Jill Russo Foster

Tips for Successful Personal Finances

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The Importance of An Emergency Fund

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I am rerunning a post from 2016 that has been really relevant to us so far this year (and the last week of last year too).  We had three events between the holidays and now, that we are so grateful for our emergency fund.  It saved us again!

We woke up on a Sunday morning to no heat or hot water.  If that wasn’t bad enough, our plumber was away for the weekend.  The installer of the system was attending a football game was wasn’t available.  Luckily, we found a temporary solution.  That was great because the part took two weeks to come in (as it was back ordered).  Next, I was driving home on the highway and I had car trouble.  Help came quick and it was a minor repair.  Lastly, the furnace began dripping and another call for service.  All in all, this could have been a really expenses month on top of our regular bills.  We were fortunate enough to have an emergency fund to rely on when needed.

In praise of emergency funds! I can’t say enough about having an emergency fund to use in times of an emergency, as well as having the protection of insurance. We had a big life emergency this time, and it could have been much worse.

While Dave and I were out of the house for about an hour and a half, an emergency struck our house. A feeder line for the toilet broke and we came back to a small geyser. Not only was the bathroom flooded, the water flowed into the master bedroom and then down into the basement. Ugh! You can imagine the damage this has caused. But it could have been much worse.

So this is how our afternoon went:

* Shut off the water – we had individual shutoffs installed all over the house
* Next the clean-up began – towels, wet vacuums and more
* Contacted the insurance company to file a claim. This is the first homeowners claim we ever filed.
* Started the removal of the damaged stuff, and this was hard without Dave being able to move things.
* The insurance company sent out Service Master to remediate the damage. They moved the heavy furniture, installed the industrial fans and dehumidifiers to lessen the damage
* Next day we had to replace the modem, as we lost phone and internet service. It’s difficult to make multiple calls with only a cell phone.
* The drying out stage lasted for days. It included the carpets, hardwood floors, ceramic tiles, sheet rock, furniture and that’s only the big stuff!

Now we are at the rebuilding stage, with the contractors giving us estimates for replacing floors, hard wood and tile, sheet rocking the portion of the walls that were cut away with water damage, painting of rooms, replacing furniture and items that were damaged and more.

Living in a disorganized home as two rooms of furniture and personal items had to be moved out of the rooms and the basement, made our home somewhat of an obstacle course for quite a few weeks. Hopefully by the holidays, we can be back to our organized house.

If You Don’t Succeed, Try Again

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You’ve heard the saying, if you don’t succeed, try again.  We’ll that was try number two yesterday to get the results that we wanted.

Every August it’s the time in our home to negotiate the TV, internet and phone bill.  It’s a time that I dislike, but it’s something that has to be done.  Every year, we get that letter that our current package is expiring and the cost will be increasing substantially.  Ugh!

I phoned earlier in the month and was given a new package that didn’t meet our needs or budget.  We have lowered our services in past years, so there isn’t a lower package with less channels (we’re on basic).  Not being happy with the call, I research other companies and their options.

Yesterday, was call number two.  Spoke with two different people and get the results we wanted.  The price will be increasing less than $5.  Yeah!

If you need to negotiate with a company to get the results you need / want, be prepared to make multiple calls.  You might just get a person that will go the extra mile to find what you are looking for.  We did and we are set for another year.

The Cost of a Pet

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We adopted Willow this past weekend, so I wanted to rerun an article about the cost of pets.

I am passionate about travel, but it doesn’t compare to how I feel about my dogs.  Brownie has been a member of the family for seven years now.  We rescued her at about 8 weeks when she was only 12 pounds, a far cry for her 70 pounds now.  We love her just as much as any of our other dogs.

But owning a pet can be a budget breaker.  Pets are expensive.  You need to consider their day to day costs – food, supplements and services – which can range in price from affordable to “how am I supposed to pay for that?”

The Initial Costs

According to peteducation.com, the first year can cost between $500-$6,600 depending on how much you’re willing to spend.

You have the simple comforts and necessities: bed, leash, collar, food bowls, toys – these aren’t too expensive individually, but can add up when you’re buying them all at once.

Then there are your legal requirements, like puppy shots, license and tags.

You may also want to consider having your puppy neutered and micro-chipped.  Thank goodness where we rescue the cost of puppy  neutering is included, so it’s not an extra cost for us.  If you rescue, ask to see if you can save too.

Finally, depending on the dog’s personality or medical issues, you may have other expenses.  Brownie went through the teething stage, as puppies do, but she wasn’t interested in inexpensive items like shoes or pillows. She chewed the molding around the door so that we needed a carpenter to make the repairs.  That was expensive.

