For Americans, it’s still saving versus spending

American economic growth is high and appears to be reliable, but a warning light is flashing: Personal savings are falling.
Consumers comprise roughly 70 percent of the economy — a crucial force in economic growth.
Overall, economic growth climbed by 2.6 percent on a quarterly basis at the end of 2018. Personal consumption increased substantially in the fourth quarter of 2018 just as the savings rate slumped to 2.6 percent as a share of disposable income, its third-lowest on record.
A new study finds the median American household has $4,830 in a savings account, and almost 30 percent have less than $1,000 saved.
As of June 2018, millennials had saved less than baby boomers. Of course, older Americans have had more than three decades longer and larger salaries from which to save.
By age, these figures show millennials (born 1981-1998) saving $2,430; Gen X (1965-1980), $15,780; and baby boomers and older (born before 1964), $24,280.
MagnifyMoney, a company that provides consumers with comparison-shopping information for financial products, uses data from the Federal Reserve and the Federal Deposit Insurance Corporation.
According to the company, its results indicate that while half of all U.S. households have more than $4,830 in savings, half have less. Among households having at least some money set aside, the median savings is about $73,000.
But, Americans may still owe more in debt than they save.
According to Northwestern Mutual’s 2018 Planning & Progress Study, Americans now have an average of $38,000 in personal debt excluding home mortgages — a $1,000 increase from a year ago.
Meanwhile, the study reported fewer people said they carry no debt this year compared to 2017–23 percent versus 27 percent.
According to Emily Holbrook, Northwestern Mutual’s director of planning, the typical American’s purse strings are in “a mini tug” between enjoying the present while saving for the future.

Legal issues crucial when forming small business

Entrepreneurs are busy people. They’ve got a ton of things on their mind from marketing and advertising to customer service and phones forever ringing to business appointments — and more.
Unfortunately, legal and technical issues have to be attended to at the same time.
According to Entrepreneur magazine, small businesses need to take some basic steps as they grow.

  1. Set up the proper business structure. There are sole proprietorships, LLCs, S corporations, C corps, and partnerships. Choosing the correct one means learning the advantages and disadvantages of each. For example, as a sole proprietor, the business owner and the business are considered as one in the legal system. If your company is sued, all your personal assets are at risk. Corporate structures and LLCs offer protection of personal assets, although this protection isn’t a guarantee. Talk to a lawyer and accountant about the structure you need.
  2. Set up and follow customer service policies. When you access company websites, especially those that provide services of some sort, you’ll usually see a Terms and Conditions agreement. Included in this agreement are all the specifics for the use of your products or services and the customer’s obligations in that use. If you do not have this policy in writing and a box for a customer to check before a purchase, you are wide open to inclusion in a lawsuit should that customer become a defendant.
  3. Set up accounting and tax systems. Is your business subject to sales/VAT taxes? When must you file your business income tax returns? Do you need to make quarterly payments? Business tax laws are complex. You need a good business accountant–or at the very least, proven accounting software–to keep accurate records and file your taxes on time.
  4. Obtain appropriate and complete contracts with outside vendors. When you use the services of or purchase raw materials from someone outside of your business, demand iron-clad contracts. Never agree to anything with a contractor without a legally-binding agreement with the terms and language set out clearly and properly.
  5. Get the proper documentation on employees. At minimum, before hiring, document and verify past employment. After hiring, document work hours, complaints, responsibilities and attendance issues such as sick days, personal days off, and vacation.
    Be sure to specify, in writing, work expectations – including whether work can be done remotely.

The no-spend challenge
A financial writer set out to spend no extra money for a year.
Michelle McGagh and her husband vowed to pay bills, but not to buy coffee, clothes, or a beer at a pub. They didn’t eat out or even buy gas. Instead she rode her bike everywhere all the time. She spent only $35 on food every week, so she had to plan cheap meals.
What happened? At the end of one year she saved $23,000.
She admits the effort was not easy. She missed having face cream and fresh flowers. She missed socializing with friends at a pub. And they missed her.
On the other hand, she also found new ways to have fun for free and she realized how much money she frittered away. McGagh wrote about her extreme challenge in her book, “The No Spend Year: How you can spend less and live more.”
McGagh’s challenge was extreme–but what if you could spend nothing extra for just one month. Could you save money? Definitely.
According to Bankrate.com, the first thing to do is decide why. It could be to pay off a big bill that is coming or pad your savings account, but the goal should mean something to you.
Next steps:

  • Eliminate any optional expense that comes out of your checking account such as subscriptions. They will take your money next month.
  • Eliminate luxuries and start thinking of some things as luxuries. For example, cable TV. You could get rid of Netflix for $10 a month or cable for $120, or both.
  • Make a barebones food plan and stick to it. No prepared foods. Make your own cookies. This is nearly its own challenge. Can you spend $100 a week or less on food?
  • Cellphone: No extra overages or get rid of the plan, if you can.
  • No restaurants or pubs. Plan some things to do that are free.
    Then count your cash at the end of the month!

Is debt consolidation wise?

According to ConsumerCredit.com, people thinking about consolidating debts often have one question: Is debt consolidation wise or not?
The answer is maybe. As one might expect, the wisdom of debt consolidation depends on several factors:

  • The interest rate on the new loan.
  • The consumer’s goal in taking out the new loan.
  • The consumer’s resolve not to take on any more debt.
    With a debt consolidation, you move your debt to a new loan serviced by one lender instead of many.
    In theory, with a new loan at a lower interest rate, the money saved on interest each month may enable you to pay off your debts faster. Or, if the new loan has a longer term, you may be able to lower your monthly payment. Either way, debt consolidation might be useful in some situations.
    But debt consolidation isn’t always effective.
    Debt consolidation is useful for people who are disciplined enough to make the payments without taking on new debt. That’s the key. If you consolidate, but don’t change spending habits, you’ll be in deeper debt in a few years.
    With debt consolidation, good credit can make a big difference.
    Trying to consolidate debt with bad credit is usually not wise. With a bad credit rating, it is unlikely that you can get a loan with low enough interest to make a difference in paying down debt. While having only one monthly payment may be a temporary source of comfort, consolidating debt to a high-interest loan hurts finances rather than improving them.

What Gear is Appropriate for New Motorcycle Riders?

If you’re new to riding, you’re at greater risk of having an accident due to your lack of experience on the road. For this reason, you should do what you can to maximize your protection.

Motorcycle insurance from InsureUS in Cypress, TX, can protect you and your bike against injuries and property damage. Motorcycle safety gear can minimize injuries that an accident can cause. What gear is appropriate for new motorcycle riders?

Motorcycle Helmet

Even if it’s not mandatory in your state, a motorcycle helmet is a must. A DOT (Department of Transportation) approved helmet can save your life in a serious accident. A helmet that covers your head and face offers the most protection.

If your helmet doesn’t come with a shield, a quality set of goggles will protect your eyes against rain, wind, bugs, and gravel kicked up from the wheels of surrounding traffic.

Jacket

A durable leather or synthetic jacket will protect you against the elements and bugs as you ride. It can also protect your chest, back and arms in the event of an accident. Choose a jacket that fits comfortably, has accessories you need (pockets, zippers, snaps, etc.) and coincides with your riding lifestyle.

Riding Boots

A sturdy pair of riding boots will protect your ankles and feet in a crash. If your foot gets trapped beneath your bike in an accident, a sturdy pair of motorcycle boots will help absorb the impact to keep your ankle bone from snapping.

Gloves

When you take a spill, the first thing you do is put out your hands to protect yourself. Motorcycle gloves offer protection against the risk of road burns and lacerations in an accident.

For quality motorcycle insurance coverage at an affordable cost, contact InsureUS in Cypress, TX.

