hidden costs

Watch Out for These Hidden Costs of Free Travel

Holly Johnson — Thu, 22 Mar 2018 09:30:19 +0000

Almost every day of the year, you can find a new story about a blogger who spent a month in some far-flung country for almost nothing out-of-pocket. And why wouldn't you believe them?

Travel credit cards do, indeed, offer points and miles that can cover the costs of airfare and hotel rooms. With a savvy strategy and enough stockpiled points, it's possible to craft a rewards-fueled plan that lets you travel for almost nothing. (See also: 5 Steps to Getting a Free Vacation in 9 Months or Less With Credit Cards)

The problem: Travel credit cards — and rewards cards in general — don't cover every aspect of your trip. They can pay for the bulk of your major travel components, sure, but you may come up short when it comes to covering other common travel expenses.

Hidden costs of travel to watch out for

There's nothing wrong with aiming for "free travel," but it's important to know what your real expenses might be so you can plan accordingly. How much does free travel really cost? We interviewed a handful of points and miles bloggers to find out some of the biggest expenses people fail to plan for.

Airline taxes and fees

According to Ariana Arghandewal, the blogger behind the popular Point Chaser blog, the biggest expense people forget about is airline taxes and fees. For domestic flights, these include the Passenger Facility Charges, U.S. Excise Tax, Domestic Flight Segment Tax, the September 11th Security Fee, and others.

International flights are also subject to a U.S. Arrival/Departure Tax, U.S. Customs User Fee, U.S. Animal and Plant Health Inspection Service Fee, and U.S. Immigration and Naturalization Fee. Foreign taxes, inspection fees, security charges, and departure taxes can add up to hundreds of dollars more, as can carrier-imposed surcharges. "Some airlines, like British Airways, even impose fuel surcharges, which can set you back over $1,000 round-trip to some destinations," notes Arghandewal.

Flight incidentals

Lee Huff, a travel writer who blogs for Boarding Area at BaldThoughts.com, says that, while some airline cards let you and your travel companions check bags for free, not all do. Checked bag fees can run you $25-$35 per bag, which could easy add up to $100 each way for a family of four.

Then there are other flight incidentals to be aware of. In-flight internet service on domestic flights (if you need it) can cost $5-$20 a day, depending on the airline and itinerary. Snacks in the airport can also be pricey, and so can drinks and magazines. Drive your own car to the airport and you will also need to pay for airport parking, says Huff.

Hotel extras

Even when you pay for a hotel with hotel points or a free night certificate, that doesn't mean you'll escape all costs of staying there. While hotels that let you book with rewards don't charge taxes on your stay, you could still be on the hook for parking, internet service, or resort fees. And let's not forget the costs of tipping housekeeping, if that's something you do.

Resort fees in particular can be costly, notes a report from the Federal Trade Commission. In 2015, consumers paid around $2 billion in resort fees on top of their nightly room rate, and many of those fees were not properly disclosed.

If you use points to book a hotel stay, make sure you understand ahead of time if the property charges resort fees. If you don't, you could be in for a nasty surprise when you go to check out from your free hotel room and find you owe a balance.

Food and entertainment

Even if you have the bulk of your trip covered with rewards, you still have to eat and have fun. You may think you will stop at a supermarket to stock up on groceries to make your own meals, but that doesn't mean you won't want to go out for at least a few meals, right? Make sure to plan accordingly for some dinners out so you don't overrun your travel budget.

Then there are excursions to plan for. If you want to visit local museums or attractions, you'll most likely need to pay an entry fee. Sure, there are tons of free things to do no matter where you travel, but many attractions cost money whether you like it or not. Even many natural attractions such as beaches and national parks charge an entry fee. (See also: 5 Natural Wonders You Can See for Free)

And what about souvenirs? Leana Storts, who blogs about credit card rewards at Miles For Family, says extras we buy can easily add up to hundreds or thousands of dollars if we're not careful. Storts recalls taking her family to New York City late last year, where her husband bought her daughter a $30 chocolate tower when she wasn't looking. Gifts like this can be fun in the moment, but they can send your travel budget into a tailspin, she says.

Transportation

What about taxis or public transportation? Unless you're visiting a small, walkable destination, you'll need a way to get around or even your own rental car.

And if you don't have a rental car, you'll at least need a ride to and from the airport. You can hire a private driver, pick up an airport taxi, call an Uber, or hop on a bus, but all of those options will cost you money.

How to avoid overspending on your rewards fueled trip

While each of these travel expenses may be reasonable and expected if you really think about it, it's important to take time to plan out each aspect of your trip if you want to avoid overspending.

Be realistic, advises Huff. "Make a list of the activities and food experiences that you really want to do, then research prices online," he says. "Budget for the big items, then have a daily slush fund that can be used toward all of the little things that you may not think about."

Plan for what's important to you, but make sure you prioritize your travel expenses. You may not be able to afford every travel extra your heart desires, but you may be able to afford most of what you want if you're intentional with your spending.

If you don't plan, Storts says you could wind up returning home from your travels with credit card debt. It would certainly be ironic to go on a "free trip" only to end up paying for it for months. And obviously, this would be especially bad if your credit card has a high interest rate, as many travel cards do.

"In general, I recommend always saving money for your trip ahead of time and sticking to a budget if at all possible," says Storts. To accomplish this goal, Storts suggests opening a separate travel account and contributing money every month. Then wait to book your trip until you have the cash you need for food, fun, and incidentals. "It's a lot easier to enjoy your vacation that way," she says.

Last but not least, make sure to have a travel insurance policy in place to cover any components of your trip you've prepaid with actual money and not miles. "If something happens and you can't take your trip, you won't lose your hard-earned cash," says Storts. "Travel is an investment of sorts, so make sure to protect it."

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This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Hidden Costs of a Luxury Car

Toni Husbands — Tue, 23 Jan 2018 10:00:06 +0000

You've seen the commercials: an oversized, red bow atop a shiny new luxury car in the driveway. You can all but imagine the new car aroma wafting while an exuberant recipient jumps for joy in his or her jammies.

Luxury cars make a statement. They say something about the owner's arrival into a land of accomplishment. They stand out in a sea of moderately priced alternatives. Heck, they just look better. But, they can also have you scrambling to stay on top of your finances.

Even if you've absorbed the sticker shock and accepted that a new luxury car will cost you more than the comparable non-luxury model, there are other hidden costs that can transform that new car smell into a rotten stench of budget overrun. (See also: 10 New Car Costs the Dealer Is Hiding From You)

Everything costs more with a luxury car. Do your homework before signing on the dotted line.

Insurance

Insurance is one of the not-so-sexy must-haves that every buyer must reckon with after leaving the car lot. As you would expect, a fender bender with your shiny new luxury mobile will cost more to repair. The insurance company will pass the cost along in the form of higher premiums.

Just how much your insurance costs rise depends on your new car. Let's compare a top-of-the-line Toyota Camry to an entry-level luxury model, the Mercedes C300. A fully loaded Camry in Chicago tops out at $33,000 according to TrueCar.com. Slide into an entry-level C-class Mercedes, standard frills only, starting with a $40,000 price tag.

A quick search on InsuranceQuotes.com shows that as a married woman in her 40s, I would pay $1,500 annually for the typical Toyota Sedan insurance premium. By comparison, I would fork out a whopping $2,689 a year to ensure my new hot Mercedes. That's an additional $1,189 a year, an 80 percent increase, to ride in style.

Gasoline

Fuel costs are another ongoing expense to calculate when considering a luxury car. Luxury cars, with their massive engines, are built for performance, not fuel economy. That's why premium fuel is required to keep these marvels humming. The national average for regular gas prices is $2.48 per gallon, according to AAA. That average jumps to $3.01 for premium prices.

In Illinois, we have the honor of paying even more for gas. Premium prices are currently an average $3.37 per gallon, while regular fuel costs around $2.62 per gallon. So my fuel costs on average per year will cost $1,800 annually for the Mercedes vs. $1,500 a year to drive a Camry, according to a calculator on FuelEcomony.gov.

Maybe you're not bothered by an additional $300 in fuel costs. We're not done yet.

