Tag Archives: savings

Earn Gift Cards for Being a Regular Reader

punchtab-gift-ribbonYou may have noticed that a Rewards tab has appeared in the bottom left-hand corner of our screen. Allow us to introduce Punchtab, the Silicon Valley-based loyalty program that helps readers of blogs to earn loyalty points by reading and sharing our posts. These loyalty points can be redeemed for gift cards from popular retailers like Starbucks, Amazon and Target.

To get started, simply click on the Rewards tab in the corner and then log-in using your Facebook account. By using your Facebook account as a unique identifier for you with Punchtab, you can start to accumulate points whenever you view or share our posts. As you accumulate more points, you can choose from the various rewards in the PunchTab Rewards Merchandise Catalog based on the number of points you have and the number of points needed for a particular reward.

We’re happy to be working with Punchtab here, and we hope the gift cards help you save money $5, $10 and $20 at a time!

Thanks for joining the FiveTenTwenty Club

~Janet and Karl

Don’t know what the FiveTenTwenty Club is? Learn more here, read about our Money Method, join in the conversation in our Community Forum and start living the Seven Days to Financial Fitness Plan!

Interest Rates Are Rising! Here’s What You Need to Do Now

interest rateThose of us with savings accounts know where interest rates have been in recent years: Nowhere. But the historically low rates used by the Fed to help stimulate lending and borrowing (and by extension, the entire economy) are very likely to rise soon. In some sectors, such as housing, mortgage rates have already doubled in recent months. Here’s what you need to do now to position yourself for rising rates:

Check Your Current Interest Rates

Find out what you’re paying on private student loans, car notes, mortgages, and so forth, because if any of these are variable, that rate will almost certainly rise in the coming months. Now’s the time to switch to a fixed loan if you can, or re-allocate additional funds in your budget toward debt servicing if you can’t. Rising interest rates make loans more expensive to re-pay, so act now to re-finance, if possible. In the case of variable rate mortgages (whose rates are already increasing rapidly), you should have acted yesterday, so get moving!

Re-Think Savings & Money Market Accounts

My “high yield” savings account has been paying me less than 0.8% interest – and I’ve gladly taken it, because safe sources of yield have been hard to come by in recent years. But many investors have shunned savings and money market accounts and CDs in search of better returns elsewhere. If you’ve been reluctant to hold cash because of low yields, it may be time to re-consider. (Who remembers the pre-recession days when such accounts yielded four or five percent?) Rising interest rates will provide you with better returns and a safer environment for your funds. That’s of real benefit if you’re expecting to make higher payments on variable-rate loans — or if you just plain want more money in the bank.

Bond Market Malaise

Rising interest rates mean a decline in the value of bonds (these move inversely), so the recent suggestion that the Fed might ease back on its bond purchases some time later this year has caused a mass sell-off in the asset class. Depending upon your investing style, this may be the time to re-consider your bond holdings. Some experts believe the worst is yet to come and are encouraging a complete departure, while others think the demand for bonds will re-surface as banks, major companies and government entities seek new purchases to roll-over older debt. They see this dip as a buying opportunity. Either way, one thing’s for sure: Bonds are likely to suffer in the coming weeks and months. Consider positioning yourself accordingly as you see fit.

Potential Five Ten Twenty Club Savings Example:

Let’s say you have a $10,000 savings account that is currently earning 0.5% interest (and that you don’t add a single penny to it). If rates return to their pre-recession levels of about 4%, you’d be earning eight times as much interest! Such a dramatic rise is unlikely in the near-term, however, so let’s focus on a more realistic new rate of about 2%.

Total Savings With 1-Year Interest Gains: $10,200 (vs. $10,050 at current rates)

Total Savings After 10 Years: $12,190 (vs. $10,500 at current rates)

Total Savings After 35 Years: $20,000 (vs. $11,900 at current rates)

..And, if rates do rise to 4% again, you’d have almost $40,000 after 35 years!

What interest rate are you earning on your savings account(s)? Have you started looking at whether your interest rates are variable or fixed? What do you plan to do next? Share your story in the comments below or in our Community Forum!

Disclaimer: This post is for your consideration only and should not be taken as actual financial advice. Please consider consulting a financial management professional before modifying your investments.

 

 

 

Six Tips For Making the Most of the Economic Recovery

economyThe recession may have officially been over for a few years now, but it hasn’t been until fairly recently that most of us have started feeling the economic wind at our backs. With improving GDP, consumer confidence and housing numbers, it’s time to re-assess your financial position in light of the improving economy. Here are the top things you should be doing now:

Polish Your Resume & LinkedIn Profile

Lower unemployment figures mean better job prospects for many of us, so it’s time to dust-off your resume and prepare your online career profiles for new opportunities. Even if you don’t plan on looking for a new job anytime soon, the work landscape has changed, so it’s worth updating your resume to reflect the evolution in the job marketplace. Be certain your skills and experience are current to reflect this.

