General | Blog - Part 20

New Year’s budget resolution? – Try zero-sum budgeting

Posted on January 13, 2017December 31, 2016 by Victor Varma

If your goal is to make 2017, a better financial year, try Zero-Sum Budgeting, a simple idea that can bring big results.

According to FamilyFinancier.com, Zero-Sum Budgeting revolves around two main ideas: Budgeting to zero and paying for next month’s expenses with this month’s income.

What is budgeting to zero?

* Budgeting to zero means spending every single dollar on a specific goal.
* You could have goals like paying a bill, savings toward a holiday or adding to an investment.
* Over time you can identify overspending in one or multiple categories and make adjustments. Slowly you can create a reliable growth in savings.

How to Pay for Next Month’s Expenses Today

The second main goal for the zero-sum method is to pay for the month ahead with the current month’s income. This allows for two benefits:

* No issues paying bills on time
* Safety net of at least one month’s income in case of emergency accomplishing these two goals would put someone far ahead of the average American. According to a recent Federal Reserve survey, 46 percent of Americans said that they would have to borrow or sell something to pay for a $400 emergency. Given this reality, paying bills a month ahead can take time unless a person already has savings. Once accomplished, this goal can provide substantial financial security and peace of mind.

Tips for Implementing the Zero-sum BudgetStart with your monthly bank statement in hand. Make a list of spending categories. Assign expenditures to one of these categories. This helps you see what you actually spend and where. Now, decide where you can cut spending and where you can add spending, to suit goals such as paying off bills. Make sure every single dollar you bring in has a ‘home’ in your budget. A few recommendations for someone trying this, or any other, budgeting method:

* Use an app, tool, or spreadsheet to help stay organized and accurate. This makes the process so much easier.
* Find an accountability partner.
* If overspending is a problem, roll with the punches and work to get back on track.

Pop the cork on the bubbly! It’s a great time to sell (and buy)

Posted on January 2, 2017December 13, 2017 by Victor Varma

Everything is coming up champagne and roses for home sellers in 2018 as experts predict more home sales and rising home prices as Millennials appear to finally be buying.

For the new year, the real estate scene looks great for both sellers and buyers.

Buyers will benefit from low mortgage rates, ticking just past 3.9 to 4 percent in mid-November 2017 for a 30-year fixed rate mortgage.

Analysts do not expect those rates to rise much, if at all.

In many areas, the number of houses for sale is low and that drives prices up. On the other hand, prices are not as high as in the recession-era market. Experts say that should give buyers some confidence.

The construction industry appears to be addressing the problem of a low supply of homes for sale as new construction rose in mid-November 2017, according to the U.S. Census Bureau.

The overall economy also forecasts a healthy housing market, as more people are working and tax cuts may add money to the economy.

Banks stop banking on mortgages, report says

Posted on December 30, 2016November 15, 2016 by Victor Varma

Fearful of regulations and expensive penalties, banking is backing away from traditional mortgages.

According to Inside Mortgage Finance, banks loaned less than half of all mortgage dollars in the third quarter of 2016. This is the first time in 30 years that banks and credit unions have not taken the lead in mortgage lending.

Traditional banks have shied away from making mortgages insured by the Federal Housing Administration. This follows a series of costly lawsuits brought by the federal government surrounding these loans in the last few years, according to The Wall Street Journal.

Non-bank lenders, such as Quicken Loans, have stepped into the market snapping up borrowers with less than pristine credit.

Meanwhile, banks have concentrated on jumbo loans (those more than $417,000 in most parts of the country) because they are considered less risky both financially and legally, according to The Wall Street Journal.

Living longer means planning for later life

Posted on December 23, 2016November 15, 2016 by Victor Varma

With Americans living longer than in the past, planning for long-term care has become a priority.

In March, the results of a Nationwide Retirement Insurance survey revealed that many women over the age of 50 are hiding a big retirement worry from those they love: the fear of burdening family if long-term care is needed. But, it doesn’t have to be such a worry, or such a secret. With planning ahead of time, people can feel secure in their futures.

Some of the issues families must consider:
1. Housing: Will Dad sell the house and move to a long-term care facility if he can no longer live alone? Does he agree? Has he chosen some places he likes? If he does not agree, what are the options for the family?

2. Health care: If mom stays healthy and active, she may avoid the move to long-term care. It could be helpful now, while she is strong, healthy and of sound mind, to create a living will or health care directive that lays out exactly what they want to happen if they get sick and need long-term care. Getting that information on paper and signed can help to protect her and ensure that wishes will be followed if they cannot make those decisions on their own.