Maintenance and repairs

Repairs will also cost you more for luxury models. The parts are more expensive. Technicians have to be specially-trained to work with the complicated gadgets. Even if you opt for non-dealer mechanics, repairs will undoubtedly add to your cost of ownership as the car ages. Non-luxury cars need maintenance, too, but repairs and upkeep are cheaper.

Toyotas are famous for their new car care programs. Toyota purchases include ToyotaCare, which covers factory-scheduled maintenance costs for the first two years or 25,000 miles. Your oil changes, tire rotations, and brake inspections are covered.

Mercedes, on the other hand, offers a prepaid maintenance package starting at $769. According to MBUSA.com, the Mercedes-Benz website, the package will save you 30 percent on routine maintenance costs over three years compared to paying as you go. This one-time fee covers the car for three years or 30,000 miles.

Once these new car protections expire, the difference between maintenance cost grows. YourMechanic.com ranks the cost to maintain all of the major car brands. Mercedes, not surprisingly, is one of the most expensive cars to maintain — right after BMWs — at nearly $13,000 over 10 years. A Toyota should cost only $5,500 to maintain over 10 years. In annual terms, the Mercedes costs $750 more than the Toyota to maintain. (See also: 6 Cars You Can Drive (Almost) Forever)

Depreciation and taxes

No one walks into a dealership and wonders how much depreciation will impact their cost of ownership. Maybe we should. This hidden cost impacts your car's resale value. Luxury car values continue to drop after standard car depreciation rates tend to level off. (See also: 3 Reasons Why You Should Never Buy a New Car)

The higher cost of maintenance and repairs has a lot to do with that. Think about it. Someone buying your used luxury car is taking on an expensive bill with their new-to-them car purchase. It will cost you more, in terms of lower resale value, to sell your car when you're ready to upgrade.

Kelly Blue Book has a handy tool that will allow you to compare a car's depreciation as a portion of the total five-year cost of ownership. Our Mercedes in this example would lose $27,000 by year five, versus a $16,700 loss for the Camry.

In the end, you may still decide you want the cush Mercedes over the practical Toyota. Either way, go into your decision with your eyes wide open about ongoing costs and total cost of ownership. (See also: Could You Put Away a Million Dollars by Driving a Used Car?)

Sales taxes are another consideration. State taxes vary based on your location, but given the higher purchase price of the Mercedes, you'll pay more taxes on it, too.

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Retirement Struggles Nobody Talks About — And How to Beat Them

Carrie Kirby — Mon, 04 Dec 2017 09:00:07 +0000

If you have ever sat down with a financial planner, you know that one of the main questions that comes up is, "How much income do you think you'll need when you retire?"

When I was asked this question, the first answer that popped into my head was, "Hardly any!" In the retirement scenario in my mind, my kids were independent and my home was paid off, leaving few financial obligations. When pressed, I acknowledged that I might need some money for taking fun vacations with all that free time I'll have, and for buying gifts for my grandchildren.

While it's true that a lot of the big expenses of our working lives have ideally been paid off by retirement, retirees still face a lot of financial obligations. Retirement is not all learning to paint or strolling on the beach — despite what prescription drug ads may lead you to believe. A 2016 study by the U.S. General Accounting Office found that retirees on average spend 77 percent of what they spent while they were working, with spending declining decade by decade as retirees age. (See also: 9 Unexpected Expenses for Retirees — And How to Manage Them)

Let's go through some of the retirement expenses you may not have accounted for, and how to deal with them.

1. Health care

While other expenses shrink after retirement, medical care spending increases. In the present day, the increase is modest. The same U.S. General Accounting Office report found that retirees ages 65 to 79 spend an average $5,000 a year on health care, compared to $3,900 for workers aged 50 to 64. But predictions for future health care expenses in retirement are dire.

HealthView Services' 2017 Retirement Health Care Costs Data Report predicts that medical costs will rise 5.47 percent per year for the foreseeable future — meaning that today's 65-year-old may be spending $10,000 or more per year on health care by age 75, on top of Medicare coverage.

"Health care will be one of the most significant retirement expenditures; however, the savings required to cover this expense may be modest — especially if one has been utilizing an income replacement ratio (IRR) of 75% to 85%," warns the report.

HealthView recommends talking to your planner not just about income replacement, but also about what you expect medical expenses to be based on your current health. Look at optimizing your retirement portfolio to address those needs. For example, some advisers recommend saving for retirement medical expenses using a health savings account — although these are only available to workers who have high-deductible health plans. (See also: How an HSA Could Help Your Retirement)

Managing health conditions proactively can also make a big difference in expenses over a lifetime.

"A 50-year-old male with type II diabetes can save (an average of) $5,000 per year in pre-retirement health expenses by shifting from Poorly Managed to Well Managed care," the report says.

2. Taxes

You might expect your income tax to disappear or decline steeply when you retire, but remember that withdrawals from 401(k) plans and traditional individual retirement accounts are taxable, as are most pensions and some Social Security benefits. If your retirement plan involves collecting rent on properties you own, well, that's taxable too. And if you have paid off your mortgage before retiring, remember that you just lost a big tax deduction in the form of mortgage interest payments.

The problem of taxes during retirement is the reason many workers also invest in a Roth IRA or Roth 401(k) plan. Unlike a regular retirement account, which you fill with untaxed income, only paying taxes on withdrawals, a Roth takes income you already paid taxes on, and withdrawals are tax free. Since no one knows how tax rates when you retire will compare to tax rates today, many advisers recommend spreading investments across both kinds of accounts to hedge your bets. (See also: Here's How Your Taxes Will Change When You Retire)

Another thing to consider when retired is whether you plan to make charitable donations part of your estate plan. If you were going to give away thousands of dollars to charities in your will, for example, discuss with an accountant setting up a schedule of giving while you're alive, instead, so that you could take annual tax deductions that could reduce or eliminate taxes you owe.

3. Inflation

In recent years, inflation has been low, but the long term average annual rate of price increases is 3.22 percent. That means that if you retire with benefits and savings designed to cover 80 percent of your current income, those same benefits will cover a smaller portion of your current spending each year, if not invested to grow at a rate faster than inflation. This is why financial planners never advise keeping your life savings in cash, stuffed in a mattress.

Of course in retirement you don't want to take on big risks with investments, since you can't earn more money to replace what you lose. But you also can't be too conservative or you risk having inflation shrink your savings each year. With interest rates as low as they are, you can't count on earnings from certificates of deposit to surpass inflation. For most retirees, that means you must have some money in stocks, bonds, or other investments. And you must stick to your investment plan, even if the market gets rocky. (See also: 7 Reasons to Invest in Stocks Past Age 50)

4. End of life

When you plan your retirement, you're likely thinking more about all the golf you want to play or the traveling you want to do, not so much about spending your final years in a nursing home or planning your funeral. Unfortunately, those less fun expenses must also be planned for.

Take a realistic look at how much assisted living and nursing homes cost. If you are still young enough to get it, look into long-term care insurance. Discuss with your family whether they expect you to move in with them if you need more care later in life, or if they would prefer you plan for nursing home care or assisted living. If long-term care needs seem imminent, meet with an attorney who specializes in making Title XIX plans; they can help you learn what assets can be shielded from being liquidated to pay for care. (See also: Is Long Term Care Insurance Worth It?)

Medical expenses tend to jump in the final years, costing about $7,000 to $8,000 more per year in the last two years of life, according to HealthView Services.

Consider prepaying funeral expenses so that it's not a cost hanging over your head as you enjoy retirement. And certainly meet with an estate planner as part of your retirement planning to make provisions for the distribution of wealth after you are gone. (See also: 9 End-of-Life Cost Savings Your Survivors Will Thank You For)

5. Mandatory withdrawals

The moment you turn age 70 and a half, you are required to take minimum distributions from your IRA, 401(k), and other retirement accounts on a schedule set by the IRS. This doesn't sound like a problem — after all, this is what you saved all that money for. But what if you don't need to spend the required distribution this year? Unfortunately, you still have to withdraw it, and pay taxes on it, or the IRS will confiscate 50 percent of the money you were supposed to withdraw in the form of a tax penalty.

While you can't change the IRS's schedule for required withdrawals, and you can't roll the distribution into a different tax-deferred account, you can plan for this requirement and schedule income and spending around it. For instance, you can avoid selling real estate or other investments, or scale back work hours if you are still working, and allow the income you are getting from your retirement account to replace other income. And of course, you can always invest your distribution outside of retirement accounts, if you don't need to spend it.

