Money Matters 2014 by High Desert Media Group

Money Matters

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Help at Home

How to negotiate an affordable mortgage

The Road to Savings

How to cut your automotive costs

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Money Matters

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inancial planning is often mistakenly assumed to be a concern for the wealthy. That assumption essentially promotes the idea that people without much money need not worry about what to do with their finances. However, financial planning can benefit people at all income levels, even helping those at lower income levels move into higher brackets if they plan successfully.

Though having an idea of how to spend and grow your money is an idea many people would likely embrace, a significantly large number of people do not have a financial plan. In its 2012 Household Financial Planning Survey, the Certified Financial Planner Board of Standards found that just 31 percent of financial decision makers in families J<< 9<E<=@KJ G8>< )*

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any consumers are aware of the importance of having a good credit history. A strong credit history means consumers have a high credit score, which can help them secure home and auto loans with reasonable interest rates. But while consumers may know the significance of a good credit score, they might not know about the credit score itself. The following are a few things even consumers with strong credit histories may not know about that three-digit figure that can have such a substantial impact on their lives. • You have multiple credit scores. The success of Web sites offering free credit scores, and those sites’ popular television ad campaigns, opened many consumers’ eyes to the reality that they have multiple credit scores. That’s because each of the three credit bureaus has its own way of determining an individual’s credit score. Experian, Equifax and TransUnion each has their own proprietary scoring model. As a result, consumers typically have three credit scores. Though these scores are often within a few points of one another, that’s not always the case. Adults planning to apply for loans should find out all three of their scores before beginning the loan application process. If one score is considerably lower than the other two, examine each of the three reports thoroughly to determine if there are any discrepancies. Even credit reporting agencies make errors, but those mistakes can prove quite costly to less careful consumers. • Your score is constantly changing.

Just because you have a great credit score today does not mean that score will be just as stellar tomorrow. That’s because credit scores are constantly in flux. When determining your credit score, credit bureaus consider a host of factors, including what’s known as a credit-utilization ratio. This compares the amount of debt an individual is carrying to his or her total available credit. If your credit score last month was excellent but you have spent much of the past month piling up charges, then that score has probably lowered, even if you haven’t missed a payment. A low credit-utilization ratio is ideal, so piling up charges will hurt your score unless you are immediately paying those charges off. Carrying balances and/or missing payments can quickly turn a great score into one that raises a red flag with prospective lenders. • Credit scores sometimes benefit from debt. Many consumers are aware there’s such a thing as good debt and bad debt. Credit card debt is typically considered bad debt, as credit cards often charge much higher interest rates than lending institutions that give consumers chances to build good debt. Installment loans, which include mortgages and auto loans, give consumers the opportunity to demonstrate they can make steady payments over a prolonged period of time, and each timely payment can boost a consumer’s credit score. However, men and women should be aware that missing installment loan payments can have a very detrimental impact on their credit scores. — Metro

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hances are you have come across an advertisement for a reverse mortgage and have probably wondered what this type of mortage is all about. Geared toward seniors, reverse mortgages are growing in popularity and inspiring the curiosity of older homeowners. A reverse mortgage is a loan offered to people over the age of 62 that enables borrowers to convert part of the equity in their homes into cash. People of retirement age may find that their limited income can make monthly expenses more difficult. Reverse mortgages were conceived as a method to helping people at this stage in life use the money they put into their homes to pay off debts or cover routine living expenses. The loan is dubbed “reverse mortgage” because instead of the homeowner paying money to a lender as is customary with a traditional mortgage, the lender makes payments to the borrower. What’s more, the borrower is not required to pay back the loan until the home is sold or vacated. As long as a person is living in the home he or she is not required to make any payments toward the reverse mortgage loan balance. However, the borrower must remain current on insurance and tax payments. When a person takes out a reverse mortgage, he or she may borrow a portion of the market value on the home. As of 2012, the maximum loan amount available in the United States was $625,000. Any outstanding existing mortgages are paid off with the proceeds of the reverse mortgage, and either a lump sum of the balance or monthly payments are established. A homeowner may also opt for a line of credit with the reverse mortgage proceeds. Here is a more in-depth look at or she is still eligible for the monthly the pros and cons to reverse mortgages. payments received through the reverse mortgage. This money can be used for any purpose and is tax-free. Borrowers Pros A reverse mortgage enables seniors can opt to modernize their homes or to live in their homes for the rest of their make safety improvements. The funds lives without fear of mortgage payments. can also be put toward medical expenses Because there are no payments being or travel or to help family with their own made during the life of the loan, borrow- financial needs. Because the government insures the ers do not have to meet income requirereverse mortgage program, borrowers ments or credit checks. need not worry about receiving their As long as the borrower continues payments. Should a lender fail to make to maintain residence in the home, he

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a payment, the borrower is eligible for that money and a late fee as well. Another benefit of reverse mortgages is they protect homeowners against falling home prices. If the value of the home drops after the loan is negotiated, it will not affect the equity value assessed for the life of the loan.

Cons

One down side to reverse mortgages is that the loans have higher up-front fees than other types of financing. Borrowers

have to pay not only an origination fee and closing costs, but mortgage insurance costs as well. These initial costs can be several thousands of dollars. Unlike a traditional mortgage, where the balance gets lower and lower over time, with a reverse mortgage, no payments are being made on the loan. This means the loan balance simply gets larger over time depending on how much money is drawn from the home’s equity. At the end of the loan, when the homeowner moves from the property or the premises is vacated upon the borrower’s death, the value of the estate decreases based on the pay-off value of the reverse mortgage loan. Heirs will pay off the mortgage by selling the home and will only inherit the remaining money after the reverse mortgage lender has the loan satisfied. This means men and women will be leaving less money for their heirs, but those heirs will not be personally liable if the home sells for less than the value of the mortgage. The mortgage lender has to claim a loss and request reimbursement from the Federal Housing Administration. Something many seniors may not be aware of with regard to reverse mortgages is that these loans can affect eligibility for some need-based programs. Although Social Security and Medicare are not affected, Medicaid and other government assistance programs can be affected if a senior has a surplus of funds from a reverse mortgage that are not spent during the month. A reverse mortgage is a long-term solution. People who are looking for a short-term fix will find that this type of loan probably doesn’t meet their needs. Furthermore, it is hard to be approved for reverse mortgages on newly purchased homes. Lenders usually like to see at least six months or a year chain of title on a property before issuing a reverse mortgage. Many seniors often find reverse mortgages confusing. Seniors may unwittingly agree to a loan without fully understanding the scope of the reverse mortgage. It is adviseable to seek counseling on reverse mortgages before applying for one. — Metro

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n the heels of a recession that saw home values drop, many would-be investors have shied away from buying investment properties. But real estate has historically remained a sound investment, boasting a long-term appreciation rate that makes it a worthwhile investment for those who can withstand temporary setbacks in housing prices and hold on to their properties over the long haul. But investors are often nervous as they look for their first properties. Uncertainty about housing prices aside, investing in real estate also is risky, and firsttime investors need to be comfortable with such risk in order to make the most of their investments. The following are a few things potential real estate investors should consider as they decide if investing in real estate is right for them.

Personal ability

another way to invest their money. Time also must be considered when considering profits. Real estate is not the type of investment that turns a profit overnight. Even investors who are looking to invest in an up-and-coming neighborhood must be prepared to hold onto their properties for at least a few years, if not much longer, to maximize their investments. Though real estate is a sound investment, it is not a get rich quick type of investment, so investors looking to make a quick buck should consider alternatives before buying investment properties.

