric? What companies are there?
  • How much do my utilities average?

I was blessed with finding almost exactly what I wanted so quickly. Needless to say, that may not be the case for everyone. But, if you hold to your expectations and you’re patient, you should be able to find something at least close to what you want. I did!

Defining some Tax Deductions

It’s income tax season again, and one of the biggest mistakes that many people make is missing deductions that could be making their refund check a lot bigger, or the amount they’re to pay in a  lot less. Many people just throw on what’s called the standard deduction: for most Americans this tax season, that amount is $5,700. This is the amount of income that you make that isn’t affected by taxation.

Did you know in some cases, you may be missing out on a lot by just taking this instead of itemizing? Last year, it was estimated that there were over one trillion dollars in missed or overlooked deductions. That’s a lot of money! When you itemize, you take each individual deduction, add them all up, and deduct that from your income instead. Here is an inconclusive list of things you may be able to deduct on your taxes:

  • Interest on student loans – your loan company should provide you with the documentation necessary to claim this deduction.
  • Dependent children and dependent parents that you care for. They don’t have to live with you to count, as long as you provide 50% or more of their living expenses and they don’t claim themselves, you can claim them.
  • Energy efficient home renovations and vehicles. Energy efficiency is encouraged, and these deductions prove it.
  • Home office and computer supplies if you have a home office. But you need to be the only one using these things if you claim them.
  • Moving expenses for starting a business or relocating for a new job. Keep those receipts!
  • Health care premiums. Especially for the self-employed or those who own their own business. This is a huge help.
  • Charitable donations, gifts, and supplies/gas for volunteer work. People don’t realize that they can deduct these if it’s to a non-profit organization with the right paperwork.
  • Teacher school supplies- Up to $250
  • Child care- To encourage parents to work, especially because this can be expensive.
  • Lifetime learning credits- If you go back to school as an adult and pay tuition out of pocket, you may be able to qualify for these.

Many times, in order to avoid an audit or to verify the amounts you itemize, you will need sufficient documentation (receipts, inspections to see if what you’re claiming applies for the deduction you’re filing for, etc.) If you think that your deduction is going to be more than $5,700, then it’s wise to itemize. The IRS isn’t allowing itemizers to file until February 14th of this year (because of the Tax Relief act passed at the end of 2010), but the wait may be worth it.

If you need help or think that you may miss something in the process of preparing your tax return, never be afraid to spend the money to go see a tax professional. They’re there to help you get the most for your money. Make sure that you don’t miss out on the money that you deserve this tax season!

Issue with filing my Taxes

Last year, taxes were a headache. It was the first time that I’d ever tried to do them on my own. Needless to say, that really wasn’t that big of a deal. It was as easy as plugging a few numbers into where I was told to (my taxes weren’t overly complicated last year, I was a graduate student with an on-campus job). Months earlier, we’d decided on me finally filing as independent: I paid for almost all of my needs, and I was 25 years old.

Turns out my step dad didn’t hear about this agreement. My mom was ill last year, and so he was in charge of doing their taxes… and accidentally listed me as a dependent. It wasn’t his fault; Mom hadn’t told him, I didn’t think so, but this started a complicated process that I will thankfully never have to go through again.

My return got shot back to me. “There are mistakes on your tax return,” the email said. How could I have made a mistake when my return had been so simple? So, I went back through it, double checked some things, and sent it right back. Once again, the tax return bounced right back. I called my step dad, wondering what in the world was going on.

“Not sure.” He said. “I claimed you on your mother’s form…”

I groaned. That was the issue. I had been trying to file myself as an independent taxpayer, whereas the filing service noticed that I’d already been claimed as a dependent by my mom. This lead into a 10 minute conversation with my step dad about what exactly we were supposed to do about this. We talked to a friend that knew about taxes, and they said we had two options.

-          Just to file myself as a dependent for one more year and make sure that the following year the same mistake doesn’t happen again.

-          Go through this big long process to redo my mom’s taxes then redo mine.

Honestly, it wasn’t worth the hassle to do the second one. My step dad paid me the part of what I didn’t get because of his mistake. But that goes to show you: make sure you talk to everyone that may be involved in your tax process. Or it could end up being a huge headache.

What determines whether you’re a dependent or independent?

-          Dependents have half of their living expenses paid by the person they’re a dependent to.  When this all happened, I was kind of on the line (at about 48%). So we were fine making the case that I was still a dependent.

-          You are 24 or younger, disabled, or a parent being taken care of by a child. (I was 24 for the tax season in question, just 25 when this all happened).

This year, I don’t qualify for that in any sense, so it’s not a question. But make sure, before you automatically list one or the other, that you fit the criteria… and that other people involved aren’t claiming you. Rough lesson learned, but at least it was learned.

Avoid Debt Elimination Scams

Every day, especially if you read a lot of websites about finances, you are probably bombarded with phone calls, emails, and other forms of communication about debt elimination. It sounds appealing at first: Pay about 15 to 20 percent of your debt off, and then the rest goes away and creditors leave you alone. But, let me assure you, this doesn’t work.

With the economy we are currently in, a lot of these companies are trying to appeal to the masses. Why? Because debt is the reason the economy is in the state it’s in. The average American has thousands of dollars of debt. So, it’s the basic rule of supply and demand: There’s a need, people see a way to scam people with it, and then they go for it.