Another way to conquer the mandatory distribution is to plan for it while saving for retirement, for example by putting some income into a Roth IRA, which doesn't have required distributions. As you approach retirement, if your IRA distributions look like they will be too large for you to use, you may also talk to a planner about converting a traditional account into a Roth.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Cost of Finding a Treasure Chest Full of Gold

Paul Michael — Tue, 28 Nov 2017 09:00:06 +0000

Most of us have had the fantasy of discovering hidden treasure. Maybe it's digging in the backyard and unearthing a chest of gold, or it washes up on the beach. However it happens in your mind, finding treasure and living happily ever after is the end of the story. But what about the costs and legalities involved? How much of that treasure would you actually get to keep?

First, can you legally keep the treasure?

"Finders keepers, losers weepers." Is that an accurate description of the law when it comes to treasure, or finding anything of value? Well, yes and no. United States common law dictates that a treasure trove belongs to the finder. However, there are discrepancies to this in some states.

For example, Texas does not recognize the common law regarding treasure troves. In Louisiana, found treasure must be split between the finder and the property owner. In Tennessee and Idaho, the treasure belongs to the landowner.

In other states, you are required to make a reasonable effort to return found treasure to the rightful owner, which includes first taking it to the local police. If no one claims the find after a certain time period, it's yours. If you find treasure and do not report it or make efforts to return it to a rightful owner, you can be found guilty of theft. What's more, if the gold you find was due to criminal activity, it could well be claimed by the state if the rightful owner cannot be found.

So, make sure you are free and clear in the eyes of the law before you think of spending a cent from that chest of gold.

How much of the treasure will be yours to own?

Again, this is going to vary depending on what you found and where you found it. Look at the example of the Schmitt family and the treasure chest they found on a shipwreck in 2015.

Filled with gold and coins valued at over $1 million, it would seem they hit the jackpot. However, the haul was discovered on a wreck off the coast of Florida. By law, the state collected 20 percent of that $1 million, and as the wreck was owned by a company called Queens Jewels, LLC, the remaining gold had to be split 50-50 between that company and the Schmitts. That reduced their $1 million find to $400,000.

You may get lucky and find your treasure on a piece of land not owned by anyone, and live in a state that abides by the treasure trove law. But guess what? You still have to pay Uncle Sam ...

That treasure chest's value must be reported to the IRS

Taxes: It's a dirty word at the best of times, but it can really cast a dark cloud over your haul. IRS code section 61 states that "gross income means all income from whatever source derived." While the tax code does not specifically call out buried treasure, it has been left broad enough to collect taxes on whatever the IRS deems to be income. And you can bet a find of valuable gold coins or jewels will make the IRS sit up and take notice. You can look for legal deductions to reduce your tax burden, but don't avoid paying it altogether. If you are living a Champagne lifestyle on a beer budget, the IRS will become suspicious. (See also: 35 Bizarre Things You Can Be Taxed On)

Know what you're selling, and how to sell it

So, you've gone through all the steps, and the treasure chest is yours. It's time to sell the gold and pocket the cash, and you know you will have to report that money to the IRS. What are your options?

For a start, you need to know exactly what it is that you're selling. Not all gold coins and jewelry are made alike. In some instances, you may have a very valuable artifact that has historical significance, or was made by a highly-prized designer. In that case, the object will be worth much more than the going rate for an ounce of gold. If you have these items appraised, and they are indeed collector's pieces, you will most likely have to put the object up for auction. In that case, the auction house will take a percentage of the final value.

If, on the other hand, it's simply a bunch of gold that is worth the going market price, you should find legitimate sales avenues. The first place to go is a reputable jeweler in your area. Their main source of income comes from selling jewels, not trading in gold, and they will be less likely to rip you off. Avoid those "cash for gold" places; they will try to give you the least possible amount of money for your trade. The same is true of pawn stores. The owners aren't knowledgeable in what you have, and just want to buy low and sell high. Also, do your homework. What kind of gold do you have? If it's 24 carat gold, it will get the highest value.

A box of treasure is a lucky find however you slice it — but you will not get to keep the whole amount unless you're intent on breaking the law and accepting the consequences.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Unexpected Costs of Living in a Tiny House

Aaron Crowe — Thu, 23 Nov 2017 09:00:06 +0000

Not having a mortgage can certainly make life a lot cheaper. With the average price of a traditional home coming in around $273,000, according to Redfin, it's no wonder some people are turning to alternative housing in efforts to save more money.

The tiny house movement has gained a lot of traction in recent years, made all the more attractive by tiny home prices as low as $20,000. But there are some expenses that tiny homebuyers may not consider before building or buying a small home. Here are five of the most unexpected. (See also: Can Tiny House Living Actually Save You Money?)

1. Land

Adding the price of land to a tiny home's cost shouldn't be unexpected, but it can be forgotten about if the house is on wheels and you plan to move it. Even if you get a free deal to place your home on your parents' or friend's property, you should factor in the possibility that you may eventually want to move it. When you do, you may have to pay rent for a lot or space on the property of your choice.

2. Zoning laws

The jurisdiction in charge of the land you want to put your tiny house on will likely have laws on zoning, land use, building, and other red-tape headaches. None of these are cheap.

Zoning laws and building codes are meant to make sure a home is safe and in an area where homes are allowed. If your tiny house isn't approved by your municipality, a code enforcement proceeding could be started against you and you could be forced to remove your tiny home and pay a fine.

And while a tiny house built on a permanent foundation may have one set of zoning codes to follow, a tiny house on wheels that qualifies as a recreational vehicle will likely have others. An RV on wheels may only be allowed for temporary residential use, and it may be illegal to live in one unless it's parked at an RV or mobile home park. You'll need to check your local regulations so you understand the specific laws in your area.

3. Cost of being mobile

One appeal of a tiny home is that they're mobile, and can either be towed or put on a flatbed truck. If you're spending money to meet zoning laws and buy land, then being mobile may not be so cost-efficient. And unless you can safely tow your tiny house yourself with a truck big enough to haul it, you'll have to pay someone else to move it.

To be legal to tow, a tiny home must meet certain road requirements; namely, it can't be bigger than 13 feet by 6 inches in height and 8 feet by 6 inches in width, according to regulations in the U.S. Even if you have a truck with a big enough engine to tow a tiny house of 15,000 pounds or more, you'll want to ensure you can hook up trailer brakes to the truck, that your truck has the proper transmission for towing, and that you have the skills required to tow it.

These costs can vary, but Tiny House Giant Journey estimates the annual cost of towing their tiny house at $1,520. That includes gas, truck and trailer maintenance, truck insurance, campground fees, and propane.

4. Utilities

No matter how big or small your house is, utilities such as water, electricity, gas, and garbage are part of your living expenses. How do these utilities factor into the costs of living in a tiny home?

Probably not by much if the area you're living in has such services normally available. But if you're moving around often, you may have to pay hookup fees each time. You may also face other unique obstacles such as not being able to find drinking water that can easily be hooked up to your tiny home. You might also need to pay extra for things like a mobile internet service, which can be more expensive than service in a fixed location, and regular visits to the laundromat if you don't have room for a washer or dryer.

5. Resale value

Selling your tiny home sometime down the road may be the last thing on your mind when you first move in, but resale value could be a potential problem later on.

The tiny house market is too new to know yet if the resale value of these homes will go up. Location will likely play a big part, as it does for permanent homes. A home on wheels may be thought of more as an RV, which can depreciate quickly in value like a car.

And since a tiny home is so small, the new owner will have to be happy with the same customizations you chose if they don't want to spend a lot of money changing things. You may be OK having a small kitchen and a bigger living room, but another buyer may want it the other way around. (See also: 3 Ways to Finance a Tiny House)

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This article is from Aaron Crowe of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Autopay Is Great for Money Management — Until It Starts Costing You

Emily Guy Birken — Fri, 27 Oct 2017 08:30:08 +0000

I'm a big believer in the set-it-and-forget-it lifestyle. I have cleaning products and paper goods delivered to me monthly via an automatic subscription, so I never have to think about whether we're running short on laundry detergent or toilet paper. I've set up automatic transfers to savings and retirement accounts each month, so I never have to think about building my emergency fund and my nest egg. And I have several of my bills automatically paid out of my checking account so I never have to remember a due date. (See also: 5 Ways to Automate Your Finances)

Of course, what I love about all of this automation is exactly what makes automation potentially costly: When you don't have to think about something, you might end up forgetting about it.

