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NO MORE Mortgage Financial Peace Newsletter May 2011

david.bollard — Fri, 06 May 2011 15:47:23 +0000

The International Monetary Fund has just dropped a bombshell, and nobody noticed…

For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China. And it’s a lot closer than you may think.

According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now. Put that in your calendar. It provides a painful context for the budget wrangling taking place in Washington right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s dominant power.

According to the IMF forecast, which was quietly posted on the Fund’s website just two weeks ago, whoever is elected U.S. president next year will be the last to preside over the world’s largest economy. Most people aren’t prepared for this. They aren’t even aware it’s that close. Listen to experts of various stripes, and they will tell you this moment is decades away. The most negative will put the figure in the mid-2020s. But they’re miscounting. They’re only comparing the gross domestic products of the two countries using current exchange rates. That’s a largely meaningless comparison in real terms. Exchange rates change quickly. And China’s exchange rates are phony. China artificially undervalues its currency, the renminbi (or yuan), through massive intervention in the markets.

In addition to comparing the two countries based on exchange rates, the IMF analysis also looked to the true, real-terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies. Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising. Just 10 years ago, the U.S. economy was three times the size of China’s. We have lived in a world led by the U.S. for so long that there is no longer anyone alive who remembers anything else. America overtook Great Britain as the world’s leading economic power in the 1890s and never looked back.

Banks expect to send out 3.2 billion card offers this year…

The 3.2 billion card offers this year is up 15% from 2010, and more than double the 1.4 billion mailed out in 2009. “Issuers are actually sending the best offers we’ve ever seen in 20-plus years,” says Anuj Shahani, the director of competitive tracking services for Synovate Mail Monitor. As an aftereffect of the CARD Act, the attractive terms you see in pre-approved offers are also more likely to be those you get, according to a study by the Center for Responsible Lending.

Still, finding a card that offers the best of the recent changes without the costs isn’t easy. Many of the drawbacks are buried in the fine print (yes, there’s still lots of that). We dug through the cards to find the best new ones that might be worth a place in your wallet.

First, some good news: consumers have less credit card debt to wrangle. The average household owes $7,490 — 9% less than at the recession’s onset in 2008, according to Synovate Mail Monitor. Spending cutbacks have helped, but so have CARD Act provisions that allocate payments of more than the minimum toward high-interest rate debt first and forbid issuers from raising rates on existing balances in good standing, says Odysseas Papadimitriou, the chief executive of CardHub, a comparison site for credit and prepaid cards. Of course, higher interest rates overall and rising minimum payment requirements can cancel out those friendlier practices, making carrying a balance just as expensive, if not more so. And balance transfer fees now range as high as 5%, up from 3% a few years ago.

Managing debt in a post-CARD Act world requires at least two different cards: one with a good balance transfer offer and another with a low ongoing rate on purchases, just in case you can’t always pay off your monthly balance, says Papadimitriou. Right now, the most generous balance transfer deals for consumers offer at least 18 months at 0%, and charge no more than a 3% fee. With 21-month offers and 3% fees, both Citi Diamond Preferred and Citi Platinum Select fit the bill. (The 0% rate applies to purchases made during the first 21 months, too.) Discover More offers more time — up to 24 months — with a higher 5% transfer fee. But for those who need more time to pay down their debt and don’t plan to make any new purchases on the card, it could be the better deal, Papadimitriou says.

For the occasional balance-carrier, the best bet is typically the card with the lowest rate available. The Simmons First Platinum Visa currently offers a 7.25% APR, but only for people with excellent credit. For those with average credit, there are cards with average rates that cut interest rates for on-time payments and offer rewards for months you pay in full. Citi Forward cardholders see their rate drop 0.25% every three months that they pay on time and stay within their credit limit, for up to a 2% total reduction. After 0% for 12 months on purchases, the APR ranges from 12.99% to 19.99%. The higher interest rate and short introductory offers aren’t the best deal if you’re carrying a big balance. But the rewards, including 6,000 points for making $250 in purchases within three months and 2,500 for paperless billing (combined, worth $50 in cash or $60 in gift cards), can work out better for cardholders who only occasionally don’t pay off their balance in full.

How to negotiate the best deal on 6 common fees & expenses…

1. Credit Card Rates
• Why they are negotiable: Now that most of the dust has settled following the big credit card reform act, card companies are competing fiercely again for new customers. Issuers sent out 1.2 billion credit card offers in the third quarter of 2010 — more than three times the number sent during the same period in 2009. “Use the competition to your advantage,” says Ira Rheingold, executive director for the National Association of Consumer Advocates. “Don’t jump at the first offer. You should argue for the best rate.”
• Who to talk to: Call the 800 number associated with a new card offer (or the number on the back of a current card) and talk to the customer service rep. If the rep can’t — or won’t — adjust the rate, ask to speak with a manager.
• What to say: “I’ve gotten several credit card offers with lower rates. Tell me what you can do to beat those offers.”
• Possible savings: How much you’re able to lower your interest rate will depend on your credit and payment history, as well as your credit score. In a study conducted by the U.S. Public Interest Research Group several years ago, more than half of consumers who asked for lower rates got them, with their average APR dropping from 16 percent to 10.47 percent.

2. Mortgage and Refinancing Rates and Fees
• Why they are negotiable: “Mortgage lending has gotten difficult, which means that a lender will work hard to make a deal,” says Rheingold. And that’s particularly true for consumers with credit scores of at least 750.
• Who to talk to: Mortgage brokers or lenders at banks and credit unions.
• What to say: Get several estimates in writing and ask, “Here’s the best deal I can get. Can you beat it?”
• Possible savings: In addition to offering better rates, lenders might reduce certain fees or even waive them altogether. To negotiate the lowest out-of-pocket costs, ask for discounts on all upfront fees, including application and origination fees. According to the Federal Trade Commission’s website, comparing and negotiating mortgage fees can result in thousands of dollars of savings.

3. Home Improvements
• Why they are negotiable: “Business is slow and that means contractors are willing to haggle over their prices,” says Greg Daugherty, executive editor of Consumer Reports. Plus, the prices of many common home building materials are down as much as 35 percent from their peak in the mid-2000s.
• Who to talk to: The contractor.
• What to say: “What are the options for less expensive materials? And what discounts can you offer me on labor?”
• Possible savings: Up to 20 percent of the cost of the project, according to a new survey by Angie’s List, a website that publishes surveys and consumer reviews of service businesses. Of the home improvement contractors who were surveyed in 2010, 80 percent were willing to drop their prices to get a job (compared with 43 percent in 2008). And more than half of the contractors surveyed said they were willing to lower prices by 10 percent, with nearly 25 percent willing to drop their fees up to 20 percent.