Starting a family business has unique problems

Starting a business with a spouse, parents, siblings, children or other family members is not like the typical startup.
According to the Family Firm Institute, family-owned businesses comprise two-thirds of the companies worldwide. However, only 30 percent endure into a second generation, 12 percent to a third, and 3 percent to a fourth.
The typical snare of a family business is putting too much weight on family and not enough on business. Rarely are the qualities of a healthy business entirely compatible with family harmony. When the business is going well, there will be jealousy. When it is going badly, there will be blame.
The earliest stages of a family business are the most ominous. Family members can join the promise of a new venture without clear definitions of their roles, duties, compensation–and, should they become problematic, exit arrangements.
To avoid miscommunication and hard feelings in the future, advises StartupNation.com, always put family business relationships in writing.
While various family members may qualify for similar duties, they must be divided up to avoid conflicts. Significant decisions can be reached together, but disputes over minor procedures impede the overall progress of the business.
The dominant structure of a thriving family business is having one person serve as the ultimate leader of the endeavor. When this leader is resilient and competent, he or she can persevere, stay focused, and proceed with their responsibilities and intentions despite the obstacles and challenges.
These capabilities are especially essential in a family business where professional and personal issues frequently become intertwined.
Leaders of strong family-owned businesses know that setting boundaries among participating family members is critical to continuing success. Precise methods of communication must be installed.
Since business quandaries and differences of opinion are inevitable, consider weekly meetings to assess current progress and plans, air differences, and resolve disputes. Moreover, keep family issues out of the boardroom and office.
Keeping pace with the times is vital to any business, more certainly those with multigenerational roots. Regardless of age, family members must continuously evolve and deliver or risk alienating both employees and customers.
Furthermore, so-called sympathy jobs should not be open as a last resort to children, cousins, or other family members for any reason. Employment must be based on the experience, knowledge, or skills a family business demands.
For leadership and staff positions the business demands, look outside for the qualities family members do not possess.

Cube versus open work space debated

Since the introduction of cubicles to the workplace a half-century ago, the pros and cons of their existence have been well-debated.
But today cubicles are being compared, often favorably and sometimes fondly, to open work spaces.
Open work concepts save floor space and encourage camaraderie, they also convey a false sense of productivity, in which movement and sound translate to only intermittent concentrated quiet, according to the International Facility Management Association.
On the other hand, open work spaces are often most suitable for telecommuting employees who only visit offices occasionally.
But those who work in the open office tell IFMA surveys that privacy is at an all-time low and 74 percent of workers are concerned about it.
The question is whether gains in office communication, brainstorming and camaraderie justify the open space. According to Business News Daily, a cubicle environment can also foster a sense of community, motivation and accountability. Open offices and cubicles also are easier to manage.
Separate office space ranks highest in terms of concentration, privacy, and personalization. But ranks lower in community.

Considering a vacation home? It might even pay for itself

A vacation home may be just the ticket if you love to visit sunny climes, the forest, beach, or mountainside.

These days, thanks in part to the sharing economy, more people than ever can afford a second home.

Today you can buy a home at relatively low interest rates, then rent that home out when you are not there.

Homeowners have successfully covered their mortgages and leases by renting out as little as one room thanks to sites like AirBnB.

According to John Banczak, executive chairman of TurnKey Vacation Rentals, for every $100,000 you spend to purchase a vacation home, you should expect yearly rental income of $12,000 to $14,000.

Vacation homes are appealing to owner and vacationer alike. The rate is often less than or equivalent to a hotel, but with the option to spread out more and eat meals in. For locations with popular attractions, owners can visit when they like and rent when they aren’t there.

In 2017, about 12 percent of home buyers purchased vacation homes. According to Economist Outlook, buyers wanted a second home for vacations (42 percent), for future retirement (18 percent), or because real estate prices offered good deals (12 percent). The median household income in 2016 for vacation home buyers was $89,900.

If you’re considering a vacation property, make sure to find a trusted local real estate agent to help you navigate the purchase. The agent will know the area and any local and state contract laws.

It’s also important to find a local person to keep an eye on the property, whether it’s your housekeeper, the agent, or a contractor. If you rent the property regularly, your housekeeper can be your second set of eyes, letting you know how the latest guests treated the property as well as how everything looks overall.

As part of your due diligence, factor in a higher insurance rate for a second home.

Consider installing a home security system for yet another set of eyes as well as a way to make sure the heat has stayed on.

Managing cellular service options while traveling abroad

Both frequent travelers and the occasional vacationer will need to prepare in advance to secure mobile data and phone service abroad.

There are many options available depending on the person’s current situation, according to Engadget.

The easiest route to take is to just do nothing, and that is possible for those using T-Mobile, Sprint, or Google’s Fi service because each of these offer some unlimited data coverage in most foreign countries.