While automatic payments allow you to effortlessly stay on top of your bills and other financial obligations, they can also become a budget leak that you aren't even aware of. Here's what you need to know about the downside to automatic payments, and how to make sure you don't automatically waste your money. (See also: 7 Ways Auto-Payments Can Screw You)

Automatic payment or gray charge?

Automatic bill payments that you've willingly signed up for can be a great way to manage your money and avoid late charges. But some automatic payments are actually what's known in the industry as "gray charges."

These are little recurring automatic payments that you have not necessarily agreed to and do not know about. For instance, I had to deal with a gray charge earlier this year when I realized (after several months had gone by) that I was being charged twice a month for a single digital newspaper subscription service. It turned out that each of my two subscriptions was associated with a different email address, and I had not realized I'd accidentally signed up for the second subscription.

I have no one to blame but myself for that unnecessary subscription charge, but most gray charges have much more pernicious origins:

"Free" trials that require a credit card: With this type of gray charge, the merchant is counting on you to forget that you provided a credit card to sign up for a free trial. Once the trial period ends, the merchant charges your card. These types of charges account for nearly half all gray charges.
Phantom charges: These gray charges piggyback on an online purchase you did make. With these types of charges, you might be charged for an extra product or service that you didn't request. For instance, a consumer might pay for their credit score without realizing they have also signed up for (and will be charged for) monthly credit monitoring. Phantom fees account for 18 percent of all gray charges.
Zombie charges: These types of gray charges are well-named, since they are the automatic payments that simply will not die even after you cancel your subscription or membership. A common example of a zombie charge is the gym membership fee that is charged to your credit card even after you have quit the gym. Zombie charges account for about 6 percent of gray charges.

The high cost of forgotten automatic charges

According to a study by Aite, gray charges on credit cards accounted for more than $14 billion in 2012, which translated to approximately $215 per cardholder.

It's completely understandable how this can happen. Often consumers will agree to a charge without realizing it because they did not read the terms of service. At that point, it's up to the consumer to notice the recurring charge on their account — and it often takes several months before the cardholder notices. By the time consumers realize what has happened and cancel the service, it often seems pointless to try to reverse the previous months' charges.

In addition, the majority of gray charges are perfectly legal, which means it can be next-to-impossible to get previous months' charges reversed. The companies that are using gray charges to pad their bottom lines are counting on the apathy and inattention of the average cardholder, and they unfortunately have the law on their side.

Combating gray charges

There are several options for keeping unnecessary automatic payments from taking a bite out of your budget.

1. Calendar reminders can keep you from paying for "free" trials

The companies that offer "free" trials assume that you will forget when the trial period ends — and they already have your payment information. The best way to take advantage of free trials is to set up a calendar reminder for the day before the end of the trial. That way, you'll remember to cancel the subscription a full 24 hours before you might get charged.

2. Read through the fine print

Skimming through the terms of service may be no one's idea of fun, but it's a lot better than having to make an angry call to customer service several months later and several sawbucks poorer.

3. Research complaints about phantom charges

Before you buy, Google the company whose product or service you are considering to see if anyone has had trouble with phantom charges from them. Then you'll know what to look for in the terms of service and you can determine if you can avoid charges by unclicking a box — or just choosing a different merchant, if necessary.

4. Review your statements regularly

Making a monthly date to look over your credit card and bank statements will help you identify gray charges as soon as they occur. You can call to cancel these subscriptions or notify your credit card that you would like to dispute the charge. In many cases, your credit card company will reverse the charges if you can prove that you did not consent to recurring charges.

5. Use apps to monitor your accounts

If you would rather not the spend the time combing over your accounts and canceling unnecessary automatic payments, there are several apps available that will do the work for you. Clarity Money helps you organize your entire financial life, including helping you to find and cancel unused subscriptions. Trim identifies recurring payments that can be canceled and will take care of contacting the merchant on your behalf to do so. Truebill notifies you of subscriptions that can be canceled and offers you a one-click cancellation process.

Stay on top of your automatic payments

Automatic payments are a major boon to busy budgeters. But it's important to remember that your automatic payments should be like the cruise control on your car: It can relieve you of a little work, but you can't fall asleep at the wheel. No matter how automated your financial life may be, you need to still keep an eye on things to prevent automatic payments from causing a financial crash.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Unexpected Expenses of a New Baby

Carrie Kirby — Tue, 24 Oct 2017 09:00:06 +0000

Can you afford to have a baby?

You may have calculated obvious costs such as diapers, clothing, food, and day care, but don't be too quick to assume that you've accounted for everything. According to the United States Department of Agriculture, middle income families spend an average $12,980 a year on each kid, and $233,610 in a lifetime, not including college.

When I was expecting my first baby, I thought there was no way I could spend that much. I may have been more frugal than most, but I still ran into all kinds of expenditures — and decreases in income — that I hadn't anticipated.

Watch out for these unanticipated ways a baby may impact your family budget. (See also: 24 Tips for Having a Baby Without Going Broke)

1. A birth that doesn't go as planned

If you have a high-deductible health plan or no health insurance at all, you may have carefully planned for a low-cost birth. That's smart. But one thing I learned from having three babies is that "birth" and "plan" can be oxymorons. So many factors are outside your control, such as when and where your labor begins, whether the baby has any trouble making their big entrance, and what kind of care you and the baby need after the birth.

I know couples who planned a homebirth with a midwife, but ended up being transferred to the hospital in an ambulance for a C-section. If you are birthing at home or at a non-hospital birth center, both of which can be great choices, please have a financial plan for what happens if you get transferred. You will be under enough stress on the day of without adding financial unknowns to the mix. (See also: 10 Newborn Costs That Took Me by Surprise)

2. Higher utility bills

When my husband and I were childless, we lived in a San Francisco flat with no central heat and we typically ran our electric wall heaters an hour a day or less.

Once we brought home our first child, our electricity bill jumped for two reasons: One, we felt that baby needed a warmer room to sleep in at night, not to mention the fact that I had to leave the cocoon of blankets multiple times a night to feed her. Two, since I took a six-month maternity leave, then left our child at home with a nanny, our apartment was suddenly occupied nearly 24/7 instead of only on evenings and weekends. We ran the heat much more, kept more lights on, and certainly ran more loads of laundry and dishes. If you decide to use cloth diapers, expect your laundry use to increase even more than average. (See also: Everything You Need to Know About Cloth Diapers)

3. Convenience food

When I stopped working full-time to stay home with my new baby, I expected to make more home-cooked meals. In the long run that was true, but in the early months, I had trouble getting dinner on the table. Like many babies, my infant fussed most in the late afternoon, and often I couldn't put her down without her screaming. Many things can safely be done with a baby strapped to your body, but stirring a dish over a hot stove or putting a casserole in the oven aren't among them.

For many households — especially if both parents work and have limited time between day care pickup and dinner — bringing home a baby is going to mean also bringing home more pizzas, ordering Chinese, and heating up Trader Joe's fake out. Don't guilt yourself about it; just budget for it.

4. Health care

Your health plan may not charge copays for the well baby visits scheduled frequently during the first year, which is great. But keep in mind that these may not be your only doctor visits. An ear infection may lead to two visits and a prescription. For one of my babies, a cold turned into a hospitalization for pneumonia. Another had frequent chest congestion that necessitated a breathing machine at home.

If you have been on a health care plan that only covers major illnesses, you may need to look into a plan that covers more frequent visits before your baby is born.

Then there are all the nonprescription supplies that you might buy for minor infant health concerns: baby Motrin, teething gel, a humidifier to ease congestion, medicated cream for eczema or rashes, a high-tech thermometer, so on and so forth. All these things add up, and quickly.

Babies have to be taken to the doctor so often — weekly at first, then monthly, plus sick visits — that even transportation costs for getting to the doctor may have to be taken into account.

5. Loss of income

The last time I earned a full-time paycheck was 13 years ago. I may never earn one again.