4. Home Appliances and Electronics
• Why they are negotiable: Store managers understand that a discounted deal done today is often better than a potential deal in the future (and definitely better than no deal at all). One trick is to go first thing in the morning or just before the store closes when there are fewer customers. “A manager will hesitate to offer a discount if he thinks he’ll have to make the same deal with all of the customers who overhear the negotiation,” says Consumer Reports’ Daugherty.
• Who to talk to: A store’s manager or assistant manager.
• What to say: “I like this model. If you can give me a discount and free delivery, I’ll buy it today.”
• Possible savings: Profit margins are generally fairly thin on appliances and electronics, so getting 10 percent off is a reasonable goal, particularly if you can also get them to throw in free delivery and installation. Consumer Reports found that three-quarters of shoppers were able to negotiate a better deal on major appliances, with an average savings of $100 per appliance.

5. Cars and Vehicles
• Why it’s negotiable: Car dealerships are one of the few places where price negotiations are not only acceptable, they’re expected, notes Philip Reed, senior consumer advice editor for car-buying site Edmunds.com. But instead of trying to negotiate your purchase price down from the MSRP (the sticker price), as you might for other items, ask to see the invoice price (the price the dealer paid for the car) and work your way up from there. You can look up dealer invoice prices for free on Web sites like IntelliChoice.com, Edmunds.com, and KBB.com.
• Who to talk to: Sales staff.
• What to say: “Another dealership has given me a better price on the same model. Tell me how you can beat their offer.”
• Possible savings: It’s possible to save more than $1,000 on a new car by negotiating smartly, according to Reed. And you’ll net even higher savings by also negotiating the value of your trade-in, as well as financing terms and the cost of extended warranties.

6. Medical Bills:
• Why they’re negotiable: Patients usually assume that the cost for various medical procedures and tests are set in stone, but often they’re not. And with health care companies shifting more out-of-pocket costs onto consumers, asking for potential discounts is essential, particularly since there’s often a huge variance in costs among providers, says Angie’s List spokeswoman Cheryl Reed. In Washington D.C., for example, the price for an MRI of the right knee ranges from $400 to $1,501, according to a recent report.. You can look up average prices in your area for various procedures at Healthcare Blue Book.
• Who to talk to: The billing administrator.
• What to say: “This is a significant expense for me. Is there a discount for paying upfront or in cash? What other kinds of discounts might be available?”
• Possible savings: Fifty percent or more. An Angie’s List poll found that 74 percent of respondents who negotiated their medical bills were successful, often paying less than half of the original cost.

What is the danger of making minimum credit card payments…

Gift cards: For the person who has everything (or whose tastes you simply cannot fathom), gift cards are a safe bet. You can find cards on discount at www.giftcardgranny.com. The site pulls prices from six gift card discounters, which buy unwanted cards from other people that they then resell for less than face value. Discounts can be as much as 50%, although most are in the 15%-to-20% range. And the rules for gift cards just became more consumer-friendly (see Gift Cards: A Better Deal Now).

Checking accounts: Banks everywhere are eliminating free checking accounts, but with a little creativity you can still avoid paying that extra $8 to $15 a month. If you arrange for direct deposit or maintain a minimum balance, or bank online and skip the paper statement each month, your bank is likely to waive the fee. About 750 community banks and credit unions offer free checking accounts with no minimum-balance requirement. They’ll also pay as much as 3.5% interest if you use your debit card ten to 15 times a month, arrange for automatic payment or direct deposit each month, and receive your statement electronically. www.checkingfinder.com.

Groceries: For many families, a bulging budget is the result of excess spending at the supermarket. Ditch the gourmet grocers and shop at Trader Joe’s or warehouse stores. While you’re at it, use coupons, which you can find online (at CouponMom.com, Coupons.com and CouponCabin.com). Or, for $5.95 a month, you can get customized coupons from Shopping Nanny. Shopping Nanny recently guaranteed that if you spend more than $90 a week at the grocery store, you’ll save $40 a month using its service — or your next month’s membership is free.

Connectivity: Bundling your cable-TV, phone and Internet service can save you — dare we say it — a bundle. For example, you pay just $85 a month for 12 months if you sign up online with Verizon for unlimited local and long-distance calling, high-speed Internet service and DirecTV with DVR service. That saves $50 a month compared with buying the same services separately.

Cell-phone plans: Wireless carriers keep you tethered to them with two-year contracts and tempt you to renew with snazzy new phones or monthly discounts. But you can slash your costs with a prepaid plan, especially if you’re paying extra for text messaging and data plans. All of the major carriers plus a number of smaller firms offer prepaid plans. Compare them at www.prepaidreviews.com/compare , then check the carrier’s Web site for more details. Before you compare plans, decide what is most important to you.

Water: A low-flow shower head is easy to install — just screw off the old shower head and twist on the new. Because it restricts the water output to no more than 2.5 gallons per minute (older shower heads send as many as 5.5 gallons per minute down the drain), you can save 25% to 60% of the water and 50% of the energy it takes to shower and shampoo you and your family. The shower heads generally run $10 to $20 a pop (some utility companies give them away) and screw into existing fittings. The new fixtures — labeled WaterSense — go as low as 1.5 gpm, saving 7,300 gallons and $30 to $100 a year over their 2.5-gpm counterparts.

February 2011 NO MORE Mortgage Newsletter

david.bollard — Thu, 03 Feb 2011 20:41:48 +0000

WHEN INCOME IS CUT, HOW SHOULD I PRIORITIZE CASH FLOW?…

1. Pay the Rent/Mortgage First: Regardless of your financial circumstances, you need a roof overhead, a place to call home, a sanctuary from the world at the end of the day. So, your housing comes off the top of your check. If your check is not big enough, you may have to relocate or find a roommate. When applying for a loan, I was told the house payment or rent should not be more than 25% of the monthly income. Any amount above and beyond that percentage and you will surely be financially challenged.

2. Pay the Utilities Next: The roof over your head will be very uncomfortable, if you are freezing to death in the winter, or roasting to death in the summer. You need to keep up with your utilities. If you are ever required to pay late fees or reconnection charges, it will be extremely costly and put your finances further in the toilet. If your utilities are too high, you must conserve. In the winter, turn the heat down a couple of degrees and wear a sweater, if necessary. In the summer, turn the air conditioning down to a bearable temperature. When you are not at home, keep the house about 10 degrees lower than when you are home. The same goes for nighttime. Crawl deeper under the covers and save.

3. Pay the Remaining Bills: Before you do anything else with your money, pay your creditors. You bought it, your pay a monthly fee for service, or you already used it, and you need to pay. If you do not pay your bills, the cost rises for the people that do, your credit will be ruined, and debt collectors will start to call.

4. Buying Groceries: You have met all your financial obligations, and you need to buy groceries. Now what? You already know you do not have enough to shop for your favorite food items. You need to shop sales, used coupons-even if they may be a pain to collect, buy generic, and cut back on your list. For example, I love a good steak. However, I am on a hamburger budget. So, I buy hamburger. Sometimes, even when hamburger seems too expensive, I purchase eggs, beans, potatoes, and peanut butter. These are excellent sources of economical protein. What you buy at the store may not be your favorite items, or even your preferred brands, but you are doing the right thing to stay within your budget.