3. Legal decisions and planning: There are several documents that are helpful and important in situations where long-term care is a possibility. The first of these is a living will or health care directive, as outlined above. The second is a health care power of attorney. This designates a specific person to make medical decisions if a person cannot make them.

4. Financial planning: Long-term care can get expensive. To reduce this expense and stress, it is important to consider purchasing a long-term care policy that will pay for costs when that help is needed. Having long-term care insurance can lessen the financial impact.

Celebrate at home, not on the road

Posted on December 16, 2016November 15, 2016 by Victor Varma

The holidays are here, bringing with them family, fun and a dose of partying. It may be no surprise then that December is known as National Impaired Driving Prevention Month.

The National Highway Traffic Safety Administration (NHTSA) reports that in 2013, there were more than 10,076 fatal crashes that involved a driver with a blood alcohol content of .08 or higher.

There is good news: The number of fatal, alcohol involved crashes in the entire year of 2013 has declined from a high of 13,582 fatal accidents involving alcohol in 2005.

To remind individuals of the dangers involved in driving while impaired, the NHTSA launches a “Drive Sober or Get Pulled Over” campaign each year, from December to January. The NHTSA reports that nearly 1,000 deaths occur because of impaired drivers during the month of December alone.

Although fatal crashes where drivers died have declined over the years, more drivers are impaired not by alcohol, but by other drugs. From 2006 to 2012, drug involvement in this type of crash increased six percentage points. Although the campaigns used to target drunken driving specifically, now that marijuana is legal in a handful of states, the campaigns have changed to target impaired driving as a whole, including driving after smoking marijuana or ingesting another drug.

For example, in May 2016, AAA reported that deadly crashes that occurred after drivers had used marijuana in Washington State doubled between 2013 and 2014.

These campaigns highlight the importance of making the right choices during the holiday season. If you’ve been out drinking, there are options: call a cab; get a ride with a sober friend; have a designated driver. There are always options that are better than getting into a car and driving after you’ve been drinking or partying for the holiday season.

New ways to twinkle for the holidays

Posted on December 9, 2016November 15, 2016 by Victor Varma

New lines of technology-enhanced decorations are making decorating easier.

1. Color-changing LED Lights from LED wholesalers LED Strip Lights: A flexible strip of LED lights is a great option that is not only more energy-efficient, but also easier to install. These are available in indoor and outdoor models. The indoor strip is approximately 16.4 feet long and contains 150 LED lights.

2. The iTwinkle Christmas tree by GE: The iTwinkle Christmas tree is covered with 500 tiny sparkling lights and 75 LEDs. With a smartphone app, it’s easy to control this Christmas tree’s looks. Choose from more than 1,500 different colors on this 7-foot tall Christmas tree.

3. Holiday Landscape Projector from Sharper Image: This projector is a weatherproof device meant to be positioned in the yard to decorate the outside of the home, or inside to make the walls sparkle with color. This projector puts hundreds of tiny lights all over the walls, indoors or out. The remote allows users to choose from red or green lights, or a mix of both; and it also lets the user choose between flashing light mode, or continuous.

Tips to Avoid Holiday Safety Hazards

Posted on December 2, 2016November 15, 2016 by Victor Varma

Christmas is a time to celebrate, spend time with family and friends, and to relax. But, it’s also a time when safety should be on your mind because the holiday season brings a unique combination of hazards into the home.

Christmas Light Safety

1. Make sure the holiday lights are meant for outdoor use. Lights made for outdoor use are designed to withstand cold and wet conditions. The tag near the plug will specify whether lights are made for indoor or outdoor use.

2. Make sure all cords and lights are intact. Frayed cords and cracked light bulbs are more likely to cause a fire.

3. Never leave lights on overnight. Be sure to turn off the lights before retiring for the night.

Christmas Tree Safety

1. If using a real tree, water often. A tree that dries out causes a fire hazard. The National Fire Protection Association (NFPA) reports that one of every 31 reported home fires in the holidays is caused by a Christmas tree fire and results in death.

2. Keep the tree away from heat. Trees, unlike humans and animals, don’t need to be kept warm during the winter months. This only dries the tree out and increases the risk of fire. Keep it away from the fireplace, space heaters, even living room lamps.