My family is an extreme example — many must and do have both parents return to working full-time within six weeks of birth. But I took six months away from my job after my first birth, some of that time unpaid, and then returned as a part-time worker. While pregnant with my second child, I quit my job altogether. I only began contributing freelance income to the family budget gradually as my kids got older.

Even for families where both parents plan to keep working full-time, income may decline. Both parents may pass up opportunities for overtime. Time for side hustles evaporates. Parents may have to take unpaid days off if the baby is sick, or for those numerous well baby visits. (See also: 12 Side Jobs for Stay-at-Home Moms and Dads)

6. A bigger house

My husband and I brought our first baby home to a 750 square foot, one-bedroom apartment with no immediate plans to move. After all, the American Academy of Pediatrics recommends sharing a room with your baby! We were sure we would be cozy.

Unfortunately, we almost immediately felt crowded out by baby equipment, not to mention the fact that there was nowhere to escape to if the baby was crying and one parent was trying to sleep or work. Living in a building with shared walls also became a problem, especially when the baby learned to bang her toys on the floor.

Housing accounts for around a third of the expense of raising a child, according to the USDA. If you think you won't move after you have a baby, go to some open houses and ask the sellers why they're moving. Lots of them will tell you it's because their family is growing. And if you don't move after the first baby, you will probably want a bigger place once the second is on the way.

Our family moved out of that one-bedroom flat into a three-bedroom house around the time that our second baby was born. The mortgage is twice what we paid before having kids. (See also: 5 Easy Ways to Make Room for Baby)

7. A larger car

You do not need to rush out and buy a minivan the moment you see two pink lines on the pregnancy test. However, it can be shocking how much space today's infant seats take up in the back seat. If you've been driving a two-door compact car, you may find yourself wanting something larger after the baby comes. And if you have more than two children, good luck fitting their car seats in the back of any sedan. The first baby saw us upgrade from a two-door hatchback to a Subaru; the third child sent us from the Subaru to small sport utility vehicle.

8. Life insurance

Before having kids, my husband and I didn't worry about life insurance. If I died, my husband would have been able to handle the payments on our condo by himself, and vice versa.

But once you have a child, you have to ask yourself what would happen if one parent suddenly died. Your child would likely receive Social Security payments, but would this be enough to keep living where you live, to pay for child care while the surviving parent works, and to save for college? And what if both parents died?

Life insurance costs can vary widely depending on your overall health and lifestyle and the specifics of your plan. However, you need to seriously consider this expense once you become a parent. (See also: Term vs Whole Life Insurance: Here's How to Choose)

9. Child care

Of course, you knew before you had a baby that you weren't going to be able to leave it home alone while you worked. But you probably didn't realize just how much child care would cost. According to a recent NerdWallet study, half of expecting parents thought diapering would be the biggest expense of having a baby, not child care.

According to that study, the cost of full-time child care ranges from $8,000 at a day care center to $27,000 or more for a nanny.

Even if you had realized that child care would be expensive, you may find yourself paying even more than you'd imagined. For instance, when my first child was born, I hoped I wouldn't need child care because I planned to change my work shift to evenings. That plan collapsed when my boss turned down my request. My second thought was to use a day care center, but I quickly found out that all the centers in my urban neighborhood had years long waiting lists for infant care. Home-based day cares were more affordable and available, but each one I visited had a worrisome condition, such as kids sitting in front of the TV for hours or being left crying in their cribs well after naptime. I finally ended up sharing a nanny with another family, at a cost far higher than I had anticipated.

10. All the cute things

You might think that you won't waste money buying clothes and toys for your newborn. After all, you got all those clothes at your baby shower. Then you meet your baby and realize that she's the most beautiful creature on earth and that beautiful creatures need accessories. After my first child was born, I developed a habit of popping into the Gymboree near my work regularly to see if new styles were in and if anything had gone on sale. This routine did not help our family budget.

11. Feeding

If you're planning on breast-feeding your baby, you might expect that to be free, right? Not exactly.

A surprising number of newborns have trouble getting the hang of breast-feeding. You might need to consult a lactation specialist just once to help your infant latch and learn to suck, or you may need multiple home visits. You may need to buy products, such as nipple shields, to help the latch happen. All this struggle may wreak havoc on the mother's body and soul, necessitating anything from nipple cream to doctor visits for mastitis to seeing a counselor.

Whether your baby succeeds immediately at breast-feeding or not, you still probably need a breast pump. You'll also likely need a better, more expensive breast pump than you thought. I've tried a lot of them, and trust me, a cheap breast pump will not enhance postpartum life.

Many parents end up bottle feeding instead of or in addition to breast-feeding, which brings the expense of formula and bottles. You might even buy a sanitizer for the bottles, an insulated carrying pack for either breastmilk or formula, or a mini fridge for the office or nursery.

In the second half of the first year, your baby will start eating solids, an occasion you can mark by purchasing many kinds of organic foods for him to spit onto the kitchen walls, and new feeding gadgets such as suction cup bowls and spoons that hold puree in the handle. Expect to throw away most of the food you purchase, either directly from the container because it went bad before your baby finished it, or after scraping it off the floor, walls, cupboards, and your own clothing.

12. Specialists

Taking care of a baby might sound easy before you try it. After all, humans have been doing this since they lived in caves. If that were true, though, there wouldn't be so many specialists out there ready to help you figure it out for an hourly fee.

You might realize after you come home from the hospital that you need a postpartum doula or baby nurse to help you get back up to speed and get a few hours of sleep at night. Many more families than you would imagine consult a sleep specialist to help them figure out how to get their infants to sleep.

13. Baby gear

Before my first was born, I read a book called The Baby Book by a certain Dr. Sears. This book, which embraces attachment parenting, convinced me that I wouldn't need anything but my own arms and maybe a sling to care for my baby. After all, I would never want to turn my baby over to a mechanical device like a swing when I could be cuddling her in my arms.

Then I brought the baby home, and I realized that sometimes I needed to use the bathroom or shower or cook dinner. This wasn't really covered in the book. We purchased our first baby swing, a weak little portable model. By the time we had our third baby, I had the most powerful swing on the market downstairs, another swing for upstairs, plus a bouncy seat for the bathroom, two strollers, and countless other pieces of baby gear.

Even if you think your baby shower will cover your gear needs, the fact is that you will end up spending money on baby equipment. Don't feel the need to buy every single product that's advertised for babies, but accept the fact that there will be gadgets, and some of them really help.

14. Replacing things that baby wrecks

That sweet thing can't even raise his head; how could he destroy your possessions?

Just wait.

My babies have slobbered and mouthed a cellphone into oblivion. They've grabbed fragile things that I thought were out of reach and flung them. They have vomited on strangers and caused me to have to pay for those strangers' meals. They have stretched out the necklines of my shirts while reaching for my breasts. One of them even wrecked an expensive ballpark beer before I got the chance to take a sip by throwing a cleaning wipe into the cup.

And oh, the pacifiers. I have surely spent thousands of dollars replacing pacifiers that babies flung out of car windows, dropped in the park, and just disappeared into the baby ether.

You really can't have nice things with a baby around. And even your mediocre things will need replacing or professional cleaning more often than you'd expected.

15. Entertainment and education

Before I became a mother, I laughed out loud at a colleague who told me he took his infant to a music class. But when I was on maternity leave with my daughter, the hours began to weigh on me. We needed somewhere to go, and you can only grocery shop so many times per day.

We signed up for a baby sign language class and later — yes — a baby music class.

For the parents, there are also continuing education classes to pay for, such as infant CPR. And if you stay home with your baby, there's the cost of being out and about instead of sitting in an office all day. I found myself spending on things like lattes and lunches with other moms, just because I was out pushing the stroller.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Things to Consider Before Buying a Home When You're Single

Camilla Cheung — Tue, 18 Jul 2017 09:00:09 +0000

It's become increasingly common for people to buy a home by themselves instead of as a couple. According to the National Association of Realtors' Profile of Homebuyers and Sellers, new homeowners in 2016 were comprised of 17 percent single females and 7 percent single males.

Buying a home is a big undertaking, whether or not you're doing it as a single person. I spoke to Markus Brown, a realtor in Orange County, California, about some things to consider before buying a home by yourself.