5. Say “No”: If staying within the budget is still impossible, you need to learn to say “no”, even to yourself. Personally, I like to watch television, when I have the time. However, if the privilege of cable keeps me from observing the first four budget constraints, it is bye-bye cable. I would much rather feed my kids than watch the news. If you have more expenses than you have money, obviously something has to go. You may have to say “no” for many things you or your family want, but it is more important to budget for housing, utilities, absolutely necessary bills, and food. Anything else is optional.

How to stay on a tight budget, and live within your means…

As a single mother of two growing children, I have a tight budget, even with child support payments. Just when I think I am getting ahead, somebody needs a new pair of glasses or a dental visit. Forget that my youngest is having growth spurts and needs a new wardrobe two or three times a year. With my oldest going to college soon, and still paying off my own student loans, I have tough money decisions to make.

Just like everyone else, I have to prioritize how I spend any income. First of all, the house payment, car payment, and student loan are automatically deducted from my account, so nothing is paid until that money is subtracted from the budget. Next, I pay the utilities. Since my first full-time job was working with the electric company for 10 years, and the fact that the family lives in cold country, I know letting those bills slide will only cost me more in the long run. Then, I am trying to pay off credit card debt, one teaspoon at a time. As you all know, paying the minimum is not an option, if a person ever hopes to get out of debt. So, I try to pay extra, and try to keep up with my debt plan software.

Finally, I can go to the grocery store. Now, I know many will say to go to the store first, feed the kids, and then worry about the bills. Some have even criticized me for doing the opposite. However, it works for us. Since I have a fluctuating income, some months we have a Mac and cheese budget, and other months we can do better. I will say this—my family has never gone hungry. We may not always get to eat our favorite foods, but my kids always get filled up.

I know I said “finally” about the grocery store, and some of you may be wondering why I put food after debts. It’s because I believe food is where we can save the most money, and so it’s the most flexible. Others ask me about the entertainment piece of the pie. Well, going to the movies is a once or twice a year treat. We have a library of movies we can watch on the television. We play games on the computer or get out a deck of cards. Between school, work for my boys, and extracurricular activities, we are not really concerned about an entertainment allowance. We have decided to set them aside for a higher goal, and as a family, we are all on the same page. I can say that I believe the battles we have fought, and the hard choices we have made, will stick with my sons for the rest of their lives. I believe that as a Mom, I am teaching lifetime skills, and leaving a legacy that will bless my grandchildren. This is a huge reward for me.

Ever had a “no-money weekend?…

Think about it—when do you spend the most, during the week or on the weekend? For most people, it’s the weekend. So, here are some fun ideas on how to combat the 2 favorite days for overspending. Take it to heart and try it, even once/month, and what new things you can add to your life.

1. Check out the community calendar. Look at your town’s website (as well as those of cities and towns nearby) or stop by city hall to find a list of events going on in the community, many of which are free. You’ll often be surprised at how many interesting (and free) activities are going on right now in your area.

2. Visit your community library. Not only is a library a warehouse of books, most libraries also have extensive CD and DVD collections you can check out. Many libraries also have “story time” for young children, film nights, book clubs, and many other events that you may be unaware of – completely for free. Stop in and check out what they have to offer.

3. Get involved in community sports. Many towns have community sports fields where both youth and adult sports leagues and activities are regularly going on throughout the weekend. Stop by, watch a game or two, and if something intrigues you, look into joining either as a participant or as a volunteer.

4. Get your financial papers in order. This may not sound like a fun activity up front, but the peace of mind it gives you will make your life a lot more relaxing. Spend an hour or two organizing all of your statements and other financial documents. This is a perfect time to start your own filing system.

5. Check out some podcasts. Podcasts are wonderful things – top-notch audio programs available for you to listen to for free. Give some a sample – you can do it easily by using iTunes. Visit the Podcast section of the store and check a few out. My favorites include The Splendid Table (on food topics), Marketplace (on economics and business), Speaking of Faith (on religion), Fresh Air (interviews of general interest), This American Life (quirky general interest stuff), and This Week in Tech (technology news), among many others.

6. Play board games. We have a pile of board games, mostly received as gifts, that we often pull out and play, plus our closest friend has a few choice ones. Classic games like Monopoly and Pictionary can be great fun, but our favorites are Settlers of Catan, Cartagena, Puerto Rico, and especially Ticket to Ride. Just dig through the recesses of your closet, find an old board game you haven’t played in ages, and bust it open!

7. Bake a loaf of homemade bread. You probably have everything you need to make a loaf of bread in your kitchen right now (except for maybe the yeast). Anyone can do it, and the bread turns out deliciously. Here’s a detailed visual guide for making a simple loaf with minimal ingredients and complexity.

8. Learn how to juggle. All you really need is three balls and a video showing you how to do it. Not only is it a fun activity to learn, it’s something that’s fun to bust out as a party trick on occasion (trust me, you can always get people to smile if you juggle three fruits in the kitchen while preparing something).

9. Teach yourself how to change the oil in your car. If you’re due for an oil change, just bring the oil you need home with you and teach yourself how to do it. All you really need is an old pan to catch the wasted oil and a funnel to pour the old oil back into the canisters for later disposal. Just use your car manual as a guide for the procedure and you might just find that not only is it a lot easier than you thought, but it’s a useful skill to have and it’s cheaper than taking your car into Jiffy-Lube (or wherever you take your car for oil changes).

10. Meet your neighbors. Make an effort to introduce yourself to your neighbors if you don’t know them well. Invite any interesting ones over for a cup of coffee and a chat, just to get to know each other better. Your neighbors can not only become friends, but can also be a valuable resource – a friendly pair of eyes on your property when you’re away or a helpful set of hands when you’re trying to complete a challenging task.

11. Have a “cupboard potluck.” Go through your cupboards and find any items that might have slipped to the back over time. Invite some friends to do the same, then get together for a potluck dinner prepared from only these ingredients and whatever else you have on hand. It makes for a “free” meal and a lot of fun for everyone involved.

12. Clear out your media collection – books, DVDs, CDs, etc. Just go through what you’ve got, determine which ones you’d actually like to keep, and get rid of the rest. You can either sell them at a used media shop or swap them online using services like PaperBackSwap, SwapTree, and SwapADVD. In either case, you’ll get rid of stuff you don’t watch or read or listen to any more in exchange for either some money or new media to enjoy.

13. Make a 101 Goals in 1001 Days list – then start on some of them. A 101 Goals in 1001 Days list is a very effective way to codify all of the ideas of things you’d like to do all into one place, so that when you have spare time, you can just turn to the list and do what’s next on it. Spend some time thinking of things that belong on this list, then when it’s finished, you’ll have an excellent list of potential accomplishments and be ready to go with lots of activities.

Some Inspiring Thoughts on Financial Discipline…

1. Check out the community calendar. Look at your town’s website (as well as those of cities and towns nearby) or stop by city hall to find a list of events going on in the community, many of which are free. You’ll often be surprised at how many interesting (and free) activities are going on right now in your area.

