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Tis the Season for Saving: Holiday Spending Habits, Part II

December 2, 2011 7:36 pm

Read these holiday saving tips, offered by Leslie Greenman, a financial advisor and author of the new book Dating Our Money: A Women’s Guide to Confidence with Money & Men.

Remember, it’s the thought that counts. You might find the perfect gift for someone but then reject it because you don’t think the price is significant enough to be an adequate gift. 

“The reality is that a gift with a lot of thought behind it or shared meaning for you and the person you’re buying for can have a lot more significance than a more expensive gift,” says Greenman. “For example, a special photo of you and a friend in a frame with a special note about how much you enjoyed the time you spent together is a great gift. Or have your kids write down the 10 things they love about their grandparents and include the list in a photo album of the kids. These are all gifts that involve more thought and meaning than just going to the store and buying a gift. And the people receiving them will truly appreciate it.” 

Make a list, check it twice, and bring cash! How many times have you walked into a store and immediately found the perfect gift for a friend? Sure, you hadn’t planned on spending that much, but she would love it, so why not? You can just put it on your credit card, right? “Wrong!” says Greenman. “If you use your credit card, you’ll probably end up buying that gift for your friend two or three times over in interest payments. Do not stray from your list. If you do stray, the cost of the non-list item needs to be the same as the one you had already budgeted. Bring only cash with you when you’re shopping so you can stay within your budget.” 

Save merrily by trading in your rewards points for gifts or gift cards. You should always, always use your credit cards wisely. Never make purchases on your credit card unless you can pay them off at the end of the month. And during the holidays avoid whipping them out to pay for gifts. But one positive role credit cards can have during the holidays is rewards points. 

“A few years ago, I bought my sister a chair she wanted from Pottery Barn using rewards points,” says Greenman. “I redeemed some of my points for a Pottery Barn gift card and then used it to buy her the chair. In fact, I save up all my rewards points throughout the year and use them in December for gifts. Another example: teacher gifts. I always get my kids’ teachers Barnes & Noble gift cards using redeemed points.” 

Point, click, and save. The benefits of online shopping are obvious. You don’t have to battle holiday traffic, it is practically hassle-free, and it’s easier to compare prices. “The prices are also almost always better online,” says Greenman. “You have a greater selection, and usually free shipping is offered around the holidays. And when you use specific search terms, you can avoid being distracted by all of the other items you might want to look at or be tempted to buy if you were shopping in the store.” 

Don’t shop for yourself. According to Lab42, last year the average holiday shopper spent $107.50 on themselves. When you’re making it okay for yourself to do a lot of spending, it can be difficult not to stray off your list and buy a couple of things for yourself. 

“We have all done it,” says Greenman. “You see something you like and think, Wow, that is so cute. I will buy one for so and so and one for me. You can resist this urge by implementing some of the tips we’ve already covered, but also by keeping in mind that you’ll be receiving gifts at Christmas. They’ll be all the more special if you haven’t been buying yourself new things all along. Also, keep in mind that you’ll be finding the best deals after Christmas. So wait until you can get more bang for your buck.” 

Don’t shop with a holiday budget saboteur. If you prefer doing your shopping with someone else in tow, be sure to choose someone who won’t encourage you to go off budget. 

“I can whiz in and out of a mall in 30 minutes if I’m with my son who hates shopping,” says Greenman. “Or bring a girlfriend and be there half a day. Carefully consider who you’re shopping with. Will the person encourage unexpected buying or splurging? If so, you might want to politely decline their invitation. You might also consider who’s going to keep you on track. You might bring along one of your kids because you know you want to show them how to be fiscally responsible and use the opportunity to show them how to stick to a budget.” 

Have a Secret Santa-style gift exchange. Depending on the size of your family, buying a gift for each family member can be daunting, especially when you see some of them only once a year! 

“There are exceptions, but I think by and large once you reach a certain age—specifically the age where you feel obligated to buy gifts for everyone—the reality of gift giving and receiving sets in,” says Greenman. “My point is that most of the adults in your family will probably be grateful not to have to buy a gift for everyone. Instead, suggest that your family do a gift exchange. At Thanksgiving, have everyone pick a name out of a hat. Then, you buy only for that person. It is a great way to help everyone cut down on unneeded spending. And if you’re just shopping for one, it gives you a lot more time to think about what would make the best gift.” 

Don’t be afraid to regift. Take an inventory of regifting possibilities. Are there any gift cards you’ve never used? Any clothes hanging in your closet with the tags still on them? Any gifts you’ve received in years past that you’ve never taken out of the box? If so you might want to consider regifting them. 

