expenses http://www.wisebread.com/taxonomy/term/11371/all en-US 10 Hidden Housing Costs New Homeowners Don't Expect http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-hidden-housing-costs-new-homeowners-dont-expect" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_tired_painting_000067183647.jpg" alt="Man finding hidden housing costs he didn&#039;t expect" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're a new homeowner &mdash; congrats! The hardest part is over, for sure. Saying so long to most of your savings isn't easy, after all. But the money hemorrhage isn't finished just yet. There are several under-the-radar and often overlooked fees and expenses that accompany homeownership that a newbie like you might miss. Keep tabs on these expenses with this list of hidden housing costs to help soften the blow.</p> <h2>1. Moving Expenses</h2> <p>Your belongings have to get from A to B somehow, but have you considered the method? If you plan to enlist the help of your friends, you'll save a huge chunk of change, but if you have more than a few truckloads, it's probably best to hire movers &mdash; and movers aren't cheap. Depending on how much stuff you have, how many flights of stairs the movers are going up and down (my fourth-floor movers <em>haaaated </em>me), and the distance they need to travel to deliver it, the cost could reach upwards of $10,000. With so many other expenses coming down the pipeline, this isn't one you want to forget about. (See also:&nbsp;<a href="http://www.wisebread.com/dont-forget-to-budget-for-these-unexpected-moving-expenses?ref=seealso">Don't Forget to Budget for These Unexpected Moving Expenses</a>)</p> <h2>2. Furnishing <em>All </em>the Rooms</h2> <p>Your eyes opened wide to the four-bed, three-bath colonial when you first saw it &mdash; all that space! But those rooms aren't going to furnish themselves. This is important to keep in mind if you're coming from a much smaller dwelling. You likely don't have enough furniture to outfit the entire new home, which means that you'll have to buy new items to make it livable. Beds, dining tables, couches, sofas &mdash; any or all of these may be required, and none of it is cheap. Otherwise you can take the easy way out and assign two of your empty, furniture-less rooms to &quot;storage,&quot; like I've seen some of my friends do. You'll just have to accept that somebody (like me) is totally judging you, lazy.</p> <h2>3. Window Treatments</h2> <p>When I moved into my first apartment in Manhattan, I assumed that the place would come with blinds. No such luck. What was worse was that my landlord wouldn't supply the blinds&hellip; and the ones I had to order if I didn't want nosy neighbors watching me do <em>everything</em> had to be custom made. The cost was an extra $500 or so that I didn't plan for, which is annoying when it's for something as silly as window treatments. Although, according to interior designer Tiffani Stutzman, I got off pretty easy.</p> <p>&quot;New homeowners are always shocked at the price of window treatments,&quot; she says. &quot;The average cost of a very basic blind or shade for a medium-sized window is normally around $500. Most homeowners should budget around $1,000 per window as a good rule of thumb. However, the cost can increase significantly for very large or tall windows or windows with non-standard shapes like arches. If you are interested in using custom fabrics or other features such as motorized shades, expect much higher costs per window.&quot;</p> <p>Yeah, I definitely got off easy, and I made half my money back by selling the window treatments to the renter who was coming in after me. Business is business. For your own reference, I used Blinds To Go, which was extremely affordable compared to Stutzman's estimates, and the process was a cinch.</p> <h2>4. Utilities and Other Day-to-Day Usage Expenses</h2> <p>If you previously lived in an apartment where your utilities were included in the rent, you're in for big sticker shock your first few months of energy usage. Gas and electricity isn't cheap, and if you've been taking advantage of the built-in amenities that your rent covered, you better brace yourself. To make the transition smoother, ask the seller if you can see a copy of a recent utility bill so that you can somewhat prepare. Knowing is half the battle. Tread lightly initially, too. Stay conscious of lights, heat, and A/C running only when necessary to help slow down the speed at which you're accruing new bills.</p> <h2>5. HVAC Inspections and Upkeep</h2> <p>Heaters and air conditioners are crucial to climate-controlled living (I'm so uppity I won't even spend the night someplace without an air conditioner; I get <em>hot</em>, bro), and they don't fix themselves. Unless you have these very specialized skills to handle their maintenance, you'll have to hire the work out. Of course, it's wise to ward off major catastrophes with annual inspections &mdash; which will still cost you &mdash; but not nearly as much as early replacement of a furnace or A/C unit that's been neglected.</p> <h2>6. Termite and Pest Treatments</h2> <p>Before you move into your new home, you should get the all clear that it's termite-free. Your inspection will reveal the pests, and it should fall on the owner to address the problem. If not, you have the right to walk away. That's not always the case, however. The owner is not <em>required</em> to rid the house of pests, but only to disclose the existence of the pests. If you choose to move forward with the sale knowing that there's an active pest problem, the problem is on you if it's not negotiated that it will be exterminated by the time you move in.</p> <p>And if you don't mind me saying so, it's an incredibly dumb move on your part to accept the pests, as they can be very costly to eliminate. You also want to check for roaches, ants, mice and rats, and bedbugs. None of these critters are signs of good fortune.</p> <h2>7. Landscaping and Other Outdoor Maintenance</h2> <p>I do a lot of things myself to cut costs on having to pay for someone else to do it, but I draw the line at mowing the lawn and other yard maintenance. I hate it. Thus, I bring in the big guns to do the dirty work, and it costs about $800 a year. Other hidden costs to new homeowners can include, but aren't limited to: snow removal, roof maintenance (which can be a <em>huge </em>expenses if there's a serious problem), gutter cleaning, and outdoor pest removal, like the hornet's nest that set up camp in my own backyard.</p> <p>&quot;Lawn mowing services can run roughly $25 a week or more, but that's just for cutting the grass; that doesn't include tree trimming, fertilization, and other landscaping services,&quot; says Ryan Farley, co-founder LawnStarter, a lawn-care concierge service. &quot;If you go the DIY route, lawn care involves an expenditure of both time and money; it's hard to put a price on your time. If you prefer to let someone else take care of your lawn, be sure to include that cost in your monthly housing budget. Whatever you decide to do, keep in mind that a well-landscaped lawn can easily boost the value of your home by 10%, and a lousy looking lawn can cause you to lose money when you're ready to sell.</p> <h2>8. An Eventual Increase in Property Taxes</h2> <p>There are only two certainties in life &mdash; death and taxes, and the latter will keep increasing until you wish the former would come faster. While you should be aware of your expected property taxes before you purchase the home, you may not expect the rate at which they will increase over the years.</p> <p>&ldquo;When you buy a home, most sales are reported to the taxing authority, which means your property taxes will be raised to the value &mdash; or the price you paid &mdash; for the house. For many buyers this can be a 20% to 30% increase in their property taxes,&quot; says Sissy Lapin, co-founder of ListingDoor.com, a DIY home-selling resource.</p> <h2>9. Homeowner's Association Dues</h2> <p>If you're moving to a fancy neighborhood, you can bet there's a homeowner's association, which, in my opinion, is just a congenial title for &quot;a sanctioned group of nosy neighbors who like to tell other people what to do&quot; &mdash; but I digress. Either way, you'll have to pay up to be part of the club, whether you like it or not. But, hey, at least you get an awkward holiday party out of it at the end of the year.</p> <p>&quot;While these fees are likely disclosed during the purchase, and may bring many benefits, they are an additional cost to owning a home in many parts of the country,&quot; Lapin says. &quot;Furthermore, there can also be periodic 'one-time' additional assessments to cover special projects or budget deficits by the association.&quot;</p> <h2>10. Special Assessments to Cover Special Projects</h2> <p>Special assessment fees generally don't apply to single-family homeownership, but they can be a surprise aspect of condo living if you're not prepared. Recently, we had to replace the roof on our building in Manhattan to the tune of more than $1 million. Uh huh. I needed a minute when I heard that, too. With only 12 units in the building, the cost was divvied up between the owners based on the shares we held in the building. Needless to say, it wasn't cheap for anyone, and special assessments like these can force you out of your home if you're not financially capable of paying your share.</p> <p>Furthermore, if you're forced to move because you can no longer afford the mortgage plus fees, it can be difficult finding a buyer given the financially-strapped circumstance of the unit and the building. There's no real way to prepare for things like this &mdash; it's more of a roll-with-the-punches situation &mdash; but it's certainly something to consider before buying a condo.</p> <p><em>Are you a new homeowner? What are some of the pop-up fees you weren't prepared for? I'd love to hear about it in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house">23 Hidden Costs of Buying an Old House</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-forget-to-budget-for-these-unexpected-moving-expenses">Don&#039;t Forget to Budget for These Unexpected Moving Expenses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-100s-on-your-next-move">How to Save $100s on Your Next Move</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/first-time-home-buyer-consider-these-5-cities">First-Time Home Buyer? Consider These 5 Cities</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing expenses furniture hidden costs moving new homeowners utilities Windows Mon, 18 Apr 2016 09:00:05 +0000 Mikey Rox 1689028 at http://www.wisebread.com 10 Reasons You Should Really Fear an IRS Audit http://www.wisebread.com/10-reasons-you-should-really-fear-an-irs-audit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-reasons-you-should-really-fear-an-irs-audit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retro_calculator_000017912650.jpg" alt="Learning reasons why you should fear an IRS audit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's that time of year again. We all do our best to comply with the vast array of tax laws out there, while trying to get the deductions and rebates we're owed. But what if you make an honest mistake, or try to cheat the IRS, and get a dreaded audit? Is it really as bad as people say? Well&hellip; sometimes, it can be even worse, as these 10 reasons show.</p> <h2>1. The IRS Can Take Money Directly From Your Bank Account</h2> <p>Do not think, for one second, that the money in your bank account is safe and sound. The IRS has incredible power, and if they choose to do so, they can simply place a levy on your account and take your money. This happened to Joan Smith, a 52-year-old artist from Philadelphia. In 2010, she was preparing to go into the hospital for spinal surgery, when the IRS put a $10,000 tax lien on her account. This was, in fact, more money than she even had in the bank. And all because she did not receive an audit memo that was sent to the wrong address. It took her 11 months to dig herself out from that tax hole.</p> <h2>2. The IRS Now Has Six Years to Audit You</h2> <p>You may have been told that the IRS statute of limitations was three years from the date you filed your taxes. Not anymore. The IRS now has a series of exemptions that increase the amount of time they have to audit you. For example, if you omitted more than 25% of your income, the IRS can now hit you up six years after you filed. And, if you forgot to file certain forms, the IRS can audit you at any time in the future. Basically, 30 years from now, you could get a letter in the mail from the IRS. And if you no longer have records, you could be in trouble. Which brings us to our next point.</p> <h2>3. You'd Better Have Meticulous Records</h2> <p>If the IRS does come after you (and luckily, there's less than a 1% chance they will), they will want to examine certain records, receipts, proof of income, and anything else that may have triggered the audit. We all do our best to keep track of everything, filing it away in a safe place, and often storing copies electronically. But, if you lose some of those records, which can happen when you move, if you have a fire or burglary, or even by just misplacing them, you can wind up in real trouble. That big deduction you took for your home business? If there's no longer proof, then you can't have it. All that money you gave to charity? No receipts, no deduction. It really does pay to scan as much as you possibly can and store it on several hard drives and a cloud-based service. (See also: <a href="http://www.wisebread.com/i-lost-my-tax-documents-now-what?ref=seealso">I Lost My Tax Documents&hellip; Now What?