2. Visit your community library. Not only is a library a warehouse of books, most libraries also have extensive CD and DVD collections you can check out. Many libraries also have “story time” for young children, film nights, book clubs, and many other events that you may be unaware of – completely for free. Stop in and check out what they have to offer.

3. Get involved in community sports. Many towns have community sports fields where both youth and adult sports leagues and activities are regularly going on throughout the weekend. Stop by, watch a game or two, and if something intrigues you, look into joining either as a participant or as a volunteer.

4. Get your financial papers in order. This may not sound like a fun activity up front, but the peace of mind it gives you will make your life a lot more relaxing. Spend an hour or two organizing all of your statements and other financial documents. This is a perfect time to start your own filing system.

5. Check out some podcasts. Podcasts are wonderful things – top-notch audio programs available for you to listen to for free. Give some a sample – you can do it easily by using iTunes. Visit the Podcast section of the store and check a few out. My favorites include The Splendid Table (on food topics), Marketplace (on economics and business), Speaking of Faith (on religion), Fresh Air (interviews of general interest), This American Life (quirky general interest stuff), and This Week in Tech (technology news), among many others.

6. Play board games. We have a pile of board games, mostly received as gifts, that we often pull out and play, plus our closest friend has a few choice ones. Classic games like Monopoly and Pictionary can be great fun, but our favorites are Settlers of Catan, Cartagena, Puerto Rico, and especially Ticket to Ride. Just dig through the recesses of your closet, find an old board game you haven’t played in ages, and bust it open!

7. Bake a loaf of homemade bread. You probably have everything you need to make a loaf of bread in your kitchen right now (except for maybe the yeast). Anyone can do it, and the bread turns out deliciously. Here’s a detailed visual guide for making a simple loaf with minimal ingredients and complexity.

8. Learn how to juggle. All you really need is three balls and a video showing you how to do it. Not only is it a fun activity to learn, it’s something that’s fun to bust out as a party trick on occasion (trust me, you can always get people to smile if you juggle three fruits in the kitchen while preparing something).

9. Teach yourself how to change the oil in your car. If you’re due for an oil change, just bring the oil you need home with you and teach yourself how to do it. All you really need is an old pan to catch the wasted oil and a funnel to pour the old oil back into the canisters for later disposal. Just use your car manual as a guide for the procedure and you might just find that not only is it a lot easier than you thought, but it’s a useful skill to have and it’s cheaper than taking your car into Jiffy-Lube (or wherever you take your car for oil changes).

10. Meet your neighbors. Make an effort to introduce yourself to your neighbors if you don’t know them well. Invite any interesting ones over for a cup of coffee and a chat, just to get to know each other better. Your neighbors can not only become friends, but can also be a valuable resource – a friendly pair of eyes on your property when you’re away or a helpful set of hands when you’re trying to complete a challenging task.

11. Have a “cupboard potluck.” Go through your cupboards and find any items that might have slipped to the back over time. Invite some friends to do the same, then get together for a potluck dinner prepared from only these ingredients and whatever else you have on hand. It makes for a “free” meal and a lot of fun for everyone involved.

12. Clear out your media collection – books, DVDs, CDs, etc. Just go through what you’ve got, determine which ones you’d actually like to keep, and get rid of the rest. You can either sell them at a used media shop or swap them online using services like PaperBackSwap, SwapTree, and SwapADVD. In either case, you’ll get rid of stuff you don’t watch or read or listen to any more in exchange for either some money or new media to enjoy.

13. Make a 101 Goals in 1001 Days list – then start on some of them. A 101 Goals in 1001 Days list is a very effective way to codify all of the ideas of things you’d like to do all into one place, so that when you have spare time, you can just turn to the list and do what’s next on it. Spend some time thinking of things that belong on this list, then when it’s finished, you’ll have an excellent list of potential accomplishments and be ready to go with lots of activities.

November 2010 NO MORE Mortgage Newsletter

david.bollard — Wed, 03 Nov 2010 21:28:21 +0000

Welcome to the NO MORE Mortgage Newsletter

Your credit score is an important number…

1. Paying late: Thirty-five percent of your credit score is your payment history. Consistently being late on your credit card payments will hurt your credit score. Pay your credit card bills on time to preserve your credit score.

2. Having a balance charged off: When creditors think you’re not going to pay your credit card bills at all, they charge off your account. This account status is one of the worst things for your credit score.

3. Having an account sent to collections: Creditors often use third-party debt collectors to try to collect payment from you. Creditors might send your account to collections before or after charging it off. A collection status shows that the creditor gave up trying to get payment from you and hired someone else to do it.

4. Defaulting on a loan: Loan defaults are similar to credit card charge-offs. Defaults show you have not fulfilled your end of the contract.

5. Having your home foreclosed: Getting behind on your mortgage payments will lead your lender to foreclose on your home. In turn, the late payments will hurt your credit score and make it harder to get approved for future mortgage loans. Late mortgage payments are worse than late credit card payments.

6. Getting a judgment: A judgment shows you not only avoided your bills, the court had to get involved to make you pay the debt. While they both hurt your credit score, a paid judgment is better than an unpaid one.

7. High credit card balances: The second most important part of your credit score is level of debt, measured by credit utilization. Having high credit card balances (relative to your credit limit) increases credit utilization and decreases credit score. A maxed out card is the worst.

8. Closing credit cards that still have balances: When you close a credit card that still has a balance, your available credit drops to $0 but your balance remains. This makes it look like you’ve maxed out your credit card, causing your score to drop.

9. Closing old credit cards, especially those with available credit: Another component of your credit score, 15%, is length of credit history – longer credit histories are better. Closing old credit cards, especially old cards, makes your credit history seem shorter. Also if you have several credit cards some with balances and some without, closing those credit cards without balances increases credit utilization.

10. Applying for several credit cards or loans: Credit inquiries account for 10% of your credit score. Making several credit or loan applications within a short period of time will cause your credit score to drop. Keep applications to a minimum.

11. Having only credit cards or only loans: Mix of credit is 10% of your score. When you have only one type of credit account, either loans or credit cards, your credit score could be affected. This factor mostly comes into play when you don’t have much other credit information in your credit history.

NO MORE Mortgage Tax Update

IRS STOPS MAILING OUT FORMS…

The Internal Revenue Service says it will no longer mail out tax packages with forms and instructions for filing a paper return. The change comes as an increasing number of taxpayers are filing their returns electronically. In early October, taxpayers who filed paper returns last year should have gotten a postcard from the IRS with instructions on where and how to get the forms needed for filing 2010 returns. In short, the forms will be available in January from the IRS website or at select libraries and post offices.

The IRS says people who file electronically can get refunds deposited directly into their bank accounts in as little as 10 days. Otherwise it can take up to six weeks to get a refund check in the mail.

