Jill Russo Foster

Is Your Home Improvement Project Worth It?

couple-blueprints As the weather turns to Spring, homeowner’s start to think about home improvements. Several years back, we did a major home improvement to our home and we had to make some tough decisions about what improvements to make. Do we make changes that will make our lives easier? Do we do something that would bring added value to the home? These are the tough decisions we had to make as homeowners.

First, do the improvements that will ward off problems. For example, it’s better to replace a roof than to wait until it leaks. Once it leaks, you have to repair interior water damage on top of replacing the roof. In my opinion, regular maintenance and preventative maintenance are your top priority.

But what about the other things you want to do around your home. According to Remodeling Magazine, here is a chart about average cost and what portion of that cost can you expect to recoup in value.

Which home improvement projects pay off?

Project	Job Cost	Resale Value	Portion Recouped
Entry door replacement (steel)	$1,162	$1,122	96.60%
Minor kitchen remodel	$18,856	$15,585	82.70%
Window replacement (wood)	$10,926	$8,662	79.30%
Basement remodel	$62,834	$48,777	77.60%
Major kitchen remodel	$54,909	$40,732	74.20%
Bathroom remodel	$16,128	$11,688	72.50%
Roofing replacement	$18,913	$12,777	67.60%
Backup power generator	$11,742	$7,922	67.50%
Home office remodel	$28,000	$13,697	48.90%

SOURCE: Remodeling Magazine 2014 Cost vs. Value Report, mid-range projects

So, what if the improvement you want, isn’t just something that will make the house look or feel nicer. I personally don’t think the choice is as easy as picking the project most likely to recoup your expenses. The first question you need to ask yourself is, “How long to do I expect to live here?”

couple-homeimprovement If you are planning to sell in the near future, then recouping your expenses is a major factor in your choice. Talk with a realtor and discuss what improvements will increase your home’s value and recoup your money.

But what if you are planning to live in the home for a long time? Then choose the project that will make your life more enjoyable. If you are handy and have the time, you can do some improvements yourself. A fresh coat of paint always makes a home look better and most people can do this themselves. If you want to tackle a bigger project yourself, then your home improvement store can be a big help with how-to classes.

In case you were wondering, we did some major improvements – renovated the kitchen, remodeled a bath, added an additional bath, updated the electrical, etc. We worked within a set dollar budget and did a lot of the work ourselves. Bottom line, think about what you want to do, and do your research first. Your kitchen remodel may be affordable if you reface the cabinets instead of replacing them. It’s something to think about.

Forgive and Move On – The Wise Money Path

I caught up on my emails last week. Some were personal, some were business, and some were newsletters. I love reading email newsletters – I subscribe for much needed inspiration, and to receive free tips, recipes and deals.

As I was writing this newsletter, I had just read Cheryl Richardson’s newsletter on forgiveness. You may be wondering what forgiveness has to do with finances.

Many of us have struggled with our finances at some point in our lives. We made mistakes because we didn’t know how to manage our own money. Why is that? It’s partly because finances aren’t considered a polite topic of conversation. It’s unthinkable to ask questions about a topic you never hear anyone discuss freely and openly. We’ve had to learn about money as we go, and that means learning from our embarrassing mistakes. Those missteps may have cost you dearly – both financially and emotionally.

Forgive yourself and move on.

Now is the time to forgive ourselves, and others who have hurt us, for our financial missteps. You may need to forgive the person who never repaid the money you loaned them, or you may need to forgive the person who damaged your credit because they reneged on a loan you cosigned. You may have to forgive yourself for overspending in the past and now you wished you had saved that money instead. You cannot wave a magic wand and change the past. Somehow you have to find a way to move forward. You do that by forgiving yourself.

Forgiveness is not an easy process.

You can make the decision to forgive, but it takes some work to actually let go of the shame, guilt, anger or regret that is keeping you from moving forward. It’s a process. I would encourage you to read books or speak to an expert about the path to forgiveness so that you can get closure in your life, move on, and claim the wisdom earned from experience.

Resolve that today is your first day on the Wise Money Path and that you are going to forgive the mistakes you made while you were on the spend-thrift freeway. You are going to take expert advice when you need it and make informed choices that work best for you and your family from now on.

Remember that I support you in your journey.

Is it time to take a break from your credit cards?

My credit cards have been with me for years – my oldest was opened in 1987. They were there for me when I had unexpected car repairs, unfinished holiday shopping lists, uncovered medical expenses, a slow month in business, and the times when our money ran out before the end of the month. They have gotten me through good and bad financial times, just like old friends.

But, about ten years ago, I came to the conclusion that my cards were helping themselves more than they were helping me. When I relied on them for emergencies, it meant paying interest on the entire balance for an unforeseeable amount of time.