</a>)</p> <h2>4. One Audit Can Lead to Another</h2> <p>So you get the dreaded audit notice. And in this case, it's not one that is handled by mail. You actually have to meet face-to-face with an auditor. Even if you are fully prepared, and have all your ducks in a row, you could say or do something that leads the IRS to audit more of your tax returns than the one in question. For instance, saying something like, &quot;Well, I have taken that deduction before and it was fine,&quot; could lead the investigator to look into several returns, not just the one that has been flagged. In the case of an audit, you may want to look into getting some legal help.</p> <h2>5. Auditing Can Take Years &mdash; And Cost Thousands of Dollars</h2> <p>Don't think that an audit is simply a few weeks of gathering up paperwork and checking a few boxes. Audits can sometimes take years. Take the case of <a href="https://www.mainstreet.com/article/tax-audit-horror-stories-will-haunt-your-dreams">Tim and Tracey Kerin</a>. Their accountant hadn't correctly evaluated their expense categories, which led to an audit. But, it didn't go smoothly. In fact, they ending up spending over 30 months battling the IRS to prove their innocence, spending over $95,000 in legal fees.</p> <h2>6. You Are Guilty Until Proven Innocent</h2> <p>Unlike the justice system, the IRS operates on the principle that if you have done something wrong on your tax return, you are guilty. You owe them money. You have to provide the paperwork to prove you are innocent, or you will face the full wrath of the system. If you cannot comply, you can literally wake up to find out your bank account has been frozen, and there's not much you can do about it.</p> <h2>7. If You Owe Money, the IRS Applies Penalties and Interest</h2> <p>So, you made a genuine mistake. You owe the IRS money. Well, you don't just owe them the unpaid taxes. You also have penalties to pay, and interest, too. As the <a href="https://www.irs.gov/uac/Newsroom/Eight-Facts-on-Late-Filing-and-Late-Payment-Penalties">IRS states on its website</a>, the &quot;penalty starts accruing the day after the tax filing due date, and will not exceed 25% of your unpaid taxes.&quot; That means if you owe $4,000, you may end up owing $5,000. Rather than incur the penalties from the IRS, find another way to pay, and get them their money quickly. You could arrange a home equity loan at a very low rate. Just get them their money, or the debt can really start to add up.</p> <h2>8. The IRS Can Garnish Your Wages and 401K</h2> <p>If you owe money, and don't have any way to pay back the sum of money owed, the IRS has the power to garnish your wages. Your employer has to comply fully with the IRS, and you will suddenly find your monthly paycheck has become smaller. Not only that, the IRS can also levy your retirement accounts, rental income, life insurance policies, or anything else of value. And this is all stated right there on the IRS website. This is a warning. If you have any doubts, ask Willie Nelson, Nicolas Cage, or Ja Rule.</p> <h2>9. The IRS Can Seize Anything of Value</h2> <p>One way or another, the IRS will get their money. If the audit reveals that you owe money, and you have no way to pay, then the IRS will start looking into your assets. If you own your vehicle, they can seize it, sell it, and apply the funds to your tax debt. Worse still, if the debt is large enough, they could actually take your home, sell it (they won't hold out for the best price), and apply that to your debt. If you do owe a large sum of money, you need to get professional advice. You do not want to be left homeless and penniless because of an IRS audit.</p> <h2>10. You Could Go to Prison</h2> <p>If worse comes to worst, you may actually find yourself behind bars. This is unlikely unless you are found guilty of major tax fraud and evasion, owing more than $100,000. But if it does happen, you have committed a federal crime and that can come with a hefty prison sentence; in some cases, up to five years. What's more, the fine could be as much as $250,000. Your whole life could be ruined, all because of a genuine mistake, an oversight, or because you put your trust in a bad accountant. When it comes to taxes, you do not want to mess around.</p> <p><em>Do you have any IRS horror stories? Or any advice on how to deal with an audit? Please share your experiences in the comments. </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/10-reasons-you-should-really-fear-an-irs-audit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-the-best-tax-preparer">How to Choose the Best Tax Preparer</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-are-your-chances-of-getting-audited-by-the-irs-your-guess-is-probably-wrong">What are your chances of getting audited by the IRS? Your guess is probably wrong</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ring-ring-ka-ching-lying-about-your-telephone-tax">Ring. Ring. Ka-ching! Lying About Your Telephone Tax</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-survive-a-tax-audit">How to Survive a Tax Audit</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/worried-about-an-audit-six-irs-red-flags">Worried About an Audit? Six IRS Red Flags</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes accountant audit cpa debt expenses IRS receipts tax evasion tax fraud Fri, 15 Apr 2016 10:30:10 +0000 Paul Michael 1689021 at http://www.wisebread.com 8 Debt Reduction Mistakes Even Smart People Make http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-debt-reduction-mistakes-even-smart-people-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_blindfold_money_000084064747.jpg" alt="Woman making debt reduction mistakes even smart people make" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everyone knows it is a good idea to reduce your debt load. With less debt, you save money on interest charges and reduce your risk of financial catastrophe if your income is disrupted and you are unable to make payments. If you don't have enough to make debt payments, you can fund investments and build wealth instead of working to get back to zero net worth.</p> <p>Some people are much more successful at debt reduction than others. What key mistakes prevent people from paying down your debts?</p> <h2>1. High Interest Accounts</h2> <p>It is hard to pay down the principal on a debt when the interest rate is high. Too much of your payment gets burned up paying interest charges and too little actually goes to paying down the debt.</p> <h3>How to Fix It</h3> <p>Use a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">balance transfer card</a> to move debt from a high interest credit card to a <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">lower interest credit card</a>, allowing you to pay off the principal faster and get out of debt sooner. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">How to Use a Balance Transfer to Pay Off Credit Card Debt</a>)</p> <h2>2. Negative Cash Flow</h2> <p>If your bills and payments are higher than your income, then you are not going to get out of debt! In fact, negative cash flow may be the reason your debt has built up in the first place. There are only two ways to correct negative cash flow: Lower your expenses or raise your income &mdash; or both!</p> <h3>How to Fix It</h3> <p>Consider debt consolidation to reduce your total monthly payments, find ways to reduce nonessential expenses, and look for side hustles to boost income.</p> <h2>3. Faulty Repayment Strategy</h2> <p>I was stunned the first time I saw personal finance advisers offering the advice to pay off your smallest debts first. This strategy for paying off debt is called the &quot;<a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">debt snowball</a>.&quot; You make minimum payments on all of your debts and put the rest of your available money toward paying off the smallest debt. After that smallest debt is paid off, you use the money that would have gone toward that debt to focus on the next smallest debt. This process is repeated until all debt is paid off.</p> <p>The reason the &quot;debt snowball&quot; strategy is surprising to me is that it is not the fastest way to get out of debt. Simple math shows that you will get out of debt faster and spend less money by paying off your highest interest debt first.</p> <h3>How to Fix It</h3> <p>Having any debt repayment strategy is better than not having a strategy at all. Use the &quot;debt snowball&quot; strategy if this motivates you, but paying your highest interest debt first will save the most money and get you out of debt fastest.</p> <h2>4. Adding More Debt</h2> <p>It you are working to pay down debt, obviously adding more debt isn't going to help. Why would anyone add more debt when they are trying to get out of debt? One reason this can happen is if unexpected expenses pop up and you have directed all available funds to paying off debts.</p> <h3>How to Fix It</h3> <p>Put off taking on new nonessential expenses until after you have paid off debts. Keep some cash in an emergency fund to help avoid using credit.</p> <h2>5. Not Tracking Progress</h2> <p>There is a reason that successful business people are so interested in looking at every financial report that comes out about their business. Feedback is essential to spot problems early and find areas for improvement to get even better results in the future.</p> <p>If you do not check your total debt on a regular basis to monitor your repayment progress, you might not be making progress at all. In fact, your debt could be growing and you wouldn't know it! You need to monitor your total debt and track how well your debt repayment plan is working.</p> <p>Once you start making progress in paying down your debt, seeing the smaller debt total every month can be a good motivator to redouble your efforts and get the debt paid off.</p> <h3>How to Fix It</h3> <p>Add up your total debt every month and monitor your debt repayment progress.</p> <h2>6. Not Everyone Is On Board</h2> <p>Many households have more than one person who makes spending decisions. For example, if you are focusing on debt reduction and your spouse is not, then you will probably not make much progress.</p> <p>I think numbers can be a good way to communicate about debt. Instead of debating purchases and problem spending areas, focus instead on agreeing on the big picture monthly budget numbers. Let each person make their own spending decisions to fit within the budget.</p> <h3>How to Fix It</h3> <p>Get all spenders committed to debt reduction goals and work together to agree on a budget plan.</p> <h2>7. Irregular Expenses</h2> <p>Getting the routine monthly bills under control can be manageable since you know what to expect, but it is easy to overlook those occasional expenses that don't follow a regular monthly billing schedule. For example, budgeting for vacations gives a lot of people trouble. When vacation time comes around, a lot of people end up getting out a credit card to cover at least some vacation expenses. In my house, vet bills are problematic since we have a lot of pets and they need expensive vaccinations and treatments at times. Many years, the vet bill has ended up going on a credit card and moving us in the wrong direction on debt reduction.</p> <h3>How to Fix It</h3> <p>Budget to set aside money ahead of time to cover irregular expenses such as vacations, pet care, and medical expenses.</p> <h2>8. Delay Starting Debt Reduction</h2> <p>For a lot of people, &quot;next month&quot; is always the best time to start debt reduction!</p> <p>Paying off debts is hard work. You have to track and control spending, and you will likely have to sacrifice buying things you want in order to pay off debts instead. It can be tempting to take another month to plan out your budget and figure out your strategy before you start seriously working on debt reduction.</p> <p>But delaying another month doesn't provide any advantage to getting your debt paid off. Your debt will hang around and maybe even keep on growing until you take action to turn things around and get it paid off. The sooner you get started, the sooner you will have your debt paid off.</p> <h3>How to Fix It</h3> <p>Start debt reduction now. Don't wait until next month.</p> <p><em>Which of these debt reduction mistakes has caused the most problems for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first">The Simple Way to Decide Which Credit Card to Pay Off First</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-this-if-you-have-too-much-credit-card-debt">Do This If You Have Too Much Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management cash flow expenses interest rates progress repayment strategies snowball method Thu, 07 Apr 2016 10:30:06 +0000 Dr Penny Pincher 1685087 at http://www.wisebread.com Everything You Need to Know About Switching to the Cash Only Lifestyle http://www.wisebread.com/everything-you-need-to-know-about-switching-to-the-cash-only-lifestyle <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/everything-you-need-to-know-about-switching-to-the-cash-only-lifestyle" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_cash_000009192860.jpg" alt="Woman learning everything she needs to know about cash only" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Have you considered using the cash system to get your budget under control? You're not alone. But what are the best practices? I'm going to share a few tips and tricks that work for my family. If you're totally new to this method, these tips should help you become a cash-carrying ninja in no time at all. (See also:&nbsp;<a href="http://www.wisebread.com/top-6-reasons-why-using-cash-only-rocks?ref=seealso">Top 6 Reasons Why Using Cash-Only Rocks</a>)</p> <h2>1. Plan Ahead</h2> <p>Carrying money around can be horribly inconvenient and even intimidating without a good plan in place. When I started out with cash, I was always worried I wouldn't have enough to cover what I was buying. Worse, I didn't have a clear understanding of exactly how much I spent in each of my budget categories.