1. Understand the risks

As a single person, is it better to pay rent or to own a home? The monthly costs of owning a home may be higher than what you pay in monthly rent when you consider costs like insurance, property tax, maintenance, and higher utility bills. You're also taking on greater risk by taking on a loan. (See also: Why I Choose to Rent Instead of Buy)

However, according to Brown, there can be significant advantages to owning a home, the biggest of which is the ability to fix your housing costs in the future. When you own your home on a fixed-rate, 30-year mortgage, you remove unknowns such as your rent going up, being asked to move because the landlord wants to renovate or sell, and more. This allows you to make concrete plans for the future without worrying about housing.

If you're planning to stay in the area for several years, you should consider buying a home. "Historically, you need to own for at least five to 10 years before market appreciation helps you to make a profit," Brown says, "[but] if you're going to be relocated in a year or two, don't buy."

2. Review your finances

Having only one income to rely on in purchasing a home can stretch you financially, so it's a good idea to go over your finances before considering a home purchase. You'll also want to take steps to improve your credit score before buying a home. Consider the stability of your income and whether you have enough savings to see you through if something happens to that source of income.

As a single person, you will want to have a large savings buffer, because you won't be able to fall back on another person's income if yours is disrupted. The rule of thumb is that your emergency fund should have at least six months of income — nine if your income is unpredictable.

3. Calculate the hidden costs

Don't be surprised by the "hidden" costs of owning a home, including the closing costs, property taxes, insurance, possible homeowners association fees, utilities, maintenance, and potential renovations. Factor all these extra costs into your budget before deciding on a home that you can afford. According to Brown, many people think they can buy more than they actually can when all these costs are factored in. (See also: 10 Hidden Housing Costs New Homeowners Don't Expect)

4. Talk to a mortgage broker

As a single person, it can be more difficult to quality for a loan because you can only count on one income. If it's your first time buying, you may be able to qualify for an FHA loan, which allows you to purchase with a lower down payment (only 3.5 percent down) and lower interest rates, and doesn't require as high of a high credit score.

Another option is the HomeReady Mortgage Program through Fannie Mae, which only requires as little as 3 percent down, and allows greater flexibility in qualifying for a loan, including income from co-borrowers, family members who are not on the loan, gifts from family members, and even "boarder" income from a roommate.

Talk to a mortgage broker or financial adviser about whether it makes sense for you to pay a lower down payment. You may have to purchase mortgage insurance if you don't put enough money down, so factor those costs into your decision.

"Low down-payment loans make sense for people who have a solid job and stable income, but don't have a lot of savings because they've just started out, such as new grads or young couples," Brown recommends.

5. Choose the right home

In his experience, Brown sees single people going for condos, because the maintenance and chores are simpler and easier to deal with. Brown suggests buying only what you need at the moment and getting a foot in the market, instead of trying to buy a family home when you don't know what you'll need later. Look for a condo in a community that has other working professionals, and allows you to enjoy your single life.

However, it's better to buy a two-bedroom rather than a one-bedroom if you can afford it, according to Brown, because it gives you what he calls "future-proofing." If you lose your job or the economy tanks, you can take on a roommate to help you share the costs. On the other hand, if you get married or have your partner move in, you have enough space for the next step in building your family. Either way, you won't have to sell immediately if something changes in the future.

In addition to potential financial benefits, there are a lot of intangible benefits to owning your own home. Pride in your own home, the ability to control things about your living situation that you couldn't control as a renter (such as decorations and renovations), and the feeling of being more settled, are all attractive reasons to buy a home as a single person.

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9 College Expenses You Aren't Saving For

Mikey Rox — Tue, 11 Apr 2017 08:00:16 +0000

Worried that tuition and room and board will bleed you dry when your kid goes off to college? Pfft. Wait till you get a load of all the expenses you didn't account for! You'll want to sit down for this.

1. College prep items

You'll want to send your kid off to college well prepared — with things. Things like study and work supplies, dorm room necessities, snack foods, toiletries, a new computer, maybe a new phone. It's amazing how easily items pile up when you're shopping for college.

2. Traveling home and back

No loving parent can go too long without seeing their kid — especially their freshman year in college. So, you'll need to account for travel costs to get your child back and forth to your home if they attend a school that requires more than a few hours' travel.

"Create a travel budget by researching typical costs for airfare, train, or bus, whichever mode of transportation is available to you, and estimate the number of times your child will head home throughout the year," suggests money-saving expert Andrea Woroch. "If they have a car and are driving [a long] distance away from home, propose that they carpool to save on gas and tolls if applicable."

They can also use a site like Zimride, which will connect them with other college students looking to share a ride.

3. Local transportation costs

If your child has a car on campus, you're looking at the cost of a parking pass plus insurance and gas. If they don't have a car, you'll need to consider a new bike and investigate the cost of public transportation passes. These costs can add up, as well. College students don't tend to be holed up in their tiny dorm rooms while not in class.

4. Food outside the meal plan

College meal plans are expensive enough by themselves, but don't count on those being your child's only source of food. Many campus dining halls close earlier than you probably think, and late night study sessions require energy. Plan on having to send them some extra dollars for groceries, snacks, and late-night diner runs.

5. Greek life

I was interested in joining a fraternity when I went to college. It signified the quintessential coming-of-age experience to me, and I liked the idea of having "brothers," as I wasn't close with my own growing up.

Nice sentiment, but it got expensive real quick.

My dues were about $400 per semester, I wanted to buy new clothes every time we had a formal or theme party, and if something went wrong in the house — like the one time a drunk alumni brother smashed up our soda machine — we had to collectively cover the cost. By the end of four years, I had spent thousands of dollars to be part of this exclusive club — which, in hindsight, was worth every penny considering the memories I made. So, I guess what I'm saying here is … grab your checkbook.

6. Sports and extracurriculars

If you're the parent of a child whose athletic skills have earned them a college scholarship, congrats; consider yourself lucky. On the other hand, if your child is perfectly average but still wants to play sports or join extracurriculars, you'll need to cough up the cash.

"Sometimes participating in extracurricular activities on campus can cost extra money," says Johan Zhang, co-founder of CollegeVine. "Whether it's paying for club dues, schoolwide participation fees, or even apparel, at many colleges there exists a hidden cost to joining and being an active member in extracurricular activities.."

Be sure to consider this and save up in advance.

7. Your trips to see your child

Bringing your kid home is going to cost you, and so is traveling to visit your child. You may also want to attend things like orientation weekend, parents' weekend, and other events hosted by the college. You'll need to factor in transportation, lodging, and food, so budget wisely.

8. Off-campus living

Eventually your kid will outgrow the dorm and want to live off-campus. This usually happens around junior year, but sometimes you can hold it off until senior year. With that comes the expense of monthly rent, renter's insurance, furniture, utility bills, and a security deposit that you're never going to see again. Make amends with that right now; it's already spent.

9. The extended plan

Listen, I'm rooting for you to get your kid in and out of college in four years, but, well... the odds aren't in your favor.

"At most public universities, over 80 percent of students will take more than four years to graduate due to overcrowded or unavailable classes," say Adrian Ridner, CEO and co-founder of Study.com. "That means if you are planning on four years of college expenses, you could be under budgeting by 25 percent to 50 percent. Taking low cost college courses online can be a great way to stay on track and graduate on time. Another factor that can extend your child's time in school is lack of college readiness. This may mean completing remedial courses that do not count toward graduation."

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Watch Out for These 5 Last Minute Home Buying Costs

Damian Davila — Fri, 18 Nov 2016 11:30:10 +0000

In 2015, 5,250,000 existing homes and 510,000 newly constructed properties were sold in the U.S. And as Wise Bread predicted back in December 2015, homes have been one of the necessities that are cheaper in 2016, boosting the percentage of first-time homebuyers entering the market.

But unexpected costs toward the end of the buying process can leave prospective buyers scrambling at the last minute or, even worse, unable to land the home of their dreams. Let's take a look at five pesky home buying costs that could appear at the eleventh hour.

1. Lower Property Appraisal

The seller told you that the home is worth $350,000 and you earnestly believed that valuation. So, you went to the bank and applied for a mortgage based on the market value of $350,000. To meet compliance requirements and to do its due diligence, the bank includes an appraisal contingency in your mortgage application. This clause requires that a third-party appraiser verifies that the home is actually worth $350,000.