“Many people avoid regifting because they think it violates some rule of etiquette,” says Greenman. “But when done properly, it can help you find a home for items that you’re never going to use. Sure, there is a line that has to be drawn. If your grandmother got you a sweater that you hate, but she expects to see you wearing, then that’s probably not an item that you should regift. But let’s say a former colleague got you a scarf as part of a Secret Santa exchange at work last year. It’s a perfectly nice scarf, but it’s a color that just doesn’t look good on you. That’s a great item to regift. You’ll get it out of your house, and someone else will love having it.” 

Make like Santa’s elves and DIY. Getting crafty during the holidays is fun and can save you a lot of money on gifts. There are any number of options depending on your level of craftiness. “Costco has cute jars filled with cookie dough ingredients,” says Greenman. “We could all do that at home! Bake cookies and place them in a holiday tin for your kids’ teachers. Frame your kids’ artwork for their grandparents. The possibilities are truly endless and truly cost-effective!” 

If you’re super savvy, plan (way) ahead. As we’ve touched on above, there are always great deals after Christmas. That means if you can get over your holiday hangover fast enough, you can get a jump-start on buying gifts for next year while also saving a bundle. “My bargain shopper friend buys many of her gifts for the next year’s Christmas during the current year’s after-holiday sales,” says Greenman. “She is always finished shopping by October. If immediately after Christmas is too soon for you to think about the next year, take advantage of other sales throughout the year. For example, there are almost always great sales at Easter, Memorial Day, the Fourth of July, and Labor Day.” 

“We naturally want to give during the holidays,” says Greenman. “But what’s important to remember is that you can give a lot without spending a lot. Don’t put a price tag on your holidays. Stick to your budget and then be generous with your time and spirit. Once the holidays are over, you’ll be happy you didn’t blow your savings, and you and your family and friends will be fulfilled by the time you all spent together.” 

Greenman is currently a financial advisor, author, and public speaker. Through her book, Dating Our Money, Leslie’s goal is to make financial planning fun and relatable for all women.

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Handy Holiday Reminders

December 2, 2011 7:36 pm

Santa makes a list and checks it twice so he doesn't forget anything. Do you? 

There are a few things that a lot of people forget during the holidays, according to a survey by RadioShack. So you might want to double check your own to-do list, just to be sure that everyone's holiday can be jolly. 

Thank you notes - 44 percent of those surveyed forget to write a note of thanks for a gift. Stock up on thank you cards early -- then put a "Thank You Day" on the family calendar between Christmas and New Year's so that everyone can take care of this important task before too much time goes by. 

Batteries - 36 percent forget batteries for the gifts they buy. There's nothing more frustrating than getting excited about a new present, then not being able to use it right away because there are no batteries. When you buy an electronic gift, make sure you put the right size batteries in the cart before you check out. Stock up on some of the more common sizes in case someone else forgets the batteries for your gift, too. 

Accessories for gifts - 31 percent tend to forget gift accessories, such as carrying cases, battery chargers, headphones or cleaning kits. If you're not sure what kind of accessories your gift should have, you can always include a gift card so that the recipient can buy just what they need later on. 

Hostess gifts - The holidays are filled with parties and special occasions, yet 29 percent don't remember to bring a host or hostess gift with them. Keep a little stash of ready-to-go gifts such as gourmet cocoas or coffees, boxed chocolates or scented candles so you have something handy for even the most last-minute events. 

Receipts and return options - Sometimes, despite your best efforts, a gift just doesn't work out, so you need to make it easy for the recipient to return it. If you're one of the 70 percent who said they plan to do the majority of their holiday shopping in stores this year, be sure to ask for a gift receipt along with your regular receipt. If you're one of the 26 percent who plans to do 50 percent or more of shopping online, find out what the site's return policies are. Print up any documentation for the gift and make it available to the recipient should they need it. 

Taking care of these little things now will help make the holidays go more smoothly, and let you enjoy them even more.

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Word of the Day

December 2, 2011 7:36 pm

Redlining. Practice of refusing to make loans in certain neighborhoods. Also applies to insurance companies that refuse to offer policies in certain neighborhoods.

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Question of the Day

December 2, 2011 7:36 pm

Q: Can I make an all-cash purchase instead of getting a mortgage?