</p> <p>Now? I use cash for all our variable expenses. These core areas for my family include groceries, clothing, entertainment, household items, allowances, and other activities. At the start of each month, we get out half of the budgeted amounts in cash and divide them up into the categories. We get the second half out at the next pay period during the month.</p> <h2>2. Get Organized</h2> <p>A lot of people use an <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">envelope system</a> to organize their cash. And it makes good sense. Once you have planned ahead and budgeted out your amounts, you simply label envelopes, distribute your money into them, and get to sensible spending.</p> <p>I personally like to use one of those <a href="http://amzn.to/1Rhrlv1">mini expanding files</a> to keep everything together and clearly labeled. I also have a paper register where I track how much cash I've taken out of each category. It's a little old school, but it's a system that works well for me. You may want to use an Excel spreadsheet or budget app to manage your paper money.</p> <h2>3. Keep Track</h2> <p>At the end of each month, I try to make some mental notes about how everything went. Our needs as a family change and evolve over time. For example, we haven't bought many clothes lately, so we've been able to reallocate some of those funds into our grocery budget that seems to have ballooned since our daughter transitioned from toddler to preschooler.</p> <p>I also track any extra money we have leftover at the end of each month by category. As I observe the trends, I customize our budget accordingly. The thing I like about cash is that it's so physical. There's no ignoring it. It's either there or it isn't. So, it's a nice, in-your-face reminder of how we're doing with our variable expenses each month. The extra time it takes to pay attention is well worth it.</p> <h2>4. Mind Leftovers</h2> <p>Usually we use the surplus to do something fun as a family &mdash; go out to dinner, enjoy a movie, etc. Though lately we've considered adding it to our savings since we're expecting baby number two in the summer. The cool thing about leftover money is that it's, well, leftover. You can do whatever you want or need to do with it, depending on your current lifestyle and financial situation.</p> <p>We keep our excess funds in a big jar. This method, if you can call it that, might not work for everyone, but our budget is tight enough that it isn't overflowing. Still, it's a good place to grab cash as needed for incidentals, like random ice cream dates. If you're more into getting ahead or saving, you could consider pitching the money forward and taking out less for the next month. Or when you visit the bank for next month's withdrawal, put the leftovers straight into your savings account.</p> <h2>5. Think Safety</h2> <p>Above all, if you're carrying a load of cash around, you want to be safe about it. I try not to carry more than I need for any given shopping trip. So, if I'm going grocery shopping, I won't bring any of the other envelopes unless I need to. (If I'm getting household products in addition to food, for example.)</p> <p>I also don't bring the entire month's worth of funds with me when I go shopping. Instead, I calculate how much I might spend beforehand and bring only that much (or just slightly over what I expect to spend). It can be tricky, but with a little practice, you will get the hang of it. The worst that can happen is you have to leave something at the store.</p> <p>With regard to safekeeping at home, there are definitely good and bad ways to store your cash. Our jar is well hidden in the kitchen cupboards (though, I should probably go move it after telling you that). Also: We don't keep more than a set amount at home. If you plan to keep lots, make sure you add that amount to your home or rental insurance in case of emergencies. (See also:&nbsp;<a href="http://www.wisebread.com/the-best-and-worst-places-to-stash-cash-in-your-home?ref=seealso">The Best and Worst Places to Stash Cash at Home</a>)</p> <p><em>How do you handle keeping cash at home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-marcin">Ashley Marcin</a> of <a href="http://www.wisebread.com/everything-you-need-to-know-about-switching-to-the-cash-only-lifestyle">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-things-every-frugal-person-should-have-in-their-wallet">The 7 Things Every Frugal Person Should Have In Their Wallet</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/managing-your-short-term-money">Managing Your Short-Term Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-old-school-tools-to-help-you-stay-on-budget">6 Old School Tools to Help You Stay on Budget</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/sensible-ways-to-raise-cash-for-a-wedding">Sensible Ways to Raise Cash for a Wedding</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting cash Envelope system expenses money organizing planning Mon, 28 Mar 2016 09:00:05 +0000 Ashley Marcin 1678001 at http://www.wisebread.com 7 Money Fixes You Can Make When You're Stuck Inside Because of the Weather http://www.wisebread.com/7-money-fixes-you-can-make-when-youre-stuck-inside-because-of-the-weather <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-fixes-you-can-make-when-youre-stuck-inside-because-of-the-weather" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_phone_window_000068400755.jpg" alt="Woman making money fixes while stuck inside " title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Crazy winter weather have you stuck indoors? Take advantage of your lazy snow days around the house by digging deep into your finances to make a few (and perhaps much-needed) tweaks.</p> <h2>1. Call Your Service Providers About Reducing Rates</h2> <p>Recently I had a couple bills lying on my desk &mdash; one from the IRS and another from my doctor &mdash; that I had been putting off because I wanted to call their respective offices to ask about the charges and, ideally, reduce them. The bills sat there for weeks because I didn't have time to spend 30 minutes or more on the phone during my regular work hours (the IRS call took an hour and 45 minutes!). I made good use of my time inside during the recent blizzard to follow up.</p> <p>The calls saved me about $200. Outside of questionable charges and bills you may want to investigate, now is a good time to check in with your service providers to see what kind of new deals for which you may qualify, too.</p> <p>&quot;Whether it's your cable bill, car insurance, or even trash service, calling these providers regularly to ask about rate reductions is a great way to save money every month,&quot; says Kendal Perez, savings expert at Coupon Sherpa. &quot;Often times the threat of departure is enough to get someone to reduce your rates, but be sure to do your research to find out if there's a lesser-cost alternative out there. If your current provider won't budge and there's a viable alternative, take the snow day to get accounts switched over.&quot;</p> <h2>2. Download Some Money-Saving (and Making) Apps</h2> <p>You've probably heard about how smartphone apps can make and save you money, but maybe you haven't had the time or patience to download the apps and learn what they're all about. Now's your chance, and there are several ways you can boost your bottom line in just a few taps of your fingers. (See also: <a href="http://www.wisebread.com/8-ways-your-smartphone-saves-you-money?ref=seealso">8 Ways Your Smartphone Saves You Money</a>)</p> <p>Apps like&nbsp;<a href="https://www.varagesale.com/">VarageSale</a> and&nbsp;<a href="http://us.wallapop.com">Wallapop</a> let you sell unwanted items (like Craigslist, but way easier to use), while grocery-specific apps like Ibotta and Checkout 51 help you earn cash back on your purchases. (See also: <a href="http://www.wisebread.com/the-8-shopping-apps-thatll-actually-save-you-money-in-2016?ref=seealso">The 8 Shopping Apps That'll Actually Save You Money in 2016</a>)</p> <p>If you're really ambitious (and also looking for a sort of side gig), check out&nbsp;<a href="https://dogvacay.com/">DogVacay</a>, where you can watch people's pets and get paid for it, or Airbnb, if you have extra space in your home that you'd like to rent out to earn more income. All of these apps also have similar alternatives, providing plenty of platforms from which to choose.</p> <h2>3. Review Your Recurring Payments and Make Adjustments</h2> <p>As a personal rule, I don't have any automatic payments set up because I don't like the idea of an institution pilfering money out of my account when I'm not actively monitoring the fees. Errors happen all the time, and all the time they go unnoticed. That's not to say that you should avoid automatic bill-pay altogether &mdash; there's something to be said for its convenience &mdash; but you should, every once in awhile, check in to make sure everything is on the up-and-up.</p> <p>&quot;Automatic bill-pay is a great way to ensure you're never late on a payment, but these set-it-and-forget-it systems can be detrimental to your finances if you don't pay close attention to the charges,&quot; Perez says. &quot;Review recurring payments to determine a) if the charges are what you expect, and b) if it's still something you want to pay for. You may decide a gym membership or streaming membership are no longer worth your dollars.&quot;</p> <h2>4. Organize Your Finances on an Easy-to-Access Spreadsheet</h2> <p>One of the biggest problems that people with financial issues have is that they lack organization &mdash; and chaos begets chaos, as the old adage goes. Nip that problem in the bud once and for all by creating a spreadsheet that comprehensively compiles your finances across the board for easy access and upkeep.</p> <p>Harrine Freeman, financial expert and CEO of H.E. Freeman Enterprises, details a few category options to help you get started.</p> <p>&quot;Create a list of company names, account numbers, passwords/PINs, security questions/answers, account balances, minimum monthly payments, interest rates, how often you receive statements, due dates, customer service phone numbers, hours, customer service email addresses, and any other information you feel you may need,&quot; she suggests.</p> <h2>5. Purge Your Inbox of All Those Solicitation Emails</h2> <p>Cards on the table, I love my marketing emails &mdash; especially around my birthday (three cheers for free pancakes, cheeseburgers, ice cream, and candy!) &mdash; but they can become overwhelming, especially if you don't stay on top of your email regularly. I have friends who have thousands of emails in their inbox &mdash; <em>and I just can't!</em> For that reason, I love that Gmail now has a separate tab that auto-files promo messages, but it's also not a bad idea to go through and weed out what no longer interests you and unsubscribe.</p> <p>&quot;Snow days are a great opportunity to clean up your email, and when it comes to unnecessary spending, retail newsletters should be the first thing to go,&quot; Perez advises. &quot;While you may have received a nice coupon upon sign up, subsequent emails are only tempting you to spend more. The urgency associated with these messages coupled with the tempting images of stuff you desire most are tough to pass up, but can be immediately fixed with the click of a button.&quot;</p> <h2>6. Create the Budget That's Been on Your To-Do List</h2> <p>Don't have a budget established to keep your money on track and in the black from month to month? Tisk. I probably don't have to tell you that this is one of the touchstones of positive personal finance, and it's about time you caught up.</p> <p>Perez agrees.</p> <p>&quot;A snow day is a perfect opportunity to [create a budget],&quot; she says. &quot;Brew some coffee or tea and create a spreadsheet of all your recurring expenses. Record how much you've spent on groceries, gas, dining out, and any other activities over the last several months. This will give you a good idea of where your money goes and how you can economize to meet your financial goals, whether it's building an emergency fund, contributing more to retirement, or saving up for a vacation.&quot;</p> <p>This budget can and should be different and separate from the previous spreadsheet that you created, which serves as a broader and more comprehensive compilation of your whole financial picture. Your budget may fluctuate from one billing period to the next, while your overall financial spreadsheet may just serve as a reference guide.</p> <h2>7. Establish a Budget-Tracking Account</h2> <p>Prefer to manage your finances the new-school way? Skip the desktop-based system and go the cloud route by tracking your finances with an app.</p> <p>&quot;If a spreadsheet doesn't work for you, consider taking the time offered by a snow day to set up a budget-tracking account with a service like Mint,&quot; Perez suggest. &quot;You can list all your accounts including checking, savings, retirement, mortgage, etc., to get a full picture of your finances and budget. You can also set up alerts for when upcoming bills are due and when you're close to spending your limit in a budget category.