If the appraisal requested by your bank were to come under the $350,000, then somebody would have to come up with the difference for the bank to approve the loan. Depending on several factors, including the number of days the house has been on the market and the skill level of your real estate agent, the seller, her agent, or your own agent may help you with the difference. In the worst case scenario, you'll have to come up with the difference or have to say goodbye to that home.

In the event that you believe the third-party appraiser may have provided an inaccurate estimate, you could hire another appraiser, submit that new estimate to the bank, and let the bank re-evaluate the mortgage. However, you would be most likely responsible for the cost of that second appraisal.

2. Mortgage Insurance

Let's imagine that you are in the process of saving for a decent down payment for your first home. Two years before you reach your savings goal, a home is finally available in your dream neighborhood. Your broker is confident that a similar home won't be available for another five years, so he suggests that you buy. The catch: You can't come up with at least 20% of the home value for a down payment.

When you pony up less than a 20% down payment to buy a home, you'll have to pay private mortgage insurance (PMI). The Homeowner's Protection Act requires homebuyers who finance more than 80% of a new home's value to purchase PMI. Keep in mind that this is protection for the lender (not you!) in case you default on your mortgage.

The average PMI payment ranges from 0.5% to 1% of the total value of the home loan. Still, this cost isn't small potatoes. In 2015, the average value of a mortgage in the U.S. was $172,341. Assuming a 1% PMI, the average PMI payment in 2015 was about $1,723. That would be one cost that you would have to pay year after year until your loan value reaches 78% of the original market value of the secured property.

Still, your lender may have a strong case to continue requiring the PMI in the event of a dramatic price drop in the market value of your home, an existing home equity line of credit (HELOC) on your property, or a long string of late monthly payments within the last two years.

3. Dramatic Change in Financial Situation

When you're in the process of buying a home, you should keep a consistent financial picture, especially with your credit score. So, delay buying all those expensive new kitchen appliances, pieces of furniture for your living room, and blue period art pieces on credit until you have the keys in hand. A dramatic change to your credit score is a major red flag for the lender and the financial institution may decide to offer the mortgage at a higher interest rate than originally expected — or turn down the loan entirely.

Here are other financial do's and don'ts until settlement day:

Do keep a good paper trail of the source of your down payment;
Don't make large transfers between your accounts;
Do delay any other large purchases on credit, such as a car;
Don't miss any monthly payments on existing debt (they account for 35% of your credit score!);
Do provide all documentation requested by your lender and agent within the stipulated time frame;
Don't open new credit or store cards.

4. Repairs

When you receive the report from a licensed home inspector, you may find that your dream home is not so dreamy after all. Take the comments from the inspector seriously and determine whether it's worthwhile to ask the seller to incur some of those costs, or to provide a financial remedy. After all, you'll be the one covering all of them once the home is yours.

However, choose your fights wisely. No home is 100% perfect. Having to replace all door handles because you find them out of style isn't nearly as bad as having to battle black mold in the basement of your soon-to-be home.

5. Special Case: Hike in Homeowner's Association Fees

Last but not least, make sure to review the minutes of the meetings of the homeowner's association (HOA) for your property for at least the last six months.

Pay special attention to two items.

First, look for a schedule of upcoming monthly dues. In some cases, you may be welcomed with a higher-than-expected bill right off the bat.

Second, watch out for any large projects that are under current review by the board of the HOA. For example, installing a complex system of solar panels on the roof or replacing all the windows of the apartment building because existing windows no longer meet city codes could both mean an ever-growing monthly HOA due. In certain circumstances, the HOA board could be planning to present you the option to pay your entire pro rata amount for the project or to finance the cost through the HOA's loan. Either option would put a dent on your monthly budget.

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Thinking Skills Frugal People Should Master

Paul Michael — Thu, 15 Sep 2016 10:00:09 +0000

"Think before you speak" is a lesson most of us have learned well over the years. However, "Think before you buy" is just as important to the frugal shopper. It's not just a case of questioning the reasons you're spending money, but also weighing up hidden costs, wants and needs, and even the usefulness of the item. Here are six thinking skills you can adopt today that can help you become an even better frugal shopper.

1. The 80/20 Rule (Pareto's Principle)

You may well have heard this before, and it has been around for over 100 years. The rule suggests that, for many events in life, 80% of the effects come from 20% of the causes. So, how does that apply to you, and your frugal life?

Well, for a start, take a look at your wardrobe. Almost all of us wear around 20% of the items in our closet approximately 80% of the time. Go in there tonight, and do a little stocktaking; the things you wear regularly, versus the things you hardly ever wear. Is there any point in having those rarely worn items around? It's highly likely you can sell or donate those items, and build your closet based on the items you wear most of the time (such as Steve Jobs filling his closet with black polo shirts and blue jeans).

If you sell items on eBay or Etsy, 80% of your business will come from 20% of your clients. So, you should use this information to keep them happy. Used more broadly, the 80/20 rule can help in other ways. When grocery shopping, 80% of the stuff in your cart should be devoted to "clean eating," such as fresh fruits and veggies, with 20% being more of the treats and packaged goods. And 80% of the items you buy should be on sale, if you can spend the time hunting for bargains. And 20% of your paycheck should go straight into a savings account. What's more, you spend 20% more when using a credit card, as opposed to cash or checks, so keep that in mind.

2. Always Put a Price on Your Time

You know the expression "Time is money," but how often do you apply it to your own life? It is vital to figure out exactly what your own time is worth, and using it as an anchor point whenever you think you are saving money by doing it yourself. (See also: How a T-shirt Equals a Taco)

For instance… washing the car. For the longest time, I used to wash my own car. It would take a good hour to do it properly. The local gas station charges $8 for a decent wash when filling up the tank. I realized my time is more valuable than $8/hour, which is barely minimum wage, and let's not forget the materials that have to be purchased to keep the car clean. So, I stopped washing my own car.

Some people will spend hours clipping coupons, and yet, they forget to use them, or the savings add up to only a few bucks. What did that time actually cost? What else could have been achieved? DIY jobs around the house can go either way. Sometimes, it is clearly worth your time to do something over paying a professional, such as changing a washer or even mowing the lawn. But on other occasions, stop and think first. If you're about to tackle building your own deck, or laying a floor, figure out the cost of hiring a professional, and then figure out how long it will take you to do the same job. Which is the better deal? If it takes you 80 hours, would that have been time better spent doing something else?

If you buy and sell items on eBay, you may be making a small profit. But, have you factored in your own time? If it takes hours each day to list the items, photograph them, package them up, and get them mailed out, does that eat into your profits? Are you really only making a few bucks an hour? Your time is valuable, and you should think of it like that whenever possible.

3. Look After the Pennies — The Dollars Will Take Care of Themselves

Don't think of those expenses that cost a dollar or less as something trivial, because they add up quickly. A candy bar here, a small coffee there, and before you know it, those tiny purchases are eating away at your bank account like termites in a 19th century cabinet. So, get into the habit of tracking your smaller expenditures, and repeating the "look after the pennies" mantra whenever you are putting low-cost items into your shopping cart. It may only be 69 cents, but is it worth it? Do you need it, or just want it? A good way to do this is to pay cash for anything that costs less than one dollar; you'll be amazed at how quickly that $20 bill disappears, whereas swiping a card each time doesn't have the same instant impact on your wallet.

You should also do your best to save that small change. An app like Acorns will literally take care of those pennies for you, putting your small change into a savings account, or an investment. What's more, never be afraid to haggle over pennies. Most of the time, people won't fight you, especially on an item costing $100. So, you ask if you can pay $99.20, and pocket the 80 cents. Do that enough times during the month, and your pennies are quickly turning into dollars. It can seem like a lot of work for small rewards, but remember… they add up. It's not simply 10 cents here, and 20 cents there. It's all adding to a pile that can make a big difference.

4. Keep One Eye Fixed on the Future

Many people who live for today (or YOLO), do not have the future in mind. This can lead to overspending from things like impulse buys and extravagant purchases, and eventually, a lack of funds in savings and retirement accounts. Whether you're 19 or 69, you should have one eye firmly fixed on the future, and it should be something you think of regularly.

One such example is growth.