Here’s a common example of credit card debt:

Balance Owed	Interest Rate	Minimum Payment	Months to Payoff	Additional Interest Paid	Total Paid
$5,000	12%	$100	70 Months (almost 6 years)	$1,966	$6,966
$20,000	18%	$350	131 Months (almost 11 years)	$25,745	$45,745

I want you to look closely at the last 3 columns. Look at how much you’ll end up paying and how long it will take! That should scare you into taking a break from using your credit cards. I know it did me!

Once you get behind in your bills, it becomes a never-ending cycle of taking out debt to pay debt. You worry yourself into sleepless nights and your whole paycheck goes towards past expenses instead of current wants and needs.

Today is the day to make a resolution to stop your credit card debt and take back your financial independence.

This step is the scariest, make a list of all your credit card debt (you can include other debts as well).

The list should look something like this:

Name	Interest Rate	Minimum Payment	Balance Owed	Payment Due Date	Paid On
Creditor #1	18%	$350	$20,000	5/1/14	4/27/14
Creditor #2	12%	$100	$5,000	4/15/14	4/10/14

You can tackle paying off your credit card debt in one of two ways.

Save money by paying the highest interest rate card first.

The first way is to pay the credit card with the highest interest rate off first. Pay every penny you can above the minimum to get it paid off as soon as possible. There is a box on your credit card bill that tells you how much you have to pay each month to pay the balance off in 3 years – aim for that or sooner.

Once that card is off your list, pay off the next highest interest rate credit card until all cards are paid off in full.

Get satisfaction quickly by paying off the lowest balance first.

Sometimes we need to see physical evidence that our efforts are working to stay motivated. If you need encouragement, then pay off the lowest balance first, then work your way to the highest balance. You’ll get satisfaction as the low balance cards drop off your list.

Either way, you need to stop using your credit cards for emergencies and monthly expenses, and make a plan to pay off your debt once and for all.

Finances: An Honest Look

My finances weren’t always in great shape – too much debt, weak savings, with some self-indulgent spending for good measure. To stay on top of my finances, I have had to take the occasional “honest look”. I think of it as a 3-way mirror view of my situation. By that, I mean that enlightening view you get in the department store changing room where you find out how people see you from the back on a bright, sunny day.

First, I encourage you to step in front of that mirror and take an honest look at your spending and debt. You may want to stick your head in the sand. Please don’t. I can assure you that no matter where you are with your money, with action you can firm up your finances.

You need to ask yourself these questions:

Are you using credit cards for your basic expenses?
Are you making multiple transfers from savings to cover your checking account?
Are your wages running out before the end of the month?
Are you avoiding your bills by not opening your mail or emails?
Are you only making partial payments on utilities and credit cards?
Are your credit card balances going up versus down?

Answer these questions honestly – either alone or with the person you share your finances. Again, Be Honest. You may be thinking, “It’s the economy” or “I wouldn’t be in this situation if not for…” You have to face the reality that is, not what should have been. You cannot change the past. All you can do is to pull your head out of the sand and address the issue now by taking action.

The first thing to do is to track your spending. Keep a list of all that is coming in (income) and going out (expenses). That is the only way you can determine how much of a shortfall you have.

Once you know, you can begin to make changes. You will see where your money is going and can cutback and eliminate unnecessary spending. If you need help, I offer coaching packages that can get you through this.

You want to take action on the overspending now, Trust me, in my 20s I had maxed out many credit cards and had to pay off all that debt. At times, I worked three jobs and it seemed like it would never be paid off, but I did and you can too. The sooner you start the better off you will be.

Start today before it’s too late, and it snowballs into something so big that you cannot manage it, and the only answer is bankruptcy.

How We Cut Costs So We Can Afford Great Food and Travel

Saving money is a passion of mine and all these snow days have given me more time at home. Instead of online shopping, I stayed inspired by watching TV shows on frugality, doing some online research, and reading many books.

After learning about all the creative ways a person can cut costs, I wouldn’t say that I’m a cheapskate. I just scrimp and save in some areas, so I can splurge in others.

Reuse and Borrow

We do reuse and borrow versus throwing away or buying. I suppose that some people might think it’s pretty miserly to rinse and reuse a plastic baggie, or to save packing peanuts. But it works for me. We also like to lend equipment amongst close and family members. We don’t all have to own our own tile cutter or a rotor router – it’s easier and cheaper to borrow from someone you trust.

Recycling – Including Rainwater and Kitchen Scraps

We are avid recyclers. Our town accepts all plastics, glass, metal, newspapers and other paper at the dump. It doesn’t seem like work to me. Honestly, my mother was a recycler and that’s just how I grew up. We have a rain barrel in our yard for watering the flowers and garden. We have a compost bin for our fruit and vegetable scraps, which is a really great fertilizer for our vegetable garden.. We have cut down our trash to about a bag a week.

