Saturday, August 31, 2013

9 Ways to Save on End of Summer Energy Costs


Labor Day usually signals that summer is coming to an end.  You hear sayings like, vacation is over, time to get back to work; you can’t wear white anyway and other colloquialisms.  Temperatures start to drop and children are back in school getting homework assignments and writing reports.  This summer however is a little different. 

In some parts of the country this summer was not as hot as last summer which is good for homeowners who saved money on cooling costs.  However, temperatures are still in the 80-90's in some areas across the country and which is not good news for homeowners and their electricity and cooling costs.  Here are 8 quick tips to save money in the last few weeks of summer which can help offset some of the high energy bills we paid during this hot summer. 

  1. Appliances.  Limit the use of the microwave.  Use or purchase a portable grill such as the George Foreman grill or similar devices which reduces the amount of time it takes to cook food.  Try drying clothes using full loads or air drying clothes to save money.  Buy energy efficient appliances and light bulbs to save on energy costs.  Wash clothes in warm or cold water and rinse in cold water.
  1. Electronics.  Turn off all electronics and appliances when not in use.  If you have multiple televisions in your home this adds up in electricity costs when running them at the same time.  If you are out of the room for more than 20 minutes turn off all electronics.  Avoid going to sleep with the tv on, if you do set a timer so it is not on all night long.
  1. Computers.  Turn off your computer when not in use or leave it in standby mode.  Energy Star has free energy efficient programs for computers that will help reduce energy usage.
  1. Oven cooking.  Using the oven when it's hot outside will make it harder to keep your home cool.  Try cooking on top of the oven to save money on electricity. 
  1. Thermostat. Set your air conditioner thermostat to 78 degrees F and keep it there.  If you need additional cooling use a portable fan or ceiling fans.  Don't place lamps, televisions or computers near your thermostat.  The thermostat can sense the heating coming from the appliances and will run longer than necessary.
  1. Lights.  Don't turn lights on if your home gets natural sunlight.  Open the blinds or curtains to get natural sunlight light.  Keeping lights off also keeps your home cool.  Turn lights on only when necessary.
  1. Insulate.  Seal any cracks or leaks around and inside your home and insulate your attic floor.  Install storm windows to save on energy costs.
  1. Refrigerator.  Keep your refrigerator at 38 - 40 degrees F.  Keep your freezer at 5 degrees F.
  1. Open the windows at night to keep your home cool instead of turning on the a/c.

Tuesday, August 27, 2013

Smart Ways to Refinance Your Auto Loan

If you are considering refinancing your auto loan there are several things to consider.  You should only refinance if the process will benefit you financially.  When you refinance an auto you should get approved for an interest rate that is at least 1% lower than your current loan interest rate.  An auto refinance should take one day or less to complete. If you fill out an application online the process should take no more than a few hours provided the company has all of the required documentation.  The best way to refinance your auto loan is to shorten the term and lower the interest rate.  If you lengthen the loan term you will pay more interest over the life of the loan.

When to Refinance
1.      If interest rates have decreased since you originally bought your auto.
2.      If you leased your auto and your lease is expiring soon.
3.      If you credit score has improved. Check your credit score and credit report to be sure.
4.      If you original auto loan had a term of 5-8 years and you owe at least $10,000 on your loan.
  1. If your financial situation has gotten worse or you have experienced a financial setback.

Factors that affect Refinancing
  1. If you owe more on your auto than the auto is worth, lenders may be reluctant to do business. A lender willing to loan you enough money to pay off the existing loan will now have a loan that is only partially secured.  This is because the loan balance is higher than the auto's market value. This will prevent you from getting a lower interest rate and cause you to go further in debt.
  2. If you plan on making a big purchase such as a home, investment property or other purchase you will have to postpone refinancing your auto for at least 3-6 months because the purchase will lower your credit score.  In some cases, if you have good credit you may not be impacted.  I was able to purchase a home and 3 months later was able to purchase a new car with a good interest rate. 
  3. If you purchased a new car, your refinanced loan will now be for a used car versus a new car and may impact your interest rate.
  4. Use an auto loan refinance calculator to make sure you are saving money by refinancing.  Avoid pressure from the dealer or loan officer to lengthen the term of your loan.
  5. If your original auto loan has a prepayment penalty you will have to pay fees prior to refinancing which may eat up the money saved by the actual refinance.
  6. Some banks and finance companies have stopped offering sub-prime loans for those with bad credit.  For companies that do offer these loans they are costly and your interest rate will be higher than the current market rate. Furthermore, you may be required to pay additional fees or a security deposit.
  7. The outstanding balance on your auto loan, the condition of your auto (if you have been in any car accidents or currently have damage to your car) and the age of your auto may also affect your interest rate. Some companies will not refinance an auto if it is more than 7 years old or if the loan is less than $7,500 or greater than $30,000.