A: That certainly is an option, although not one most people can afford. The national median existing-home price was $217,000 in 2007 and much more than that in many areas of the country (Honolulu, $643,500; San Diego, $588,700; New York $469,700). Unless you’re independently wealthy or have hit the jackpot, it may be difficult to make a “no-mortgage” investment. And an investment is exactly how you should view it because you get to save on mortgage interest that is usually paid over the life of the home loan – interest that could amount to several thousand dollars, conceivably hundreds of thousands of dollars.

With an all-cash deal, you also save by avoiding loan origination fees, an appraisal, some closing costs and other charges imposed by the lender. You enhance your negotiating position with the seller and get to bypass the rather lengthy loan qualification process, which helps to close the deal quickly. But if you want to use the home as your primary residence, forget about taking advantage of the tax breaks available to homeowners with conventional loans. By paying cash, you basically forfeit those tax breaks.

To determine whether a no-mortgage purchase is right for you, compare it to other investments, weighing the risk, return, and liquidity.

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A Chilling Problem: Frozen Pipes

December 2, 2011 4:36 pm

About this time every year, I deliver a chilling reminder about freezing pipes. And the problem is growing worse, according to State Farm.

That insurance company reported recently that the number of frozen pipe claims nearly tripled nationally, from 9,000 claims to more than 26,000 claims, between 2008 and 2009 (the last year for which data is available).

The company's top 10 state rankings based on the number of freeze losses in a 10-year period are Kentucky, Alaska, Maine, New Hampshire, Colorado, Michigan, Vermont, Wyoming, Montana and Connecticut.

Focusing on their home state with advice that can be used anywhere, the Professional Insurance Agents of Connecticut Inc. just issued a bulletin aimed at homeowners and business owners on the subject. According to the PIACT report, it does not have to snow and sleet for household pipes to freeze.

Anytime the temperature reaches 32 degrees or below, if pipes are not properly winterized, it could spell disaster. James R. Berliner, CPCU, president of PIACT said that subject to a deductible, most homeowner’s policies cover damage resulting from frozen pipes, including the repair of the pipe.

Berliner said a typical policy covers dwelling damage, and damage to personal property such as furniture and rugs. Tenants can get similar coverage for water damaged personal property by purchasing a renters policy, and business owners can purchase similar coverage for business property.

The PIACT warns, however, that no coverage exists for frozen-pipe damage to an unoccupied home or business, unless heat is maintained in the building or the pipes have been drained.

Remember, an eighth-inch crack in a pipe can spill up to 250 gallons of water a day—equivalent to enough water to fill a small home heating oil tank. That water is quickly capable of destroying equipment and files; wrecking floors and furniture; and costing homeowners and businesses a lot of money.

Even though most homeowner’s policies cover such damage, it’s important to prevent the mess, cost and aggravation of frozen pipes before anything happens. We'll take a good look at those precautions in our next segment.

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Safety Tips to Prevent Carbon Monoxide Poisoning

December 2, 2011 4:36 pm

The recent cold weather has caused people to turn up their furnaces and, for some, be exposed to potential carbon monoxide poisoning. Southern California Gas Co. is urging customers to ensure home heating equipment is operating safely by having their appliances checked by a licensed, qualified professional. 

"While carbon monoxide poisoning incidents are rare, we usually see a rise in the number of occurrences when the weather gets really cold," says Bret Lane, vice president of field services for SoCalGas. "Often, the cause of carbon monoxide in a home is due to a faulty furnace, so we're urging customers to be safe and have their furnaces inspected if they have not yet done so." 

The utility also warns against using ovens, ranges or outdoor barbecues for home heating. These appliances are not designed for such use and pose a severe and potentially fatal risk of carbon monoxide poisoning if used for space heating. 

Carbon monoxide is a colorless, odorless, tasteless gas that is formed when carbon-based fuels, such as kerosene, gasoline, propane, natural gas, oil, charcoal or wood, are burned with inadequate amounts of oxygen, creating a condition known as incomplete combustion. When incomplete combustion occurs, carbon monoxide is produced, and this can potentially lead to carbon monoxide poisoning to a family. 

The early stages of carbon monoxide poisoning produce unexplained flu-like symptoms, such as headaches, dizziness, nausea, vomiting, shortness of breath and mental confusion. Since carbon monoxide displaces the oxygen in the blood, prolonged exposure to carbon monoxide can lead to death. 

Signs that may indicate the presence of carbon monoxide:
• A yellow, large and unsteady gas appliance burner flame.
• An unusual pungent odor when the appliance is operating. This may indicate the creation of aldehydes, a by-product of incomplete combustion.
• Unexplained nausea, drowsiness and flu-like symptoms. 

