Dollars and sense 06 29 13

DOLLARS and

SENSE How homeowners can reduce monthly expenses Live comfortably on a budget Also Inside: Get smart about buying insurance Top three reasons to find your banking bliss Tips for women managing their personal finances

s r e n w o e How hom r i e h t e c can redu s e s n e p x E y l h t n o M Saving money is a priority for many people.

But reducing monthly expenses is typically a bigger concern for homeowners, especially new homeowners adjusting to life with a mortgage, higher energy bills than they likely had while renting and other costs associated with owning their own homes.

Home ownership is a dream for many people, but the realization of just how expensive owning a home can be is often 2 DOLLARS & SENSE • JUNE 2013

eye-opening once you get the keys and move in. Once the initial sticker shock has worn off, homeowners should know that the cost of home ownership need not be so steep. In fact, there are several ways homeowners can cut costs without drastically changing their lifestyle.

Combine your insurance coverages.

Many lenders mandate that borrowers carry homeowners insurance for their homes.

The cost of coverage varies from company to company, and one of the ways homeowners can reduce the cost of their homeowners insurance is to bundle their homeowners coverage with their auto insurance. Some companies provide discounted premiums as high as 15 percent for policy holders who combine their homeowners and auto insurance coverage. Speak with your current provider to determine if combining your coverage

Article courtesy of metrocreativeconnections.com Bundle your services. More and more could save you money. If the savings are not consumers have decided to bundle their significant, shop around for an insurance Internet, phone and television packages. company that can offer you the lower price Consumer Reports found that bundling just you desire. Just be sure the company is accessible and reputable. two of those services instead of buying Refinance your mortgage. Refinancing them from separate providers can save consumers between 40 to your mortgage is another great 60 percent depending way homeowners can save a there are on where they live. Rates substantial amount of money. Even several ways if you only recently purchased for bundling packages often come with an expiration your home, your lender might be homeowners can willing to refinance your mortgage date, but a Consumer Reports cut costs without survey found that even with a lower interest rate.

Depending on the amount of drastically changing those packages come with time and money left on your some wiggle room. In their their lifestyle 2011 Annual Telecom loan, reducing your interest Survey, Consumer Reports rate by 2 percent can save you a substantial amount of money on your monthly found that one-third of survey participants attempted to negotiate a lower rate for their mortgage payment, which can add up to considerable savings on the total interest you bundled services, and 90 percent of those efforts were successful. When negotiating, will pay over the life of the loan. If you think your interest rate is a tad too high, consult your discuss lower prices for bundling as well as lender and discuss refinancing at a lower rate. extending the package beyond the current

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expiration date. It never hurts to ask, and one study has already shown that it actually helps to ask.

Go green. Going green benefits the environment, and it’s almost certain to benefit homeowners’ wallets. According to the U.S. Environmental Protection Agency, toilets account for more water usage in the home than any other appliance or fixture.

But the EPA also notes that a family of four can save thousands of dollars by switching to a high-efficiency toilet over that toilet’s lifetime. And installing eco-friendly appliances or fixtures around your home might even make you eligible for certain tax breaks while also updating your home, something that will make the home more attractive to prospective buyers when you sell down the road. There are many ways to make a home more environmentally friendly, and nearly all of them can save you money over the long run. n

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Live comfortably on a

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Seniors are one of the fastest-growing segments of the population, as medical advancements have increased life expectancies considerably. Many Baby Boomers have entered retirement age and are joining the ranks of other seniors on fixed incomes. This means they’ll also have to implement strategies to live comfortably on less money.

Statistics Canada states that as of a 2005 survey, the average net worth of individuals age 65 and older was roughly $303,000. This amount is characterized by money in savings, income provided by pensions and government assistance. In the United States, the average income of seniors in 2008 was around $29,000 according to the Congressional Research Service tabulations of data from the March 2008 Current Population Survey.

Upon retirement, many retirees are faced with quite a reduction in income and the stark reality of making ends meet with this new level of income. Those who are successful are often those who are adapting and are able to budget cleverly. Here are some ideas to do just that.

Set priorities. What are the necessities that you absolutely cannot skimp on? These may include a mortgage or rent, utility bills 4 DOLLARS & SENSE • JUNE 2013

and any other loan payments that have already been established. These amounts will have to be deducted from monthly income before you will discover just how much money will be left over for other things.