3. Use lights specifically created for indoor use. Although indoor and outdoor lights can look similar, they are very different. It may be tempting to use them interchangeably, but that is a bad idea.

Candle Safety

1. Use battery operated window or tree candles.

2. If traditional candles are a must, be very careful about placement. Place them on sturdy, non-flammable surfaces, away from decorations, curtains, the Christmas tree and anything else that could catch fire.

3. Do not allow candles to burn when no one is in the room.

Car crash deaths spike higher, report reveals

Posted on November 21, 2016October 14, 2016 by Victor Varma

The National Highway Traffic Safety Administration said in August that traffic deaths have spiked 7.2 percent, the largest single increase since 1966.

In fact, the NHTSA found traffic deaths rising in every segment of the population, including “passenger vehicle occupants, passengers of large trucks, pedestrians, pedal-cyclists, motorcyclists, alcohol-impaired driving fatalities, male/female, daytime/nighttime.”

Nearly half of passengers who died in crashes were not wearing a seatbelt.

Oddly, the use of seat belts reached a rate of more than 88 percent in 2015, up from 86.7 percent.

The dismaying reality is that while more people are wearing seatbelts, but there are also more people dying from not wearing them.

One explanation: Gas is cheap and more people are driving. According to NHTSA, in 2015 people drove 3.5 percent more miles than in 2014, the largest increase in nearly 25 years.

The Centers for Disease Control notes that primary enforcement actions by police can make a difference; this type of action allows a police officer to issue a ticket because a driver or passenger does not have their seatbelt on, but there are only 18 states that have primary enforcement laws for every seating position.

One other factor: People in the back seat don’t buckle up. “Rear-seat passengers are three times more likely to die in a crash if they’re unbelted,” according to Consumer Reports.

Some technologies in newer model cars may also encourage people to put their seatbelts on. For example, a driver who loves music may be more inclined to buckle up when they realize that their vehicle (particularly Chevrolet cars and GMC trucks, like the 2015 Cruz, Colorado, Silverado, and GMC Sierra) won’t allow them to turn up the radio or get on the road until their seatbelts are fastened. There’s an optional package for certain GM vehicles that won’t let the car out of park unless seatbelts are fastened

Six documents every homeowner should keep

Posted on November 18, 2016October 14, 2016 by Victor Varma

As a homeowner, you may find yourself with a lot of paperwork. While you don’t have to keep all of it, it is a good idea to keep certain files for tax or mortgage purposes. There are several documents that you should keep as long as you own a property and some after you sell the property. Those include:

1. House deed: A house deed is a document that transfers ownership of a house from one party to another. Keep this for as long as you own a property, to have proof that you own it.

2. Closing documents: Keep documents related to closing the sale of your new home or property as long as you own the property, and three years after the sale.

3. Receipts for home improvements: Keep these for three years after you sell a property. It will help to show an increase in home value help to justify a sales price during the sales process, and can be useful when it comes to your property taxes.

4. Mortgage payoff statements: Keep mortgage payoff statements indefinitely. These are documents from your lender that both parties sign when you’ve successfully paid off your mortgage. Keeping them indefinitely offers you a defense if your lender tries to come back to you later and say that you still owe money on your mortgage.

5. Private or primary mortgage insurance statements and cancelled checks: Keep these for three years after the tax year in which you’ve claimed this deduction. This payment is part of your monthly mortgage payment.

6. Property tax payment: Keep your tax bill and statements showing payment for three years after you’ve made the payment.

The minimum time to keep important household documents is three years after payment is made, although it doesn’t hurt to keep many of these for longer. This is because the IRS can audit individuals for specific years for up to three years after the tax year (they can audit your 2015 tax return until the end of 2018.)

If you don’t keep these documents, you could find it difficult to state your case or provide proof during an audit or dispute related to your home.

Thanksgiving tradition: Cover table

Posted on November 15, 2016October 14, 2016 by Victor Varma

According to thekitchn.com, one family covers the Thanksgiving table with butcher paper and then gives everyone a marker.

They can doodle, and give thanks, and draw pictures throughout dinner.

The creation then becomes a banner to enjoy for the day.

If you don’t want to substitute butcher paper for your nice tablecloth, or if you would prefer conversation at dinner, consider hanging a large thankfulness paper on the wall or door. Attach markers so everyone can give their autograph or opinion. Or drawing. Or thanks.

If you want, you can clip autographs and notes off the banner and scrapbook them.

Another idea is to give the banner to the person who lives farthest away, a college student or family friend.