Money, when combined with compound interest, can grow and grow over time. A small investment today can turn into many thousands of dollars in the future. Of course, when that future is 40 years away, it's hard to think about the impact of a few dollars here and there, but it really does make a vast difference.

When buying big-ticket items, consider the future. Is this going to be something you use on a daily basis, or are you buying it on a whim? Fitness equipment is a prime example of this. The dedication and effort required should be there before spending thousands on high-end machines. If you are not committed now, the shiny new exercise bike or rowing machine won't change that. It may get used for a week, but chances are, it will be at next year's garage sale.

And think about money being spent today, and how it could impact your future. Are you spending it wisely? Would it be better off in a savings account? What are you sacrificing in your future to have things now? It may radically change the way you spend today.

5. Question Value for Money

There's an expression; "Buy cheap, buy twice." There's another expression; "A fool and his money are easily parted." These two philosophies can sometimes be at odds with each other, especially when comparing the prices of two similar purchases. A pair of shoes that costs $100 may last you four to five years, whereas a pair of shoes costing $400 may last a lifetime. However, will you still want those same shoes 30 years from now, or will they be completely out of fashion? If that's the case, the cheaper pair is probably your better bet. They may not last as long, but you don't want them to.

However, the same cannot be said of a major appliance. The $300 dishwasher may do everything you want, but will it last? The $800 dishwasher has the same features, but it's made with superior parts, and will last many years longer than the budget model. In this case, you are better off paying for the more expensive model.

This can apply to almost every purchase you make. Is it worth spending the extra $1 to go from generic ketchup to Heinz? Some people say yes, others say it's a waste. Check the weight of the items on the grocery shelves, too. Perhaps the brand name package of cereal is actually cheaper than the generic, but you may discover the generic weighs twice as much. A plumber that costs half as much as one you have used in the past may take twice as long. Or, the work may be substandard, and will need to be fixed again. However, it may be that the cheap plumber gets incredible ratings and simply charges less than the others because he or she has less overheads. Whatever you are buying, even if it's a service, question the value.

6. Examine Your Wants and Needs

Frugal thinkers have mastered the separation of the wants and the needs. Learn to do it, and you can save a fortune. Sometimes, it's an open and shut case. You need milk. You need gas for the car. You need dog food. But even in those situations, there are wants as well. You need milk, but want the most expensive brand. You need gas, but want premium. You need dog food, but want organic. You have to assess the additional costs, and whether they are worth paying simply because you want it.

Of course, things get a little more tricky when it comes to other expenses. You need a car. But you want a new one, not a used one. There are good reasons for having both. You want to buy instead of leasing. There, your wants may well be justified, or they may not be. So, you have to employ an online calculator, and figure out why you want to buy, and what the pros and cons are of each method. It may turn out your wants and needs are in perfect sync, or that your wants are impossible on your budget.

When you buy clothing, what do you need, and what do you want? You need shoes, but do you need $500 Guccis? Probably not. However, when weighing up a pair of work boots that cost twice as much as the most popular brand, but have much better protection, you may need to spend the extra money.

Wants versus needs should be top of mind whenever you open your wallet or purse. From buying takeout to getting a four-bedroom house, analyze it. Is it a want, or a need? This thinking strategy can save you a small fortune.

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Hidden Costs That Can Derail Your Budget Travel Plans

Amy Lu — Wed, 03 Aug 2016 10:00:08 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on hidden costs that can break your travel budget, emergency preparedness tips for first-time renters, and ways to turn unwanted wedding gifts into cash.

10 Hidden Housing Costs New Homeowners Don't Expect

Mikey Rox — Mon, 18 Apr 2016 09:00:05 +0000

You're a new homeowner — 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.

1. Moving Expenses

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 — 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 haaaated 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: Don't Forget to Budget for These Unexpected Moving Expenses)

2. Furnishing All the Rooms

Your eyes opened wide to the four-bed, three-bath colonial when you first saw it — 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 — 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 "storage," like I've seen some of my friends do. You'll just have to accept that somebody (like me) is totally judging you, lazy.

3. Window Treatments

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… and the ones I had to order if I didn't want nosy neighbors watching me do everything 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.

"New homeowners are always shocked at the price of window treatments," she says. "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."

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.

4. Utilities and Other Day-to-Day Usage Expenses

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.

5. HVAC Inspections and Upkeep

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 hot, 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 — which will still cost you — but not nearly as much as early replacement of a furnace or A/C unit that's been neglected.

6. Termite and Pest Treatments

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 required 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.

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.

7. Landscaping and Other Outdoor Maintenance

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 huge 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.

"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," says Ryan Farley, co-founder LawnStarter, a lawn-care concierge service. "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.

8. An Eventual Increase in Property Taxes

There are only two certainties in life — 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.

“When you buy a home, most sales are reported to the taxing authority, which means your property taxes will be raised to the value — or the price you paid — for the house. For many buyers this can be a 20% to 30% increase in their property taxes," says Sissy Lapin, co-founder of ListingDoor.com, a DIY home-selling resource.

9. Homeowner's Association Dues

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 "a sanctioned group of nosy neighbors who like to tell other people what to do" — 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.

"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," Lapin says. "Furthermore, there can also be periodic 'one-time' additional assessments to cover special projects or budget deficits by the association."

10. Special Assessments to Cover Special Projects

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.

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 — it's more of a roll-with-the-punches situation — but it's certainly something to consider before buying a condo.

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.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

23 Hidden Costs of Buying an Old House

Dr Penny Pincher — Wed, 10 Feb 2016 18:00:02 +0000

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.

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.

1. Big Energy Bills

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!

2. Air Conditioning

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.

3. Furnace

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.

4. Roof

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.

5. Exterior Painting

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.

6. Siding Replacement

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.

7. Window Replacement

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.

8. Lack of Storage

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.

9. Electrical Services

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.

10. Electrical Outlets

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.

11. Old Electrical Wiring

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.

12. Lead Paint

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.

13. Asbestos

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.

14. Wet Basement

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.

15. Insulation

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 — but initially, this cost thousands.

16. Well Expenses

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.

17. Small Garage

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 — 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.

18. Water Line for Refrigerator

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.

19. Old DIY Projects

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: 15 Cool DIY Home Improvements for $50 or Less)

20. Nothing Is Square

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 — and more expensive — because nothing is level due to settling over the years.

21. Uneven Steps or Sidewalks

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.

22. Historic Restrictions

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.

23. Endless Projects

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.

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.

Do you live in an old house? How "charming" is it?

This article is from Dr Penny Pincher of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

13 Holiday-Season Costs Everyone Always Forgets About

Mikey Rox — Thu, 03 Dec 2015 16:00:32 +0000

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.

1. Postage for Holiday Greeting Cards

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 — I knew I had to send them out — 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!

2. End-of-Year Tips for Service Professionals

Some service professionals you tip every time — hairdresser, masseur, manicurist, babysitter — and some you only tip once a year, like your doormen or mail carrier. Either way, it's important to factor in these "holiday bonuses" 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.

3. Holiday Babysitting Premiums

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.

"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," says Rachel Charlupski, founder of The Babysitting Company. "A holiday sitter will cost between $250 and $500 for four hours depending on the reservation, number of children, and the city."

4. Personal Upkeep and Grooming

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.

5. Increased Gas and Electric Bills

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.

"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," says energy industry analyst Joel MacDonald. "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."

6. Higher-Than-Normal Grocery Bills

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 — mine, too.

7. Hidden-in-Plain-Sight Travel Costs

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.

"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," he says.

If you're not careful, you can put a decent dent in your vacation fund before you ever reach your destination.

8. Dining Out More Than Usual

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.

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.

9. Gas for All That Extra Driving

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.

10. Post Office/Delivery Service Fees for Gifts

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 — like, at all — 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.

11. Stocking Stuffers

You've got a million and one presents wrapped under the tree, but — doh! — 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.

12. Boarding Pets That Can't Travel With You

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 — 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.

13. Last-Minute Host/Hostess Gifts

You should never, ever show up to a function — holiday or otherwise — empty-handed. If you're attending parties this season, pick up a few bottles of wine or other appropriate host(ess) gifts 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.

Are there more holiday costs that we all forget about? I'd love to hear your suggestions in the comments below.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: