What Have You Been Missing?

Am I paranoid, or are they really trying to overcharge me?  In the past six months, we changed our ISP, entertainment, and phone service, saving us $150 each month.  I have had to call five months in a row because my bill was wrong – sometimes up to $200 in errors. 

I shopped our insurance rates, and it’s reassuring that we already have a company with the best rates and reliable service. Our homeowners’ insurance company had the wrong start date on the policy, and we were able to get it corrected and have two additional months of coverage.

We reduced one bill that provided redundant services and will save $240 a year, and I did find an error on our medical insurance bill dating back to August, and we are getting a refund for $200. 

All this is from reading the monthly statements for our bank, credit cards, cell phone carrier, and reviewing the insurance bills at renewal time.  Except for the phone service and insurance, I accomplished most of these savings in January.  Is there anything you have been missing on your statements?  How would you know?

I’ll admit that reading statements and bills is not very entertaining.  I’d rather be perusing travel brochures and planning our next escape.  That is my motivation for being vigilant about our money – I want to travel and experience new adventures as often as possible.  Our next trip keeps me inspired to save now and enjoy soon enough.

I’ve talked about this before, First Step to Control – Review Your Bills.  You don’t have to look at every detail on your 401K account, but make sure that your contributions are showing up right, and that the money is being invested the way you had it planned.  At least once a year, have a face to face appointment with your financial advisor to ensure your investments are doing what you need them to do.  Your goals may have changed, and you want to ensure your securities are still the best choice for you.

Starting today, read all the statements that you receive in the mail or e-mail for the next thirty days.  See what you observe about the bills, note any follow-up needed. Make the calls to get things fixed.  You are more in control of your finances than you were a month ago.  Feels good, doesn’t it?  Now, you can browse the internet for your next adventure.

A little research can keep hidden costs from hitting where it hurts most — your wallet!

The unexpected costs of buying a home Buying a home is expensive, but it’s not just the price of the house itself that you need to plan for. If you’re considering a new home, BetterMoneyHabits.com can help you look beyond the sale price to understand and plan for the extra expenses that come with making this big purchase. Low Credit Score Your credit score has a big impact on what your mortgage interest rate will be and how much you will need for a down payment. If your score isn’t great, you might not even be approved for a home loan. You can check your credit report at annualcreditreport.com, or by contacting one of the three credit bureaus: Equifax, Experian, or TransUnion. But if you find you fall into the lower range of credit scores, it is not the end of the world. Check out these BetterMoneyHabits.com videos to get back on track: Build Credit and Keeping Yours Healthy What Really Goes Into Your Credit Score Down Payment and Private Mortgage Insurance The more you put down on your new home, the better. Ideally, you will need to put down 20 percent. At that point, you will receive a better interest rate, have lower monthly payments, and you will not have to pay for private mortgage insurance, or PMI. PMI is a type of insurance that lenders require you to pay if you are unable to make a full 20 percent down payment. This protects them if you default on your loan. And it’s not cheap. PMI can cost up to about 2 percent of the total loan amount. PMI is either required up front, or rolled into your monthly mortgage payment. With some loans, you won’t have to pay PMI forever, but check with your lender for more details. If you cannot come up with a 20 percent down payment, there are some alternative options, such as government programs that require just 3.5 percent. For more information, watch Understanding Alternative Mortgage Options.  Closing Costs Closing costs include things like title insurance, appraisals, and attorney fees. Plan on these closings costs being 3 to 7 percent of the total loan amount. And remember, this is on top of the down payment. Unanticipated Expenses Homeownership may come with some unexpected expenses. These could be increased energy costs, the price of new appliances, homeowner’s association fees, or even just the expense of maintaining a nice yard. So make sure you’ve accounted for all these in your budget. And for good measure, start an emergency fund for those things you cannot prepare for. Learn more by watching Create a Safety Net for Life’s Unexpected Events.

Change What?

I can’t count how many people have told me they will be ready to work with a money coach as soon as they take care of a few other things.  What could those things be that would delay starting a positive change in your life?

