Every Day Finances

Layaway for the Holidays

I was in Costco before Labor Day and they already had holiday displays. They seem to “deck the halls” earlier and earlier as each year passes. Personally, I am not thinking about the holidays this early, but it’s not a bad idea to think ahead.

How are you going to pay for your holiday purchases? Do you have savings set aside for this time of year? If not, you are not alone.

In this economy, stores are lobbying for dollars and they want yours. They know that people are cutting back on credit card spending so they’re bringing back layaway plans.

What is a layaway plan? It’s a little like store credit, with one big exception: the store keeps your purchase until you’ve paid in full.

Here’s how it works.

You pay a down payment or deposit to start the process
You may have 30-90 days or a “must be paid by” date that coincides with a holiday
Usually, you can pay as often as you like. Many people pay weekly (after they get paid themselves).
As soon as your purchase is paid in full, you can take it home.

Why use a layaway plan? It may help you stay within budget. Credit cards make you feel like you have endless money to spend. If you can walk out of the store with that cashmere sweater, then it’s all paid for, right? Wrong! Some people won’t have their holiday credit card bills paid down until next spring. A layaway plan, on the other hand, never lets you forget that you’re paying installments.

What are the costs?

As with any installment payment plan, there will be fees.

Many stores charge a fee for layaway. For example, Wal-Mart is charging a five dollar fee, and Best Buy charges a five percent fee. These fees are typically non-refundable.
In addition, there could be a cancellation fee if you change your mind.

Which retailers are offering layaway plans this year? I know of T J Maxx, Marshalls, Toys R Us, Wal-Mart, K-Mart, and Best Buy. There are probably more.

You might be thinking, “Should I sign up for a layaway plan now or wait for the Black Friday sales?” That’s a question only you can answer. If you want to wait, start your own “layaway plan” by putting aside cash each payday. That way, you’ll have money for your purchase by Black Friday, whether it goes on sale, or not.

Debit or credit?

Which should you use: a debit card or a credit card? You all know the difference between the two – a debit card uses your own money and a credit card means borrowing with interest.

Here is what I recommend:

Use a debit card when…

You make everyday purchases in person. These are items that are part of daily living: groceries, doctor co-pays, restaurant meals, etc.

Use a credit card when…

You are purchasing big ticket items, anything with a warranty, travel reservations, online purchases, etc. Using a credit card will (usually) give you extra consumer protection for little or no additional cost.

More about that added layer of protection:

When you travel, certain credit cards give trip insurance for items such as lost luggage protection. If you are purchasing electronics, some credit cards extend the warranty period. If you purchase something online and it never arrives (or arrives broken), you can dispute the charge with your credit card company after you have attempted to resolve this with the merchant. You should check with your credit card issuer to see what benefits you have with your credit card. Then make your purchases where you will get the most benefits.

Planning for 2012 Financially

I have to admit that I am a planner – I already have my 2012 calendar. Even if you prefer to live in the moment, you have to admit that some areas of your life must be planned ahead.

For example: if you are a homeowner and have your homeowner’s insurance escrowed, you can’t just switch insurance companies a week or two before the policy is set to renew. You need to make the changes ahead of time so that your mortgage servicer can send the check to the new insurance company.

Getting divorced? You might have to make alimony or child support payments. Children grown? Your alimony or child support will be ending soon. Is your employer struggling? You could see a reduction in wages, medical coverage or even be laid off.

Finances can be overwhelming. They certainly can be if you have to make many changes in a short amount of time.

I pencil noteworthy financial dates in my calendar to help me start the process early. In my case, my homeowner’s insurance policy will expire in early February. I don’t want to tackle this project during the holidays, so it’s on my calendar to do in early December.

Thinking ahead will save you the eleventh hour stress. Look at your year and pencil in the important changes you have coming in your future. By addressing these matters with time on your side, you can do more comparison shopping and make changes to save money. Get out your 2012 calendar and start planning.

Using layaway for holiday shopping

I know you don’t want to hear this, but the holidays are about 3 months away. Are you ready to do some shopping?

If the answer is “no”, then consider this: retailers are bringing back layaway plans. They’ve noticed that people are spending less because money is tight and they want to keep that holiday cash flowing.

Layaway plans offer you the convenience of making payments over time so that you can budget your purchases.

What you should know about layaway plans:

You can’t take your purchase home with you until it is paid in full. The store keeps it until you make your final payment.
There is typically a small fee for the layaway plan.
If you change your mind there can be a cancellation fee as well.
Payment plans are typically 60-90 days.

Why not use your credit card instead? With a credit card you might pay more in interest and take longer to pay it off. You may also spend more because you can take your purchases home with you, giving you a satisfied (but very wrong) feeling that your work is done.