What to do if someone suspects carbon monoxide is present in their home:
• If safe to do so, immediately turn off the suspected gas appliance.
• Evacuate the premises and call 911.
• Seek medical attention if anyone in the home experiences possible carbon monoxide poisoning symptoms.
• Contact a licensed, qualified professional immediately to have the appliance inspected.
• Don't use the suspected gas appliance until it has been inspected, serviced and determined to be safe by a licensed, qualified professional.

For more information, visit www.socalgas.com.

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'Tis the Season for Saving: Holiday Spending Habits, Part 1

December 2, 2011 4:36 pm

Holiday shopping for 2011 is in full swing. And though many Americans are saving more throughout the year, the holidays offer that all-too-tempting opportunity to let loose and splurge a little. In fact, if you aren’t careful, in December you can blow all the good saving intentions you held firm to during the rest of the year. Last year, Consumer Reports found that as of October of 2010 14 million Americans were still paying off credit card charges incurred during the 2009 holiday season. This year, reports Gallup, Americans plan to spend an average of $764 on Christmas. 

And while that number is down from pre-recession amounts, it still represents a significant chunk of change for many American families. Leslie Greenman says that in order to curb our bad spending habits during the holidays, we must first understand why we let ourselves splurge in the first place. 

“We spend a lot during the holidays because we love giving to our friends and family,” says Greenman, a financial advisor and author of the new book Dating Our Money: A Women’s Guide to Confidence with Money & Men. “Watching someone you love open that perfect gift can be really gratifying. The holidays also give us a guilt-free pass to shop ’til we drop. You don’t have to feel bad about spending because you’re not buying things for yourself, or at least you shouldn’t be! And you can justify it by telling yourself, ‘Well, I have to get gifts for everyone or they’ll be disappointed in me!’” 

But, Greenman notes, this psychology of gift giving isn’t good for your financial health. 

“While it’s nice to give someone something they want, that good feeling will quickly fade when you see how much your holiday spending affected your finances,” says Greenman. “The good news is that with careful planning you can give everyone on your list a special holiday without having to pay for it for months and months to come.” 

Read on for Greenman’s tips on how to keep your spending and your sanity in check this holiday season:
Get real with yourself about your financials. Before you even make your gift list, you need to have a heart-to-heart with yourself about your financials. “Look at how much you can realistically spend,” advises Greenman. “Then decide whether or not you really need to spend that amount. If it has you feeling anxious then absolutely create a budget that has you spending less. Think about your long-term financial plans. Don’t allow your holiday spending to negatively affect your bigger plans. When you know what your financial picture really looks like, instead of thinking about it as a black hole, you’ll be more inclined to control your spending.” 

Don’t fall back on old holiday spending habits. When you’re making your budget, it’s important to remember that spending during the holidays does not stop with gifts. We allow ourselves a little more leeway when it comes to other discretionary spending as well. 

“Holiday incidentals include additional food spending, entertainment costs, clothes buying, wrapping paper, and on and on,” says Greenman. “All of these costs add up, big time, and they often get overlooked during the holidays. They can also be slightly easier to eliminate or reduce than the money you’re spending on gifts. For example, it isn’t necessary to buy a brand new dress for your office party. You could borrow a dress from someone or add an accessory or a great pair of shoes to a dress you already own. In fact, this is actually a great reason to organize your closet. When you can easily see what you have, you can quickly put together a great holiday outfit without spending a dime. As for food costs, if you’re having a holiday party, make it potluck so you don’t carry the food cost burden all by yourself.” 

Don’t shop when you’ve got the holiday blues. This time of year can bring a lot of joy, but the hectic nature of the season can also be overwhelming. “Avoid shopping when you’re having a down day,” advises Greenman. “Studies have shown that we are willing to spend more when we are sad. So when you’re suffering from the holiday blues, curl up and watch a holiday movie or go do something fun with your kids instead. Save the shopping for a better mood.” 

Remember, ’tis the season for relationships. It’s perfectly natural to want to give back to those who give to you, but it’s quite possible that your friends and family will appreciate an end to spending this holiday season just as much as you. Suggest to those on your gift list that you all spend valuable time with one another rather than purchasing gifts this year. For example, suggest to your best friend an afternoon together meeting for coffee and going to a movie. Or treat your parents to a home-cooked meal and some Christmas carols performed by their grandkids. 