Now, I’m not saying that all debt reduction is illegitimate. But, here’s some things for you to look into and/or do if you’re considering using one of these programs:

-          Do they claim reduction, elimination, or counseling? There’s a difference. Usually debt reduction and counseling programs help you to make a more manageable budget, assist you in consolidating your debt, and teach you to manage your money better. Elimination programs try to make you believe that you can just make your debt disappear by paying some of it.

-          Do they have proof of it working? If it’s an elimination ploy, they’d have to go to court to settle these debts. If that occurred, you’d be able to get the records; civil court cases are public access. If the company claims that they don’t have documents because “that violates their customers’ privacy,” then they’re probably scamming you.

-          Check out the BBB. Checking out any business you trust any form of money or investment in is always wise. I’d rather take the five minutes to look them up on the BBB website than waste a ton of time on a less-than reputable company.

-          Check out their websites. A lot of companies have public forums, or check out other websites about these types of companies. You’ll find out quite quickly which ones are legit and which ones aren’t.

The best option is to always do it yourself or find a financial counselor. If you are patient and are willing to make some sacrifices, debt reduction is a lot easier than it seems. People get overwhelmed by the amount of debt they’re in, and many times they can panic and just scramble to find the quick fix. If you do that (without answering the questions above or doing the research suggested), you could possibly lose even more money, kill your credit, or even end up filing bankruptcy. Be smart with your money and with your debt, don’t trust it to just anyone, and you’ll be able to fix the mess you’re in better than you could with the easy way out.

Simplifying Social Security

Do you ever look at your paycheck? Statistics say that not a lot of Americans do in detail. Most people just look at the dollar amount and put it in the bank or cash it (or, because more and more of us receive Direct Deposit, just look at the amount and toss it aside). If you ever were, there are some interesting things being taken out. Have you ever wondered what that $15 that is taken out for Social Security is actually used for? I did, and now I’m going to share with you how the whole thing works.

Social Security was put into place by Franklin Roosevelt as part of the New Deal in 1935. The elderly and disabled had been taken care of by their families financially until this was put into place. Roosevelt made it clear that he wanted people to be taken care monetarily of during times of their lives that could be otherwise stressful (old age, becoming disabled, losing a spouse or parent).

The numbers I’m using are prior to the Social Security Cut that President Obama is initiating in 2011, which I’ll talk about at the end of this article. Basically, for every dollar you paid in Social Security (until 2011)…

-          69 cents goes to a trust fund for retirees and their families

-          19 cents goes to a trust fund for Medicare

-          12 cents goes to a trust fund for people with disabilities.

Only about a penny of every dollar is for administrative costs. But, the government can dip into those trusts and borrow money in order to pay the above benefits, especially when those benefits cost more than what is projected. In summer of 2010, Social Security said that it had a $2.5 trillion dollar trust fund (truth was, the government just owes Social Security a lot of money).

Here’s a breakdown of how Social Security Benefits work:

In short, the number of years that you work give you what are called “credits.” As of 2011, you get one credit for every $1,120 you make, and you can get up to 4 credits a year.

For retired persons: The “normal retirement age” varies by your birth year. If you were born before 1938, normal retirement is 65. It increases in 2 month increments until those who were born in 1943, where it changes to 66 and stays there until the birth year of 1955. If you were born in 1960 or later, retirement age now changes to 67.  You can get reduced benefits at age 62. You can also delay retirement until age 70 and get increased benefits. In order to get retirement benefits, you need the equivalent of 10 years of work (40 credits).
For disabled persons:
Long story short, filing for disability is difficult. The severity of the disability, whether it’s temporary or permanent, and how long you get benefits for is based upon applications and physicals. These following numbers are if you become disabled as an adult (different rules apply if you were born disabled):

-If you are 24 or younger, you need 1 ½ years of work (6 credits).
-If you are 24-30 you need credits for half the time between age 21 and when you were disabled. (If you’re 26, you need 2.5 years or 10 credits)
- 31 or older, you need at least 20 credits in 10 years immediately before you became disabled. The Social Security Administration has a table on this at http://ssa.gov/pubs/10072.html.

For widows/widowers and their children: Called “survivor’s benefits, they are as follows:

  • Widow/widower- full benefits at retirement age, reduced at age 60, if they’re disabled it can be as early as 50, and at any age if they’re taking care of a child that’s 16 or under or disabled.
  • Divorced spouses (this is a big, long, complicated thing that I won’t get into here)
  • Unmarried children under 18 unless they’re still in high school until age 19. Stepchildren, grandchildren, and adopted children may be included in some cases.
  • Dependent parents over age 62.

As with everything, there are exceptions and most times it’s best to get a lawyer if you are in a unique situation.

There has been a lot of concern about Social Security, which has lead into debates about privatization and reform that I won’t get into in this article. It has been estimated that many of today’s workers won’t be able to get Social Security because the program is simply going to run out of money. President Obama and Congress have recently implemented a tax cut that furthers this concern; the Social Security tax will be cut by approximately 1/3. That’s a lot, especially for a program that is suffering. What does this mean for the future of Social Security? No one really knows, but I think everyone agrees that reform needs to happen or the program will go belly up.