Downsize. There is the option to cut back on certain things to free up more money. Many people find it is wise to sell their home and move into a smaller condo or apartment. Not only will the expenses be less, there’s a good chance the complex will offer maintenance -- further saving you on unexpected expenses.

Consider downsizing your car as well. Rather than making high monthly payments for a brand-new auto at the dealership, you may be able to get a preowned vehicle for a lower payment schedule. Or you may have enough in savings to pay for the used car outright, saving you the expense of a monthly payment.

Consider shopping at consignment stores. Consignment stores are popping up in all different areas, including exclusive cities and towns. Shopping consignment stores no longer carries the stigma it once did. Many times the merchandise in consignment stores is brand new or has only been used once.

This could be the ideal place to turn for housewares, clothing, accessories, and even

gifts for others. The prices are typically marked well below retail value, and you may find some well-known brands.

Shop store sales. With the popularity of shows teaching others how to save big with coupons, many people believe this is the best way to save at grocery stores. However, the people doing the couponing are often capitalizing on buying in bulk and clipping mass amounts of coupons -- not practical for senior households. It could be in your best interest to simply shop for the items you buy frequently at the store that is selling it at the lowest price.

It may increase the number of stops on your shopping trip, but you can get a really good deal in the process.

Get crafty. Sometimes things that are sold at stores for a high price can be replicated at home easily with just a few materials. From tufted headboards to curtains to decorative pillows, chances are with a little ingenuity you can make these items yourself. Or, enlist the help of a friend or family member to assist you in a project that is slightly beyond your level of expertise.

Living on a fixed income can require reassessing priorities and making a few changes to the household budget. n

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Tips for women managing their personal finances The roles played by women have changed dramatically over the years. Modern women now wear many hats, one of which is money manager. That’s true for women managing their personal finances or those overseeing their family’s finances.

But managing finances can be intimidating for anyone, regardless of gender. Oftentimes, a careful assessment of your attitude toward money is a great way to make the process of managing your finances a lot less stressful.

A great first step when managing your finances is to identify any concerns you have about money. Being able to pinpoint the particulars will help you develop a plan of action.

Think positively and value your strengths. Embracing your strengths, even if those strengths have little to do with money management, can help you gain control of your finances. Perhaps you are not a financial

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whiz but your networking skills have left you with a vast network of friends and family in various professions. You may be able to use those connections to gain access to experts in the financial field who can guide you through the questions you may have.

Know your current financial status.

Feigning ignorance is not the way to get started. It is important to honestly assess your financial situation so you can effectively handle those finances going forward. Take stock of your income, expenditures and what you have in savings. Keep abreast of any changes in your accounts and stay current with business news and issues that may play a direct or indirect role on your finances.

Get talking about your concerns.

Talk to other women in similar situations. You may find that you share the same concerns.

Discussing common concerns or financial

strategies can help you in your own endeavors.

Continue working, even if it’s only part-time. A study by the Women’s Institute For a Secure Retirement found that a college-educated 25-year-old female will earn $500,000 less than a male counterpart in a similar position over her lifetime because of sporadic employment associated with caring for family, including children and aging parents.

That worries many young women who have previously thought about taking time off from work to raise families.

Consult with an estate planner. The earlier you start the better off you will be with regard to planning for the future. It is not an admission of weakness if you rely on the help of financial experts to guide you in the right direction. n Article courtesy of metrocreativeconnections.com

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Get smart about buying insurance Article courtesy of Brandpoint Content.

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For most Americans, insurance coverage is a necessity. While coverage can be confusing and expensive to obtain, its solace is undeniable in the event of a car crash, emergency surgery or if your home has been damaged in a storm.

From home and health to auto, life, disability and more, it’s important to be smart about how you buy coverage to limit costs, purchase the right coverage and avoid redundancies.

The best place to start is on your state’s official government website, says FindLaw.com, the nation’s leading website for free legal information. There you will find a list of licensed insurers so you can be assured that you’re dealing with a legitimate company.

“Work with a reputable insurance agent who represents a financially sound, highly-rated company,” advises Ed Susolik, an attorney who specializes in insurance law at Callahan & Blaine in Santa Ana, Calif. “As is often the case, you get what you pay for.

You don’t want to add to a tragedy by discovering that you’re underinsured or that the policy you’ve purchased from a little-known company is fraught with loopholes.”

