Finances

Do-It-Yourself Can Save Bucks

August 2, 2018 by Twila Van Leer

How many ways can you think of to save money by taking care of home maintenance items, making your own clothing, your baby’s food and dozens of other projects?
You can save lots of money if you go about it right.

Know What You Are Doing

First on the list of don’ts is the obvious: Don’t undertake DIY projects unless you know what you are doing. Free courses through local schools, colleges, libraries, stores, sewing centers, etc. can prepare you for routine home upkeep chores. Book stores have shelves of how-to books and there is a website for any job you could imagine. Don’t start a project until you’re sure you can finish it.

Leave It To the Experts

Stick with things you are genuinely willing to tackle. If you are put off car repairs by the smells and dirt, leave it to the experts. Focus on projects you want to undertake and have reasonable expectations of success.

Estimate The Time It Will Take You To Complete Your Project

Start small. Re-roofing an entire house is a huge, dangerous and expensive undertaking. Start with a small section of roof on a garage and see what the reality of the full job would be.

Do Your Own Lawn Care

Lawn care might be a good place to start. If you have been hiring it done, enlist the help of family members and do it yourself. Don’t assume you have to do every bit of every job yourself.

Review & Update Your Plans

Reassess your budget periodically to see if there are items you could eliminate or undertake to do on your own rather than pay to have them done.

Get Rid of It!

Sell (or donate) items you no longer need. Keep track of their value to use for tax deductions. Items that have value as collectibles can be offered on eBay.

You will multiply the value of Do-It-Yourselfing by putting the money you saved into your regular savings or into a separate account for emergencies.

Save Money On Food

July 16, 2018 by Twila Van Leer

The typical American family of four spends $8,513 per year on groceries. And many families add to that amount by eating out regularly. If you are interested in cutting the amount you spend at the grocery store, file these tips away and follow the advice they offer:

Learn To Eat At Home

Learn to cook. Cooking you own meals can significantly cut the costs of eating. Even fast-food eating out in enormously expensive. You’ll also save if you cook from scratch and avoid the higher-priced frozen and pre-prepared meals. Not only that, it is likely that you will eat healthier. Book stores have dozens of cookbooks, many of them focused on inexpensive and easy-to-fix meals.

Plan Meals For A Week

Take fewer trips to the grocery store. Typical American food shoppers go to a store three or four times a week. This means they triple or quadruple the temptation to pick up things they don’t really need. Studies say the frequent shoppers spend up to 54 percent more than those who stock up for a month or more at a time.

Homemade Lunches

Take sack lunches to work. Compare the cost of a $2 brown bag lunch to the average $6 trip to a sandwich shop and you can see how fast you could save yourself some serious money. In this comparison, the savings are about $80 a month or $960 in a year.

Write Down What You Need

Make a list. Impulse buying is sharply curtailed when you have it written down. Sketch out a week’s meals and see that all the ingredients are on hand. Add a few goodies to the list for the occasional treat, but otherwise, stick with the list.

Use The Brands That Are Cheapest

Buy generic. No-name brands are almost invariably less expensive than those that you recognize right off the bat and the quality is likely to be comparable. The experts say you can pocket big savings on such items as canned goods, cereals, frozen vegetables and even baby products such as diapers and prepared formulas. When buying prescription drugs, compare labels so you are sure you are getting the same dose of the active ingredients.

Discount Coupons Help Save Money

Use coupons. Coupons are good money-savers only if you look for items that don’t cost more than you would find in another brand. Store brands usually cost less. Eateries also offer coupons and you’ll find them online.

Consider Buying In Bulk Quantities

Many stores offer information on their shelves or price tags that gives a unit price. Comparison shop using the unit price. Buying in quantity is a good idea for some items. For instance, a pack of 40 diapers may cost f$13. or 33 cents per diaper. A box of 144 diapers at $35 is just 24 cents per diaper. (A word of caution: Although buying in bulk is usually less expensive, it’s a waste if you cannot use the product within a reasonable time. A good deal is not a good deal if it goes to waste.)

Robust Economy? Not For Everyone

June 28, 2018 by Twila Van Leer

Unemployment is down. Spending is up. Inflation is manageable. Taxes are down. Demand for new homes is up. Household wealth is higher.

Why Are Americans Feeling Insecure About The Economy

So how come many Americans are not feeling secure, even though the last major recession is nine years in the past? Too many of them are falling into categories where high child care costs wipe out the advantages, or the expanding costs of travel wipe out any pay raises, or those pay raises have not materialized, or . . .