·        I’m too busy or I can’t afford it

·        My bills and bank statements are disheveled and I need to get organized first

·        Let me get done with this big project at work that is distracting me

·        I’m stuck right now anyway, so how could I work on changing?

 

If someone told you the work phrase “do you want fries with that?” could be in your past, and the new job pays twice the wage with benefits, why would you stay in the old job another minute?  If you received a gift certificate for a house cleaning, would you pick up the house first so they wouldn’t think you are sloppy?

 

We all have reasons we are afraid to move forward.  What if I start the new job, and find out that they don’t like me?  If we try a new spending plan we might not be able to see the inside of a restaurant ever again unless we’re working there to make some extra money.  It’s so overwhelming that looking deeper into the problem will only make it worse and I’ll get depressed.  These fears sound familiar to most of us thinking about a change in our lives. 

 

I recently was in the same quandary about working with a personal coach.  I’m afraid I’ll try and fail.  I want to be positive that I choose the best coach for me.   I’m not sure that I need to change all that much.  I could spend the money on something else.  I finally realized if I think the right coach is going to add value to my life, I should get started.  I can think of a few big decisions that I delayed, and later wondered what took me so long to make the easy choice.

 

Having gone through this thought process, I’ve committed to hiring that coach.  I’m ready to be open to change, and I don’t have to be done with everything else to start the coaching process.  Personal coaching is valuable to me, and I know I’ll make the time and effort to get the most out of it.

 

 What decision are you delaying?  Take the first step right now. 

 

Question:  What excuses did you overcome to move forward?  Share in the comments.

Balance Your Checking; Control Your Money

By Susan Wilson, MBA

Controlling your finances means understanding all of the money-related statements that your receive online and in the mail.  I don’t look forward to reviewing them; it’s a tedious task, but an important step to see everything is o.k. with your checking and savings accounts.  Here’s a list of things I have found myself and heard through my clients:

Life Insurance on Boat Loan (my hubby before we married)

 

Forgotten Gym Memberships

Unwarranted Overdraft or “Convenience Fee”

ATM and Credit Card Fees

Purchase Amount Errors

Unwanted Payment Protection Plans or Subscription Services

 

Yikes!  These are usually not small fees, and removing that $15 monthly life insurance on the boat loan (yes, the heirs would get a paid-for used boat) is instant money saved.  I just look through the line items and make sure they are legitimate. I look for any surprise fee hikes or excessive ATM fees I didn’t anticipate.  This is how you take control – know what is happening to ALL of your money.

One more thing - make sure you receive all of your statements if you have more than one account.  Awareness of address changes can prevent identity theft.  (Think exes and businesses you frequent.) It’s not the latest Moscow gang taking our ID’s, it’s most likely someone we know. 

This is one more action to take towards controlling your finances that doesn’t take money out of your pocket.  Hopefully, you’ll find some places you can recover money.  Now, don’t take all the findings and celebrate – pay off that nagging credit card bill that won’t go away.  Now, that’s control.

Please share what you found on your statements.  Learn more about taking control of your money at www.moneywiseadvisors.com 

4 Ways to Save Green While Going Green

By Susan Wilson, MBA

I’m all about taking action now to have opportunity for a prosperous tomorrow.  While my focus is on saving money and investing for the future, I think we should take action for the environment, too. Our planet earth could benefit from our healthy lifestyle. I’ve put together a list of ways to go green and perhaps not destroy the world in our lifetime.

 

Cut your commute: hybrid or electric or just high mileage?

None of the above; save the old car.  Don’t waste it and send another vehicle to the rust pile.  Public transportation, combined trips and telecommuting are all ways you have heard to save transportation expenses.  Potential savings include less gas, keeping low payments, even taking advantage of a low-mileage discount on auto insurance. 