Negotiate a Raise

I finally got a job offer this month earning as much as I did before the recession. The six years in between were a hard slog of low or stagnant wages (anes yes, my share of zero wages, too). Mercifully, the economy has healed enough to allow many of us to reclaim some lost ground.

Ok, so maybe not all of us are in a position to ask for more money just this second, but in an improving economy, salaries can be expected to grow, too. If you didn’t get much of a raise (or even saw declining income) during the lean years, it’s time to do some research and figure out whether you’re now underpaid. Websites such as Vault.com and Salary.com can give you a peek into what the competition’s making – and whether you have room to negotiate a better salary.

Re-Assess Your Mortgage & Home Value

Falling home prices were virtually inescapable during the recession, and some of us even faced underwater mortgages — or worse. At last, home prices are now rebounding smartly, meaning it’s time to assess your home’s current value. If re-financing is an option, now’s probably the time to do so, since interest rates aren’t likely to be any lower in the coming years. If you’ve been waiting to sell, now’s also the time to consider entering the market again. And if your cash flow has improved, consider making small cosmetic improvements that can improve your home re-sale value further.

Update Your Budget

The recession taught us how to make do with less; many of us pared down our budgets as a consequence of falling incomes and job opportunities. Now that our incomes may be rising again, consider sticking to the budget you used during the recession – with a few small updates. Don’t spend more on the essentials, but Do pay off more of your high-interest debt (such as credit cards) — if you can afford it. Also consider increasing your savings or investment contributions.

Scrutinize Your Accounts

With improving economic conditions, you may have the ability to contribute more to your 401K or other investment accounts. It’s best not to do so blindly – the economy has changed, and you probably don’t want to invest as you did before the recession. For example, many experts believe bonds are likely to under-perform in the next few years; some investors may want to re-calibrate their portfolios, accordingly. Consult with an investment advisor or do a little homework before you embark on any changes.

Re-Visit Your Credit Score

If you’ve been afraid of the recession’s impact on your credit, it’s time to suck it up and take a look at where you stand today. Free services such as Credit.com enable you to track your entire credit history and bureau scores on a regular basis. Tidy up any unresolved accounts by negotiating directly with the creditors themselves, rather than using a third-party service (since going through a middleman tacks on extra fees).

DOMA’s Gone! Here’s What it Means for Gay Couples’ Finances

flagAfter the Supreme Court’s historic 5-4 decision today striking down the constitutionality of The Defense of Marriage Act (DOMA), married gay couples can enjoy many of the same benefits and legal recognitions of their heterosexual counterparts. This is news worth celebrating, since it’s not only a historic step toward equality, but also of great benefit to gays’ financial futures.

Some of the immediate benefits include the ability for married couples to file taxes jointly and an elimination or reduction of the estate and gift taxes — all of which can result in thousands in savings.

It’s worth keeping in mind, however, that DOMA’s repeal currently only benefits same-sex couples in states that already legally recognize such marriages. Still, because more states are likely to approve gay unions in the coming months and years — and further Supreme Court decisions may emerge — non-married gay couples should take action to protect joint finances.

Here’s what gay couples should do to take advantage of their new protections:

Create a Will

It sounds simple (and perhaps a little morbid), but many gay couples haven’t yet contemplated what will happen to their estate upon their passing. That’s a shame, because it was at the heart of the issue that brought the landmark DOMA case before the Supreme Court: The spouse of a deceased gay person was required to pay hundreds of thousands of dollars in additional taxes because they weren’t an officially recognized spouse.

If you don’t have a will, get one – and make sure your spouse or domestic partner is listed as you wish. A living will is also useful if you intend for your spouse or partner to make decisions for you in the event of catastrophic illness, or if you wish to have them serve as executors of your estate/power of attorney.

Though the laws regarding domestic partner benefits are more nebulous, there is reason to believe benefits will soon (or eventually, anyway) be extended. Plus, even states that don’t yet recognize gay marriage may do so in the future. Consult with an attorney about the legal nuances here; you’ll want your will to have the best odds of treating your spouse or partner as the recipient of your inheritance (or whatever portion thereof you intend).

Notify Your Employer 401K  and/or Insurers

Notifying your employer and/or insurers of your same-sex marriage or domestic partnership is important if you intend on sharing insurance benefits or listing a spouse or domestic partner as beneficiary.

The same applies for your 401K and IRA — make sure your loved one is listed as beneficiary, and update their status if you marry or enter a civil union. Inquire with your individual plans about their same-sex policies.

Get Married

If you were already planning on doing so, getting married makes more sense than ever now, since you will receive the full protections under the law. Domestic partnership recognition offers weaker protections in some jurisdictions, so it’s to your advantage to marry, if possible. Even if you don’t live in a state that recognizes same-sex unions yet, it may be to your advantage to get married in one that does. That marriage may be recognized in your home state sooner rather than later, and the benefits of DOMA may even apply to you. (Such legal nuances have yet to be worked out. Stay tuned to the news and consult with an attorney, as needed.)