The Costs Going Forward

According to the Pet Education, the annual costs can be anywhere between $300-$2,500.

Brownie’s annual vet check-up and shots cost about as much as a car payment and are due every summer along with her license.  That’s not including any extra trips to the vet for illness, injuries, etc.  All these need to be planned for.

Your homeowners / renter insurance can increase depending on your dog’s breed.

Lastly there is caring after your dog’s emotional and physical well-being.  Do you need to have a dog walker while you’re at work or to board your dogs when you’re traveling?  More costs.

Lots to think about. Besides just selecting the right pet for your family, make sure to plan the financial part, too.

Money, Life and Savings

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A reader asked me about how to save to purchase a home, when your money doesn’t allow much for savings.

That’s a great question. But not an easy one to answer.

We all know that saving should be a priority.  But we have monthly obligations.  So here are so general steps to achieve what you want (in this case a home).

  1. Track your spending – many people overlook this step.  Trust me this is the most important step in achieving your goal.  Write down every penny that you spend for at least a month.  Track everything from the rent payment to purchase of the newspaper.
  2. Weekly (or more often) take your tracked numbers and put it in to a budget.
  3. Analyze where your money is going and make a plan to spend less.  Even saving $5 a week will add up.
  4. Automate your savings goals and pay yourself first.  You will learn to live off less if you don’t see it available in your checking account. You may want to unlink your checking and savings (or have them with separate banks).
  5. Lastly, look into home ownership programs in your community.
  6. Check out to see if you qualify for an Individual Development Account to save for a down payment.

While it’s hard to save money each and every month.  It a necessary step in life to achieving your goals.

 

Love and Money

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Valentine’s Day is a day when we exchange gifts, have a special meal and more with the person we love.  Usually all is well and life goes on. love and money

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.

Paying For College – FAFSA

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It ‘s that time of year.  Your teens are making their college choices for the fall and all the excitement that goes with it. What school should they go to?  Will they stay near or go far? What will I need to do next?

First let ‘s start with the paying for college.  If you have the money saved for the cost of college for all four years (or more), then you can stop reading.  If not, you need to start or continue to figure out the finances.  FAFSA – Free Application for Federal Student Aid – is the first step.  Apply now, even if you don’t think you qualify – you may be surprised.

Here is a great article by Consumer Reports for financial aid that will tell you what you need to know.

Ask Questions

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January has been a month of me asking questions.  You may be thinking what is she talking about.  Lots of items came to light throughout the month that required more information.  Here is a sampling of what came up:

  • I was listed as a “non-owner” on our auto insurance.  I had no idea what that mean and had to do the research to find out more.
  • I received two bills one from the lab for bloodwork and one from doctor’s office for a physical.  It was my understanding that this was covered through my medical insurance as a preventative visit at no cost to me. Again, multiple calls and asking for my medical claims to be adjusted.
  • Receiving less than expected in a paycheck.  More calls to get to get to the bottom line
  • And the list goes on.

Never be afraid or think your questions aren’t worthy of an answer.  In my case, it’s my money.  Call and ask questions until you are satisfied with the answers.

For me, I was able to save money on our auto insurance after a lengthy phone call, the medical insurance company paid the bloodwork bill in full after appeal, the doctors bill was adjusted and I owed less than 50% of the bill and I am still working to understand resolve the paycheck issue.  So far, I with these questions we have saved close to $300. That’s worth my time and efforts.

With Interest Rates Rising, You Might Want To Consider …..

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Welcome to 2019!

I hope you had a great holiday and are looking forward to another year beginning.

2018 was a challenging year.  The Federal reserve raised interests rates four times – yikes!  The stock market lost all of it’s gains for the year.  What does that mean to you? Rising interest can mean larger monthly payments.  Stock market loses could mean less money for retirement.  Let’s talk about what rising interest rates means to your wallet.

Mortgages / Home Equity Lines

Do you have a fixed or variable interest rate on your mortgage?  If you have a variable rate, that could mean your interest rate could go up.  For an adjustable rate first mortgages, they typically change at a certain point (see you mortgage documents), but most home equity lines of credit change as interest rates change.  High interest rates means larger payment is due.  This might be the time to modify to refinance to a fixed rate.

Credit Cards

Most credit cards typically have variable interest rates.  High interest means a larger minimum payment is due.  If you carry a balance from month to month, you may want to transfer your debt to a zero or lower interest rate credit card while you are paying down your debt.

You never know what is going to happen, so you need to be prepared for whatever life throws at you.  Be proactive and your debt paid off, so that interest rate hikes won’t hurt your finances.