&quot;</p> <p><em>What are some ways you'd spend your snow day making money fixes at home? Let's discuss in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-fixes-you-can-make-when-youre-stuck-inside-because-of-the-weather">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-we-are-likely-to-lie-for-money">6 Times We Are Likely to Lie for Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-im-spending-my-tax-refund">10 Smart Ways I&#039;m Spending My Tax Refund</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-financial-moves-to-make-the-moment-you-get-fired">11 Financial Moves to Make the Moment You Get Fired</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-year-end-financial-moves-you-must-make-now">10 Year-End Financial Moves You Must Make Now</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting bad weather bills expenses finances money moves organization snow days Wed, 10 Feb 2016 22:00:07 +0000 Mikey Rox 1653341 at http://www.wisebread.com 23 Hidden Costs of Buying an Old House http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/23-hidden-costs-of-buying-an-old-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_money_000021065464.jpg" alt="Learning the hidden costs of buying an old house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Buying an old house may seem like a great way to save some money. The purchase price is typically much lower than a newer house, especially considering the cost per square foot. Older homes tend to be located closer to downtown areas, which can be convenient and reduce transportation expenses. Plus, you may see potential to fix up an old house yourself and sell it for a profit.</p> <p>However, it's easy to overlook hidden costs that can hit you soon after you buy that old house, all of which trump any potential financial gains. Here are some of the hidden costs I learned about the hard way after I bought a 120-year-old farmhouse.</p> <h2>1. Big Energy Bills</h2> <p>The heating bill for our old farmhouse was over $300 per month before we added insulation. Check the utility bill history before buying an older house to see what kind of energy costs you are signing up for!</p> <h2>2. Air Conditioning</h2> <p>Older houses may not have air conditioning at all, or may only have a window unit in one room. Installing central air costs a few thousand dollars.</p> <h2>3. Furnace</h2> <p>Older houses may have older furnaces. Although a furnace can last 50 years or more, at some point the furnace will become unsafe or ineffective and will need to be replaced at a cost of thousands of dollars.</p> <h2>4. Roof</h2> <p>The roof of a house wears out over time and eventually needs to be replaced. Depending on how many layers of shingles have been installed, you may be able to add another layer, or you may need to tear off all of the roofing material and start over. Be prepared to spend a few thousand dollars if you need a new roof.</p> <h2>5. Exterior Painting</h2> <p>Wood siding requires periodic repainting. You can repaint a house yourself, but this is time consuming. It took me five months to repaint my house, working mostly on weekends and evenings. Hiring someone to repaint a house can cost thousands of dollars depending on the size of the house and the condition of the siding.</p> <h2>6. Siding Replacement</h2> <p>If you don't want to paint wood siding, you can upgrade to vinyl. The biggest problem with this is that new siding can cost $30,000 or more.</p> <h2>7. Window Replacement</h2> <p>Older houses often have single pane glass windows. With respect to energy efficiency, single pane glass windows are almost as bad as leaving the window open. Upgrading windows costs around $300 per window. Older houses tend to have a lot of windows, so this can add up quickly.</p> <h2>8. Lack of Storage</h2> <p>Older houses usually have much less closet space than newer homes. This means you may need to buy wardrobes and other furniture for storage, or install cabinets, or build closets yourself.</p> <h2>9. Electrical Services</h2> <p>Older houses may have an undersized electrical panel. Modern houses need at least 100 amp service to handle appliances and lighting. Upgrading the service panel can cost a few hundred dollars.</p> <h2>10. Electrical Outlets</h2> <p>New houses have abundant electrical outlets in every room, but older houses may only have one or two in each room. If you don't want to use extension cords, you may need to have some outlets installed at a cost of over $100 each.</p> <h2>11. Old Electrical Wiring</h2> <p>The insulation on old electrical wiring starts to crumble and can be a fire hazard. Old wiring is hard to deal with, since it can be difficult to remove and replace with new wiring. Rewiring an old house can be incredibly expensive.</p> <h2>12. Lead Paint</h2> <p>Before 1979, lead paint was used for both interior and exterior surfaces. Older houses may have lead paint, which is hazardous and expensive to remove. You may need to resolve any lead paint issues before you can sell an older house.</p> <h2>13. Asbestos</h2> <p>Another hazard in older houses is the potential to encounter asbestos. Asbestos was used for insulation and may be used in old floor tiles as well. Removing asbestos can be expensive and requires special equipment and expertise.</p> <h2>14. Wet Basement</h2> <p>Older houses may have settled over the years, resulting in cracks in the basement which leads to dampness and water issues. If you are planning to use the basement of an older house for storage or to remodel it into living space, make sure there are no water problems first.</p> <h2>15. Insulation</h2> <p>My old farmhouse had no insulation in the walls or under the floor! I added insulation and was able to recover the cost in a few years from lower energy bills &mdash; but initially, this cost thousands.</p> <h2>16. Well Expenses</h2> <p>If your older house has its own well to supply water, you are responsible for all costs of maintaining the well. I had to replace a well pump at a cost of about $2,000 and then had to add a chlorinator to resolve a bad water test result before I could sell the property.</p> <h2>17. Small Garage</h2> <p>You may be in for a surprise when you try to pull your SUV or minivan into the garage of an older house for the first time &mdash; it may not fit! Measure the garage or try to pull your car in when looking at an older house to make sure you will have a place to park.</p> <h2>18. Water Line for Refrigerator</h2> <p>Refrigerators that dispense water and ice are a relatively new invention. To put one in an older house, you may need to install a water line for your fridge.</p> <h2>19. Old DIY Projects</h2> <p>In an older house, you may encounter old do-it-yourself projects that are not up to code or are just plain ugly and need to be removed and redone. (See also: <a href="http://www.wisebread.com/15-cool-diy-home-improvements-for-50-or-less">15 Cool DIY Home Improvements for $50 or Less</a>)</p> <h2>20. Nothing Is Square</h2> <p>One thing that struck me when I moved from my old farmhouse to a brand new house was how square and level everything was in the new house. Improvements in an old house can be more challenging &mdash; and more expensive &mdash; because nothing is level due to settling over the years.</p> <h2>21. Uneven Steps or Sidewalks</h2> <p>Having uneven steps or sidewalks at an older house may seem like a minor problem, but this presents a trip hazard and it is expensive to correct.</p> <h2>22. Historic Restrictions</h2> <p>Some older houses may be classified as historic. This designation may result in restrictions on the type of remodeling and additions that can be done, and even what color you can paint it. This can force you to spend more than you planned on remodeling and can limit your potential to upgrade an older house and sell it.</p> <h2>23. Endless Projects</h2> <p>Constantly spending money for home improvement and remodeling expenses is a big drag on your budget. Those trips to buy more building materials and paint every weekend add up to significant money. It can easily end up being less expensive to buy a newer house that requires less work than taking on all of the challenges of fixing up an older house, even if the initial purchase price is lower.</p> <p>Before deciding to buy an older house, get a home inspection by an inspector experienced with older houses. Review the inspection report and make a list of all of the upgrades and repairs you think the house needs. Consider all of the hidden costs of buying an older house before taking the plunge.</p> <p><em>Do you live in an old house? How &quot;charming&quot; is it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect">10 Hidden Housing Costs New Homeowners Don&#039;t Expect</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-myths-about-real-estate">6 Myths About Real Estate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house expenses hidden costs home ownership old houses Wed, 10 Feb 2016 18:00:02 +0000 Dr Penny Pincher 1651573 at http://www.wisebread.com 9 Things That Cost More in 2016 http://www.wisebread.com/9-things-that-cost-more-in-2016 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-things-that-cost-more-in-2016" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bottled_wine_000023538266.jpg" alt="Learning which things that cost more in 2016" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If your New Year's resolutions included trimming the fat from your budget, you'll want to avoid these nine purchases that will see a price hike this year. (See also: <a href="http://www.wisebread.com/8-necessities-that-will-be-cheaper-in-2016?ref=seealso">8 Necessities That Will Be Cheaper in 2016</a>)</p> <h2>1. Cable and Satellite TV</h2> <p>NBC recently reported that DirecTV and AT&amp;T's U-verse packages, channel bundles, and premium channels will see increases ranging from <a href="http://www.nbcnews.com/business/business-news/cable-satellite-tv-costs-will-climb-again-2016-n484531">$2 to $8 per month</a>, a change that went into effect Jan. 28. Dish Network customers also will experience a similar pricing increase on its bundles, which started on Jan. 14.</p> <p>Cable industry watchdog Chris Brantner (Mr. Cable Cutter of CutCableToday.com) says these increases are not limited to just a couple companies. In fact, most of the big national names in the cable and satellite TV game will be jacking up prices.</p> <p>&quot;Comcast is raising its broadcast fee to $5 from $1.75, and its sports programming fee to $3 from $2,&quot; he says. &quot;Time Warner is raising both broadcasting and sports fees as well &mdash; from $1 to $3.75 and $2.25 to $5, respectively. This seems to be a yearly trend, as pay-TV prices have skyrocketed over the last few years, with average bills breaking $100 a month.&quot;</p> <h2>2. Medicare Premiums</h2> <p>If you're retired and new to Medicare Part B, beware. <a href="http://money.usnews.com/money/blogs/planning-to-retire/2015/11/20/some-retirees-pay-higher-medicare-premiums-in-2016">Double-digit price hikes</a> &mdash; about 16% over last year &mdash; went into effect at the beginning of the year. Previously enrolled Part B recipients aren't faced with the increase because Social Security didn't see a cost-of-living adjustment in 2016, and Medicare payments, by law, are prevented from increasing faster than SS payments. Thus, just consider the $16.90 more you have to pay per month than older retirees your dues for being the new kid on the block.</p> <h2>3. Netflix</h2> <p>Remember back in 2011 when Netflix announced it would increase its then $10 dual streaming-plus-DVD-by-mail combo plan to $16, and the Internet lost its collective mind? Netflix stock dropped 40% after the announcement, and some called on CEO/co-founder Reed Hastings to resign. Because unlimited DVDs, y'all!</p> <p>Well, Netflix has learned several lessons since then, and while it abandoned all those 2011 plans (including an ill-fated breakaway brand called Qwikster), it raised prices $1 to $8.99 in 2014, and it plans to <a href="http://money.cnn.com/2015/10/08/media/netflix-raising-price-standard-plan/">increase the price of its streaming service</a> by another dollar to $9.99 this May for new customers. If you're already a Netflix subscriber, however, you won't get hit until 2017.</p> <h2>4. Chocolate</h2> <p>If you can't trust Forbes, who can you trust? Its 2016 consumer predictions include higher prices for chocolate. According to the publication, &quot;the Ivory Coast, center of world cocoa production, is under strain from drought &mdash; putting the world's chocolate industry at risk.&quot;</p> <p>Better start rationing those leftover Kisses from Christmas.</p> <h2>5. Domestic Wine</h2> <p>If you fancy a nice glass of wine, you may have to switch up what you're drinking &mdash; at least from domestic bottlers.</p> <p>The blog SVB on Wine reports that according to its annual State of the Industry report, 41.74% percent of winemakers plan to <a href="http://svbwine.blogspot.com/2015/10/bottle-prices-are-going-up-in-2016.html">implement a small price increase</a>, while another 16.12% are planning a moderate increase in 2016. Another 2.07% are really going for the jugular with a strong increase. Alas, at least 34.71% of respondents will have pity on your pocket when you're at the liquor store: They'll hold prices steady they said, while an additional 5.37% will decrease prices slightly.</p> <h2>6. Postage</h2> <p>A summary of postage rate increases show prices for First Class Mail Letters, metered mail for First Class Mail Letter, and First Class Mail Flats will remain constant into 2016, but <a href="http://www.stamps.com/usps/postage-rate-increase/">most other services</a> will see an increase.</p> <p>Priority Mail Express recently saw an average rate increase of 15.6%, while traditional Priority Mail has increased 9.4%, as of Jan. 17. Other hikes include 11.6% for Priority Mail Express International, 10.2% for Priority Mail International, and 21.6% for First Class Package International Service.