Jill Russo Foster

Tips for Successful Personal Finances

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Free Checking Accounts May Not Be Free

Question: Is my free checking really free? If so, how does the bank make money?

Great question Yes, there are free checking accounts as long as you meet the banks requirements These are typically a minimum balance in the account, direct deposit to the account or a certain number of debit card transactions It’s your responsibility to know what you can and can’t do according to your banks requirements so that you avoid these fees.

Banks make their money on the fees they charge their customers The checking account can be free, but the other optional costs are not These optional costs can include overdraft fees for either writing a check and/or using your debit card for more money than you have in your account, uncollected fees for using the money in your account before the deposited funds are available to use, stopping payment on a check that you have written, purchasing bank checks (money orders, certified checks) or using an ATM from a different bank All these fees add up.

There still could be more fees If your transaction is not honored, then the person or company you did the transaction with incurs fees that they may charge you too That ATM that you used from the different bank may change you a fee as well The most cost effective way to save your money, is to keep accurate records (checkbook records with a ledger or software) so that you know how much money is in your account at all times and to never run short on cash so that you have to use the most convenient ATM and incur a fee A little planning on your part can save you money.

How to Prepare for Retirement

Will you have enough money to live the lifestyle you want when you retire? That’s a hard question for most people to answer I usually hear that I don’t have enough money to live today, so how can I possibly save for my future?

Let me start by giving you some history of how retirements worked When our parents were working, they worked for one company their entire career For that loyalty, the company took care of them in their retirement Once your parents retired, they would collect a monthly pension from the company for the rest of their lives That, with the added benefit of social security, paid for their life style.

Then companies changed and 401K’s and 403B’s were introduced These are savings plans that are offered and sponsored by the company you work for You, as the employee would designate a portion of your income to go into this account pre tax and the company would match a certain percentage An example of this would be for each dollar the employee put into the account, the company would match that at a percentage up to a maximum amount Companies have almost eliminated the pension in favor of this savings plan.

This has altered your retirement and your financial future, along with the fact that employees don’t typically stay with one company for the entire career Instead of being set with a pension, you now have to be proactive and plan for your own retirement.

If you want to live the lifestyle that you are accustomed to, you have to do two things prior to retirement First, you need to save for your future by making funding your retirement a priority You need to find the money to be able to save for your future Second, you need to enter into retirement with minimal of no debt Someone who is living in a home that has no mortgage and has no other debt (car payment, credit cards etc), will need far less money per month, than someone who does.

Bottom line, you need to find the money today to save for tomorrow.

A Mortgage and A Divorce: Not a Love Story

In a divorce, the best way to handle the mortgage is to refinance. This is to protect both parties. If you’re making the payments, the loan should be in your name. If your ex is making the payments, then take your name off the loan.

Why is it so important? Because your mortgage company considers a divorce decree to be a personal matter – not a legal matter. A divorce agreement can’t prevent foreclosures or repossessions. It also can’t prevent your ex from ruining your credit if he or she refuses to make payments. The loan document is all that matters.

What if the divorce decree put your ex in charge of mortgage payments, but he or she is refusing to make payments or agree to a refinance. You could always make the payments yourself. That would save the home and your credit.  The courts will (eventually) order your ex to reimburse you, just don’t expect it to happen anytime soon.

Sometimes, the biggest income earner is ordered to pay the mortgage even if that person no longer lives in the home. This is more common when children are involved. In that case, both parties may be reluctant to refinance the mortgage, because they feel the original mortgage agreement gives them control over the other person or the home. This is a bad situation for everyone. If the person left in the home can’t afford the payments, and the person out of the home refuses to pay… then you could lose your biggest investment.

If you can’t agree to refinance, then sell the house and move. Regardless of how much you love the home, or the idea of your kids living in it, it is best if both parties move to a more affordable home than to endure the continued heartache of credit problems and payment disputes.

Hidden Fees in Foreign Travel

Going out of the country? If so, there are hidden fees to address before you go. Foreign transaction charges can turn an affordable trip into an overpriced nightmare.

If you plan to use credit, you should know that most credit card companies tack an additional percentage on purchases made across the border or overseas.  MasterCard and Visa start at 1%, Discover at 2% and American Express at just under 3%. These hidden fees can ruin your travel budget.

There are credit cards that don’t charge a foreign exchange fee. Check with your credit card company. It might even be worth it to apply for a new card.