Some Are Using Savings To Live Month To Month

Analysts at Oxford Economics who studied American spending patterns found that those in the bottom 60 percent of earners were drawing from their savings to maintain a standard of living. Many are living paycheck-to-paycheck. Even those who have found jobs as the jobless rate dipped are not feeling financially secure.

Here’s how the current economy looks to these folks:

Even though inflation is not a current concern, the prices of some indispensible items is rising. Gasoline is up 24 percent since a year ago. That can eat away as much as a third of what people hoped to save.

Owning A Home Has Become Harder

Owning a home has become harder, not easier. Many areas of the country are seeing a dearth of listings in the affordable range. Prices are rising more than 6 percent annually overall and even higher in some areas, increases that effectually wipe out the 2.7 percent increase in most hourly wages. Thirty-year fixed-rate mortgages are growing costlier. Average interest rates have jumped too 4.62 percent, from 3.95 percent at the beginning of this year.

At the root of the problem is the decline of America’s middle class. Wealth is increasingly lop-sided, with the ultra-rich sector growing while those at the other end of the scale see little benefit from the great economy. The top 10 percent of the country controls 73 percent of the personal wealth. The gains are concentrated in the top 1 percent, which lays claim to 39 percent of the wealth.

Where the middle class once included some 40 percent of the overall population, the figure now is just 27 percent. In the lowest 40 percent, Americans have a negative net worth and few have cushions sufficient to offset an emergency. They can’t look to stocks, rental properties, capital gains or home equity to shore up the budget if needed. Hourly wages haven’t risen over the past year for most of them.

Times are particularly tough for people who lack an advanced educational degree. Those who ended their education with high school find themselves scrambling as most of the jobs go to college grads. Those minimally educated make up less then 1 percent of the job gains that have boosted the overall economy.

Student Debt Affects Home Buying

At the same time, it isn’t all rosy for those with a college degree. Ever-higher student debt has wiped out some of the advantage. Since 2004, total student debt has increased 540 percent to a startling total of $1.4 trillion. That doesn’t include graduate school debt. That debt is influencing the ability to buy homes. Realtors have reported home-buying delays of about seven years among those burdened with education debt. College graduates dealing with debt also tend to delay the start of families, another factor that impedes full economic health in the country.

Children are, in fact, very expensive. Nearly a third of families put out at least 20 percent of their income for child care. Some families go into debt to cover child care expenses. Average cost of care for one child is $10,486 a year and it can be as high as $20,209. Many women have dropped out of the job market to stay home with children rather than pay the high costs of outside care.

The percentage of American women in the workforce has dropped from 77 percent in 2000 to 74.8 percent now. A return to the higher figure would see some 1.4 million more women in the workplace.

So while the economy appears in print as encouraging, there are problems to address before the benefit can blanket all Americans.

Mortgage Lingo Requires Study

June 11, 2018 by Twila Van Leer

Buying a home can thrust you into a realm where the language is about like being in a foreign country. The alphabet soup of acronyms and the jargon that peppers the conversation can leave you feeling a little lost.

Understanding just one factor, the LTV or loan-to-value component, can be a big help. Basically, it compares the size of the loan you are signing to the value of the home.

The LTV mathematics are relatively simple. You calculate it by dividing the amount of the mortgage by the appraised value of the property. The lender is interested in the LTV because it is an indicator of loan risk.

For instance, on a home appraised at $300,000, if you make a down payment of $40,000, the $260,000 mortgage represents an LTV of 86 percent. In other words, your mortgage is 86 percent of the value of the home. A higher LTV could represent a greater risk for the lender because it suggests the assets behind the loan are lower. Should you default or foreclose with a high LTV, it becomes more difficult for the lenders to recuperate the outstanding balance when they resell the property. Because of that risk, they may charge higher interest in the first instance.

Lowering the LTV has a number of benefits for the purchaser. It will make applying for a loan easier and could lock in a lower interest rate. You may not be required to purchase mortgage insurance, which usually becomes a factor when the LTV is 80 percent or lower. If the value of the property should drop, you could find yourself “under water,” a term applied when the balance on your mortgage is greater than the value of the home.

You can improve the LTV by increasing your down payment, building equity as you pay off the mortgage or by proving that over time, the value of your property has increased. That requires another appraisal.

As time passes, check the numbers to see if your LTV has improved. If so, you may be able to drop your mortgage insurance.

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.