</p> <h2>7. Girl Scout Cookies</h2> <p>Your undying love for the Girl Scouts' Thin Mints will make your wallet a little thinner now that boxes of the good stuff are <a href="http://www.forbes.com/sites/katiesola/2015/11/05/girl-scout-cookie-price-increases-spark-outrage-but-experts-say-its-good-business/#16819fbf4deb">$5 in some areas</a> like Massachusetts and California, up from $4 last year. Pricing is set based on factors like ingredient costs, market size and availability, and shipping costs. From the new fee structure, troops would receive about $.90 per box sold opposed to the $.62 they made on the $4 box. Expect more troops across the country to adopt the new pricing in 2016.</p> <h2>8. Hotels</h2> <p>MarketWatch reports that according to the 2016 Global Travel Price Outlook, hotel prices around the globe are expected to rise this year, with North America taking the lead with a 4.3% increase. Hotel prices are estimated to increase 1.8% in Europe, 3% in Asia Pacific, and 3.7% in Latin America. Luckily, there are plenty of deals to cash in on &mdash; if you're a savvy shopper &mdash; and you can also save some dough by booking private short-term accommodations from services like Airbnb and Roomorama.</p> <h2>9. Prescription Medication</h2> <p>Drug companies aren't relenting on seemingly never-ending price increases. The Wall Street Journal reports that Big Pharma players like Pfizer, Amgen, Allergan, and Horizon Pharma &quot;have raised U.S. prices for dozens of branded drugs since late December, with many increases between 9% and 10%, according to equity analysts.&quot; Vanda Pharmaceuticals increased by 10% the price of its new drug Hetlioz, which treats a sleep disorder in blind people, resulting in a 76% hike from when it was introduced in 2014.</p> <p><em>Has &quot;Pharma Bro&quot; Martin Shkreli started offering classes on how to rip people off that we don't know about? What are you spending more for this year?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/9-things-that-cost-more-in-2016">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-five-senses-tricking-you-to-spend-more">Are Your Five Senses Tricking You to Spend More?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-resistance-bands">The 5 Best Resistance Bands</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-exercise-mats">The 5 Best Exercise Mats</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/chinese-money-habits-how-my-culture-influences-my-attitudes-toward-money">Chinese Money Habits - How My Culture Influences My Attitudes Toward Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Shopping cable chocolate expenses medicare postage price increases wine Tue, 09 Feb 2016 18:00:06 +0000 Mikey Rox 1650372 at http://www.wisebread.com When Location Isn't King: How to Choose Income Rental Property http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-location-isnt-king-how-to-choose-income-rental-property" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_moving_house_000057031510.jpg" alt="Woman learning how to choose an income rental property" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We've all heard the expression many times: &quot;When it comes to making a home-buying decision, the three most important considerations are location, location, location.&quot; But does that same rule apply to <a href="http://www.wisebread.com/turn-your-home-into-a-rental-in-9-easy-steps">rental properties as an investment</a>? Not necessarily. To illustrate, I'll provide an example from my storied past &mdash; in this case, the recent past.</p> <p>About five years ago I spent time looking at rental properties along the New Jersey shore. Over time I narrowed my focus to two neighboring towns &mdash; let's call them &quot;Poshtown&quot; and &quot;Middleville.&quot; Poshtown is a beautiful upscale community with quaint shops, large lots, and manicured lawns. Next door, Middleville is more of a mixed bag, with some very attractive sections, but also other areas crowded with seasonal rental properties often in need of some TLC.</p> <p>Next, I crunched the numbers. I gathered estimates of rental income and expenses for dozens of multi-family units listed for sale in both towns. Then I ranked each property from best to worst based on its monthly cash flow. Properties with the most positive monthly cash flow after all expenses rose to the top of the list. The following chart shows the highest ranked property in each town based on its estimated monthly cash flow:</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202015-12-18%20at%204.57.15%20PM_1.png" width="605" height="451" alt="" />&nbsp;</p> <h2>Why Cash Flow Is King</h2> <p>As you can see, the winner by far was a Middleville property with<em> positive</em> cash flow of $640 per month. By contrast, estimated cash flow for the highest ranked property in Poshtown was negative $1,365 per month. Adding to the rout, there were eight additional properties in Middleville with higher rankings (more positive monthly cash flow) than the highest ranked property in Poshtown.</p> <p>Why were the numbers stacked so heavily against Poshtown? The town's exclusivity added such a high premium to its home prices that rents couldn't make up the difference. Poshtown was a better location, but Middleville was a better investment.</p> <p>The lesson? For rental properties it's all about cash flow, cash flow, cash flow!</p> <h2>Other Factors Worth Considering</h2> <p>Alright, but surely &quot;location&quot; must be the second most important consideration, right? Sorry to disappoint, but in my experience the answer is still no. That honor goes to&hellip;condition, condition, condition. Here's why: If two properties have the same monthly cash flow at the time of purchase, but one requires tens of thousands of dollars in repairs while the other doesn't, then repair costs for the run-down property translate to more negative cash flow. Again, it gets back to the cash flow.</p> <p>Of course, there are other factors to seriously consider when looking into rental properties, and some of them aren't financial. For example, are you handy with repairs and making sure they're done in a timely manner? Are you willing to interrupt your evenings and weekends, even vacations, in order to address property issues? Perhaps most importantly, do you think you could effectively choose tenants and deal with them on a regular basis? If not, then becoming a landlord might not work for you.</p> <p>Before leaving this topic, I'd like to make one more point to illustrate the value of crunching the numbers prior to making a rental property purchase decision. This will require taking a look at two other properties, a $250,000 two-family house and a $150,000 condominium. I learned this lesson years ago when we purchased our first condo rental.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202015-12-18%20at%204.56.49%20PM_0.png" width="605" height="448" alt="" /></p> <p>In the example above, monthly cash flow at the time of purchase for the two-family is slightly negative and would flip to a positive $1,000 after paying off the mortgage. But notice how negative the condo's cash flow is. It loses $650 per month. Even after paying off the mortgage, which would free up $645, the best you could hope for is break-even cash flow. That's a red flag. I wouldn't buy it.</p> <p>This comparison illustrates the importance of two &quot;all other things equal&quot; factors in determining the attractiveness of rental properties. First, all other things equal, properties with fixed monthly association and/or maintenance fees are more challenging to turn into positive cash flow than those without. Condos, townhomes, and other properties governed by an association typically charge homeowners in the community such fees. These often add up to hundreds of dollars a month,<em> every</em> month.</p> <p>The second factor is, all other things equal, more rental units in a property is better than fewer. You are more likely to achieve positive monthly cash flow with a two-family than a one-family. And a three-family will usually do better than a two-family. Why? Because each additional unit brings in additional income, but not proportionately higher expenses. For example, the price of a three-family (and therefore its monthly mortgage payment) is rarely three times higher than that of a single family on the same lot. Also, property taxes and insurance won't be three times higher for a three-family than a one-family. Nor would monthly maintenance and repair costs.</p> <p>As you can see, rental properties have a different set of rules than those for a single family property used as your primary residence. And the most important of these rules is &mdash; you guessed it: cash flow, cash flow, cash flow!</p> <p><em>Have you considered investing in rental property?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make">8 Debt Reduction Mistakes Even Smart People Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect">10 Hidden Housing Costs New Homeowners Don&#039;t Expect</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-9-most-important-lessons-i-learned-about-money-when-i-became-a-landlord">The 9 Most Important Lessons I Learned About Money When I Became a Landlord</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cash flow expenses investments location rental properties Tue, 22 Dec 2015 14:00:07 +0000 Keith Whelan 1623601 at http://www.wisebread.com These 13 Numbers Are the Keys to Understanding Your Finances http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/these-13-numbers-are-the-keys-to-understanding-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_thinking_money_000059289248.jpg" alt="Woman using 13 numbers to understand her finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Understanding a few basic numbers can give you a good picture of your financial health and help you plan your future. You may have seen these terms mentioned in personal finance articles and in the news. Learn what these numbers mean and how to use them to improve your money situation.</p> <h2>1. Net Worth</h2> <p>Net worth is the most important measure of your overall financial health. The calculation of net worth is simple &mdash; in short, subtract everything you owe from everything you have:</p> <p><em>Net Worth = Total Assets - Total Liabilities</em></p> <p>Assets include all property you own (including cars, a home, etc.), savings, investments, and the money in your checking account.</p> <p>Liabilities include credit card debt, student loan balances, mortgage balance, auto loan balances, and other debt. It is possible to have negative net worth if your liabilities exceed your assets &mdash; this is a common situation for new college graduates who have student loan debt and few assets, for example.</p> <p>There are two ways to improve your net worth: Increase your assets, or reduce your debt. Do both simultaneously, and you'll be on your way to improving your financial health quickly.</p> <h2>2. Home Equity</h2> <p>Home equity is a measure of how much of your home you own based on its current value, including improvements and appreciation. Here's how to calculate your home equity:</p> <p><em>Home Equity = Current Market Value of Your Home - Mortgage Balance</em></p> <p>You can see that the calculation of home equity does not include the price you paid for your house. Home equity depends only on the current market value of your home &mdash; in other words, how much would it sell for today?</p> <p>As with net worth, home equity can also be negative in some situations. If your home value declines to less than your mortgage balance, you have negative home equity. This is also known as an &quot;underwater mortgage.&quot;</p> <p>A great way to increase home equity is by doing your own home improvement projects and repairs that increase the value of your home by more than the cost of doing the improvements.</p> <h2>3. Gross Income</h2> <p>Gross income is your total income before taxes and withholdings. If you are an employee, taxes and withholdings are taken out before you get each paycheck. You can find your gross income on your paystub.</p> <p>Most salary offers and salary statistics are given in terms of gross income. This is also the number that you report on income tax forms. Gross income can be confusing for budget planning, since you'll never really have this much money to spend. Use your <em>net income</em> instead.</p> <h2>4. Net Income</h2> <p>Your net income is how much money you get after taxes and withholdings are taken out. This is an important number because this is how much money you have available to work with to pay bills and to save and invest.</p> <h2>5. Market Salary</h2> <p>Market salary is how much you are worth in the labor market, depending largely upon your length of job experience, education, and location. Your market salary may not be equal to your actual salary if you are overpaid or underpaid. You can find your estimated market salary on survey websites (such as Salary.com).</p> <p>It is useful to know your market salary to bargain for a raise or to know when it would be worthwhile to look for a higher paying job.</p> <h2>6. Monthly Expenses (Burn Rate)</h2> <p>Monthly expenses (burn rate) is one of the most important financial numbers, and one that you have a lot of control over. This is the total of your expenses over a month, including housing, food, clothing, and transportation.</p> <p>Your burn rate is the amount you are actually spending each month, and there is always room to reduce this number to leave you with more money available to pay down debt or invest.</p> <h2>7. Investment Balance</h2> <p>Good for you if you are regularly contributing to investment accounts. Your investment balance is an important number since this will largely determine if and when you will be able to retire. Check it regularly to determine whether your investment strategy is meeting expectations.