If you plan to use cash, watch the exchange rates. Airports usually have the worst rates. You’ll probably get the best rate if you can buy foreign currency at home – that way, you’ll already have foreign currency with you when you arrive. Do your research.

Using an ATM in a foreign country could cheaper than an exchange – even free – if…. your bank is international or has foreign partners.  Check with your bank before you go. Remember to ask how many ATM machines they have and where they’re located.

For an inexpensive and hassle free trip – plan ahead.

Can You Spend Ripped, Burned or Damaged Cash?

Damaged CurrencyWhat is damaged or mutilated currency? What can you do with it?

Damaged and/or mutilated currency is paper money that has been damaged in a major way. I’m not talking about money that’s faded and a little soft from being washed along with your jeans. This is paper money that has been ripped, burned, or even partially digested.

Let’s say you have a piece of a $100 dollar bill. You can’t spend it at the store, so what can you do with it?

If you have more than 50% of the $100 bill, you can exchange it for a replacement. Why? Because that means you probably have at least one full serial number and a portion of the second. Don’t bring it to your local bank branch – they won’t accept it. You have to either mail it, or bring it, to the Bureau of Engraving and Printing in Washington, DC. If you mail it, take precautions. Ask about insurance at your post office or other delivery service. If you go in person, bring ID.

If you have less than half of the $100 bill, you may still be able to exchange it. The treasury will consider your claim if you have other documentation to support your loss.

45 Days Notice for Retroactive Interest Rates

The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.

Tip Number Nine

You credit card company will have to give you 45 days notice before they increase your balance with a retroactive credit card interest rate. This gives you time to transfer the balance or pay it off.

Beware: They don’t have to give you notice if you agreed to pay the balance within a set time period on a promotional offer. It also doesn’t apply if your account is past due.

Home Sellers, What’s Hiding In Your Home?

If you’re thinking about selling your home in the upcoming spring market, there are many things to think about ahead of time. The first to come to mind are…

  • Cleanup and spruce up
  • Selecting a realtor
  • Determining market value
  • Picking the best time to list

All these will make your home more visible. But what happens when you scratch the service? Is something hiding in your home that could make or break the sale?

Most people think of an inspection when it comes to purchasing a home. But, you might be surprised to learn that more and more sellers are having their own homes inspected before they sell.

Knowing about property issues allows you to decide whether you want to make repairs or upgrades up front or offer a financial incentive to the buyers. That way, needed repairs won’t jeopardize a potential sale down the road.

What is a home inspection? A home inspection is a visual inspection of the physical structure of your home and it’s systems from the very top (roof) to the very bottom (the foundation).

It should include…

  • The heating and cooling system
  • Plumbing
  • Electrical
  • The roof
  • Insulation and ventilation (if visible)
  • Walls
  • Floors
  • Windows
  • Ceilings
  • Doors
  • Basement

An inspection is not to be confused with an appraisal. Appraisals determine your home’s market value based on recent sales of similar homes in your area. Inspections make you aware of problems in your home that could reduce its sales value. Those problems could be cosmetic or structural.

Once your inspection is completed, you’ll receive a report on the physical condition of the home. Repairs suggested could range from relatively small (like peeling paint or loose tiles) to major (like heating system upgrades, roof replacement, or insect damage). While that might sound terrible, the advantage is actually yours.

As the homeowner, you’ll know about issues that could affect the sales price, and what steps you can take to help your bottom line.

If you’re lucky, you might have fairly simple issues to resolve. If you can fix them yourself, you can ask for a better purchase price for your home. If the issues are costly, requiring a professional, you can decide whether to pay to have it done yourself, or sell the home as-is at a reduced selling price (meaning that known issues will be the responsibility of the buyer). Either way, knowing the structural issues up front can help prevent delays in the sale.

A word of caution: If you find problems but elect not to repair them, be sure to tell your realtor! You realtor will want to disclose this information to all potential buyers. In some states, you can be liable for damages if you, or your realtor, knew about problems but didn’t disclosed them to the buyer.

A home inspection isn’t free, but it will more than pay for itself when it helps you achieve a successful sale.

21 Days to Pay your Credit Card Bill

 

The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.

Tip Number Eight

Does it ever feel like your credit card bill is due the same day it arrives in the mail? That’s changing with the Credit Card Act of 2009. Creditors will now have to mail your bill 21 days before the due date.