T-Mobile and Sprint will cap the user at slower 2G speeds, but Google Fi will let you use up to high-speed 4G data if it is available. Check with a provider to be sure, but usually, this option requires enabling ‘roaming data’ in the phone’s settings to work.

Customers signed up with AT&T or Verizon, unfortunately, won’t have the luxury of free roaming data and will instead have to purchase roaming passes that are often expensive for what they offer. With monthly packs, for instance, AT&T will sell 1 gigabyte of data for $60 while Verizon has half a gigabyte for $70, but some plans might offer a few free passes each month.

To avoid this extra expense, local SIM cards can be an excellent option for saving money as long as the provider has unlocked the phone. For this option, head into a local telecom upon arrival, such as Vodafone in the UK, and purchase a temporary, ‘pay-as-you-go’ SIM or whatever variant they say is best for your situation. Unfortunately, a new SIM means a new phone number and anyone calling the usual one will be sent straight to voicemail as if the phone had been turned off. To make matters worse, certain new phones or devices that are still on an installment plan through the provider likely cannot be unlocked to use a local SIM, but those that hang on to older devices might be able to find something new enough to use for a short trip.

History Of Flood Insurance

InsureUS Cypress, TX, offers flood insurance policies, to Texas residents. While Texas does not require homeowners to purchase flood insurance, the State has a history of catastrophic floods. 

History of Flood Insurance

There is a U.S. Constitutional basis for government control over protecting America’s waterways.  In 1824, the U.S. Supreme Court, in Gibbons v. Ogden, ruled that the commerce clause, Article I, Section 8, permitted the federal government to construct and finance river improvements.  Congress then appropriated funds and authorized the Corps of Engineers to remove navigation obstructions from the Ohio and Mississippi Rivers.   Twenty-five years later The Swamp Land Acts became law which transferred swamp and overflows land to state government control.  One project required that the states use money from land sales to build levees and drainage channels on the lower Mississippi River without the use of federal funds.  

Congress continued its efforts in controlling flooding throughout the nineteenth century and the early twentieth century.  In 1913 the flood in the Ohio River Valley killed  415 people, causing about $200 million in property loss.   The public became alarmed, and Congress took more aggressive action authorizing a Committee on Flood Control in 1916 and the 1917 Flood Control Act. 

FEMA

The framework for flood insurance was built for today’s legal basis for flood control and flood insurance. On April 1, 1979, President Jimmy Carter issued an Executive Order, ordering the creation of FEMA, the Federal Emergency Management Agency. FEMA is within the Department of Homeland Security.

NIFP/PRIVATE FLOOD INSURANCE

FEMA flood insurance aid was delivered through the National Flood Insurance Program (NIFP. On March 16, 212 non-Federal flood insurance was allowed to be underwritten by lending institutions to support private flood insurance.

The agents at InsureUS Cypress, TX want to speak to you before the next flood in your area.  Please contact us before the next Hurricane! 

Should I replace my home’s windows?

Though new windows are pricey, a lot of homeowners assume that they will pay for themselves in a few years in energy savings.

You might want to think twice about that. True, new energy-efficient windows can help keep your house warmer in winter and cooler in summer (assuming you use an air conditioner), but they won’t necessarily save you a bunch on your monthly energy bill.

An article in time.com’s Money section said that new windows produce about 5 to 15 percent of your total energy savings; and with the average homeowner in America paying about $1,000 a year to heat and cool a home, it would take more than 100 years to earn back your investment.

So does that mean you shouldn’t bother? Hardly.

You also need to determine whether the windows are doing their job of keeping moisture out, as they may need repairs or replacement on that factor alone. And even if they don’t save you the money you expected, new windows can make you feel a lot more comfortable by helping to reduce draftiness in the winter and retaining cooler air in the summer.

Newer windows are usually a lot easier to clean because of their tilt-in design, too. And new windows can help your home’s resale value; prospective buyers see new windows as a plus, not to mention an indicator that the house has been well cared for. The Time article said homeowners get about 73 percent of their replacement window investment back when they sell the house, according to the National Association of Realtors’ 2016 Cost Versus Value study.