</p> <h2>8. Dow Jones Industrial Average (DJIA)</h2> <p>The Dow Jones Industrial Average is the stock market value that is most often reported in the news. This is calculated based on the value of a handful of large company stock prices and is currently around 18,000. The DJIA provides a general indication of the stock market's overall valuation and performance, and may give you a rough indication of how your stock portfolio is performing (assuming it's broadly diversified).</p> <h2>9. Cash Balance</h2> <p>Net worth does not reflect how much of your assets are liquid. For example, if all of your assets were invested in land holdings, you might have a hard time getting cash in a timely manner to buy food or pay your real estate taxes. Access to cash and other liquid assets (assets that can be sold rapidly to get cash) is important to be able to pay expenses.</p> <p>When I ran a small business, I learned that the three most important rules for success were:</p> <ol> <li>Never run out of cash;</li> <li>Never run out of cash; and</li> <li>Never run out of cash.</li> </ol> <p>These three rules apply to personal finance, as well. Make sure to have some cash available at all times to cover expenses that come up.</p> <h2>10. Emergency Fund Balance</h2> <p>Building an emergency fund is a step that many financial planners recommend for people trying to get out of debt. Putting cash into an emergency fund provides a cushion against using credit cards to cover unexpected bills. This practice also establishes the habit of saving money from every paycheck instead of spending it all.</p> <p>How much money do you have available to handle an emergency without running up debt? Experts recommend a minimum of three to six months worth of living expenses.</p> <h2>11. Credit Card Balance and Interest Rate</h2> <p>Many households carry a credit card balance. It is important to keep track of all debt, but credit card debt is especially important, since it usually carries the highest interest rates of any debt, and since it is easy to increase your debt without noticing.</p> <p>If you are paying a high interest rate on your credit card debt, save money by making a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">balance transfer to a card with a lower interest rate</a>. Try to reduce expenses so you will be able to pay off credit card balances faster. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=seealso">Best 0% Balance Transfer Credit Cards</a>)</p> <h2>12. Monthly Nut</h2> <p>I encountered this unusual term in an entrepreneurship course back in my college days. Your monthly nut is the <em>minimum </em>amount of money you would need to make it through a month. Your monthly nut includes basic housing, minimal food, and other essential expenses after unnecessary spending is eliminated.</p> <p>Your monthly nut is an important number to understand when you are planning to use as much of your income as possible to meet a goal, such as starting a business or getting out of debt as quickly as possible.</p> <h2>13. Inflation Rate</h2> <p>If you want to have enough money to buy the things you need in the future and throughout retirement, you'll need to account for the effects of inflation. Prices tend to rise over time, reducing the purchasing power of money in the future. Historical average for inflation rate is around 3%, but inflation rates in recent decades have varied from over 10% down to the current inflation rate of nearly 0%.</p> <p>For retirement planning, you will want to estimate your expenses, and then scale the expenses up based on the expected effect of inflation over the years.</p> <p><em>What key numbers do you track to monitor your personal finance health?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small Retirement Savings</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-boost-your-finances-while-you-sleep">7 Ways to Boost Your Finances While You Sleep</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance expenses financial health income investments net worth Wed, 09 Dec 2015 18:00:16 +0000 Dr Penny Pincher 1618971 at http://www.wisebread.com 13 Holiday-Season Costs Everyone Always Forgets About http://www.wisebread.com/13-holiday-season-costs-everyone-always-forgets-about <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-holiday-season-costs-everyone-always-forgets-about" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_christmas_000028436580.jpg" alt="Holiday season costs everyone forgets about" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Holiday time puts a strain on everybody's wallet, no matter what kind of budget you're working with. Factor in all of the under-the-radar expenses that everyone always forgets, and you're in danger of becoming a Grinch. Prepare yourself to better handle some of these hidden holiday-season costs so your spirit can stay merry and bright.</p> <h2>1. Postage for Holiday Greeting Cards</h2> <p>I used to spend hours and hours signing, sealing, and addressing holiday cards to my friends and family, and I always forgot to factor in postage. Not altogether, exactly &mdash; I knew I had to send them out &mdash; but I didn't prepare my budget for how much the postage actually would cost, which usually ended up around $100 or so. That's a whole gift's worth!</p> <h2>2. End-of-Year Tips for Service Professionals</h2> <p>Some service professionals you tip every time &mdash; hairdresser, masseur, manicurist, babysitter &mdash; and some you only tip once a year, like your doormen or mail carrier. Either way, it's important to factor in these &quot;holiday bonuses&quot; for all the people who do you well throughout the year. If you're thinking about skimping, don't do it. Now's not the time to be a miser.</p> <h2>3. Holiday Babysitting Premiums</h2> <p>Listen, we live in a free-market, capitalist society, where everyone, including that teenager up the street who babysits your kids, marks up their fees to reflect holiday pricing. If you want someone certified and trained in childcare, the price is even higher. Might as well get used to it.</p> <p>&quot;We charge additional fees and add automatic gratuities for holidays so that we can ensure that we will have babysitters that will be available for our clients,&quot; says Rachel Charlupski, founder of The Babysitting Company. &quot;A holiday sitter will cost between $250 and $500 for four hours depending on the reservation, number of children, and the city.&quot;</p> <h2>4. Personal Upkeep and Grooming</h2> <p>I don't know about you, but I like to look good when I'm enjoying the holidays. For me that means a fresh haircut, eyebrow trim, spray tan, and maybe a few new clothing items. For you, it might mean a mani, pedi, and facial. None of these services are particularly cheap, so you should think about what you'll need to feel confident about appearance this time of year and set that money aside.</p> <h2>5. Increased Gas and Electric Bills</h2> <p>Your outdoor holiday lights spectacular and round-the-clock heating costs a pretty penny. Plan for it, but also plan ways to cut down, like putting the lights on a timer, turning off the heat when you're sleeping, and lowering it during daytime hours in favor of sweaters and warm blankets.</p> <p>&quot;Something that a lot of people get blindsided by during the holidays is the sudden increase in energy costs. This is especially true in colder areas such as the northern U.S. and much of Canada, which rely especially heavily on natural gas for heat,&quot; says energy industry analyst Joel MacDonald. &quot;Households that only use a modicum of gas for cooking food and heating water suddenly see their usage skyrocket when the outside temperature drops, and in some years this is compounded by a spike in gas prices due to increased demand.&quot;</p> <h2>6. Higher-Than-Normal Grocery Bills</h2> <p>If you like to host holiday parties, expect your grocery bill to almost double what you normally spend in ordinary months. Feeding even a small crowd isn't cheap. Even if you're not hosting, you still have to factor in costs associated with holiday baking; snacks for school celebrations, if they're allowed, and foods marketed in seasonal packages, which always seem to find a way into your cart. Don't feel bad &mdash; mine, too.</p> <h2>7. Hidden-in-Plain-Sight Travel Costs</h2> <p>You've budgeted for the holiday flight, hotel, rental car, and gas, but that's just the beginning of this avalanche of financial assault. Personal finance expert Kevin Gallegos explains.</p> <p>&quot;Beyond the cost of an airplane ticket, it's easy to forget any needed cab, bus, or train rides to get to and from the airport; tips for porters, shuttle drivers, curbside check-in personnel; airport parking; any food and drink purchases made at the airport,&quot; he says.</p> <p>If you're not careful, you can put a decent dent in your vacation fund before you ever reach your destination.</p> <h2>8. Dining Out More Than Usual</h2> <p>Between shopping trips, holiday parties, kids' activities, and visiting friends and relatives, you'll spend more time on the go, which likely will result in more food on the go.</p> <p>Since dining out isn't cheap, you need to keep it in check as much as you can. Also, be mindful that all those groceries you just bought are going to waste much faster the more you neglect to eat them. It's a perfect storm for bleeding cash at a time of year you really can't afford it.</p> <h2>9. Gas for All That Extra Driving</h2> <p>You'll need gas to get around to all the holiday activities you have planned, and you'll be filling up your tank more frequently. A compromise to offset the cost of that extra fuel is to check GasBuddy.com for the lowest prices in your area (or download the convenient Gas Buddy app) and to sign up for any loyalty programs your go-to station may offer.</p> <h2>10. Post Office/Delivery Service Fees for Gifts</h2> <p>While a lot of retailers offer free shipping as a marketing gimmick this time of year, you may forget to account for those presents you buy at brick-and-mortars and have to ship yourself. As I mentioned earlier, postage isn't cheap &mdash; like, at all &mdash; and even a modest size package can cost upwards of $20. These fees can siphon a sizable chunk of money from your slush fund if you don't limit what you ship.</p> <h2>11. Stocking Stuffers</h2> <p>You've got a million and one presents wrapped under the tree, but &mdash; doh! &mdash; you forgot the stocking stuffers. Even a stocking filled solely with candy can set you back $10 or so, but these days kids expect more, like earbuds, lip balms, and other tiny but pricey items that can easily bump it up to the $50 territory.</p> <h2>12. Boarding Pets That Can't Travel With You</h2> <p>I love my dog very much, but for some reason, I always forget that he can't travel with me. Thankfully, my sitter is reasonably priced &mdash; though he'll need an extra tip, too. But if your holiday pet-sitting prices are anywhere near those holiday babysitting prices, you could be in for a doozy.</p> <h2>13. Last-Minute Host/Hostess Gifts</h2> <p>You should never, ever show up to a function &mdash; holiday or otherwise &mdash; empty-handed. If you're attending parties this season, pick up a few bottles of wine or other <a href="http://www.wisebread.com/6-holiday-gifts-hostesses-love">appropriate host(ess) gifts</a> while they're on sale. I'll let you in on a little secret, too: This is the perfect opportunity to regift something that you don't want or like, but I highly recommend sticking to consumable items, like chocolates or cookies, or items that might immediately add to the current party, like a board game. Whatever you do, don't regift an item in the company of the person who gave it to you! There are rules to regifting, my friends, and you're wise to brush up before you embarrass yourself.</p> <p><em>Are there more holiday costs that we all forget about? I'd love to hear your suggestions in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/13-holiday-season-costs-everyone-always-forgets-about">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-holiday-budget-pitfalls">Avoid These 5 Common Holiday Budget Pitfalls</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-to-have-a-no-spend-holiday-season">12 Ways to Have a No-Spend Holiday Season</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-bounce-back-from-your-holiday-splurge">How to Bounce Back From Your Holiday Splurge</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-great-gifts-for-5-or-less">25 Great Gifts for $5 or Less</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-frugal-christmas-decorating-hacks">14 Frugal Christmas Decorating Hacks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Shopping Christmas expenses gifts hidden costs Holidays Thu, 03 Dec 2015 16:00:32 +0000 Mikey Rox 1617397 at http://www.wisebread.com 9 Unexpected Expenses for Retirees — And How to Manage Them http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-unexpected-expenses-for-retirees-and-how-to-manage-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/grandparents_with_grandchild_000017586301.jpg" alt="Retiree couple learning how to manage unexpected expenses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've made the decision to retire. Congratulations! All that hard work and saving has paid off, and now you're ready to relax.</p> <p>If you've worked all your life and were diligent about saving, you may have most of your life expenses covered and funds saved for long-term care as you get older. And for the most part, retirees find that their overall expenses decline as they age. But there still could be unexpected costs that you haven't taken into account.