Size First-time real estate investors might be wise to choose a smaller property for their initial investment. Larger properties can be overwhelming to manage, and investors often rely on property management firms to tend to these properties. Such firms charge more to manage bigger properties, which can eat into investors’ finances. Veteran investors can handle such overhead costs, but first-timers might find themselves caught off guard upon realizing the gravity of their financial commitment. A good rule of thumb for firsttime investors is to stick to smaller properties, only moving on to larger buildings once they are fully comfortable with all that comes with investing in real estate.

Real estate investors typically have tenants, and those tenants inevitably have needs. Investors who have experience as contractors may not find it difficult to renovate a property and make it more attractive to tenants, nor are they likely to be inconvenienced when minor issues on the property need to be addressed. Investors with no such experience will need to hire contractors to do the work for them, cutting into potential profits down the road. In addition, investors who don’t have the ability and/or the time to address minor issues like a clogged drain or a drafty window on their own will need to hire a property management firm to tend to such needs. Such firms are effective, but also expensive, further cutting into your profits. Even those investors with contracting experience may have little or no knowledge of how the leasing process works, forcing them to rely on a real estate firm to write up leases and ensure all leases stay current. This, too, can cut into an investor’s profits. Investors who don’t bring any relevant expertise to the table can still make a profit from their real estate investments, but those profits likely won’t be as significant when outside companies must be hired to ensure the property is in good shape and all necessary documents are real estate investors depending on where they in order and up-to-date. Costs live. For example, in the United States, taxes The cost of on the profits when a property is sold may be Time a real estate indeferred if those profits are immediately rolled Real estate is often a time-consuming investment. vestment goes into another property (such a deferment is Tenants pay good money to live in attractive rental beyond the puronly available to those investors who arrange properties, and those tenants will have a host of needs chase price of the this exchange prior to selling the initial propthat must be met. Investors must be sure they have home. In addition erty). Potential investors need to consider all the time to address their tenants’ concerns, especially to the mortgage of these costs, and might want to hire a real investors with no plans to hire property management on the property, estate lawyer to help them make the most of firms. Potential investors who already have full plates investors must their investments and any profits they yield. at work and at home may not be able to devote the pay the taxes and insurance on the property, as well But even hiring an attorney is an additional cost time necessary to make the most of their real estate as any costs associated with maintaining and manag- investors must consider before investing. investments, and therefore might be better off finding ing the property. Certain tax breaks are available to — Metro

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etirement can simultaneously excite and distress men and women as they approach the day when they end their careers. Anticipating the freedom can be exciting, while concerns about maintaining financial independence can be stressful. Though there are no guarantees that men and women who prioritize retirement planning will not outlive their finances, those who do arrange their priorities in such a manner are far more likely to enjoy a comfortable retirement without worrying about their finances. As men and women approach retirement age, certain steps with regard to preparing for retirement can put them in position to enjoy their golden years to the fullest. • Assess your resources. An honest assessment of your assets will help you determine a retirement lifestyle you can afford. Assets can include any property you own, investments, savings, and retirement accounts. Your property may be your biggest financial asset, but unless you plan to sell that property or take out a reverse mortgage, then you won’t be able to rely on that property to fund your lifestyle. When assessing resources, keep in mind that you might have to pay potentially steep taxes when attempting to access any retirement accounts, such as a 401(k). Factor in any such taxes when assessing your retirement resources. • Make a list of your monthly expenses. Once you have assessed your resources, make a list of your monthly bills. Mortgage payments, healthcare costs, taxes, and food are among the essentials, while additional expenses like travel and entertainment will need to be factored in as well. When considering monthly expenses, keep in mind that some of those expenses, including mortgage payments and commuting costs, will likely disappear, while others, including healthcare costs, are likely to increase significantly. Once you have assessed your resources and expenses, you can then begin to

paint a picture of the retirement lifestyle you can afford to live. • Compare the lifestyle you want to live versus the one you can afford to live. Considering your finances several years before you retire affords you the opportunity to make changes if you determine the retirement you can afford does not exactly match up with the retirement you want to live. After you have figured out what you can afford, compare that lifestyle to the one you hope to live. If they are one and the same, then you did a great job planning for retirement. If they are slightly or significantly different, then look for ways to close that gap. If necessary, consult with a financial planner, who might be able to help turn your dream retirement into a reality. Closing the gap between your dream retirement and the one you can afford to live may require you to work an extra year or two, so be prepared to make that decision if need be. • Plan on continuing to grow your money. Just because you’re retiring does not mean your money has to stop working as well. You will still need to combat inflation during your golden years, so plan on continuing to grow your money even after you retire. Though it’s best to reduce investment risks as you age, many retirees still need to keep a toe in the investment waters. Find a balance you’re comfortable with so your money continues to grow, but be conservative at the same time. As you grow older, continue to reduce your risk. While conventional wisdom long suggested retirees should completely eliminate risk from their portfolios, today’s retirees are living longer than ever before, so you likely can’t afford to follow the advice of yesteryear. As retirement draws closer, men and women must start making important financial decisions to ensure their nest eggs can support the lifestyles they want to live throughout their golden years. — Metro

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ertain personal and financial documents need to be kept for security and other purposes, while some documents can be discarded immediately. Documents that must be kept often include sensitive information, which means they shouldn’t be stored haphazardly. Options for maintaining important records continue to evolve, but caution still must reign supreme when storing potentially sensitive documents. The Federal Trade Commission estimates that nearly 10 million people have their identities stolen each year. Identity theft occurs when criminals use another person’s personal information, such as his or her name, credit card numbers or social security number, without permission. Sensitive information can be lifted from personal effects stored in a person’s home or from items delivered to a mailbox. Here are some ways to keep information private and out of the hands of potential thieves. • Sort your documents. When sorting documents, which should be done regularly, determine which include sensitive information and move them aside. Bills and other papers that do not reveal much may be stored in a regular filing system, but documents that contain sensitive information should be kept in more secure locations. • Invest in a durable, fireproof safe. Store sensitive documents, including social security cards, marriage certificates, birth certificates, travel documents, life insurance policies, and mortgage paperwork, in a durable, fireproof safe. If you prefer to keep these items off-premises, keep them under lock and key in a bank safety deposit box. • Organize your documents and maintain that organization. Be sure to carefully label all boxes or cabinets in which important documents are stored. Create a filing system that works for your needs. You may want to organize the papers by date, type of document or your own coding method. Think about cross-referencing your tangible files with a master list so you’ll know the exact location of certain documents when you need them. • Consider digital storage. Various programs that work with a scanner or camera can now capture im-

