Your Money: A Day to Tackle the Financial To-Do List: Excerpts for VRN Readers

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Your Money

A Day to Tackle the Financial To-Do List

By RON LIEBER

Published: July 4, 2009

Taking time, 10 or 12 hours, to tackle ever-postponed money tasks and clear the books can be lucrative.

• HIGH-YIELD SAVINGS ACCOUNT Though Internet savings accounts that pay above-average rates have been around for some time, I haven’t needed one. Now that we’re keeping more cash around in case we want to buy a new place to live, however, it makes sense to enroll.I put our money in an account via SmartyPig, a Web-based savings program. It pays an industry-beating 2.75 percent, though it comes with certain restrictions, like the requirement that you put at least $10 in your account each month.

• INSURANCE PAPERWORK If you’re lucky enough to have health insurance, you’re probably constantly adrift in a sea of forms that make no sense. We’re no different, but a major snafu caused us to have to switch plans a few months into 2009, throwing everything into utter disarray.

On fiscal health day, I got all of the paperwork divided into about a dozen piles to begin our assault on the benefits office and the various insurance companies involved.

• CASH-BACK CREDIT CARD The new Charles Schwab Bank Invest First Visa pays a straight 2 percent back into our Schwab brokerage account. That’s 0.75 percentage points better than we were earning with our Capital One card. The Schwab card also levies no foreign exchange fees for use outside the United States.

SHOPPING SPREE Yes, you get to have fun on fiscal health day. Gather up all of your gift cards and spend the money that’s left on them. The longer they sit, the more interest Apple or Borders or the department store will earn from your money and bigger the chance you’ll misplace the card.

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Seems that I do this once a week lately, but with everything on AutoPay; I am so much less stressed and able to focus on making commissions and fighting the good fight. – Carlo.

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How to Save Money Without Noticing #saving #money #college

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Are you sick of worrying about the budget and how you’re going to cut back and save even more? Well, don’t worry. Here are 3 easy ways to save some cash without even noticing:

Upromise and other programs like it allow you to accumulate savings for a college fund when you purchase items you already buy with registered store cards or credit cards. The best part – there are no sign-up or association fees.

You could save hundreds each year in bank fees simply by using your own bank’s ATMs. If you have a debit card, you can also get cash back at the grocery store and other places and you won’t get charged outlandish fees for accessing your own money.

Finally, one of the easiest ways to save money without cutting back is by keeping only the minimum balance in your checking account. Deposit everything you earn in to a high-yield savings account. Then transfer money for free online to cover any checks you write. This way you’re earning interest on the money you’ve earmarked to pay your bills.

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Discover and build a healthy credit profile

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By paying your bills on time, making at least your minimum payment due on your credit card each month (I recommend using a card’s Auto Pay feature), and staying within your credit limit, you’ll earn a good credit rating that will help you get the things you need in the future, like a loan for a car and eventually a home loan.

Always pay at least the minimum amount due on your Discover Card, as shown on your monthly statement. If you can pay your entire balance each month, that’s even better, and will help you avoid higher interest costs.
• Make your payments on time, every time. Again, I use AUTO PAY!
• Make sure the total of all your transactions is within the limit for your card.
• Never spend more than you can afford to pay back. Consider this guideline: credit card spending and other borrowing (not including rent or mortgage payments) should generally not exceed 20 percent of your net income.

720 – 850: Lenders see you as a moderate to low risk, and are
more likely to give you a competitive interest rate
on loans they provide.
620 – 719: In this range, you will be considered a fair to good
risk, but interest rates on loans provided may be
higher. You should work to improve your score
by paying your bills on time and reducing your
outstanding debt.
350 – 619: You may have difficulty obtaining credit cards, lines
of credit, or loans you need for a new car, a home,
etc. So improving your score should be a priority.

Hopefully, this makes you a better consumer, fearing not the economy but how to participate in it. If you need more info please let me know.

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Fundamentals during the ‘New Thrift’ #realestate #economy #thrift

I want you to know that when I tell folks I’m doing Real Estate they wish me luck. As I correspond with many of you – and there are more and more of you as Realtors become fewer and fewer, there emerges new contemporary fundamentals in this market that must be understood.
In no particular order these fundamentals are:
■ Home values have plummeted back to 2004 levels in 2008 and seem to be headed down until there is a slowing of homes that fall into foreclosure. Prices aren’t likely to climb until 2015. And any appreciation will be small, sustained if there’s real socioeconomic staying power in your neighborhood.
■ Sellers have to get over their cognitive dissonance, and price their homes to sell lest they are forced into short sales which are when what your home sells for is less than your remaining mortgage balance, and the bank forgives the difference.
■ Banks do not want to lend money right now; the only borrowers they will even consider must put up to 20% down. Banks are rescinding home equity lines of credit because falling home values make those open credit lines too risky.
■ Lenders will step up their effort to modify loans for borrowers deemed able to afford their homes with some level of assistance because keeping those homeowners in their homes is the best way to stabilize the housing market which stabilizes our financial markets.
■ The credit market is nearly frozen and the only way to enter the market and thaw lenders is with a hefty down payment, so save towards that goal while prices are lower then ever. Keep your credit scores high by not canceling credit cards, and don’t miss their payments by ‘Auto Paying’ each month’s to avoid punishing rate hikes. Use them once a year and pay them off to show you’re responsible with your bank’s credit line.
■ Don’t use credit cards or retirement funds to pay for a too expensive home (or for anything). Better to sell it and downgrade for the time being.
■ A HELOC should not be borrowed from to pay anything because your home is its collateral. Miss a payment and you risk losing your home. Build a real savings fund after you are out of debt from which to borrow.

 

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