The extra work saves us money on our water bill, fertilizer, and our trash bill. And, it makes me feel good.

The Thrill of a Great Bargain

Buying on sale is kind of a thrill. The new curtains we bought for the bedroom were on sale – plus we had a coupon! The curtains originally sold for $39.99 a panel. They were marked 75% off to $10 and we had a $5 off coupon. So they became $7.50 per panel. Trust me; I didn’t buy them for the price. We only bought them because we liked them and they would look great in the room. But getting them on sale with a coupon is a great feeling. It was a great find.

Where We Splurge

Yet there are things that we are not frugal about. If you have followed this newsletter, you know that we travel. It’s true that we are able to get great deals when we want them, but sometimes we want to travel at a peak time when the weather is great and the price is higher. We’re also not frugal on our food choices; we spend extra on grass fed meats, wild seafood and organic vegetables.

The Bottom Line

Bottom line is that you need to be comfortable with your choices. But if you are an over-spender (stay tuned for next week’s newsletter on overspending), you should try to find ways to cut costs on things that aren’t important to you so you can afford the things that are.

Tell us, what’s your favorite cost-cutting trick and your favorite splurge item.

Don’t Let Money Ruin Your Romance

In honor of Valentine’s Day, I want to talk to you about love and money. I have known many couples who were in love until they found out about the other person’s money habits.

Your money incompatibility doesn’t have to end the relationship. If this is the one, you can make it work. You just have to ask the right questions.

This is what you need to know about each other:

Financial Issues: Income, assets, expenses, debt and credit. Understand what is going on with each other’s finances. Are there debts and back taxes? Are the savings accounts available to use jointly? Should some of the assets be merged or sold off, and if so which ones?

Money Type: Are you a Spender or a Saver? If you know, you can use your joint goals to meet in the middle on common ground. If you’re habits are extreme, you might want to keep separate bank accounts. That way, one of you won’t feel pinched while the other is in a constant state of sticker shock.

Long Term Goals: What do you want from life? Do you want to be married or single? Do you want to be a homeowner or rent for the rest of your lives? Do you want to have children? These questions need to be answered so you can save towards the same goals.

CFO (Chief Financial Officer): Who is in charge of the money? Is it one of you or both? Will you split the responsibilities by category or do everything jointly? Knowing will keep “that’s mine” arguments to a limit.

With this information, you can decide if you want to keep your finances together or separate. Joining your bank accounts together with someone who has ignored debt or back taxes may mean your money is at risk (even if it’s not your obligation), and in the end, puts you both in the same deep hole with no way out.

Finances can be the doom of relationships. Being informed and making proactive choices is the best way to make the relationship work.

How to Negotiate a Lower Price

Let’s talk about negotiation. I’m not as comfortable negotiating as I would like to be, but I’ve been trying it out and it works!!!! Honestly, what have you got to lose? The worst they can say is “no”.

I bought Dave a big screen TV with a great online deal, but when we tried to set it up, we realized it didn’t fit on the TV stand. That never occurred to me, and we had company coming for the holidays. So the search was on to find a media console at a good price, in a style that matched our furniture, before the family arrived. Was it possible? Yes.

Both Dave and I (together and separately) checked many stores – furniture stores, clearance centers, consignment shops, online websites, etc. Some stores had what we wanted but couldn’t meet our timeframe. Another store had one we liked, but the price was over our budget. We even found one that we liked and fit our budget, but it was out of stock. This was a full-blown all-out search as time was running out.

Then we found it – the perfect one. So here’s how we negotiated:

1. The store couldn’t get it to us in time, but we asked if we could buy the floor model. Yes, we could.

2. They had a poster in the window advertising 20% off with store credit. We asked if we could get the store credit discount if we paid in full right then. Yes, they gave us the advertised discount even though we didn’t open a store credit account.

3. The floor model had a few nicks and scratches, so we asked if they would give us an additional discount for imperfections. Yes, they would.

We walked away with the media console that afternoon at an amazing price.

Bottom line, it wasn’t horrible to negotiate. We simply asked questions. We were not pushy or demeaning about the product or the staff. And, yes, we would have politely walked away if we didn’t get a price that worked for us.

So, the next time you’re out shopping, ask questions that might help you negotiate a better price. You may well get the answers you wanted to make the sale a win-win for everyone.

Happy Negotiating!

It’s time to order your report

It’s January 2014 –
Time to Order Your First Credit Report of the Year
This month use Experian

Hello, it’s Jill again, reminding you to get your finances in order for the New Year by checking your credit report.

How to Order Your Credit Report

Order your credit report from www.AnnualCreditReport.com – the ONLY authorized source your no-cost annual credit report that’s yours by law. Learn more.