</p> <p>Here are nine things that might hit your wallet harder now that you're retired:</p> <h2>1. Health Insurance</h2> <p>Yes, you may be getting Medicare, but that doesn't cover everything. Many retirees find that to get proper coverage, they will need to pay for a Medicare supplement. And even if you are covered under Medicare Part B, you may have to pay co-payments and deductibles. Older citizens should budget for additional <a href="http://www.wisebread.com/avoid-these-5-costly-health-insurance-mistakes">healthcare costs</a>, even if they believe they are fully covered.</p> <h2>2. Childcare</h2> <p>You thought you were done with childrearing? Think again. According to the Census bureau, about <a href="https://www.census.gov/prod/2013pubs/p70-135.pdf">23% of preschoolers</a> are cared for at least part time by a grandparent. Now that you're retired, you are more available to help with occasional babysitting or even full-time childcare for the grandkids. You're doing it out of love, but you may incur expenses ranging from extra food, kids' clothes, furniture, and kids' activities.</p> <p>If you're worried about the costs, be honest with the children's parents about how much you're spending and ask that they contribute. If the kids have certain favorite foods they like to eat at your house, buy those items in bulk. (My grandmother used to have a seemingly unlimited supply of chicken noodle soup for when I came over.) And don't be afraid to have the kids play with older and used toys, because there's a good chance they won't know the difference.</p> <h2>3. Utilities</h2> <p>When you went to work, there was no need to keep the AC or the furnace going during the day. But now that you're home, you may be adjusting that thermostat to make things more comfortable. (And this is exacerbated by the fact that older people are generally more sensitive to cold.) Plus, you may watch TV, use the computer, and run the appliances more often. All of this can add up to higher utility bills. Consider keeping the house at a slightly warmer temperature in the summer and slightly cooler in winter. You'll get used to it. Also, make the switch to LED light bulbs, and look into finding the most energy-efficient appliances you can buy.</p> <h2>4. Car Insurance</h2> <p>Auto insurance rates generally decline between the ages of 25 and 65, but they increase after that. That's because insurance companies view older drivers as a bigger risk, due to impaired vision, other physical problems, or decline in cognitive function. For older drivers, it pays to shop around for the best rates and even take a driving refresher course to prove you're still good behind the wheel.</p> <h2>5. Car Maintenance and Gas</h2> <p>When you were working, maybe you had a short commute or simply walked to the train station. Now, you're home all day and running to see friends, take care of grandkids, or volunteer. You would be surprised how much more you drive in retired life.</p> <p>To keep these costs in check, buy a small vehicle that suits your needs or even consider an electric or hybrid car. And when you do drive, plan your errands and trips strategically to cut down on excess mileage. Many retirees are also moving back into cities, where they can get around without a car at all. But be careful; moving to the city can be expensive. Speaking of...</p> <h2>6. Urban Living</h2> <p>The Washington Post reported that between 2000 and 2010, more than a million baby boomers moved to within five miles of a city center. Empty nesters no longer have to concern themselves with yard size, school districts, or other factors that keep them in the suburbs. But city living can be expensive. Housing costs more, and there's a temptation to spend money when you're surrounded by great restaurants, theatres, museums, and shopping. You might offset some of this expense with reduced transportation costs, but it you still may want to monitor your spending.</p> <h2>7. Charitable Giving</h2> <p>Older people tend to be very generous, and use some of their retirement savings to give back to causes that they've always wanted to support. According to Morningstar, charitable giving rates are relatively small and steady up until age 60. After that, giving comprises an increasing percentage of a person's annual expenses &mdash; up to 20% for America's oldest citizens. It's great to give, but be sure you can still cover your day-to-day costs and have enough saved for a long life. Consider donating shares of stock instead of cash, as you can avoid capital gains taxes and won't dip into your everyday savings.</p> <h2>8. Lawn Care and Landscaping</h2> <p>You always liked mowing your own lawn and doing your own yard work, but as you've gotten a little older, keeping up with the property isn't as easy as it once once. There's no shame in hiring someone to cut the grass or do some landscaping, but that work isn't free. Getting your lawn mowed might cost you $35&ndash;$40 each time, resulting in hundreds of dollars each month. To save money, do as much yard maintenance as you can on your own as long as you feel you are able. When you need help, seek out a neighbor or grandkid who might do it for free or cheap. (Heck, mowing my grandfather's lawn was the first paid gig I ever had.)</p> <h2>9. More Expensive Travel</h2> <p>You saved all your life to finally take a few big trips in retirement. And that's great, but be sure to take into account some extra expenses you might incur as an older citizen. For one thing, travel insurance is more expensive for older folks, because they are statistically more likely to cancel trips due to health-related problems. And even if you do go on a trip, you may find yourself paying extra for transportation or luggage handling when you may have previously taken care of things yourself. Be sure to factor in these extra costs when booking your next adventure.</p> <p><em>How is retirement costing you more than you expected?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">How Much Can You Afford to Spend in Retirement?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-products-that-arent-worth-your-money">6 Retirement Products That Aren&#039;t Worth Your Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small Retirement Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement child care elder care expenses insurance older americans seniors Mon, 30 Nov 2015 14:00:25 +0000 Tim Lemke 1616759 at http://www.wisebread.com How Much Can You Afford to Spend in Retirement? http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-much-can-you-afford-to-spend-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retirement_fund_money_000049360888.jpg" alt="Figuring out how much you spend in retirement each year" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've finally reached retirement. Your days of fighting rush hour traffic to get to the office are over. But now you face a new challenge: How much of your retirement savings should you spend each year? It's a big question: Spend too much and you might find yourself out of money 10, 15, or 20 years into retirement.</p> <p>&quot;There are different ways to approach retirement spending,&quot; says Celandra Deane-Bess, chair of the national practice group on retirement for Philadelphia, Pennsylvania-based PNC Financial Services Group. &quot;As you get closer to retirement age, we recommend that you take a more detailed look at your income and your living situation. There are so many factors that can alter how much you can afford to spend each year in retirement.&quot;</p> <p>Planning your retirement spending isn't something you can do with a simple formula, though the following formulas can give you a starting point.</p> <h2>Inflation and the 60%&ndash;90% Rule</h2> <p>Deane-Bess says that many retirees plan for their annual cost of living, because of inflation, to rise 2% to 3% each year. That's a good starting point. But she also pointed to research showing that some costs of living are growing faster than the rate of inflation. This includes one of the major ones that impact retirees: health care costs.</p> <p>Retirees will need to adjust that annual cost-of-living increase upward to account for the rise in healthcare costs, including the rising costs of prescription medications.</p> <p>One rule of thumb that retirees have long followed is that they should spend from 60% to 90% of their after-tax annual income each year in retirement. So, if you were earning $50,000 each year before you retired and you had an effective tax rate of 15%, you were living on $42,500 after taxes each year.</p> <p>If you decide that you need to spend 85% of your most recent after-tax yearly income in retirement, you'd need to have $36,125 available to you each year after retirement. You can generate that yearly income from your savings, pensions, Social Security, and any other regular streams of income you might have.</p> <p>Again, though, this is only a general rule of thumb. You can change how much of your pre-retirement income you'll actually need during your retirement years, Deane-Bess said. If you move to a less expensive home or community, for example, you might need to spend 60% of your pre-retirement income each year. If you live in a higher-cost area, you might need to spend the full 90% each year.</p> <h2>The 4% Rule</h2> <p>Another rule of thumb? The 4% rule. This rule says that you should withdraw 4% of <a href="http://www.wisebread.com/8-steps-to-starting-a-retirement-plan-in-your-30s">your retirement-savings</a> portfolio in the first year of retirement for your living expenses. You should then withdraw that same dollar amount, plus enough extra income to account for inflation, every other year of retirement.</p> <p>It's important to note, though, that this formula rests on the assumption that your retirement will last 30 years. If you're particularly healthy, and you might be retired for more than three decades, you might have to withdraw fewer dollars each year to make your money last.</p> <h2>Expect Some Expenses to Rise</h2> <p>&quot;People often forget that there are actually a few expenses in retirement that go up,&quot; Deane-Bess says. &quot;Everyone assumes that their expenses will go down in retirement. But not all of them do.&quot;</p> <p>For instance, if you are going to be home more often after retirement, your utility bills will typically rise. That's because your heat will be on all day and you'll be using more electricity because you'll be home more often.</p> <p>Some retirees also spend more on leisure, entertainment, or travel during their after-work years. Instead of taking one big trip a year, they might plan on taking two or three. They might take more frequent smaller trips to see their grandchildren.</p> <p>The takeaway? You need to look at your own retirement plans &mdash; where you'll be living, what you'll be doing &mdash; when deciding how much money you can afford to spend each year. Start with the rules of thumb, but tweak them to meet your needs.</p> <p>For instance, Deane-Bess said that retirees who want to travel frequently or live in a higher-cost community might need to withdraw just 2.5% to 3% of their savings portfolio every year.</p> <p>&quot;We are starting to see a pullback from some of the rules of thumb,&quot; Deane-Bess says. &quot;I have been in the industry for 18 years. When I started, there were lots of rules of thumb. But things are changing. Today, it's about taking a more detailed look at your individual retirement plans.&quot;</p> <p><em>How much do you plan to spend in retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-your-boomer-parents-could-afford-that-you-cant">8 Things Your Boomer Parents Could Afford That You Can&#039;t</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-making-these-10-bogus-retirement-savings-excuses">Stop Making These 10 Bogus Retirement Savings Excuses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement cost of living expenses inflation social security spending Thu, 05 Nov 2015 11:15:12 +0000 Dan Rafter 1605094 at http://www.wisebread.com 6 Ways to Save on Pregnancy Expenses http://www.wisebread.com/6-ways-to-save-on-pregnancy-expenses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-save-on-pregnancy-expenses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/pregnant_woman_belly_000046273858.jpg" alt="Woman finding ways to save on pregnancy expenses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Babies are expensive. But if you develop the mindset of saving money before your child is even born, it will be easier for you to raise them frugally. Here are some ideas to save you cash during your pregnancy.</p> <h2>1. Visit the Dollar Store</h2> <p>Pregnancy tests can be crazy expensive. Fortunately, you can also get them at the dollar store! Some people feel concerned about whether or not the cheaper tests will work. Luckily, the technology behind a pregnancy test is pretty basic and, as long as you don't need early detection and aren't concerned what the package looks like, the cheap ones work just as well as the regular ones &mdash; and can save you a bunch of cash.</p> <h2>2. Be Smart About Maternity Clothes</h2> <p>Instead of buying new, try hitting up your friends to see if anyone has maternity clothes you could borrow. Shop thrift stores, too (most have a small maternity section). Buy items you can still wear post-pregnancy, like shirts with empire waists, or use a <a href="http://www.amazon.com/gp/product/B005N7YWX6/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B005N7YWX6&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=VFEDZDMYKV3UN6PG">Bella Band</a> to extend the life of your regular pants. Sometimes, items in larger sizes will work just as well as maternity wear, and you will want these larger-but-regularly-cut clothes after the baby comes.