What to Do Before Refinancing
  1. Fix errors on your credit report and obtain your credit score from Equifax, Experian and TransUnion. Some companies will put you in bad deals even if you have good credit.
  2. Pay down as much debt as possible.  Credit card balances should be 20% or less of the credit limit. This will help boost your credit score.
  3. Review your current auto loan paperwork to ensure you will not be charged a prepayment penalty or other fees if you refinance or pay off your loan early.

How to Refinance
1.      Comparison shop and get at least 3 offers from banks and credit unions.  Dealer financing is the most expensive even if you have good credit. Avoid offers in the mail or other solicitations.
2.      Ask about fees charged such as loan and title fees. Ask the lender for a detailed list of all fees that will be charged for the loan.
3.      Go with your gut. If you don’t feel the offer is a good match for you then walk away.

Friday, August 23, 2013

13 Smart and Practical Ways to Teach Children About Money

                                                    Teach your kids to be smart with money

Good money management is one of the most crucial skills one can possess. It can mean the difference in becoming a homeowner or business owner or renting a property for the rest of your life. This skill also needs to be taught to children.  Children are not being taught financial literacy in schools and those that are quickly forget what they are taught and are unable to apply what they learned in real life. Some parents are unable to teach their children good financial skills so these children will grow up to become adults with bad financial habits.

According to a white paper by the Consumer Financial Protection Bureau, only 22 states require high school students to complete an economics course before graduation, and only 13 require personal finance to be taught. That sad statistics leaves millions of children unprepared for the real world.

Unfortunately even if personal finance is a mandatory part of school curriculums in the U.S. it would not be enough.  The key is creating an effective curriculum and using real life situations to engage children so that the concepts taught can be applied and retained for future usage.

Children should be taught early about finances - as soon as they can talk.  It is much easier to teach younger children than waiting until they reach their teenage years to begin educating them about finances.

Children do not understand the concept of how money works until they start earning money on their own at a part-time of full-time job. Children have to be taught that they cannot be motivated by instant gratification.  Sometimes they will have to delay purchases until a later time. They have to be taught to control their urges and use those urges can be used as a teaching lesson. Here are 13 smart and practical ways to teach children about money.

  1. Create a no-buy day. Go on a spending fast and create a day once a week or once a month where you and your children don’t spend any money. Anything you need you have to make or use what you already home at home. You can’t borrow anything from anyone on this day.
  2. Generic vs. Name Brand. Have your children buy one name brand item and the exact same generic brand item. Let them write down the similarities and differences including price, color, material, etc.  Let them determine if buying a name brand item provides better quality or is the same as buying a generic item.
  3. Eating out. Compare menu items and determine portion sizes, menu specials, kid’s meals and what menu items cost. Discuss sales tax and tip and help them review the bill to ensure it is correct. This will help them learn how to comparison shop and find deals and how to ask about specials.
  4. Bank. Help kids setup a mini-store in your home or mini-bank to learn how to comparison shop and make bank transactions. Get your children and their friends serve as customers and you serve as a bank employee.
  5. Say No.  Teach children about the value of money. Don’t say yes every time they ask for money or when they want you to buy them something. 
  6. Real life.  Use real life experiences to show children how to spend money.  Sit them down with you when you are paying bills.  Sit with them to look at sales advertisements to help them find the best bargains.
  7. Discuss money.  Discuss money frequently when watching television, going shopping or when children start asking for money or gifts.  Explain to them how parents have to go to work to earn money to buy them gifts and pay bills.
  8. Tour. Take them on a tour of the US Mint or a local bank so children can learn the process of how money is made and used.
  9. Show. Take children with you to the bank or ATM. Show them how to deposit a check and take money out of a bank account and the ATM.  Show them the receipt and let them know about deposit limits, fees and you can only take out the money you have in your account and consequences of overdrawing your account.
  10. Track money.  Use the envelope system – charity, saving, investing, spending – give your child a small reward when they reach a savings goal or buy a piggy bank with 4 pre-marked slots. This helps them categorize money, learn how to save and how donate to charity.  Teach children how to categorize money: saving, donate, spend.  Explain to them the importance of saving, budgeting and donating to charity.
  11. Spending. Teach children about budgeting and saving to purchase items with cash instead of credit. Show children the benefits of paying with cash instead of with credit. Show the impact of how buying what they want impacts the household budget.    
  12. Wish List.  Ask them to create a wish list of items that are “wants”.  Ask them to think about things they want to buy and how it will impact the household.  Ask them to consider if the item is a need or want.  Wants can be delayed for purchase at a later time.
  13. Advertisements.  Review advertisements in magazines, newspapers, on TV and on the radio and explain what is a good deal and what is not.  Help them learn that all sales and specials are not bargains.