Twila Van Leer

Buy A Car or Lease

June 1, 2018 by Twila Van Leer

Buy or Lease a Car — When your current car is ready to give up the ghost, you need to consider your next step carefully. Buy or lease?

When your current car is ready to give up the ghost, you need to consider your next step carefully. Buy or lease? There are good reasons and downsides for either option, depending on your particular circumstances.

With leasing you have the advantage of getting behind the wheel of a new car every few years. And you sidestep the hassle of selling before you replace the vehicle. In general, your lease payment will be smaller than what you’d pay on a loan to purchase. And if you will be using the vehicle for business purposes, you can count some of the depreciation and financing costs as tax deductions.

Leasing has become more popular as vehicle prices rise, the experts report. In that market, leasing may be more attractive, even to those who would really favor an outright purchase.

Here come the caveats: Car lease agreements include mileage limits. If you surpass the limit, you may pay 15 to 20 cents more per mile.

When you turn the vehicle in, you will be charged for dings, cracks, scratches and general wear and tear. Should you want to end the agreement before the lease expires, you could pay penalties for up to six months.

So, if your choice is to buy a new vehicle, here’s what to look for. One of the advantages is simply that when you have finished paying for it, it’s yours. If it is possible to pay for it outright, of course, you bypass the interest payments.

Look for a lender with a good interest rate. The shorter time you can take to pay off the loan, the better. Three years or less is a good target. If it has to extend beyond that, try to pay off earlier than required by adding a little to each payment, again to save interest.

You can drive your vehicle without any of the restrictions of leasing, including penalties and fees. And if you choose to get another car after you are paid off, you can use it as a trade-in.

On the downside, purchasing makes you responsible for repairs and maintenance. Once the warranties expire, you must pay out of pocket unless you purchase a maintenance agreement.

It is likely your payment will be greater than lease payments. Use a payment calculator to see what you are facing and be certain the amount stays within your budget limits.

T.J. Maxx, Marshalls Offer Deals

May 12, 2018 by Twila Van Leer

There are good reasons that bargain-seekers shop with T.J. Maxx and Marshalls outlets. The two stores are affiliated with Marmaxx Group, the largest retailer of clothing and home décor in the country, so they are able to negotiate what they pay for goods and what savings they can offer to customers. Their usual discounts are 20 to 60 percent off original retail prices.

They keep prices low by bypassing agreements with their providers to buy back a percentage of the merchandise if it doesn’t sell within a certain period of time. So they can offer customers a lower price than retailers that agree to the “buy-back.”

T.J. Maxx and Marshalls hire aggressive buyers who pay attention to more than seasonal factors. If a product meets the quality standards and they can get it at a good price, they buy it. The practice ensures an ongoing flow of merchandise.

Marmaxx works with thousands of vendors around the world and they use past experience to make quick purchases on bargain items. They may buy what other retailers might consider “odds and ends.” They are not as fussy about such things as size ranges, etc. If they think they can sell the item, they buy it.

Different shoppers have different opinions about the two retail outlets, depending on what they are shopping for. T.J. Maxx offers fine jewelry and accessories and in some of its stores, The Runway is a high-end discount designer. Marshalls has a full line of family footwear and a junior department called The CUBE.

Knowing something about the price tags at the stores can help shoppers find the best deals. A yellow price tag indicates a deep discount; white tags are regular-priced items; purple signifies items from “The Runway” which offers desirable, high-end goods. The latter are harder to find, but there are some available.

Tuesdays through Fridays may be the best shopping days at these stores. Some shoppers regularly bet that the discounts will be more advantageous on Wednesday mornings. January and July are the months when end-of-season merchandise is offered. Prices are adjusted downward more often in these months.

If you comparison shop, be aware that T.J. Maxx and Marshalls don’t do a good job with such information. The “compare at” prices may tend to be inflated. Use the Amazon app to see comparisons.

The stores discourage haggling. Irregular items are clearly marked and the price takes it into consideration. Damaged items may give shoppers some leeway to bargain with management, but expectations should be on the conservative side.

Discounted gift cards are offered in place of coupons, category promotions or store-wide sales. Savings can vary, but shoppers can expect to shave at least another 5 percent off the price by using the gift cards, which are available through websites such as Raise.com, GiftCardGranny.com and CardPool.com. The cards can be used at T.J.Maxx, Marshalls and HomeGoods.

How To Plan A Savings Plan

April 9, 2018 by Twila Van Leer

When the time comes that you are finally a little ahead of the bills and want to make the best use of your financial “leftovers,” how do you proceed?

Saving with a concrete plan in mind will avoid the haphazard trickle of savings that too many people rely on to enhance their investment earnings. A specific objective is preferable to random savings.

Turning things topsy-turvy for awhile may help. In other words, take the savings off the top and pay bills with what’s left, forcing yourself to avoid frivolous or unplanned spending. Obviously, you do this based on long experience of what your fixed costs are likely to be. If left unchecked, our perceived “needs” expand to take up the whole paycheck. Immediate gratification is a disease that grows over time. Curb yourself.