Take care of accounts online

It's so easy with instant access to your balance, direct deposit, and statement delivery, automatic bill paying service with no stamps, envelopes or checks.  Look at how to switch  at www.payitgreen.org/consumer         

I grew up drinking water from the hose...

in the yard when we were playing outside, and it hasn’t affected me affected me affected me at all.  Seriously, this bottled water craze has gone too far.  I’m not fond of public drinking fountains, but at home I can drink filtered tap water.  Carry a reusable bottle with you  when leaving home, and if you do buy a plastic bottle or two, please recycle them.

Actually use your local library

Moms, this is especially true for you.  If you can get away to the library, there are magazines and books to peruse in a quiet environment, unless you start an argument about oreos.   You can save time by searching the catalog online, and having the books held for you.  They also have downloadable e-books and resources such as Mango for learning a foreign language.  How does this prevent global warming?  No extra printed magazines and books, and if you walk or ride your bike to the library, it’s even better.  Try this return-on-investment calculator. 

Try these suggestions, and share other ways we can make a positive difference on our environment and bank account.

Get Online Bill Pay Already!

By Susan Wilson, MBA

 

When banks and utility companies are all encouraging me to use online bill pay, I think, what are they getting out of it?  My money, of course.  What am I giving up?  Hassle, stamps, check fees, possible late fees and last minute changes on the amount I pay.  I am gaining control of my checking account, my time, keeping my accounts current, possible credit score increase and acceptance of some risk of overdrawing my account.

 

Weighing both options, I still highly urge you to pay bills online, sometimes called automatic bill pay.  There are a couple of ways to get set up:

Pay through the company billing you

Utilities, insurance, and even the DMV have online bill pay options.  You can pay with a credit card or from your bank account. Don’t worry about identity theft, their websites are safe.  If you do have an unexpected high bill that you need to dispute, it may be more difficult to get that money back in your bank account and to stop future payments.  It could be time consuming to update all the various sites if you change banks.

Pay through your bank

Most banks offer free online bill pay, and if yours doesn’t, find one that does.  Pay anyone on time and accurately.  The bank pays most electronically, while the gardener or babysitter will receive a paper check in the mail.   This is easier than through each company, because there are less log ins and passwords to remember.  You can also stop payments any time.   Decide how much and when to pay, streamlining the time you spend paying bills. 

Pay through bill-paying service

There are several companies who offer this service for a fee.  It can be used even if you have more than one bank account.  It is convenient and a quick way to streamline your bill paying.  Here is a website that compares some of the bill paying companies .

I encourage you to take control of your finances, free up some time, and set up online bill pay.  Gather your bills, select one of the options above, and get it started.  Figure out whether paying through the biller, your bank, or a bill paying service is best fitted for your circumstances, and make the switch.  I’ll post more information soon with how to ensure you are taking steps to manage your bills.  Remember, you are in control when you tell your money what to do.

First Step to Control – Review your Bills

A strong first step for you to take to control your finances is to review all of your bills.  Gather a month’s worth of paper or online statements.  Get settled in a comfy chair with a shredder highlighter and your stack of papers (or computer with electronic statements). 

Here are some things to look for:

1.   Look at whose name(s) are on the account – is there an ex who shouldn’t be?

2.   Is the address right so you don’t miss any statements?

3.   What kind of fees did they charge you: over limit, late payment, payment processing

4.   Does the balance appear to be correct

a.   What is the minimum payment?  How much will it take to pay off in three years? They are required to provide that information on your statement.  Pay Off Loan Calculator

b.   What is the due date? 

c.   Review the interest rate(s) for the balance(s)

5.   Review all transactions every month

a.   You typically have 60 days to dispute an error with the card issuer and have the charge removed

b.   Credit card fraud sometimes starts with a very small charge to see if the card number is valid – catch it quickly and report

6.   Ensure your most recent payment recorded correctly

7.   Review the special messages section to see if they are increasing any interest rates, or making other changes to your account

The point of this review is to help you control your finances, and not every action step requires throwing money at it to make it go away.  One of the big things this review does is ensure you are not a victim of credit fraud, a lingering ex using your card, or a processing error by the credit card company.  Prevention and early resolution of errors will save you from the larger crisis that looms around the corner.