When ordering online – visit www.AnnualCreditReport.com:

Select your state, then click Request Report.
Fill out your information, then click Continue.
When it asks you to select a service, select Experian.

Not comfortable ordering online? There are other ways to order your report:

Mail your postal order by downloading the form at www.AnnualCreditReport.com
Call in your order at 1-877-322-8228

It doesn’t matter how you get your report, the most important thing is that you do! Then…

Review it for accuracy!
Follow the instructions with the report to correct any errors.
And, always remember to keep copies for your records.

Were you hoping to get your credit score instead? Try CreditKarma.com. CreditKarma does not supply a FICO score, but it does provide scores from TransUnion and VantageScore. And, there’s no charge for you. CreditKarma funds their service through website advertising.

May you have a wonderful and successful year!

P.S. I’ll send you another reminder in May and September to help you stay up-to-date on your credit throughout the year.

The Worst Things You Can Do With Your Money

This is my personal top five list of the worst things you can do with your money

no-1 1. Pay ATM fees (or for that matter, any bank fees) – There are banks out there that won’t charge you just for the privilege of having a checking account. You shouldn’t be paying a monthly maintenance fee or ATM fees. Ask your banker how to eliminate the fees. If they can’t, or won’t, move your money to a better bank.

2. Pay interest or finance charges on credit cards – Paying interest or finance charges is a complete waste of perfectly good money. It might have been a great deal when you swiped your card, but when you add interest, you’ll end up paying more than it was worth. If you currently have credit card debt, try moving it to a card that offers zero percent interest on transfers for the first 12-18 months. Once you are out of debt, pledge that you will not pay interest or finances charges ever again.

no-1 3. Sign without reading the fine print – Never sign anything that you don’t read. If you read it and don’t understand it, then ask questions or do your own research to understand it before going forward. I speak with so many people who just signed an agreement thinking they got a great deal, and then were blindsided hidden fees and additional charges. Were they really cheated? No, they just read the price in the big print, and not the details in the small print.

4. Pay for unused services (or things) – Are you paying a monthly fee for services you don’t use or could get for free? If you’re actually using them, that’s fine. But if you not, you could use that money for something that will actually make you feel good. I cancelled my magazine subscriptions because I wasn’t reading them. If you pay a credit monitoring service, you can do this for free with very little time investment. Are you paying for online services instead of using the free version? If so, are you actually making the most of it?

no-1 5. Duplicate Spending – Have you bought something at the store only to find out you already had one in the back of the closet? That is duplicate spending. You can resolve this by getting organized and getting rid of the clutter. If you know where to find something, you can easily access it before you go out and buy a duplicate.

In the comments, let us know where you stopped wasting your money!

New Year’s Urge to Purge

New Years Day and winter go together where I live. It’s hard to get that “fresh start” feeling when the windows are sealed shut and the garden is dormant. If I lived in Australia, I might spend New Year’s Day planting seeds – instead, I find myself checking closets and drawers and getting the Urge to Purge.

Nothing says “last year” like unused things. Magazines, electronics, household goods… items that have been upgraded, replaced, tried but disliked, expired – these misfit goods find homes in cupboards and drawers all around my house – and probably yours, too.

I’m actually very good about keeping “stuff” to a minimum and my home clutter free. If an item is unusable, it only takes a second to throw it away. But… there are things that I just don’t want to toss; they may be useful to someone. How can I get it from my house to theirs without a lot of trouble?

It’s Easy to Give It Away, Sell or Donate:

Use CraigsList.org and FreeCycle.org. There’s no charge and you won’t have to ship your items. People will come pick them up. You can sell them or give them away. I have sold everything from toothbrush heads to a car.

Use local consignment stores. Consignment shops sell the item for you and take a percentage of the sale – but you keep ownership of the item. For example, you might agree to leave it there for 90 days, and they’ll take a 50% cut if it sells. If it doesn’t sell, you can take it back home and try to sell it another way. Others might offer to buy the item directly from you to resell themselves. You may be familiar with popular chain consignment stores, like Play It Again Sports and Once Upon a Child but most towns also have small mom & pop consignments that sell everything from clothes to appliances.

Donate items in good condition to an organization or charity. You can choose the usual places or find a local charity that serves a need that’s important to you.

We personally use some of the resources listed on my resource page. We donated a laptop through the Cristina Foundation, we bring our used CFL light bulbs to Home Depot, our eye glasses to One Sight, and our old towels and sheets to the local animal shelter. We also used a trade in program when we needed a new printer – knowing that our old one would be recycled. These are just a few examples, it would take too long to list all the ways we pass on items that can be used or recycled.

Check out the resource page on my website for more suggestions. If you have any resources that you use that would help others, please let us know and we will add them to the list.