Create Joint Accounts

Creating or updating joint financial accounts — such as credit cards, brokerage accounts, and so forth — can establish a pattern of financial “legitimacy” that can be of benefit if you live in a state without strong same-sex union protections. If you already have such accounts, be certain to list your significant other as beneficiary. If you choose to marry out-of-state, it may be to your benefit to open joint accounts there, since those states may afford your account greater protections.

Update Your Mortgage or Lease

Ditto here for updating your mortgage or lease with your spouse’s or partner’s name and legal status, should you wish to share their associated priviliges and responsibiilities.

Tell Your Friends and Family

Make sure your immediate circle knows of your relationship status; in case anything happens to you, they can be aware of and support your wishes by corroborating your relationship’s significance.

Stay Informed

Laws, right and responsibilities regarding gay unions are evolving rapidly, so stay informed. Most states’ ACLU websites can be of help, as can local gay rights organizations. Keep up to date on the important changes that impact your life together — and your pocketbook.

From the Five Ten Twenty Club, congrats on this historic win!

 

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Six Easy Ways to Score Cheap Rent

rentsignAs the housing market fizzled during the recession, many previous or would-be home-owners opted to rent, instead. This sent rent prices soaring over 10% in most major metro areas -in some hot markets, such as my hometown of Houston, rents have soared over 5% in one year, alone. If you’re trying to save $5, $10 or $20 a day, the techniques below can help you reach (and possibly even exceed) that goal.

Rent Off-Season

Most landlords and property management companies know we tend to time moves around summer vacation – and they jack up rental prices accordingly during that season.

In many cases, rents can be a full 30% lower if you lease during the low seasons –such as late winter, for example — when few people are moving and landlords are desperate to fill units.

A little advance planning can help you determine the best dates for a move. If you plan on renting from a professionally-managed property, their computer systems automatically adjust prices by availability and season, so don’t be afraid to ask how much the same 1 bedroom would cost if you rented it today vs. three months from now.

Properties Under Renovation or Construction

My current condo building is being renovated, and in the process, it’s stirring up dust and noise which could turn-off many potential renters. To compensate for the inconvenience, the rental office is offering some price concessions — including cheaper deposits/fees, free gym passes, and discounted rents — to new renters. The renovation will be done in a couple of months, but new renters will enjoy a full year of cheaper rent.

The same is true of new properties under construction; if you’re willing to pre-rent an unit off a floor-plan before it’s fully completed, you’re likely to score a big discount. The leasing offices for properties under construction tend to open a few months before the property is ready, so drop in then to inquire about rents.

Pet or House-Sitting Arrangements

If you spend enough time on Craigslist or your local alternatively weekly paper’s site, you’ll notice ads for discounted rent if you’re willing to care for someone else’s pets, plants, or other property. This usually requires you to rent someone’s fully-furnished home or apartment while they’re away, so it’s not a tradiitional leasing arrangement. However, I’ve seen desirable units leasing for 50% off market rates for those willing to walk and feed someone’s dog while they’re away in Europe for a few months. If you’re the more adventurous and flexible sort, it’s worth a try.

Rent Near Growing Housing Developments

Now that the housing market is re-gaining steam, once-empty housing developments are again filling up. That means more people are buying houses than renting in those areas, so nearby apartments are likely to have lower occupancy rates — and rents.

One other word about occupancy rates: It’s always worth asking landlords or property management offices what their occupancy rates. If they admit to anything under about 85-90%, you’ve got a good chance of negotiating a better deal, since they’ll be in more of a hurry to fill empty units.

RentReporters.com

Until recently, ther was no central repository which allowed landlords to see your rental background. RentReporters.com enables you to work with your landlord to track your payments, so that you can effectively demonstrate your worthiness as a renter. If you establish credibility through a free service like RentReporters.com, it may help you negotiate cheaper rent in the future.

Rent the Neighborhood – Not the Unit

If what you really want in your apartment is a safe address, proximity to restuarants and shops, or easy access to transportation, then location, not the apartment, itself is what you need. Prioritize correctly by seeking units that meet your basic apartment needs – but enable you to capitalize on the location benefits — by choosing older or less-luxurious options in the neighborhood you want. In Atlanta’s luxe Buckhead neighborhood, for example, older properties (still in good condition) have to compete against numerous new high-rises and loft developments, so their rents can be 25-35% lower -even though they’re right next door.

Five Ten Twenty Club Estimated Savings

According to several sources, the average 1-bedroom apartment in major US metro areas averages about $1000 per month (some cities, such as NY or SF, are obviously much higher). Taking that as our baseline, and assuming we succeed in cutting our rent by 20% using any of the above techniques, we can deduce that:

1 Month Savings: $200 (That’s about $7/day!)

1 Year Savings: $2400

35 Year Savings: $650,000 (Including 10% interest/market returns)

What techniques have you used to score cheaper rent? Tell us about it in the comments section  below, or discuss it in our community forum!