I love the Wall Street Journal. Its always a gold mine of good stuff. In today's issue, Karen Blumenthal talks about becoming aware of "Bill Creep".
Its all about normal monthly expenses for things like cell phones, cable tv, or maybe its the gym, or your video rental service.
What happens is you sign up for cable tv at the basic rate of $39 month. The creep comes in when, over time, you add a premium for high definition, rental of a dvr, the occasional movie--you get it.
With cell phones, its going over your texting limit, downloading ring tones, etc.
At the gym, its the drinks, clothing, and Lars, the trainer.
Avoiding bill creep requires periodic review of the bill to see if the cost is 'creeping' . That can be tough if your checking account or a credit card is being debited .
Go look. I bet you have Bill Creep.
Wednesday, January 28, 2009
Wednesday, January 14, 2009
The best car for you to own ...
is most often the one you now own.
Cars now last much longer than they ever have. You can expect your car to provide 200,000 miles of reliable use without large repair bills but only if you properly maintain it. Even if you invest in an extended warranty, the maintenance and warranty costs will be much less than the cost of a new car.
Cars now last much longer than they ever have. You can expect your car to provide 200,000 miles of reliable use without large repair bills but only if you properly maintain it. Even if you invest in an extended warranty, the maintenance and warranty costs will be much less than the cost of a new car.
To refinance or not to refinance, that is the question...
If you can refinance at a lower rate, why wouldn't you?
I can think of at least two reasons-(i) your property value has gone down to the point where you cannot qualify for a loan large enough to pay off your existing loan or (ii) the 'payback' period is too long.
In this market, property values have declined to the extent that you may not be able to meet the lender's loan to value ratios. For example, if the loan balance on your existing loan is $100,000 and the current value of your home is $110,000 and the new lender's guidelines are such that they will loan 80% of its value. The new loan amount would then be $88,000. In order to refinance, you would have to pay the $12,000 difference between the old loan amount and the new loan plus the closing costs of the new loan. Assuming you had the $15,000 to proceed, you would then decide whether the lower payment was worth the cost.
If your property's value would support a loan of $100,000 you would still incur the closing costs. If we assume those costs are 3% of the loan amount or $3,000, your new monthly payment would have to be enough less than your old payment to justify the expense of refinancing. If you intended to sell the house in the foreseeable future it is much more likely you would never experience enough savings to pay for the closing costs of the new loan. So make sure you do the math and see how long it would take to recover the closing costs. If it takes more than 2 - 3 years, you may want to keep your existing loan.
There are many good reasons to refinance, but the above are two reasons you might not want to.
I can think of at least two reasons-(i) your property value has gone down to the point where you cannot qualify for a loan large enough to pay off your existing loan or (ii) the 'payback' period is too long.
In this market, property values have declined to the extent that you may not be able to meet the lender's loan to value ratios. For example, if the loan balance on your existing loan is $100,000 and the current value of your home is $110,000 and the new lender's guidelines are such that they will loan 80% of its value. The new loan amount would then be $88,000. In order to refinance, you would have to pay the $12,000 difference between the old loan amount and the new loan plus the closing costs of the new loan. Assuming you had the $15,000 to proceed, you would then decide whether the lower payment was worth the cost.
If your property's value would support a loan of $100,000 you would still incur the closing costs. If we assume those costs are 3% of the loan amount or $3,000, your new monthly payment would have to be enough less than your old payment to justify the expense of refinancing. If you intended to sell the house in the foreseeable future it is much more likely you would never experience enough savings to pay for the closing costs of the new loan. So make sure you do the math and see how long it would take to recover the closing costs. If it takes more than 2 - 3 years, you may want to keep your existing loan.
There are many good reasons to refinance, but the above are two reasons you might not want to.
Monday, January 12, 2009
Who should attend a financial stewardship workshop?
Who should attend either or both of the Freed Up Financial Living Workshops or the Money.Purpose.Joy workshop to be conducted in February by Matt Bell?
I think most people fit into one of four categories: those in the midst of a financial meltdown, those just getting by but living paycheck to paycheck, those who are financially independent but not at peace with money, and those living a God-honoring financial lifestyle.
If you are in a financial crisis, you may have been laid-off or maybe you have been caught by excessive debt about the time the bottom fell out of the real estate or stock markets and now you can't sell without a loss. Whatever it was that caused it, you can't pay your bills and your creditors are closing in. You need immediate, one-on-one, counselling. Call Jerri Moats, 904.249.4091 and make an appointment to meet a counsellor. Part of their counsel will include a recommendation that you attend this course so that once the crisis is resolved you will have the tools necessary to never have to face that horror again.
If you are living paycheck to paycheck, this course will help you both avoid the crisis and to move toward financial independence. You will need a spending plan that accomplishes those goals.
If you are financially independent you may be retired or you may be working, but in either case you have enough money to pay bills with some left over for savings and retirement. However, your priorities with money, such as giving, saving and debt, are not such that you are experiencing the peace that comes with a God honoring lifestyle. This course will help you open your eyes to changes you may never have considered.
If you are living the God honoring financial lifestyle, taking this course will confirm your financial decisions and your wisdom and imput will help the others in the course. However, maybe you will find new ways to honor God with your money.
I think most people fit into one of four categories: those in the midst of a financial meltdown, those just getting by but living paycheck to paycheck, those who are financially independent but not at peace with money, and those living a God-honoring financial lifestyle.
If you are in a financial crisis, you may have been laid-off or maybe you have been caught by excessive debt about the time the bottom fell out of the real estate or stock markets and now you can't sell without a loss. Whatever it was that caused it, you can't pay your bills and your creditors are closing in. You need immediate, one-on-one, counselling. Call Jerri Moats, 904.249.4091 and make an appointment to meet a counsellor. Part of their counsel will include a recommendation that you attend this course so that once the crisis is resolved you will have the tools necessary to never have to face that horror again.
If you are living paycheck to paycheck, this course will help you both avoid the crisis and to move toward financial independence. You will need a spending plan that accomplishes those goals.
If you are financially independent you may be retired or you may be working, but in either case you have enough money to pay bills with some left over for savings and retirement. However, your priorities with money, such as giving, saving and debt, are not such that you are experiencing the peace that comes with a God honoring lifestyle. This course will help you open your eyes to changes you may never have considered.
If you are living the God honoring financial lifestyle, taking this course will confirm your financial decisions and your wisdom and imput will help the others in the course. However, maybe you will find new ways to honor God with your money.
Friday, January 2, 2009
FreedUp Financial Living Seminar
St Paul's By-the-Sea Episcopal Church, 465 11th Avenue North, Jacksonville Beach, Florida, is hosting a six-session workshop beginning at 6:45 pm, Tuesday, January 13, 2009. The workshop explores how to live a God-honoring financial lifestyle. Better yet is the opportunity to create a spending plan tailored to your particular needs.
The course is for everyone. It will benefit those who have more than they could ever spend as much as those who are struggling.
For more details on the program go to www.goodsenseministry.org/freedup . To register contact Jerri Moats at jmoats@spbts.net or 904.249.4091. To download the prework for the course, go to http://www.spbts.net/documents and click on the Freedup Precourse Worksheets link.
The course is for everyone. It will benefit those who have more than they could ever spend as much as those who are struggling.
For more details on the program go to www.goodsenseministry.org/freedup . To register contact Jerri Moats at jmoats@spbts.net or 904.249.4091. To download the prework for the course, go to http://www.spbts.net/documents and click on the Freedup Precourse Worksheets link.
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