Here are some additional tips from FindLaw.com on purchasing insurance coverage: Follow the law. Check the laws of your state. You may be required to carry certain types of insurance, such as liability insurance to operate a car, motorcycle or boat. This also applies on the federal

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level, for example, with the passage of the Affordable Care Act, all Americans will be required to carry health insurance as of 2014.

Read your policy. Many Americans don’t read their insurance policies and hastily sign contracts without considering the implications. For example, if your health insurance covers 90 percent of all medical bills and you require significant medical attention, the 10 percent for which you’re responsible could add up. If you have trouble understanding what a policy proposal covers, don’t hesitate to slow down and ask your agent for clarification or get a quote from a different company.

Remember: you’re buying insurance to ease, and not trouble, your state of mind.

Plan for major milestones. Major events will trigger the need to purchase insurance or increase your existing coverage. With the birth of a first child, parents should consider purchasing term life insurance. It offers a benefit to a spouse and child to cover living expenses if one parent dies before the

child reaches adulthood.

Inspect your home insurance. Carefully review your home insurance policy. Are you insured for your home’s market value or replacement value? The replacement value is the cost of rebuilding your house, while the market value is based on an appraisal of its value in relationship to surrounding homes.

Your agent should be willing to work with you to sculpt the policy that meets your needs.

Consider flood insurance. Standard homeowners insurance typically does not include flood insurance. First, determine the level of risk for flooding in your area. There are a few options online, including the Federal Emergency Management Agency’s website (www.fema.gov), where you can search your address and assess flooding risk. Your insurance agent also should have access to this information and can explore your options with you.

Add an umbrella policy. It’s not a bad idea to purchase an umbrella liability policy

to provide additional coverage above and beyond your homeowner’s insurance.

This helps in situations where you could be at fault for accidents, such as your dog biting a mail carrier or a tree in your yard falling onto a neighbor’s car.

Research renter’s insurance.

Apartments can be burglarized or damaged like any other property. If you rent, consider purchasing renter’s insurance to cover assets such as computers, furniture and other significant items.

Inventory your belongings. Take photos or videos, with audio descriptions, of your property so you and the insurance company have an accurate record of your belongings. Capture your home, prized possessions and high-value items such as cars, boats, jewelry and collections. Store the files on a portable hard drive in a secure and safe location, such as a safe deposit box.

To learn more about insurance and the law, visit FindLaw.com. n

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Top three reasons to find your banking bliss

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Take a look at the top three reasons to find bliss with your bank:

Have less financial stress

According to a recent poll, those in happier banking situations are more positive about their current financial state and 60 percent of these consumers report having low or no financial stress. Similarly, the American Consumer Satisfaction Index reported that customer satisfaction has increased by 2.7 percent from

last year to 77 percent, suggesting that consumers are feeling the love from their banks. What defines a good connection is unique to each individual, but research has shown the majority of people define a good banking experience by exceptional customer service. If you’re not feeling satisfied with your bank, it may be time to reconsider what you need in a financial institution.

Be more fiscally confident

When assessing their current financial situation, consumers in a happy banking relationship are more confident in their financial future and reaching their personal goals, studies show.

A bank should be more than a place to withdraw and deposit money; a great bank will be a financial partner and offer you the opportunity to have broader

financial conversations last year to 77 percent, suggesting that consumers are feeling the love from their banks. What defines a good connection is unique to each individual, but research has shown the majority of people define a good banking experience by exceptional customer service. If you’re not feeling satisfied with your bank, it may be time to reconsider what you need in a financial institution.

Have more time and less worry

Find a bank that respects your time and fits your financial needs into your schedule - not theirs. In addition to offering standard banking services, more and more banks are making customer service and convenience a priority. For example, real people available 24/7 that will even chat with customers on Twitter to provide customers support whenever it’s needed.

Look for a bank that opens early and stays open late so you can bank on your schedule. If you’re among those who are not happy with their bank, have high 8 DOLLARS & SENSE • JUNE 2013

financial stress, and feel you spend too much time worrying about your finances, consider making a change. One of the best and easiest ways to try another bank is to open a checking account.

You’ll get a feel for a bank’s customer service, accessibility, and added financial value right from your first transaction - some banks even offer instant issue debit cards, so you can be up and running by the time you walk out the door.

Ultimately, using a bank that makes you a priority, is accessible whenever you have questions, and offers reliable financial information will help you to reduce stress and feel more confident about your financial future.