The very best definition of “savings,” in this scenario, is “living below your means.” The urge to spend becomes a habit if you don’t control it. Adopt a lifestyle that allows you to save, rather than saving what’s left when your over-the-top lifestyle is dictating the spending. When you get a raise at work, automatically raise the amount you save, rather than putting the whole increase into lifestyle escalation.

Make it harder to spend. Tuck the credit cards into the back of a drawer for a while and operate on a cash-only basis for awhile. Paying cash makes the expenditure immediate, instead of looking forward to a bill that may seem a long way off.

With tax-filing season in full bloom, plan ahead how to spend your refund, if any. Use the windfall to supercharge your savings. The average return, according to the IRS, is $2,895. Half of that, or at least a good share, would go a long way toward reaching a goal of having three to six months’ of savings as a healthy cushion when things go wrong financially. Having this amount stashed in a savings account or money-market fund, before you start toward other investment goals, is a wise move.
The alternative in a financial emergency is to tap into retirement accounts that may impose a penalty on withdrawals.

Once the basics are set, the next savings strategy is to invest in such things as stocks and bond mutual funds or ETFs. Sticking to low-fee investments such as index funds and ETFs reduced your investment costs, opening the way to higher returns. Over decades that is akin to saving an extra percentage or more of salary each year.

But all of these tracks to greater savings have to begin with a viable plan and then sticking to it, monitoring along the way to stay on track. It’s the only way to assure financial security now and when you are retired.

What Would You Do With An Extra $500

March 30, 2018 by Twila Van Leer

What if you found yourself with $500 that wasn’t committed to any part of your budget. Could happen. An income tax return, for instance.

Regardless of the source of your windfall, it’s time to consider how to get the most benefit from it by looking at short-term investment options. Having one or more of these in your financial profile is a buffer against the unexpected.

Carefully look at the possibilities before putting your $500 on the line. The most common short-term options

• A term deposit, sometimes referred to as a certificate of deposit, means you put an amount into an account at a financial institution, with a fixed term. Maturity dates can be set for as short a time as six months or extend to five years. Most institutions charge a penalty if you close the account before the term is filled. In most instances, the institution pays a higher dividend on a term deposit than on a traditional savings account. You can increase the value of such a deposit by “laddering,” or opening multiple accounts that mature at different times, anywhere from a year to five years. When a deposit matures, you can flip it into a new term account. Creating a train of short-term deposits allows you to access money when you need it on a regular basis while still earning good dividends.

• Look at mutual funds, an investment program that takes money contributed by many people and putting it into securities. Beginning investors may be particularly interested because mutual funds are easy to understand and to buy. They are affordable and offer a variety of categories and types. Consider where you feel most comfortable placing your $500.

• Peer-to-peer lending puts people with money to invest together with people or organizations that need to borrow that money. These lending platforms operate online, so they have lower overhead and fewer transaction costs. Three- to five-year investments usually earn higher returns. As is usually the case, that means higher risk. It is possible the borrower could default and the debt go to collection, or be lost entirely. Diversity is the best approach. Putting small amounts of money into several loans minimizes the possibility of damage to your portfolio.

Whatever you decide to do with your $500, don’t leap before carefully studying all of the possibilities. Be familiar with the institution in which you intend to invest your money. If you are uncertain, find a financial advisor who is familiar with the answers to your questions.

Simplify Next Car Purchase

March 21, 2018 by Twila Van Leer

Unless you really like spending time in car dealerships haggling over the details of a car purchase, try to minimize the hassle by using your computer or mobile device to accomplish the legwork before settling down to the details.

If you have a particular vehicle in mind, check Consumer Reports for ratings, reviews and updated car news, There also are sources such as AutoSMART that make it easy to shop and compare both new and used vehicles online.

Compare dealer prices by emailing an internet sales representative and get quotes. Be sure to include taxes and fees, since they can add appreciably to the vehicle cost. If you want particular features, alert the dealer so the question of add-ons doesn’t come up in the final analysis.

Get your loan pre-approved. Know up front what interest you are likely to pay on a loan and be certain how much you have to offer for your new car. If you are considering financing through the dealer, compare first with the other options you have.

Establish the value of your current vehicle. Kelley Blue Book, Craigslist and other sources can give you an idea of the value. Knowing will help you if the plan is to sell the old car to help finance the new vehicle or deal for a trade-in.

Check out current promotions. Your local dealerships may be offering special deals. Look into them in detail to see what the offer means to you personally. The offers most often hold out decreased interest or a “cash back” option as the incentive.

Take the test drive. It’s like the first meeting between prospective couples. Online photos are nice, but don’t always tell the whole story. Take the test over a route that is similar to the one you expect to travel most, such as the drive to work. How does the car handle? Are you comfortable with turns? Does acceleration meet freeway needs? Are you comfortable with the vehicle in stop-and-go situations? If you have reservations, now if the time to express them.

Test out features such as fuel economy, cargo space, seat comfort, safety, information and entertainment provisions. How easy will it be to install a child’s safety seat? Can more hefty family get in and out easily and have room to sit comfortably? A short test drive may not answer all these questions.

Take your time making the final decision. If you think you need more information, rent a similar vehicle and use it for a few days. The prospects of a long-term relationship with a vehicle make it worth the extra effort.