Layaway plans could be the better option if you cannot afford to pay for your purchase in one payment.

Isn’t it better to just wait for a sale?

What if it doesn’t go on sale? You have to decide if it’s better to buy now on layaway or wait until Black Friday when there may, or may not, be a lower price. If Black Friday is your choice, then you can create your own layaway plan by saving money each pay period so you have the cash to make the purchase. That way, whether it’s on sale or not, you can get that special gift.

Either way, the holidays are coming and that is the time of year that we tend to break our budgets. Start early and spread out your purchases.

WBDC CT Budget Coaching: Enroll Today

You know that I am a big believer in budgeting. Knowing where your money goes is the only way you can make changes to your spending so you can achieve your goals. For some people budgeting is a scary idea.

In today’s economy, many people are struggling with their finances. Simple short term or long term goals such as paying bills, planning for retirement or a child’s education can seem impossible when you’re worried whether you’ll still have a job in a few years. It’s critical that individuals gain an understanding of their current financial picture as well as set, and work towards, future financial goals.

I am involved with a program that can assist you with your personal finances and budgeting. This program assists with providing clarity on what is important in your life and your personal finances. We facilitate and empower you to build a budget, and a plan, that supports your needs and goals for today and your future. Through this program you will uncover more choices in managing how you think, feel, and act around money.

How to enroll

This budget coaching program is a four-month program which includes workshops and one-on-one coaching both in person and over the phone. For more information, an application, and eligibility requirements, please call me at 203-353-1750. Completed applications must be received by September 30. There is a $40 fee if accepted into the program.

How to get the best price on a new car

Are you in the market for a new or used car? How can you tell if you’re getting the best price?

You don’t want to pay more than the car is worth. Here are some tips to help you get started.

Myths Busted

People say to shop later in the month because the sales staff will sell at any price to meet their quotas. The truth? You don’t know how they calculate their quotas. Maybe it’s quarterly. Maybe the dealership tallies sales on the 3rd Friday of each month. Maybe they’ve had a great month and don’t need to cut you a deal. You won’t get a good price by guessing the salesman’s income. Do your car research instead.

Research Your Car Online

You can research ahead of time if you’re looking for a specific make and model. Or, you can research online after the dealer makes his offer. One website is Overstock.com. You can select the car make and model, and all the options, and it will give you a suggested price that you can take to the dealer. Another website is CarsDirect.com. There, you can select the make, model and your zip code. You can also try Kelly Blue Book and the Insurance Institute for Highway Safety. Both sites give good information on car repair and safety features for current makes and models.

Save Money on Financing

If you need financing, do the research ahead of time. Start by reviewing your credit and making any corrections that are necessary. Once your credit is handled, then it’s time to research for the best terms for your loan. Don’t just rely on the dealer for their financing. Check with your bank or credit union, and then other lenders, for the best terms.

Bottom line, do your research so you can negotiate with real up-to-date information. That way, you’ll know you’re getting the best deal.

KEY ~ Feed Your Body How to Simplify Your Life and Save Money

by Vicki Heise, CHC, CHHP/AADP

Did you know that not only can you save money by cooking at home but it doesn’t have to be complicated?

If you think you don’t have time to add another thing to your to-do list, with a little planning you can not only save money, but feed your family great tasting nutritious food and not spend lots of time in the kitchen.

Here’s how:

1. Use whole foods. Buy whole foods, the ones you find around the outer edge of the grocery store. That’s where you’ll find the fresh herbs, fruits, vegetables, meat, chicken, fish and dairy. Add some things from the bulk bins like grains, beans and nuts (a huge money saver) and don’t forget to get some canned beans and frozen vegetables that are real time savers.

2. Prepare them simply. You don’t need lots of recipes with long lists of ingredients. Save the complex, full of ingredient recipes for when you have the time to enjoy the whole cooking experience.

3. Make large batches ahead of time of the things that take a while to cook like beans and grains. Yes they do take time, but it’s on the stove time, not you actively being involved time. They’ll be ready when you get home so you can quickly put all the pieces together. Use a quick cook method for the other ingredients and make extra to have leftovers for lunch/dinner the next day or later in the week.

4. Add flavor. How about letting everyone season their own meal? Prepare the food simply and have favorite condiments, spices and dressings on the table. Everybody gets to decide how much and what flavors they want to add. This make it easier on you and keeps everybody happy!

Take a little time to plan ahead to save yourself time and money starting this week!