The IRS says the move will reduce mailing costs. But the change also reflects changing habits; the majority of individual filers now file electronically. Just 8 percent of individual taxpayers got paper forms and instructions in the mail last year. The rest either filed electronically or used a paid tax preparer or software. Taxpayers can file returns electronically for free on the IRS website, www.irs.gov . The agency also gives free electronic filing help to those who earn $58,000 or less through a program that walks taxpayers through their returns by asking a series of questions about income, expenses and other financial transactions.

Signs You’re Headed Toward Accumulating Credit Card Debt…

How do you know if you’re using your cards unwisely? NO MORE Mortgage presents some ways to tell you’re on the path that will create more and more credit card debt. Here are 10 signs that you are headed toward accumulating credit card debt from NO MORE Mortgage.

1. You use credit to meet basic needs: Your income should be used to buy everyday items like food, clothing, and gas. Having to use credit cards to cover these types of purchases is a big sign of financial trouble.
2. You transfer balances to avoid credit card payments: There are times when a credit card balance transfer makes sense, like to consolidate credit card balances or to get a lower interest rate. However, frequently transferring balances instead of making credit card payments is a red flag. The fees to make these transfers are often higher than the monthly payment you might be trying to avoid.
3. You skip one credit card bill to pay another: Prioritizing credit card payments is wise. But skipping payments is always unwise. If you consistently find yourself too strapped for cash to make your credit card payments, you are already in credit card trouble.
4. You avoid or ignore credit card statements: If only wishing away credit cards actually made them go away. Pretending your credit card debt doesn’t exist only gives it time to grow. Facing credit card debt sooner gives you the opportunity to tackle debt before it gets out of control.
5. You charge more than you pay: Imagine trying to fill a hole while someone shoveled out more dirt than you put in. Your hole would never get filled would it? It’s the same with debt. If you’re charging more than you’re paying, your credit card debt will always continue to increase.
6. You don’t have an emergency fund: If you don’t have an emergency fund, you’ll feel forced to use your credit card for every little item that is out of the ordinary. Credit card debt created because of unexpected expenses can be hard to pay off, especially if your budget is already stretched.
7. You don’t have a plan to pay off your credit card debt: You know what they say, “Failing to plan is planning to fail.” If you’re not actively working to pay off your credit card balances, you could end up unnecessarily paying on the cards for years to come. Whether you have excessive credit card debt or not, you should always have a plan to pay off your balances.
8. You use credit to “afford” expensive items: The allure of credit is that it tricks us into thinking we can afford to buy more than we really can. Truth is, only extra income or lower expenses (or both) enables you to afford more expensive items. Incurring credit card debt to maintain a lifestyle you really can’t afford isn’t a losers game.
9. You have past due accounts: If you have credit cards that are currently past due, you’ve probably run into unfortunate financial trouble that’s keeping your from making payments. Remember, the more in arrears your accounts become, the harder it will be to bring them current again. Take a look at your monthly budget for money you could find to get your credit accounts back on track.
10. You have maxed out credit cards: If your credit cards are all maxed out, you’re not headed for credit card debt, you’re already in deep. What now? Make a decision to pay off your credit card debt or take more severe steps to get rid of them, even if it hurts your credit. You must learn to make wiser choices about credit card use in the future.

STRETCHING YOUR BUDGET PAST AGE 55…

Of the 14.9 million unemployed, more than 2.2 million are 55 or older, according to the U.S. Labor Department. And almost half of those have been unemployed six months or longer. The unemployment rate in that age group is a record high 7.3%. NO MORE Mortgage shares how you can make every dollar count.

1. Retirement Accounts: If you have no choice but to dig into your retirement account, there are ways to minimize the tax hit and penalties. Most people know that if you withdraw money from an individual retirement account or 401(k) before age 59 ½, you’ll pay federal income taxes on the withdrawals AND you will get hit with a 10% penalty. But the tax code has a provision, 72(t), that allows someone younger than 59 1/2 to withdraw a set amount of money at least five times until age 59 1/2 or for five years, whichever is longer. You won’t pay a penalty, but the money is still taxed. The caveat: Once you start taking out the money, you’re locked into making withdrawals, says Jerod Wurm, a certified financial planner in Sacramento. Jonathan Pond, a financial adviser for AARP, says that if you were laid off this year, you might want to delay tapping your retirement money until next year, when you might be in a lower tax bracket. If you need a chunk of money for a short period of time, consider the 60-day rollover requirement. This rule allows you to take money out of a qualifying retirement account, tax- and penalty-free, once a year, regardless of your age — but the full amount must be deposited back into the account within 60 days.
2. Health Insurance: Most states have programs that offer low-cost coverage, typically if one earns less than $30,000 a year. The MassHealth program in Massachusetts, for example, covers adults and children under age 19 if they live with the parents. Short-term insurance policies, which typically cover unexpected illnesses and accidents, can run as low as $30 per person for a month. Catastrophic insurance typically starts as low as $30 a month depending on a person’s age and health. Have you been denied coverage or been quoted an exorbitant rate because of a pre-existing condition? You can enroll in the federal Pre-existing Condition Insurance Plan, a part of the new health-care law. Premiums range from $320 to $570 a month per person depending on the state.
3. Real Estate: The typical advice is to downsize to a cheaper home in a cheaper locale. But today’s real-estate market is anything but typical. And for people who are hunting for work or have a spouse with a much-needed job, moving to a state with a lower cost of living may not be feasible. So use your home to make some extra cash. If you live near a college or university, for instance, rent an extra room to a student or recent graduate. You can easily get a few hundred dollars a month. Contact a school’s student-housing department or put up fliers on campus. For homeowners who are 62 and over and still have equity, another option is a reverse mortgage, which allows older homeowners to tap their home’s equity while they remain in the house. The loan typically doesn’t come due until the homeowner sells the house or dies. And upfront fees have come down some recently.
4. College Expenses: Still on the hook for college tuition for your kids or yourself? Try renegotiating loan and aid terms. Jerome Chester, a 51-year-old from Bethesda, Md., who has been unemployed since June, went to student-loan provider Sallie Mae to renegotiate his tuition loan. He was able to defer payments, about $1,000 a month, for six months. And a school’s aid package isn’t always set in stone. Go back to the school and ask for more aid given your financial troubles. Results will vary by school and a family’s financial status.

NO MORE Mortgage helps with homeowners insurance

EXPERIENCED AN INCREASE IN YOUR MORTGAGE PAYMENT?…

Homeowner’s insurance rates have been increasing in almost every state, which has caused many NO MORE Mortgage clients to see an increase in their mortgage payment because their escrow amount increases. This overall increase in homeowner insurance rates is caused by a variety of factors, but it appears that this trend is not going to reverse in the near future. We have asked Heritage Insurance, Inc. to work with NO MORE Mortgage customers that would like to reduce their homeowner’s insurance premium. They will not be able to save every customer on their homeowner’s policy, but it appears that the vast majority will be able to realize some savings, and some could see very significant savings.

For those of you that are interested, Heritage will review your current policy and then offer quotes from other insurance companies. This is a free service. They are a national broker that sells for 127 different insurance companies. Some of these companies are large nationwide companies (Traveler’s, Safeco, The Hartford, Progressive, etc.) and some are smaller, regional companies. This review will allow you to see a variety of prices and determine if you can reduce your insurance premium by switching to another carrier.

For those of you that are interested in trying this service using the resources of Heritage, we have pasted a link to The Better Business Bureau’s report on their company at http://www.bbb.org/louisville/business-reviews/insurance-services/heritage-insurance-service-inc-in-louisville-ky-3067. They have been an accredited BBB business since 1979.

Call now to receive your policy review at 888-782-1391, or you may send an email to chris.oneill@nomoremortgage.com. There is no cost or obligation. The analysis can be sent to you via email, and no salesman will call. NO MORE Mortgage has a strict privacy policy that prevents us from giving our client information to any third party. This is a free service available only to NO MORE Mortgage customers.

October 2010 NO MORE Mortgage Newsletter

No More Mortgage — Fri, 15 Oct 2010 20:10:24 +0000

NO MORE Mortgage Financial Security Newsletter

Two-thirds of Web surfers fall prey to online crime….

Most of us now purchase online, the following study results are worth taking a second look. Note that half the cases never get solved.

The average amount of time spent to resolve a cybercrime and the average cost vary from country to country, according to the Norton study. About two-thirds of Internet users globally and nearly three-quarters of Web surfers in the U.S. have been victims of online crime, according to a study to be released on Wednesday.

The top countries as far as reported victims are China, Brazil and India tied for second, and then the U.S., according to the findings of the study, titled “Norton Cybercrime Report: The Human Impact.” More than 7,000 adults in 14 countries were interviewed for the study. While one-quarter of respondents said they expect to be victimized by online crime, only half said they would change their behavior if they became a victim. Of those who have been victimized, 44 percent reported the crime to the police. It takes an average of 28 days to resolve a cybercrime and costs on average $334, the report found. One-third of respondents who were victimized said they never fully resolved the matter. Computer viruses and malware are the most common types of online attacks, with 51 percent reporting being impacted by them, followed by 10 percent hit by “online scams,” 9 percent by phishing and 7 percent each for social network profile hacking, online credit card fraud and sexual predation, according to the report. Read more on CNET.

Here is the economic statistic of the month…

The chart tells its own story. This means one home in seven is now at least 30 days delinquent on their mortgage payment, and it’s obvious where the increase is coming—from those who are late more than 90 days or in foreclosure. This is due to continuing under and unemployment, and it won’t change until people get back to work.

Health-care Answers to seven questions about new rules…

Parents who want to add their adult children to their health plans are about to get some relief as the health-reform provisions kick in on 9/23, six months from when the landmark Obamacare health insurance bill was signed. Many of the changes are meant as a bridge until 2014, when for the first time health plans will be available, with subsidies for those who can’t afford it, in a new insurance marketplace; most individuals will have to have coverage or face a financial penalty; and insurers won’t be able to reject applicants who already have health conditions. Even though this first wave of the health overhaul’s significant changes takes effect for most health plans Sept. 23, many Americans won’t be able to reap the benefits until January at the earliest because the law applies to new health plans begun or renewed on or after Sept. 23.

Here are answers to seven common questions, based on interviews with health-policy experts.

1. What is a grandfathered health plan? Some employers and insurers may make only minor changes to their health plans so they don’t have to comply with all the new regulations right away. These are so-called grandfathered plans, and every year the law makes it harder to be one. Employers and insurers are supposed to disclose in writing if their health plans have grandfathered status. If you’re unsure whether your health plan is adopting the new rules, ask if it has grandfathered status.

2. What new benefits apply to both grandfathered and new health plans? There are three major new benefits that apply to both kinds of plans. Health plans that place lifetime dollar limits on the benefits they potentially pay out on behalf of a member will no longer be able to impose such limits. Right now, those lifetime limits can be low in some industries and types of coverage. All health plans also will be banned from excluding children under age 19 because they have preexisting health conditions. And they can’t retroactively cancel your coverage if you get sick, a practice known as rescission that became a problem in the individual health-insurance market.

3. Are annual benefit limits still allowed? Yes, but the thresholds get higher each year before they completely disappear in 2014. For new group health plans, the minimum annual limit on how much a health plan has to pay out in benefits rises to $750,000, but cash-strapped small employers can apply for a waiver. While some seriously ill patients still may find the $750,000 annual limit a hardship, this policy change, if applied broadly, would meet many cancer patients’ needs.

4. What’s changing with preventive care? For new health plans, preventive-health services that have proven effective with a grade of “A” or “B” from the U.S. Preventive Services Task Force will be available to consumers without cost-sharing, making them effectively free to the patient. That includes routine immunizations and screenings such as those for breast, colon and cervical cancer. Smoking cessation is also covered, but it’s unclear how many counseling sessions would be free of cost-sharing. Plus, since the task force makes recommendations for people at average risk of diseases, those deemed high risk still may have to pay a copay for screenings their doctor prescribes. Questions remain about how patients can claim the benefit in some cases. But the change will help people who currently forgo routine screenings because of out-of-pocket costs.

5. Can I add my adult kids to my health plan? In most cases, parents will be able to add or keep their adult children on their health plans until those children turn 26, regardless of their educational, marital or dependent status, and health plans can’t charge more for them than other dependents. Most employers today only cover children to age 23 if they’re in school or 19 if they’re not in school.

6. Will I have any more recourse if I need to fight an insurer’s decision on a claim? Yes. New health plans will have to open up a second level of appeal through an external third party. Today health plans and employers have an appeal process they manage if they have someone who feels their claim was wrongfully denied. New plans will have to have an external appeal process that would potentially override the first-level internal decision.

7. Will my health-plan costs rise because of the new benefit requirements? Probably, but the additional cost will take different forms. A recent survey of large employers from the National Business Group on Health suggested the new rules related to health reform will add about 2% to the cost growth projected for their 2011 health plans. Many employers are scouring their plan designs for ways around cost problems. Because almost all of the reforms that hit early are in the form of benefit mandates, establishing minimum standards for benefits, this will raise cost for employers who do this without cutting somewhere else. Most employers are looking to keep their costs even or mitigate their cost increases by implementing other changes at the same time. It appears that was already happening before health reform became the law of the land. Thirty-eight percent of large companies said they reduced coverage or raised co-pays in their 2010 health-benefit offerings, up from 22% who did so in 2009, according to a survey released earlier this month from the Kaiser Family Foundation. What’s more, 36% said they increased the workers’ share of the premiums this year, up from 22% who passed on a bigger share of the premium last year. Read More at MarketWatch.

Featured Article: Overcoming the Urge to Splurge with NO MORE Mortgage

Since 1996, NO MORE Mortgage has been helping thousands of clients across the country reach the path to financial security. Our comprehensive approach to professionally managed debt elimination, combined with ongoing financial education, provides results to NO MORE Mortgage clients who enjoy interest savings of $20,000 to $200,000 or more. Find out how you can eliminate all of your debt, including your mortgage, in as little as nine years, without harming your credit!

For more information and to get a FREE audio CD call NO MORE Mortgage today. 1.800.285.9102

Will the NO MORE Mortgage Financial Plan work for me?

To find out if you qualify today! Find out what thousands of satisfied NO MORE Mortgage clients already know about taking control of their finances, and using the power of reverse compounding interest to beat the banks at their own game! NO MORE Mortgage Representatives are standing by to answer all of your questions about our program, including how soon you will be debt free, and how much money you will save in interest!

NO MORE Mortgage: What You Should Know about Consumer Credit Counseling

No More Mortgage — Tue, 05 Oct 2010 23:09:30 +0000

NO MORE Mortgage specializes in assisting clients who are able to meet their monthly debt obligations.

Sometimes when financial reversals hit, or spending has simply gotten out of control, we are forced to admit that our financial inflow is not equal to our outflow. We are simply spending more than we earn.

If this trend is not stopped, and credit cards are maxed out, and there is nowhere else to borrow money, the ultimate consequence is that our finances “hit the wall,” and we simply run out of cash. We are insolvent.

If you are reaching a “breaking point” similar to the one described above then NO MORE Mortgage may not be the answer for you. There are, however, three main solutions that can be considered. One is bankruptcy. Another is Debt Settlement. A third is consumer credit counseling.

NO MORE Mortgage is not a credit counseling firm. There is a big difference between NO MORE Mortgage and the other debt elimination categories described above.

NO MORE Mortgage does not handle client funds.
NO MORE Mortgage does not negotiate with creditors to lower balances, interest rates, or monthly payments.

If you are considering credit counseling be sure to spend some time researching your options before signing up with an agency that you do not know much about. Most people are not familiar with their options and the programs available, and when money is tight, emotions are usually running high, and it’s easy to make a bad decision.

There are many credit counseling agencies to choose from. Knowing what to look for is key to your success. Reputable agencies will provide you information upfront about their company without you having to provide any of your own personal identifying information.

Your task in choosing the right agency is to be sure that you do your homework. NO MORE Mortgage can help you make the right decision. Here are our recommendations:

You should interview at least two agencies.
After you receive your initial consultation, you should contact the Better Business Bureau or your State Attorney General to see if there have been any unresolved complaints on the agency.
Be sure the agency is charging you reasonable fees (not more than $50/month for a debt management plan).
The credit counseling agency should be non-profit.
The agency should have been in business for at least five years.
The counselors at the credit counseling agency should be certified by an independent organization.
The agency should be accredited. The two major evaluators are the International Standards Organization (ISO) or by the Council on Accreditation (COA).
The agency should be a member of one of the trade associations: either Association of Independent Consumer Credit Counseling Agencies (AICCCA) or the National Foundation for Credit Counseling (NFCC).
The agency you are considering should be licensed and bonded to do business in your state. This is an absolute requirement for your protection.
The agency should be willing to waive or lower fees if you simply can’t afford them.
The agency should spend a reasonable amount of time for your initial consultation. At least an hour is needed.
The agency should provide you with a written budget based on your personal financial situation.

One of the most important points is to be sure that the agency offers free education to help you learn how to manage your finances. They should also provide you free ongoing education while on the debt management program, or even if you decide that the program is not right for you.

If an agency is not willing to answer your questions or you feel that the answers are not satisfactory, call someone else. NO MORE Mortgage can help by referring you to honest and effective agencies that we have dealt with for many years. We get no referral fee or kickback for this service.

We know that when we get you to the right people to help you through your financial crisis, that you are likely to return to NO MORE Mortgage for help with eliminating the rest of your debt, including your mortgage.

Overcoming the Urge to Splurge with NO MORE Mortgage

No More Mortgage — Mon, 20 Sep 2010 21:51:40 +0000

Many of us have experienced the emotional side of spending money, the NO MORE Mortgage Program specializes in helping clients identify and manage those emotions.

We may feel the need to dine at an expensive restaurant in order to “celebrate” a specific achievement. Or we might go out and purchase a new outfit because we have been treated unfairly and we “deserve” to be pampered. Compulsive spending is usually an attempt to fill an inner emotional need, but the pleasure we feel from our shopping “spree” is only temporary, followed by guilt and the knowledge that we have only increased our debt load. This urge to splurge can eventually cause difficulties on a long-term basis. Not only will our financial stability be damaged, but relationships can also be jeopardized. Somehow we must recognize that our happiness and self worth will not come through spending.

NO MORE Mortgage can help you overcome the urge to splurge.

Security and satisfaction will come as we take care of essential needs and savings, before considering our wants. You may recognize yourself as a compulsive spender. Good for you! That is the first step to overcoming your urge to splurge. Asking yourself a few questions can help you to understand your emotional needs and how they play a role in your spending addiction.

What does money mean to you?

We tend to handle money situations the way our family did when we were growing up. Some might feel as though they missed out on opportunities as a child and want to make up for that now. Does money make you feel accepted, loved, important? When you think of acquiring more things does it bring you comfort or make you feel happier? Are you a procrastinator? Will there always be time to save for important future events, such as a home, vacations, education, or retirement? Is paying off your debt an important priority, or does the thought of becoming debt free and having NO MORE Mortgage just seem too distant and unreachable?

Do you understand the cycle of your addiction?

Addictions form a cycle that is difficult to break. That cycle usually begins with a feeling of discouragement or negative self worth caused by unresolved issues. The compulsive spender believes that spending money will fill that emptiness and make them feel more worthwhile and complete. At the time they make their purchase they feel happy and fulfilled, but after, they are once again faced with their financial problems and their feelings of negative self worth.

Where does your money go?

Experts at NO MORE Mortgage agree that understanding where you are spending your money is one of the most important steps in learning to manage emotional spending.

A compulsive spender finds that much of their income is already spoken for by the required monthly debt payments resulting from previous purchases. While you are shopping, it is helpful to notice the cost of individual items as well as the amount of your total transaction. For one month, keep track of how much you spend. What areas seem to have the most transactions? For instance, does restaurants, clothes, or video games take over your budget?

What role do your emotions play?

Stop and think about the way you are feeling when you consider buying something. How do you feel immediately after the purchase is completed? Put a name to the emotions: excited, happy, fearful, guilty, sad, angry. How do you feel about the purchase later that day or the day after? How do you feel the next week? Add up your total spending for the month. Were your emotional needs met? Do you actually feel more successful, happy, loved, safe? Are there feelings of self doubt, worry, and fear because of the choices you made?

It can be quite helpful to understand that the urge to splurge has a direct connection with our emotional needs. Understanding that you have allowed your spending to have power over much of your life can make all the difference. By taking time to think about your emotional state before you make a purchase, you will be better equipped to overcome your addiction, leading you to a much more successful financial future.

For more information and to get a FREE audio CD call today. 1.800.285.9102

Will the NO MORE Mortgage Financial Plan work for me?

Do you have enough homeowner’s insurance?

No More Mortgage — Mon, 13 Sep 2010 20:54:22 +0000

NO MORE Mortgage suggests reevaluating your homeowners insurance needs every year.

If you’re like most people, you signed up for a homeowner’s insurance policy to satisfy your mortgage lender. However, as life runs its course our circumstances often change, and if you don’t take the time reevaluate your insurance needs you could wind up in trouble. It only takes one natural disaster or major accident to derail you from the path to NO MORE Mortgage, leaving you in financial ruin.

Don’t get caught without the coverage you need, contact NO MORE Mortgage for more details

Are you a high income earner?

Do you live in a fault zone?

Do you live in a flood zone?

Does your home have a basement?

Do you own expensive jewelry or family heirlooms?

Do you employ people in your home?

Do you have a mortgage balance of over $300,000?

If you answered yes to any of these questions, NO MORE Mortgage suggests that now may be the time to double check your insurance coverage to make sure you are sufficiently protected.

In some circumstances you may need special types of policy coverage to meet all of your needs. For example, NO MORE Mortgage suggests independent insurance policy for any piece of jewelry or heirloom worth more than $5,000 or making sure your policy does not have a “per item” coverage eligibility limit. Most standard policies will not cover damages due to flooding and certain types of natural disasters.

NO MORE Mortgage also recommends fully disclosing to your insurance carrier any high risk elements of your home like swimming pools or trampolines. While you may be tempted to hide these things to get a lower insurance premium, if you have an accident involving something that you didn’t disclose on your insurance application, you WILL NOT be covered.

To find out about how NO MORE Mortgage can help you eliminate all of your debt, including your mortgage, in about nine years, contact us today.

Six tips for Handling Recurring Expenses

No More Mortgage — Mon, 12 Oct 2009 12:53:49 +0000

I find that while one-time expenses are the easiest to remember (unless you’re deliberately trying to forget just how much you spent at the shoe store last week… well, it was an awfully good sale…) it’s the recurring expenses that tend to add up the most in the long run. They’re also the hardest to trim down, but the payoff is usually worth the trouble. Let’s take a look at how to evaluate and slim down the day-in-and-day-out items in your budget.

1. How much do you really use it? This especially holds true for anything that you pay for regardless of whether or not you use it, like membership fees to a club. Be realistic and judge the cost vs. value based on how much you’d actually use it, not how much you might conceivably use it. For instance, Costco has a great price on vitamins, but that’s the only thing I’d normally purchase there. So once a year or so, I just ask my friend to pick up some vitamins for me since she has a husband and family, it makes sense for her to have a membership, though it doesn’t for me.

2. Think twice before making a one-time purchase into a recurring expense. On several occasions I’ve enjoyed reading an issue of a magazine, and then in my enthusiasm signed up for a subscription, only to find out that I don’t end up having time to read it on a regular basis. (Or maybe the subsequent issues don’t turn out to be as interesting as the one that caught my eye at the bookstore.) Yes, signing up for a subscription or recurring service can save money… but only if you’d definitely be making that purchase every week or month anyway. If it’s a “once in a while” purchase (like how I am with newspapers), then it’ll be more cost-effective to pay the slightly higher price to just buy it individually when you want it.

3. Calculate the yearly cost. Somehow this tends to bring home the impact of smaller recurring expenses… is that $3 daily lattÃ© actually worth $1000 every year? Seeing the numbers can be a great motivation to make small but effective changes. I really enjoy going out to coffee shops, because I find them a great place to work (I’m writing in one right now, in fact) but there’s a good reason why I’ve taken to drinking regular coffee ($1) rather than espresso-based drinks ($4).

4. Look for alternatives. Many recurring expenses can be avoided by making a one-time purchase instead; even if the one-time purchase is more expensive than a single “dose” of the recurring expense, it will often pay for itself over time. Consider the purchase of DVD player and subscribing to Netflix (or visiting your local library’s DVD section) instead of paying for cable every month.

5. Be ready to cut it off. Even if a recurring expense makes sense right now, six months from now things may have changed. You may decide you don’t actually like the magazine that you subscribed to, or you’ve discovered that you enjoy going for a run around the neighborhood better than going to the gym. If you’re not using it, cancel it! Don’t pay for a service or product that you don’t need or want. For instance, I discovered that I really liked having a cell phone, and decided to drop having a land line. It seemed weird at first, but there was no sense in having an overlap in utilities that cost me an extra $30 every month.

6. Consider adding some “good” recurring expenses. Yes, adding! We’ve probably all heard the “pay yourself first” idea for personal savings (and it’s a good one). Why not apply it to other good causes? If you’d like to give money to charity, but don’t have a plan for doing so, good intentions often end up going nowhere. I discovered that “I’ll donate to that organization one of these days” pretty much always meant “never”! So think about what’s meaningful to you, and consider making it a recurring expense so that it actually happens. For me, my contributions to my church became more mindful and thus more meaningful when I sat down and calculated a percentage that I’d give, and then made it the second most important line-item in my budget (right after my mortgage and utilities).

No related posts.

Cash for Clunkers is Done. So What’s Next?

No More Mortgage — Thu, 08 Oct 2009 12:47:50 +0000

By the end of 2009, consumers nationwide will be able to take advantage of a federal “cash for appliances” program offering rebates on purchases of a wide array of home appliances certified as energy-efficient by the EPA’s Energy Star program. Backed by an initial $300 million in funding from the American Recovery and Reinvestment Act, the state-run rebate program is intended to help make American homes more energy-efficient while further stimulating the economy. “Appliances consume a huge amount of our electricity, so there’s enormous potential to both save energy and save families money every month,” said Department of Energy Secretary Steven Chu in a press release. “These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs.”

States will Run the Rebate Program: Each state will administer its own cash for appliances program. The states will be free to select which residential Energy Star qualified appliances to include in their programs and the individual rebate amount offered for each appliance.

What Can You Buy? The Department of Energy (DOE) has recommended that the states focus their cash for appliances rebate efforts on heating and cooling equipment, appliances, and water heaters as these products offer the greatest energy savings potential. Energy Star qualified appliance categories eligible for rebates include: central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators, and water heaters.

How Big Will the Rebates Be? While the states will be free to set actual rebate amounts based on their share of the $300 million, the Department of Energy expects the rebates to range from $50 to $200 per appliance. But wait, there’s more. Any rebates offered by state and local utility districts for purchases of energy-efficient appliances will be added to the federal cash for appliances rebate.

How Do You Qualify? All consumers will need to do to get the rebate is simply buy any qualifying Energy Star appliance. Unlike the “cash for clunkers” fuel-efficient vehicle rebate program, you don’t even need an old trade-in appliance. In addi- tion, consumers will not be required to haul their bulky old appliances to the dealer in exchange for a new one.

When Does it Start? The states will have until October 15, 2009 to submit their applications for funding and plans for recycling old appliances to the Department of Energy (DOE). The DOE plans to have distributed funding to the states by November 30. As a result, the cash for appliances rebates could be available in stores just in time for Christmas shopping.

No related posts.