</p> <h2>3. Add Practical Items to Baby Registries</h2> <p>A lot of people want to have useful things on hand when baby comes, but feel silly putting practical items, like diapers and wipes, on a gift registry. Here's the truth: You won't know if that expensive swing will work for your baby until after you have your child home, but every baby needs diapers. So put those practical things on your registry and let other people buy them for you. Gift cards are great, too.</p> <p>See also: <a href="http://www.wisebread.com/10-things-you-dont-actually-need-to-buy-for-your-new-baby-plus-5-you-must?ref=seealso">10 Things You Don't Actually Need to Buy for Your New Baby</a></p> <h2>4. Decide What You Need Based on Your Lifestyle</h2> <p>Instead of buying every baby item under the sun, try prioritizing based on what you already know. For instance, I love to take long walks, so I knew that I wanted to buy a really nice stroller during my first pregnancy. The point is this: You don't have to buy everything. Get what is important to you and wait on the rest. If/when you need it, you can get it then.</p> <p>See also: <a href="http://www.wisebread.com/which-baby-products-are-a-waste-of-money">Which Baby Products Are a Waste of Money?</a></p> <h2>5. Research Pregnancy Freebies</h2> <p>Lots of stores, like Babies 'R Us or <a href="https://www.amazon.com/gp/mom/signup">Amazon Mom</a>, offer point systems. If you pick one or two of these and use them regularly, you'll be able to earn free items. Since you'll do a lot of purchasing while you're pregnant, you'll be racking up points before the baby even comes. In addition, many doctors offices and companies offer all kinds of free samples if you just ask. Try things like formula, diaper creams, lotions, and more before you buy.</p> <h2>6. Compare Medical Costs</h2> <p>There can be quite a huge discrepancy between what different medical providers charge for the same procedures. Before you choose a doctor, hospital, or provider for any prenatal testing, check out all your options. This means doing everything from making sure that you are going to a provider covered by your insurance to figuring out who will give you the best price on things like ultrasounds.</p> <p><em>Have you saved money on pregnancy expenses? What did you do?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/6-ways-to-save-on-pregnancy-expenses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/great-financial-gifts-for-children">Great Financial Gifts for Children</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-more-ways-to-save-on-maternity-clothes">4 More Ways to Save on Maternity Clothes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-saving-tricks-to-know-before-buying-an-engagement-ring">12 Money-Saving Tricks to Know Before Buying an Engagement Ring</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-places-to-get-cheaper-diapers">5 Places to Get Cheaper Diapers</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-fun-games-that-teach-your-kids-about-money">6 Fun Games That Teach Your Kids About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family Shopping children expenses having a baby pregnancy Mon, 02 Nov 2015 11:15:15 +0000 Sarah Winfrey 1603185 at http://www.wisebread.com Ask the Readers: Have You Had Any Surprise Expenses This Year? http://www.wisebread.com/ask-the-readers-have-you-had-any-surprise-expenses-this-year <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-have-you-had-any-surprise-expenses-this-year" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_paying_bills_000069458259.jpg" alt="Woman stressing over surprise expenses this year" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Editor's Note: Congratulations to <a href="http://www.wisebread.com/ask-the-readers-have-you-had-any-surprise-expenses-this-year#comment-782998">EM</a>, Katie, and Kristin for winning this week's contest!</em></p> <p>Life happens! Sometimes, it happens in a way that forces you to spend money where you didn't expect to. According to the latest <a href="http://about.americanexpress.com/news/pr/2015/millenials-financial-outlook-to-improve.aspx"><em>American Express Spending &amp; Saving Tracker</em></a>, 53% of Americans had unforeseen expenses this year. The top categories were (as you can probably guess) car trouble, healthcare, and house related improvements.</p> <p><strong>Have you had any surprise expenses this year?</strong> What were they? Did you have enough funds to pay for it, or did you have to get creative with your budget?</p> <p>Tell us if you've had any surprise expenses this year and we'll enter you in a drawing to win a $20 Amazon Gift Card!</p> <h2>Win 1 of 3 $20 Amazon Gift Cards</h2> <p>We're doing three giveaways &mdash; here's how you can win!</p> <h3>Mandatory Entry:</h3> <ul> <li>Post your answer in the comments below. One commenter will be randomly selected to win a $20 Amazon Gift Card!</li> </ul> <h3>For Extra Entries:</h3> <ul> <li>You can tweet about our giveaway for an extra entry. Also, our Facebook fans can get an extra entry too! Use our Rafflecopter widget for your chance to win one of the other two Amazon Gift Cards:</li> </ul> <p><a class="rcptr" href="http://www.rafflecopter.com/rafl/display/79857dfa211/" rel="nofollow" data-raflid="79857dfa211" data-theme="classic" data-template="" id="rcwidget_3kpcd2kw">a Rafflecopter giveaway</a> </p> <script src="//widget-prime.rafflecopter.com/launch.js"></script></p> <p>If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.</p> <h4>Giveaway Rules:</h4> <ul> <li>Contest ends Monday, October 12th at 11:59 p.m. Pacific. Winners will be announced after October 12th on the original post. Winners will also be contacted via email.<br /> &nbsp;</li> <li>You can enter all three drawings &mdash; once by leaving a comment, once by liking our Facebook update, and once by tweeting.<br /> &nbsp;</li> <li>This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.<br /> &nbsp;</li> <li>You must be 18 and US resident to enter. Void where prohibited.</li> </ul> <p><strong>Good Luck!</strong>&nbsp;</p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us if you&#039;ve had any surprise expenses this year and we&#039;ll enter you in a drawing to win a $20 Amazon Gift Card! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/ask-the-readers-have-you-had-any-surprise-expenses-this-year">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-expenses-to-ditch-after-age-30">5 Expenses to Ditch After Age 30</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-should-kids-get-paid-for-doing-chores">Ask The Readers: Should Kids Get Paid For Doing Chores?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-do-gift-cards-make-a-good-gift">Ask the Readers: Do Gift Cards Make a Good Gift?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Giveaways Ask the Readers expenses Tue, 06 Oct 2015 15:00:55 +0000 Ashley Jacobs 1579420 at http://www.wisebread.com 3 Simple Ways to Split Bills With Your Spouse http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-simple-ways-to-split-bills-with-your-spouse" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_tracking_finances_000054290340.jpg" alt="Couple finding ways to split bills and finances evenly" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Even the happiest couples have arguments: Disagreements on how to raise the kids (I vote for boarding school), how to divvy up household chores (&quot;Oh no, honey, let me clean that for you&hellip; again&quot;), or even where to live (like as far away from the in-laws as possible). But those arguments are child's play compared to the mother of all head-butting in a relationship &mdash; money.</p> <p>Managing dual incomes and household expenses gets tricky, and there's no one foolproof strategy that'll work for everyone. If one spouse works while the other stays home, there typically isn't an issue of who pays what and how much they contribute &mdash; the working spouse usually handles it all. But when both spouses work and split expenses, coming up with a fair and reasonable plan is important if you want to <a href="http://www.wisebread.com/spouses-and-debt-whos-really-on-the-hook-for-those-bills">prevent financial resentment</a> and money fights from ruining your relationship.</p> <h2>1. Take Inventory</h2> <p>I think it's funny how some spouses can talk about everything under the sun, yet clam up when the discussion turns to money. Sometimes I just want to shake 'em. If I'm talking about you, listen up: You can't keep your head stuck in the sand. For a happy financial life with your spouse, you have to get candid and have these conversations, even though they may be uncomfortable. This isn't the time to be embarrassed about your credit card debt or the fact that you bring in considerably less. Before you can even think about splitting bills, you have to know what's coming in and what's going out.</p> <p>&quot;Sit down with your spouse and take inventory,&quot; says Ashley Feinstein Gerstley, CPC Certified Coach. &quot;While some bills will be different each month, you should be able to come up with a realistic range.&quot; This includes adding up your combined income, plus the total cost of fixed and variable household expenses, such as the rent/mortgage, utilities, groceries, transportation, insurances, etc.&quot;</p> <p>In this discussion, you also should decide which expenses to include in the split. You might agree to only split household expenses and make each of you responsible for your own personal expenses like student loans, credit cards, haircuts, or manicures. Which I recommend, by the way. You'll resent your spouse the first time he or she holds these expenses over your head if they're the one footing those bills. Cut back or man up; those are the only two choices you have.</p> <h2>2. Have Realistic Expectations</h2> <p>When splitting bills with your spouse, problems can arise when there are unrealistic expectations. It might seem logical to have a 50&ndash;50 split, with each spouse contributing an equal share to joint expenses. But this approach only works when both parties earn similar incomes. Think about this: If you earn $7,000 a month, your spouse earns $3,000 a month, and your shared expenses come to $3,000 a month, splitting the bills down the middle doesn't make a whole lot of sense. This approach ends with your spouse spending half of his or her income on household expenses while you only spend 20% of your income.</p> <p>David Bakke, a personal finance expert at <a href="http://www.moneycrashers.com">Money Crashers</a>, recommends a different plan.</p> <p>&quot;A more fair way to split bills is for each spouse to pay a percentage according to how much they make,&quot; he says. &quot;If one spouse makes 65% of the total household income, that's how much of the bills he or she is responsible for.&quot;</p> <p>This strategy ensures there's enough cashflow to cover household expenses, but allows each spouse discretionary income for personal expenses and building their personal nest egg, whether it's preparing for retirement or increasing their personal savings account.</p> <h2>3. Shared Expense Account or Separate Bills</h2> <p>Once you decide how much each person will contribute, the next step is deciding whether you'll have a single account for shared expenses, or pay your own set of bills from your own personal accounts. There's really no right or wrong way to handle this.</p> <p>With a shared expense account, you both contribute a set percentage and pay all bills from one account. It can work &mdash; just know that having a shared expense account means a lot of back-and-forth communication. There has to be enough money in this account at all times to cover your bills, and you must trust that your spouse doesn't take from this account unnecessarily, which can result in insufficient funds and overdraft fees.</p> <p>Another strategy, which can be just as effective, is deciding which set of bills you're responsible for, and then paying these bills from your own account.</p> <p>&quot;Under this strategy, each person maintains his or her own separate account and identifies which expenses each spouse will be responsible for, thereby, keeping a black curtain over accounts and maintaining maximum financial independence,&quot; says Andrea Rizk, founder and CEO of Risk Public Relations.</p> <p>This doesn't mean you're out of the loop with regard to expenses you don't pay. Some couples avoid this strategy because they feel financial problems can easily fall under the radar. If their spouse gets behind on a utility payment or the car payment, they want to know as soon as possible. This is perfectly understandable.</p> <p>So that you don't have any surprises later on, you and your spouse can agree to have your own set of bills, but also agree to manage all shared expenses online. You'll both hold the passwords to these accounts, giving you the freedom to check the payment status of accounts at any time.</p> <p><em>Do you split bills with your spouse? How do you make it work in your house? Let me know in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-to-never-do-when-sharing-finances">6 Things to Never Do When Sharing Finances</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-to-keep-your-money-separated-after-marriage">5 Reasons to Keep Your Money Separated After Marriage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-expenses-to-ditch-after-age-30">5 Expenses to Ditch After Age 30</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-before-moving-in-with-someone">What to Do Before Moving in With Someone</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/chinese-money-habits-how-my-culture-influences-my-attitudes-toward-money">Chinese Money Habits - How My Culture Influences My Attitudes Toward Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle expenses living costs marriage sharing money splitting bills spouses Tue, 15 Sep 2015 17:00:23 +0000 Mikey Rox 1554838 at http://www.wisebread.com