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tringent lending policies and the escalating costs of home ownership have led many prospective home buyers to consider condominiums instead of single-family homes. Condos are typically less expensive than singlefamily homes, which makes lenders and borrowers alike feel more comfortable. Lenders feel better because the loans aren’t as large, while borrowers are more comfortable because such loans allow them to improve their standing with lenders, potentially setting the table for a low-interest home loan down the road. But the differences between buying a condo and buying a single-family home go beyond the bottom line. The following are a few things prospective buyers should know about condos before they view any properties. • Condos come with fees. Unlike single-family homes, condos come with homeowners association fees. These fees cover the cost of maintenance and repairs to the property. This includes landscaping and garbage collection, as well as general repairs throughout the condominium complex. Fees vary significantly from community to community, and the best deal is not always the one with the lowest homeowners association fees. Low fees tend to provide less bang for the buck, generally covering only the most basic services. Higher fees often mean the community offers more amenities, such as a private pool and gym for residents. Some people prefer such amenities, while others would rather find better deals on their own. But prospective condo buyers must include fees in their monthly budgets when determining how much they can afford to spend. • Condos come with rules. Owners of single-family homes can create their own rules for their households, while condo owners must agree to follow rules established by the homeowners association or the property management firm responsible for maintaining the community and enforcing the rules. Rules may not allow pets or only allow pets of a certain size. Other rules may restrict how owners can decorate their condos during the holiday season or how they can furnish the exterior of their properties,

limiting patio furniture to a set number of chairs or tables. Some condo owners are glad such rules are in place, while others might find such stipulations intrusive. Each community has different rules, and prospective buyers should familiarize themselves with a community’s rules before buying any properties within that community. • Condos often have management firms. Property management firms can be great to deal with, but they can be troublesome as well. A good property management firm produces satisfied community members who speak glowingly of their communities, while a poorly run management firm can frustrate homeowners who feel they are not getting what they’re paying for. Some property

management firms fail to collect homeowners association fees for months at a time, only to send letters demanding back dues down the road. Others simply don’t live up to expectations, failing to make repairs in a timely manner while letting the property fall into disrepair. If possible, speak to current community residents about how the property is managed. If residents are not available, potential buyers should attempt to attend a homeowners association meeting, which can shed light on what it’s like to live within a given community and how accessible the management firm is to community members and how well it tends to those members’ needs. • Condos are not as private as single-family homes. Much like apartment

dwellers, condo owners often share walls with neighbors. That means condo owners will have to sacrifice some privacy. Prospective buyers who consider privacy a top priority may want to continue living in an apartment until they can afford to buy a single-family home. Though condo owners rarely have someone living above or below them, sharing walls with neighbors is still not as private as owning a single-family home. Condominiums are great options for people who want to own their homes but don’t have enough money or credit history to buy a single-family home. But buyers must educate themselves about condominium life before signing on the dotted line. — Metro

ome ownership remains a dream for many people. But on the heels of the recession that began in late 2008, prospective home buyers are finding it far more difficult to secure a mortgage than it was in the years before the economy took a turn for the worse. Stricter guidelines now govern both borrowers and lenders alike, and the process can quickly frustrate prospective homeowners. But strict guidelines and more diligent lenders do not mean prospective borrowers will not be able to secure a loan to finance their home purchases. It just means those borrowers might want to take every stop possible to ensure their loan applications are approved and their mortgages are affordable. • Address credit concerns before beginning the process. Poor credit is a prospective borrower’s worst enemy, and it’s an instant and glaring red flag to lenders. And thanks to inaccuracies on Before they even begin the process of ap- with a fine tooth comb, ensuring there their credit reports, some people may plying for a home loan, would-be appli- are no potentially harmful inaccuracies have poor credit and not even know it. cants should go over their credit reports that may affect the ability to secure an

affordable mortgage. Inaccuracies or poor credit histories can bring down individuals’ credit scores, which lenders use to determine home loan interest rates. So prospective applicants should have any errors to their credit reports corrected and/or work to improve their credit scores before applying for loans. • Pay down debt. Even if an applicant’s credit score is solid, lenders may scoff at applicants with substantial amounts of debt. Credit card debt should be paid down before beginning the process, and it also may benefit applicants to pay off any additional loans, such as car notes or student loans, before applying for a home loan. The less debt an applicant has, the more attractive that applicant becomes. • Avoid overusing credit cards. Using credit too frequently also can make it more difficult for prospective home buyers to secure a home loan. Credit card holders each have a maximum limit on J<< 8==FI;89C< DFIK>8>< G8>< )*

WHY USE A REALTOR®? Why is working with a real estate professional who is a REALTOR® in your best interest? Not everyone who sells real estate is a REALTOR®. Possessing a real estate license does not guarantee instant REALTOR® status - a distinction of which you need to be aware. A REALTOR® is a member of local, state, and national professional trade associations and has access to a vast array of resources, research and educational programs. A REALTOR® subscribes to a strict Code of Ethics, and pledges to provide fair treatment for all parties involved. A REALTOR® is committed to protect the rights of individuals to own property and keeps abreast of changes in real estate practice through continuing education and interaction with other professionals. 1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. 2. Your REALTOR® has many resources to assist you in your home search. 3. Your REALTOR® can assist you in the selection process by providing objective information about each property. 4. Your REALTOR® can help you negotiate. 5. Your REALTOR® provides due diligence during the evaluation of the property.

Victor Valley Association of REALTORS®

Ask your agent if they’re a REALTOR® A member of the Victor Valley Association of REALTORS® 11890 Hesperia Rd., Hesperia, CA • 760-244-8841 To Find a REALTOR® in the Victor Valley visit www.vvar.com and Find a REALTOR®

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ecoming a homeowner is a great feeling for many people, but that feeling of elation often dissipates when the first mortgage payment comes due. Although most responsible buyers shouldn't be surprised at the amount of that first mortgage payment, that first bill can still catch someone off guard. Though the apprehension over mortgage payments may wear off once homeowners get settled, that doesn't mean homeowners don't wish they could pay off their homes before those mortgages reach maturity. Though it might seem impossible in those first few months after buying a home, paying a mortgage off early can be accomplished in a variety of ways. • Increase what you pay each month. Any type of loan, be it a traditional credit card or a mortgage, will disappear faster when borrowers pay more than the bare minimum. By paying just a little more each month, more of your money is going to the principal on the loan, lowering the amount of interest you will pay over the life of the loan at the same time. For example, a $200,000 30-year mortgage loan at 7 percent interest will cost borrowers $1,330.60 per month (costs may vary depending on taxes), and that loan will be paid off in 30 years. But borrowers who increase their payments by just $50 per month can pay off the loan in 26 years and nine months. What's more, borrowers who only make the minimum payment each month will have paid $279,017.80 in interest charges over the life of the loan, while those who increase each month's payment by just $50 will have paid just $242,588.80 in interest over the life of the loan. That means that extra $50 per month saves borrowers $36,249 in interest charges. One thing borrowers must be certain of is that any extra money they send in each month is applied to the loan's principal, and not just set aside for the next month's payment. Talk to your lender to verify this, and when doing so, make sure you don't have to pay any prepayment penalties if you do, in fact, pay the mortgage off before it reaches full maturity. Such penalties can be significant,

but they might be worth paying for the peace of mind of knowing you will be paying your mortgage off several years early. • Consider bi-weekly payments. Biweekly payments, in which borrowers make half-payments every two weeks instead of one full payment once per month, are another way to pay your mortgage off early. A typical mortgage agreement has borrowers making payments once per month, meaning they are making 12 annual payments. But a bi-weekly payment system takes advantage of the fact that there are 52 weeks in a year. So by the end of one calender year, you will have made 26 half-payments, or 13 full payments. Such a payment system enables some borrowers

to pay off their 30-year mortgages in as little as 24 years. When looking into bi-weekly payments, consult your lender to determine if there are any penalties to such a system. Some lending institutions charge customers who change their payment structure. In addition, confirm with your lender that each extra payment is going toward the principal and not toward your first payment next year. • Refinance your loan. Refinancing to a shorter-term loan often earns borrowers a smaller interest rate, which can offset the higher monthly payments that accompany shorter-term loans. A shorter-term loan means you won't have mortgage payments hanging over your head for as long as you

would on a 30-year mortgage, and it also means you won't pay nearly as much in interest over the life of the loan. Many homeowners find a 15-year mortgage forces them to be more disciplined. Homeowners who find their 30-year monthly mortgage payment is well below their means should consider a shorter-term loan, especially if their 30-year mortgage would penalize them for paying the loan off before it reaches full maturity. Mortgage payments have a way of dominating homeowners' thoughts. But those homeowners who want to get out from under their mortgage payments without selling their homes have a handful of options at their disposal. — Metro

onsumers sometimes buy gadgets out of necessity, but often such purchases are fueled by a particular passion or hobby. Consumers line up for the latest incarnation of a smartphone or must-have gaming system, but just because a gadget is the current must-have item does not mean consumers have to overpay for it. Without knowing how much products really cost, it can be challenging to gauge just what is a good deal. Unfortunately, information on price markups on popular items is relatively difficult to come by. There are a wide array of retailers, from boutique shops to online warehouses, so there is no standard pricing rule. According to the site Wise Bread, a forum on living frugally, electronics have the lowest price markup rates of any products at just 8 to 10 percent. Armed with this information, those shopping for the latest gadgets can more accurately compare prices to find the best values. Here are some other ways to save money

on electronics. • Compare, compare, compare. Stepping into the first store you see and making a knee-jerk purchase is not often the way to get the best deal. Whatever the purchase, always do your homework, comparing prices online or in-store to determine the best values. Look at potential hidden fees, such as shipping charges (when buying online) or restocking fees. • Scour for coupons. Explore all means possible to get coupons for your purchase. Shop when stores are having doorbuster sales and then combine this discount with coupons found online, in newspapers or through community coupon books. It’s always worth a few minutes of your time to search for a discount code or a coupon. And even if you don’t have a coupon, do not be shy about asking a checkout employee if any discounts exist. • Skip some of the frills. If you’re in the market for a new high-definition tele-

vision but are scared away by some of the price tags, separate what you need from what you want. When you strip away certain features, such as internet connectivity or home maintenance software, you could save hundreds of dollars. With any purchase, start at the base model, which may fit your needs without breaking the bank. • Buy used or refurbished. Technology changes at breakneck speed. A tablet that was once the hot item could be outdated in a few months. You can save a good deal of money by purchasing an older, yet still functional model or buying a rebuilt or used item that is in good condition. Shop refurbished items directly from manufacturer Web sites. Companies like Dell and Apple offer used, warranty-backed devices for deep discounts over new items. Very often “refurbished” only means returned and reboxed. Don’t overlook sites like Craigslist and Ebay as well. Friends also may sell you items for an even bigger discount.

• Look for items that are multipurpose. Instead of spending money on a separate phone and MP3 player, get a smartphone that does both. It may not pay to have a handheld gaming device and a tablet that can play thousands of games. • Have a little patience. Products tend to be most expensive when they are initially introduced. Retailers and manufacturers count on new devices luring in customers willing to pay any price to be the first to have a particular item. But prices drop as gadgets become more mainstream and competitors flood the market with their own versions. Wait a few months before making your purchase, and you’re likely to save a substantial amount of money. • Skip the extended warranty. Extended warranties are often unnecessary when buying electronics, as such J<< K<:? GLI:?8J<J G8>< )*

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any people work very hard to establish their credit, feeling a great sense of accomplishment upon being approved for a new account with a high limit and affordable interest rate. But as beneficial as strong credit can be, there are instances when canceling a credit card is the right move. Canceling a line of credit is not as simple as cutting a credit card into tiny pieces or shredding it in a paper shredder. But before you begin the process of canceling an account, it’s first good to consider the reasons it might be wise to cancel the card in the first place. • Annual fees: Some cards come with annual fees. Not to be confused with interest charges, which only accrue when cardholders do not pay their balances off in full and on time, annual fees are part of your initial agreement with the creditor, who will charge you an annual fee regardless of whether or not you make any purchases with the card. Cardholders often bemoan such fees, especially when they pay their balances in full and on time, avoiding interest charges as a result. If annual fees truly bother you, then there are plenty of credit cards that do not charge such fees, and you may be happier with those cards than your existing card. • High interest rates: High interest rates are another reason many people decide to cancel their cards. This is understandable, especially for those cardholders whose credit score has improved since they initially received their card. The better your credit score, the lower your interest rate should be. Some credit card companies will lower interest rates for valued customers. If your company won’t budge, then you can likely find a better interest rate with another creditor. • Too many accounts: Some men and women may feel that they just have too many existing lines of credit, which can be difficult to monitor. In addition, too many accounts can leave you more susceptible to identity theft. If you have numerous credit cards but find yourself only using one or two, consider canceling those extra accounts that you rarely use. • Curtail spending: Credit can eas-

ily be abused, and many people have found themselves in financial hot water because they put too much on plastic, piling up debt along the way. If you feel your spending is out of control and your wallet full of credit cards isn’t helping, then canceling some accounts in an attempt to curtail that spending is as good a reason as any to cancel a card.

Canceling an account Though canceling an account can be good for a variety of reasons, men and women should know that canceling a line of credit can initially have a nega-

tive impact on their credit scores. Lowering your existing credit may simultaneously lower your credit score. A good credit score can go a long way toward helping you secure a home or auto loan, so it’s important that you’re in a position to handle a temporary setback to your credit score when you cancel an existing account. If you’re on the verge of applying for a loan, you might want to wait until after your application has been approved to cancel an account. Though temporary, a dip in your credit score, even if that dip was caused by something you consider a positive, may hurt

you if it happens at the wrong time. Another thing to consider before canceling an account is the potential hit that such a cancellation may have down the road. Closed accounts with zero balances and no negative payment history can stay on your account for as long as a decade, helping you to maintain a good credit score that whole time. However, once that decade is up, that positive history is up as well. Cardholders also must consider the balance-to-limit ratio before canceling their cards. The balance-to-limit ratio compares the amount of credit being used to the total amount of credit available to the borrower. A low balance-tolimit ratio is a good thing, whereas a high ratio can hurt you. If you plan to cancel a card but have existing balances on other cards, your balance-to-limit ratio will suffer, as your balance will remain the same but your available credit will go down. So before canceling a card, it’s a good thing to pay off balances on all of your cards. Once you have, your balance-to-limit ratio will be zero no matter how much credit is available to you. When the time comes to cancel a card, do so through the customer service number on your card. This number should be the same as the number listed on your monthly statement and the issuer’s Web site. Simply cutting the card does not cancel the card; it just means you can’t use it anymore. The card must be officially canceled through the issuer for the account to be considered closed. The balance also must be paid in full for the account to be closed, and all interest charges must be paid. When speaking with the customer service representative as you cancel the card, make sure there are no lingering interest charges. If there are, pay them immediately over the phone and then close the account. Credit card issuers often try to persuade cardholders to keep their accounts open, but cardholders who gave their decision significant thought and made that decision for the right reasons should stick with their initial decision and close their accounts regardless of how tempting the issuer’s offer to keep the card open might seem. — Metro

According to the Automobile Association of America, the cost of owning a vehicle is on the rise. In its 2013 “Your Driving Costs” study, AAA determined the cost of owning a vehicle is somewhere between $7,000 and $11,000 annually depending on the type of vehicle. That’s a substantial amount of money and may leave many motorists looking for ways to reduce the cost of automobile ownership. Driving is a way of life for many people left with little choice but to keep a vehicle. Thanks to mass transportation, city dwellers might be able to get by without owning a vehicle, but those who live in rural communities or even the suburbs often find that public transportation runs too infrequently or inefficiently to meet their needs. There are ways for those who need their own automobiles to reduce the financial burden of vehicle ownership. • Downsize your vehicle. In its study, AAA found that the average cost of owning a vehicle varied considerably depending on the size of that vehicle. That should

come as no surprise, as larger vehicles tend to consume more fuel and, as a result, cost more money. But drivers might be surprised to learn just how much less it costs to own a small sedan than it does

$11,599 per year. But the most surprising thing from the AAA study might be its findings as to the costs of owing a large sedan. Such vehicles are nearly as expensive as larger SUVs, costing drivers more than $11,000 per year. So drivers who downsize their vehicles to a small sedan will likely save themselves a substantial amount of money over the life of the vehicle. • Drive safe and cash in on lower insurance premiums. Though numerous factors, including individuals’ driving histo;i`m`e^ X jdXcc\i ZXi ries, influence the cost of auto insurance, `ejk\X[ f] Xe JLM drivers with clean track records might be able to buck the industry trend and pay ZXe jXm\ [i`m\ij X less for their auto insurance policy next Zfej`[\iXYc\ Xdflek f] dfe\p year than they did this year. In its study, fm\i k_\ Zflij\ f] X p\Xi% AAA found that the cost of insurance rose by nearly 3 percent in 2012 from the a four-wheel-drive sport utility vehicle. year before. But drivers who can avoid acSmall sedans cost the least amount of cidents and citations are likely to see their money to own at $6,967 annually, while rates decrease from year to year. four-wheel-drive SUVs cost nearly twice J<< 8LKFDF9@C< G8>< )* that amount, setting their owners back

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efinancing a mortgage is advantageous to homeowners for a variety of reasons. The primary reasons people refinance their mortgages are to reduce their monthly payments or free up equity to use toward home improvements or other necessities. Lenders will frequently advertise that “now” is the time to refinance, but people may want to get all of the facts before making their decisions. A low interest rate is not reason alone to refinance. Conventional wisdom has long suggested that borrowers wait to refinance until interest rates drop 2 percent below their current rate. While a low interest rate is important, there are several other factors to consider. • Closing costs: Refinancing a home is an expensive undertaking. While it can effectively shave $100 or more off your monthly payments, there is a financial outlay during the process, which includes closing costs. A person can expect to pay anywhere from 2 to 5 percent of the loan’s value in closing costs when refinancing. Lenders used to enable some to roll the cost of the closing into the mortgage, but stringent rules have changed the way many banks now do business. If the finances are simply not there to cover the closing costs, refinancing may not be an option. • Credit rating: If your credit rating is better now than it was when you initially earned your home loan, then this might be a good time to refinance. Not only will a person benefit from a low market rate, the interest rate may be even lower because lenders look more fondly on you now than they did years ago. Lenders often base their assessments of borrower reliability and stability on those potential borrowers’ credit scores, so a strong credit score makes you look better in the eyes of lenders. Borrowers with poor credit ratings may not benefit from refinancing. • Income: A person’s debt-to-income ratio is another factor in determining mortgage interest rates and approval. A positive change in income status as well as reduction in debt could make it a good time to refinance. • Adjustable rate mortgages: Many people opted for adjustable rate mort-

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gages when buying homes years ago. Over time, their monthly payments may have increased considerably, making it nearly impossible to afford a home. Refinancing for a fixed-rate mortgage, regardless of the current interest rate, will likely ease some of your financial burden. • Home value: A higher home value means more equity in the home. This money can be used to pay down debt or for home improvements that further improve the value of the home and property. It is important to speak with a real estate professional to determine if home values have spiked in a particular

neighborhood and to gain an accurate appraisal of the home. This will help determine if refinancing is frugal. • Interest rates: Lower interest rates often motivate homeowners to refinance, as a lower interest rate can save homeowners a substantial amount of money over the course of their loans. However, refinancing too soon (within 4 years of the original home loan) may put homeowners in a negative light. Lenders may see borrowers who refinance too soon or too frequently as risky borrowers who cannot successfully manage their money. • Prepayment penalties: Certain

mortgages have prepayment penalties built in. Should a person pay off the mortgage too early, usually within two to five years, 2 to 4 percent of the home’s loan value must be paid out. Refinancing counts as paying off one loan and opening up another. Penalties could deter a person from refinancing too soon. Determining the best time to refinance your home mortgage takes effort on the part of the borrower and information about market trends. By doing one’s homework and being aware of certain factors, a person can save money by refinancing a home loan. — Metro

than they would if their money was in a bank. Credit unions are often community-based. Large banks may have branches around the globe, but many credit unions have just one or two locations. This can be advantageous to those looking to do business directly with members of their community. However, it also makes it harder to access your money without paying certain fees, such as those you might pay when withdrawing money from an ATM not affiliated with your credit union. Many credit union account holders cite better customer service as another advantage credit unions have over banks. Because credit unions are cornerstones of some communities, their employees may have more personalized interaction with members and be willing to go above and beyond for those members. Credit unions may have more lenient overdraft charges or be able to work with customers more readily than some banks. A credit union customer may have an easier time securing a loan if they are already a member. Credit unions also are known for lower interest rates than banks, particularly on auto loans. Credit unions are just as safe as banks. A personâ&#x20AC;&#x2122;s money is insured by the National Credit Union AdminJ<< :I<;@K LE@FE Â&#x203A; G8>< ))

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hile banks have long been the place people go to securely deposit their money, a growing number of people are exploring the benefits of credit unions. Laws require credit unions to have a defined field of membership. Although credit unions have certain requirements for membership, some consumers are finding itâ&#x20AC;&#x2122;s easier than ever to join a credit union. Many people gain access to a credit union through their employers, who may have a previously established relationship with the credit union. But there are other ways to join a credit union. Memberships at churches, fraternal organizations, specific communities, schools, and various other organizations may make certain people eligible to open an account at a credit union. Credit unions are similar to banks, but unlike banks, credit unions are nonprofit entities. This means that any profits earned by a credit union will not be given to shareholders. Instead, credit unions pass on profits to members in the form of lower fees and better service. In some instances, credit unions may offer dividends to members. It is very likely a person can make more interest at a credit union on certain services than they might at a bank. In addition, credit union account holders often pay lower fees on those accounts

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illions of North Americans are struggling to make ends meet, and data suggests many adults are living paycheck to paycheck. A study released in 2012 by the Consumer Federation of America and Certified Financial Planner Board of Standards revealed roughly 38 percent of Americans stay afloat by living paycheck to paycheck. In 2010, a national survey showed that around 60 percent of Canadians would be in financial peril if their paychecks were delayed even one week. Household liabilities, including mortgages and rents, as well as other established debt makes it impossible for some people to remain financially sound without a steady income. Should a circumstance like a medical illness, loss of job or furlough in pay delay a salary, many people would quickly find themselves in financial hot water. Despite conventional wisdom that suggests people should have enough money set aside to cover at least six months’ of expenses, many people do not even come close to this amount. So what to do if your are faced with a temporary loss of pay? Everyone’s situation is unique, but the following tips can help men and women weather the storm of financial uncertainty. • Remain calm. When money suddenly stops coming in, remain calm and assess the situation. Now is the time to take out financial worksheets and bank statements. Add up the amount of money you have in the bank and any assets that can be liquidated without penalty. Compare this to the money that is spent each month. Once you have an accurate picture of your finances, you can establish a plan. • Explore assistance programs. Laid off workers may be eligible for unemployment benefits. Be sure to file for unemployment as soon as possible. While unemployment benefits won’t equal your previous earnings, the money can help pay bills until you are able to get back on track. Individuals sidelined from work by an injury may be eligible for compensation through worker’s programs or any personal insurance plans. • Talk to your creditors. It is best to be open and honest with creditors so that this blip on your financial history

doesn’t end up causing any long-term damage to your credit. Many creditors have contingency plans in place and will be willing to work with individuals who anticipate trouble paying their bills. You

may be able to temporarily freeze accounts or waive payments for a certain period of time without penalty. If you have a store credit card, you may be able to negotiate a cash settlement to wipe

out the debt. Some creditors will take as little as a few dollars a month as goodfaith payments. Just don’t wait until it’s too late to negotiate with creditors. • Find ways to cut back. Lack of work may have already cut out some of your daily expenses, such as commuting costs. However, now is also the time to assess if any luxuries can be dispensed of to save money. Think about cancelling expensive mobile phone plans or cable service. Cease having dinners out on the town or ordering take-out. Kids may need to make concessions on extracurricular activities that cost money. These luxuries can be restored when a steady income is once again coming in. • Talk to family members. Do not hide the situation from friends and family members. Be honest with family members about the situation, and they may offer advice or some financial help. Although loans between family and friends can be tricky, they may be your best option to stay afloat financially during a rough patch. • Steer clear of credit cards. Many credit cards come with steep interest rates, so using credit cards to secure cash advances or make purchases is a risky proposition. Explore other options before resorting to credit cards to bail you out. • Be open to new employment. Keep an open mind when searching for a new job. You may need to settle for something part-time until a full-time opportunity comes along. Think about looking outside of your normal line of work and into industries that are thriving even in tough financial times. • Stick together. Financial uncertainty can take its toll on a family. Naturally, losing a job or having a temporary loss of pay can take its toll on morale and put added stress on relationships. But families who work together can ride out the situation successfully. • Make plans for the future. Realize this type of situation can happen again, and commit to making future plans for emergency savings and other coping strategies. Find ways to achieve a relatively stable nest egg so that you can weather any future financial storms. — Metro

to notice. Those ready to try generics can begin by experimenting with a certain products. Buy a small serving size of the desired product and try it, then try it again, and you may be surprised by the results. • Cereal: A consumer can save anywhere from 25 to 50 percent on generic cereal. If children insist on a brand that they saw on a commercial, buy it once in the branded variety, then save the box and refill it with a generic cereal. • Soda: Although relatively cheap to produce, brand-name sodas are often much more expensive than generic versions. Many generic colas are comparable to the better-known brands. • Salt, flour and spices: Generic baking ingredients can save consumers lots of money, and few people are likely to alternatives. When generic products do notice a difference in taste. Flour is flour, taste differently, such differences are of- and there is likely only a minimal differten minor. At the very least, generic in- ence between one packaged by a store gredients can be used in recipes where differences in taste are nearly impossible J<< ><E<I@: =FF; G8>< ))

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of breakfast cereal may also package that product under a generic label. The ingredients are identical, but the price is not. In many instances, the taste of generic foods may be comparable to brand name

IÝ YÊçÙ F®Ä Ä ® ½ A ò®ÝÊÙ WOLF IÄ S« Ö͛Ý C½Êã«®Ä¦? If Your Not Working With a Registered Investment Advisor...zŽƵƌ dƌƵƐƚĞĚ ĚǀŝƐŽƌ DĂǇ EŽƚ ,ĂǀĞ zKhZ ĞƐƚ /ŶƚĞƌĞƐƚ Ăƚ ,ĞĂƌƚ /Ɛ zŽƵƌ &ŝŶĂŶĐŝĂů ĚǀŝƐŽƌ ,ĞůĚ dŽ &ŝĚƵĐŝĂƌǇ ^ƚĂŶĚĂƌĚ ŽĨ ĂƌĞ͍ A Įduciary standard of care is the highest legal duty that an advisor can have for their clients. Believe it or not, brokerage and insurance ĮƌŵƐ ĂƌĞ ŚĞůĚ ƚŽ Ă ůŽǁĞƌ ƐƚĂŶĚĂƌĚ ŬŶŽǁŶ ĂƐ ͞ƐƵŝƚĂďŝůŝƚǇ ƐƚĂŶĚĂƌĚ͟. That standard only requires that Ă ƉƌŽĚƵĐƚ Žƌ ƐĞƌǀŝĐĞ ďĞ ƐƵŝƚĂďůĞͶŝƚ ĚŽĞƐŶ͛ƚ ŚĂǀĞ ƚŽ ďĞ ŝŶ ǇŽƵƌ ďĞƐƚ ŝŶƚĞƌĞƐƚ͘ dŚĞƌĞ͛Ɛ ƐŝŵƉůǇ ŶŽ ƌĞĂƐŽŶ ǁŚǇ ǇŽƵ ƐŚŽƵůĚ ƐĞƩůĞ ĨŽƌ ĂŶǇƚŚŝŶŐ ůĞƐƐ ƚŚĂŶ Ă ĮĚƵĐŝĂƌǇ ƐƚĂŶĚĂƌĚ ŽĨ ĐĂƌĞ. Unfortunately, most investors are unaware of the diīerence. They simply assume that an advisor is ŐŝǀŝŶŐ ĂĚǀŝĐĞ ƚŚĂƚ͛Ɛ ŝŶ ƚŚĞŝƌ ďĞƐƚ ŝŶƚĞƌĞƐƚ͘

tĞ ĂƌĞ Ă ϭϬϬй &ĞĞ KŶůǇ &ŝĚƵĐŝĂƌǇ ĚǀŝƐŽƌ Our clients receive our un-divided loyalty and eīort ...and their interests ALWAYS come Įrst ŵƉůŽǇĞƌƐͶ Ăůů ƚŽĚĂǇ ƚŽ ƐĐŚĞĚƵůĞ ǇŽƵƌ required annual 401(k) evaluaƟon

STARFOX FINANCIAL SERVICES, LLC

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15972 Tuscola Rd. Suite 103 Apple Valley, Ca. 92307

(760) 946-0700 www.starfoxĮnancial.com

,ĂƐ zŽƵƌ &ŝŶĂŶĐŝĂů ĚǀŝƐŽƌ Žƌ /ŶƐƵƌĂŶĐĞ ŐĞŶƚ dŽůĚ zŽƵ ĂŶ /ŶǀĞƐƚŵĞŶƚ tŝůů Ğ ͞EŽ ŽƐƚ ƚŽ zŽƵ͍͟ /Ĩ ǇŽƵ͛ƌĞ ǁŽƌŬŝŶŐ ǁŝƚŚ Ă Įnancial advisor, that advisor is geƫŶŐ ƉĂŝĚ ďǇ ǇŽƵ, either directly by checks you write or indirectly via commissions, spreads, or fees generated by the investments you make. Any advisor claiming otherwise is hidiŶŐ ƐŽŵĞƚŚŝŶŐ Ͷ ůŝŬĞůǇ ĂŶ ŽƵƚůĂŶĚŝƐŚůǇ ŚŝŐŚ ĨĞĞ for placing an investment or insurance policy.

Is Your Account Being Churned or Do You Receive Frequent Calls OīĞƌŝŶŐ Ă ͞'ƌĞĂƚ /ŶǀĞƐƚŵĞŶƚ͍͟ DĂŶǇ ŝŶǀĞƐƚŽƌƐ ĚŽŶ͛ƚ ƵŶĚĞƌƐƚĂŶĚ Žƌ ƚĂŬĞ ŝŶƚŽ ĐŽŶƐŝĚĞƌĂƟon that ďƌŽŬĞƌƐ ĂƌĞ ƉĂŝĚ ĨŽƌ ƐĞůůŝŶŐ ŝŶǀĞƐƚŵĞŶƚƐ ĂŶĚ ŝŶƐƵƌĂŶĐĞ ƉƌŽĚƵĐƚƐ͘ Brokers typically receive a 2-3% commission when they sell a mutual fund and as high as 7-10% when they sell an annuity. The broker also gets a trailer fee over Ɵme without doing anything (they do not manage the money). It is clear why brokers may be tempted to push an annuity or recommend frequent changes or addiƟons to a porƞolio.

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eneric foods line the aisles of grocery stores, often right alongside more well-known brands. Many consumers know that generic foods cost less, and price is a definite selling point. But how do these products measure up in taste and quality? Very often the differences are negligible, meaning generic products make smart buys. By switching to generic or store brands, shoppers can save hundreds of dollars a year. Generic foods tend to be less expensive than brand-name items because manufacturers of generic products do not advertise or market such products, not because they are made with inferior ingredients. With no television commercials to pay for, generic manufacturers can pass the savings on to the consumer. This helps consumers stretch their food budgets that much further. Alittle-known secret of generic brands is that many are actually produced and shipped from brand-name facilities. A company that produces a certain brand

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ome improvements are typically made to improve the functionality and look of a home, but renovations also can increase the value of a home. Certain changes to a home can make it more attractive to prospective buyers, while other renovations may make a home less appealing. For example, a complete overhaul of an outdated kitchen is often a smart financial move, while installing a pool or hot tub may not be worth the cost to homeowners. Separating the good from the bad renovations makes smart financial sense, and homeowners looking to improve their homes’ resale values may want to avoid the following projects. • Bedroom and garage conversions: Changing a room’s traditional function often turns off buyers. For example, turning a garage into a home gym might seem like a great idea for you, but it may not be so appealing to prospective buyers. Buyers can certainly reconvert the space, but they would consider the costs of such a conversion when making their offers on the home. • Stylized colors on trims and rooms: Painting over unappealing colors is a project many homeowners can handle. However, some may be discouraged by a home that has too many bright colors or textures on the walls and trims. Buyers often want homes that are movein ready, meaning they can get settled in before undertaking large projects. A living room painted in purple or zebra print may not fit the design scheme of many buyers. Dark colors do not easily disappear, and taping off and painting trimwork or changing it entirely can be equally time-consuming. Stick with neutral colors when selling a home, even if this means giving rooms a new coat of paint before putting your house on the market. • Outdoor hot tubs and indoor spa tubs: Many people find soaking in a bubbling brew of hot water quite inviting. But buyers often do not want to inherit a used hot tub. Although hot tubs are cleaned and maintained with sanitizing chemicals, some people may view them as unsanitary. Removing a hot tub can be labor-intensive. And much like a pool, a hot tub may not be appealing to buyers with young children.

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• Removing closets: Closet space is often high on buyers’ priority lists. Turning closet space into an office or removing a closet to make a room bigger may be fine for those who are staying put. But these modifications can be a turn-off to prospective buyers. • Too many features: In an effort to “keep up with the Joneses,” some homeowners will over-improve their home to the point that it outshines all others on the street. There is a case for having nice things, but homeowners may struggle to sell a home that is disproportionate to other homes in the area. Practice moderation when making improvements to attract more buyers. These suggestions are merely guidelines and should not replace the advice of a reputable real estate agent when marketing a home. Housing features and what buyers are interested in vary across the country. Some items may be desireable in specific areas but undesireable elsewhere. Making informed choices before renovating can help homeowners recoup the largest share of their investments. — Metro

Serving The High Desert Since 1995 6SHFLDOL]LQJ ,Q x x x x

Retirement Planning 401(k), 403(b), 457 & TSP Rollovers Tax Planning 401(k) Management Corporate Pension Planning Investment Management Retiree Income Strategies Insurance Estate Planning ~ Licensed Attorney on Staff

(760) 946-2220

Call For Your Consultation With A Financial Advisor. ³&DULQJ IRU <RXU )LQDQFLDO 6HFXULW\ DQG 3HDFH RI 0LQG ´ www.archangelfinancial.com 16191 Kamana Road, Apple Valley, CA 92307 Securities and Advisory Services Offered Through Centaurus Financial, Inc., Member FINRA & SIPC. Chris Martin is a Registered Principal and Advisory Associate, Victoria Martin is a Registered Representative. California Insurance License 0C43480.

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and one packaged by a name company. • Frozen french fries: French fries are simply potatoes sliced and fried, then flash-frozen. There is little taste difference between unseasoned varieties of french fries between brands. • Medications: Opting for generic pain relievers can save you quite a lot of money. These drugs are subjected to the same rigorous testing as name-brand medicines, so consumers can rest assured that they are safe. • Produce: Whether an apple has a name brand on it or a generic label, it will taste the same. Lettuce, vegetables and other foods sold in the produce department can all be purchased as generics rather than brand names without sacrificing quality. • Baby formula: There is a public perception that generics are cheap and bad for you, which is why some shy away from generic baby formula. But parents who compare the containers side-by-side are likely to find the same exact ingredients in formulas. The taste and the texture may be slightly different, but the products are nearly identical. The Infant Formula Act requires specific procedures be followed in making infant formulas, which means the generic brands must be just as safe as their brand name counterparts. — Metro

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istration up to a predetermined amount. Some credit unions use private insurance but are insured nonetheless. Those interested in joining a credit union can visit the Credit Union National Association Web site at www.cuna. org to find a credit union nearby. Individuals also can talk to their employers and any other groups to which they belong to find a credit union that fits their membership criteria. As with a bank, a person will need forms of identification and a certain sum of money to deposit to secure a credit union account. — Metro

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rescription drugs can be quite expensive, and even those who have health insurance often pay more than they need to. According to a 2012 Consumer Reports “Best Drugs” poll on prescription drugs, Americans routinely take an average of four medications per day, spending nearly $800 on drug costs each year. Those who do not have health insurance may have to pay much more out of pocket. As expensive as prescription medications can be, there are still ways to save money on prescription drug costs.

If you have any doubts, check the drug name with your doctor and then consult with the pharmacy to see if an error was made.

Club as your go-to place to buy 30-packs of toilet tissue, but these retailers also offer discounts on prescription drugs. Even nonmembers are allowed to use these warehouses for their prescription Opt for generic medications drug needs. Big wholesalers could give Generic versions of hundreds of you the best deal on your pills. brand name prescription drugs are available and typically cost a lot less Skip the insurance sometimes money. With a generic medicine you are Consumer Reports says hundreds of not paying for marketing and advertis- commonly used generic medications can ing costs. These drugs are routinely be purchased for around $10 for a threetested for efficacy and safety. There is month supply at various major chains. really no reason to select a name-brand Program details vary, but consumers medicine over the generic alternative, might be able to save a lot of money by Comparison shop even when it comes to over-the-counter using these programs and leaving their Believe it or not, drug prices vary drugs. Ask your doctor on your script to insurance cards in their wallets. depending on the time of the year and check the box for the generic option. even the pharmacy. A person can shop Opt for OTC around for the most affordable medica- Use a preferred pharmacy In many cases, an over-the-counter tion just like they would when buying mail-order service medication may be just as effective as another product. Prescription drug Certain insurance companies have a prescription drug. Talk to your doctor apps enable you to search for discounts negotiated discounts with mail-order about trying an OTC remedy before a in your neighborhood. pharmacies and pass on the savings prescription is written. Ibuprofen may to their members. Medicare and other relieve arthritis pain, and diphenhydrRead your bill government-sponsored plans may offer amine could alleviate insomnia, all at Medical coding and billing is not al- the same type of deal, and consumers a much lower cost than prescription ways accurate. Employees entering can save a substantial amount of money drugs. codes may put in the wrong informa- by opting for mail-order service. Prescription drug costs can add up. tion, inadvertently charging a person But there are a number of strategies confor the wrong medication. Treat your Consider big wholesalers sumers can employ to reduce the out-ofmedical bills as you would any other bill for prescriptions pocket expenditures on medications. and verify that the charges are correct. You may think of Costco or Sam’s — Metro

had created a financial plan. Some survey respondents did so on their own, while others used the services of a financial planner. Though some might be intimidated or even scared to institute their own financial plans, it can be done. For those who are especially hesitant to develop their own financial plans, financial planners can help you define your goals and make those goals a reality. The benefits of financial planning are numerous, helping men and women build better financial futures. • A financial plan forces you to define your goals. One of the biggest advantages to financial planning is it forces men and women to define their financial goals. An effective financial plan should consider both short- and long-term goals. If you hope to one day own a home, a financial plan can help you figure out how quickly you will own that home. A good financial plan also can help you map out a course for retirement. Ambiguity with respect to your finances is potentially dangerous. Saying you want to retire at 60 and developing a plan to make that happen are two very different things, but the latter can make it happen while the former won’t get you anywhere unless you take action. Be as specific as possible when defining your goals, and recognize that, depending on when you are making your financial plan, you might need to reassess those goals if they are not realistic. • A financial plan can help you curtail your spending. With a financial plan in place, you’re less likely to waste your money on frivolous things. Without a plan, you’re more likely to treat money as disposable, putting your financial future in jeopardy as a result. A careful examination of your financial situation can shed light on areas where your spending is excessive. A negative cash flow, which occurs when there is more money going out than coming in, has never been a part of a successful financial plan. Correcting such a situation, which is often accomplished when people establish a financial plan that trims excessive spending, can go a long way toward securing your financial fu-

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their credit cards, and financial experts recommend using less than 20 percent of available credit to maintain a strong credit rating. • Don’t bluff on loan applications. Some borrowers might be tempted to inflate their earnings on home loan applications, including counting overtime or bonuses they haven’t yet earned when listing their annual income. Borrowers can expect lenders to request documentation of any extra income, including bonuses, so applicants should avoid including additional income on their applications unless they can prove it. Applicants also must avoid hiding

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• Buy a used car. Buying a used car may not give buyers the initial excitement of driving off a car lot behind the wheel of a brand new vehicle, but it might prove quite exciting for your bank account. Revisiting a study they conducted in 2001, in 2013 experts at automotive Web site Edmunds.com examined three different financing methods and the cost of each over a six-year period, which the global market intelligence firm Polk estimates is the average car ownership period. The study examined the costs, including interest rates and fees, of leasing or buying a 2013 Honda Accord EX and buying a used 2010 Accord EX. The total cost of buying used after six years was $20,960, while the cost of leasing was $24,768 and the cost of buying new was $28,330. Buying used even saves buyers money when

past issues on their applications. Banks performing their due diligence will eventually discover any past problems, so applicants should be straightforward from the start. Applicants concerned about their earnings should know that it’s acceptable to include information about assets such as retirement plans and savings even if those funds don’t figure to be used to pay the mortgage. • Make a substantial down payment. Lenders look fondly on borrowers who can afford hefty down payments, feeling that such borrowers are less likely to default on their loans. In addition, the larger the down payment, the less the monthly mortgage payment will be, saving borrowers a significant amount of interest fees over the course of the loan. — Metro current item arrives before the one you own breaks down. • Sell your own used stuff. You can offset the cost of buying a new device by clearing out your own outdated merchandise. Companies like Gazelle will buy used phones and other electronics. While you may not make a fortune, a few dollars here and there can help fund upcoming purchases. — Metro factoring in equity. Of course, leasing saves drivers the cost of maintenance and repairs, which can be considerable when buying used vehicles. However, an older used car won’t cost as much to insure as a vehicle that is being leased or financed. • Drive less. Of course, the easiest way for automobile owners to trim the costs of owning their vehicles is to drive less. Though vehicle manufacturers have improved fuel economy in recent years, driving less will save money on fuel, the cost of which hinges on a host of factors, including petroleum demand and economic conditions. Such factors may cause a dip in fuel prices one day, but a sharp increase in price the next day. Regardless of those fluctuations in fuel prices, drivers who can cut back on their driving are certain to save money. The cost of vehicle ownership is on the rise. But motorists who rely on their vehicles can still find ways to save money. — Metro

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ture. • A financial plan can be motivational. Another significant and often overlooked benefit to financial planning is how such planning can act as a motivator. A good financial plan will include certain measuring sticks, such as having debt paid off by a particular date or a certain day by which you hope to deposit a certain amount of money into your savings. These measuring sticks often motivate men and women to be more responsible with their money, and many people find living up to short-term financial goals to be very rewarding. • A financial plan makes better use of your money. Even if you don’t have any negative spending habits, a financial plan can help you make better use of the money you do have. A closer examination of your finances can often yield a host of ways to grow your money or save it. For example, you might have multiple insurance policies, some of which offer duplicate coverage. Examining each policy and removing duplicate coverage can save you money and help you spend that money in better ways. You wouldn’t pay for the same slice of pizza twice, so why pay for the same coverage twice? But unless you make a financial plan, you are unlikely to find those areas where you’re wasting money or discover the numerous ways in which your money can be better spent. • A financial plan helps you grow your money. Even if you are worried about investing or especially skittish when it comes to risk, you will need to find ways to grow your money, and a financial plan can help you do just that. The concept of inflation dictates that the dollar you have today won’t be worth as much next year, meaning you will need to take steps to grow your money if you hope to have enough to get by in retirement. A financial plan can help everyone, whether they’re risk-averse or not, grow their money. Something as simple as opening an interest-bearing account will grow your money more than if you were to put that money under the mattress. Without a financial plan that includes ways to grow your money, the money you have will only lessen in value as time goes on. — Metro

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