If you’d like a copy of the Live Your Healthy Life meal planning and grocery list, just email Vicki at info@liveyourhealthylife.com. She will email it to you and also send a complimentary subscription to the weekly Live Your Healthy Life e-newsletter full of healthy tips and ideas AND your 12 page special report on the 7 Keys Every Woman Needs to Unlock Her Healthier, Happier Life™ (Retail Value $27). Privacy is important to me, so I will never sell, rent or give your name or address to any third parties.

Vicki Heise, Your Healthy Life Mentor is the founder of LiveYourHealthyLife.com and creator of the “7 Keys Every Woman Needs to Unlock Her Healthier, Happier Life™”.

Getting Packed for College – Part Two

Last week we talked about text books, technology, and medical expenses for your child at college. Let’s get into a few other areas that can break your budget.

Student Housing

While freshman typically have to live on campus, other year students may not. Compare the cost of these options:

Renting a bedroom in a local residence
Sharing an apartment or house with multiple roommates.
Being a dorm resident advisor (see if it will reduce rates).

Bed and Bath Items

Many stores right now offer back-to-college shopping lists. Start one of your own so nothing gets forgotten. You may want to consider areas such a:

personal toiletries
linens and towels
kitchen and laundry needs
supplies for studying
entertainment needs
storage containers/bags

Check to see if there are chain stores near campus. If there are, you can shop there instead of lugging everything from home. All this requires planning ahead.

Access to Spending Money

Last but not least: money and finances. Your child will need to have access to cash and you want to be proactive here. Look into which banks are on campus, so your child won’t lose money on ATM fees for withdrawals. It’s more important that it’s convenient for him than you.

With today’s banking, you can link his account to yours so that you can put money into his account when needed. Don’t assume he’ll know what’s appropriate.

Discuss needs versus wants
Be clear on what expenses you’re willing to cover and what you won’t cover.
Never doubt that your child will spend as much money as you give him. It’s too easy to overspend money with no guidance.

Planning ahead will save you a considerable amount of money. Now is the time to make these additional college expenses fit into your budget.

Getting Packed for College – Part One

It’s time to think about getting your children ready for college next month. While you’re making a list of supplies, consider this:

Text Books – don’t wait until you get to the bookstore.

With recent changes, text book prices have to be printed on the course schedule. This will give you an idea of the cost of each class’s books.
Don’t stop there. You can see if there are used copies to purchase, saving you some money. But make sure they are the same edition.
Another way might be to look into www.BookRenter.com and www.Chegg.com. These will help you price shop for your children’s text books.

Doctor – near campus and in your network

Kids don’t think about needing a doctor ahead of time. If you have medical insurance that covers your child at school, do some research. You want your child to have this information before he gets sick or hurt. That way you won’t have out-of-network medical expenses.

Printer – do you really need one?

Talk with the school and see what options are available to use on campus.
If that’s not the answer, then look for an office store, such as Staples or Kinkos, that is easily accessible.
You might think a printer is not a big expense, but the paper, ink and toner can be.

These types of expenses can put a kink in your budget.

Next week I will continue with a few more things to think about before your child heads off to college.

I Challenge You to Track Your Spending

Have you ever written down a budget to see where your money is going? Well, we did this earlier this month and everything looks fine, meaning that we make more than we spend.

That means we can pay our bills – great! That’s check one. Check two – are we saving enough? No, we’re not, but where do we get the money? We won’t find extra money to save until we find out exactly where our money is going.

If you want to do this process with me, follow these steps:

1. Write down a couple of short and long term goals. (Just so you’ll be inspired to do the work.)

Short term goals can be planning for a vacation, buying a car, paying down debt, saving for something that you want, and starting an emergency fund.

Long term goals can be saving to purchase a home, saving for your children’s education, retirement planning, and paying off debt/mortgage. What are yours? Imagine what you want or need and write it down now.

2. Track every penny you spend. That means finding a way to record your spending as it happens.

Don’t wait until the end of the month and use your bank statement or receipts. A single store can fall under many spending categories and receipts don’t always list items by name (or by names that you can decipher). Don’t think for a minute that your grocery store trip can be lumped under food. You may buy your pet food there, as well as cleaning supplies, shampoo, or even magazines.

I know this sounds time consuming, but it’s worth it. You can carry a pen and pad with you and write down everything by hand. Another way to track your money is by using a phone app. Choose the way that works best for your lifestyle.

3. Write your totals in a budget worksheet to see where you stand. Once you see a month’s worth of numbers, than you can begin to analyze what is going on. With this clear picture, you can make changes – lower bills to save money, get rid of unused services, check out the competition to switch etc.

Tell me what you have discovered with this exercise. Next issue, I will tell you what we have changed.

Download my budget worksheet here.