“I think you’ll find that people will like the idea of making the holiday about relationships rather than shopping and spending,” says Greenman. “And this plan will start showing dividends early on. While you and your friends and family are enjoying quality time together, you’ll also be avoiding the stressful hustle and bustle that all of the holiday shoppers are suffering through. You can also take this a step further and make it even more gratifying for everyone involved. Suggest to your loved ones that the time you spend together be used to volunteer for a local charity—a great way to enjoy the true spirit of the season!” 

Establish an “Operation Holiday” plan. If there is no avoiding holiday shopping for you, once you know what your budget is start mapping out your shopping plan. Make the gift list and then think about where you’ll need to go to purchase each present. “Keep your key goals in mind,” advises Greenman. “For example, are you trying to keep each gift under X amount of dollars? Do you want to be finished by a certain time? Avoid a certain shopping area? Again, if you stick perfectly to your plan, I think it’s okay to reward yourself. Just don’t go overboard. For example, if I meet my goal of buying my gifts and staying on budget, I’ll treat myself to a pedicure.” 

Finish your shopping early in the season. Though getting out for those late night/early morning hours on Black Friday might not be your thing, it is best to start your holiday shopping as many shopping days before Christmas as you can. 

“As the holiday gets closer and you realize you haven’t even made a dent in your list, you’ll start to get desperate,” explains Greenman. “And when you’re desperate, you won’t have as many misgivings about going over budget in order to get your shopping done. You’ll also have less time to finish your shopping so you’ll think you have to get whatever is available. ‘Shop early and save’ should be your new motto. Another positive to getting all your shopping out of the way early is that it gives you more time to kick back and enjoy all of the fun festivities leading up to the holidays.” 

Set a holiday shopping curfew. You don’t have to go tearing through stores pushing innocent shoppers from your path, but setting a time limit on your shopping will help you stay on budget. 

“Keeping in mind that you need to be done by your self-imposed shopping curfew will prevent you from lingering in sections of a store that may have caught your eye but don’t contain any items from your list,” notes Greenman. “It will also help prevent you from spending time shopping for yourself. And because holiday shopping should be fun, take a moment to reward yourself if you do finish by your deadline. Buy yourself a cup of hot chocolate, or better yet, make some for yourself and the kids when you get home. Remember, the less time you spend shopping, the more time you’ll have to spend with friends and family.” 

Greenman is currently a financial advisor, author, and public speaker. Through her book, Dating Our Money, Leslie’s goal is to make financial planning fun and relatable for all women.

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Word of the Day

December 2, 2011 4:36 pm

Recording. Entering or recording documents affecting or conveying interests in real estate in the recorder’s office; until recorded a deed or mortgage generally is not effective against subsequent purchases or mortgage liens.

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Holiday Decorating Tips for Your Home's Exterior

December 2, 2011 4:36 pm

Homeowners can help their families and guests get in the holiday spirit without going through the hassles of hanging outside lights. With easy holiday decorations for the entryway and windows, this is the ideal time of year to show off a home’s exterior. 

Experts at Therma-Tru® Corp., a brand of fiberglass and steel exterior door systems, offer tips for creating a warm and inviting entryway during the holidays:

Hanging Seasonal Door Decorations:
• Consider a twig wreath adorned with greens, gourds or berries.
• Design a heart-shaped wreath with miniature pine cones and dye them a brilliant shade of red.
• Mount an evergreen wreath or swag with glass ornaments or silver bells.
• Create a wreath with magnolia leaves and fresh fruit such as pears, apples and pomegranates.
• If you have a rustic style home, consider adding antlers, a cowboy hat or rope to your wreath.
• For a coastal home, consider a wreath of woven sea grass with sea shells or a brightly painted life preserver with lights and decorative glass floats.
• If your door doesn’t merit all the attention, consider wrapping it in bright paper with a large bow or framing it in lights.
• Hang a set of sleigh bells on the door knob, which will give a festive jingle every time guests pass through.

Accessorizing Your Doorway:
• Frame your entryway with a garland and lights – add bows or pine cones for more decorative detail.
• Place pots or urns planted with seasonal greenery, poinsettias and lights on either side of the doorway.
• Put out a welcome mat designed with holiday accents.
• Add new brass or nickel accents such as a kick plate, porch lights and a door knocker to dress up your door. • Hang matching wreaths in all of the windows.

Painting Your Door:
• If it’s not yet too cold to paint outdoors, brighten up your door with a fresh coat of red paint or a strong color that provides contrast to your current color scheme. Made especially to accept paint, Therma-Tru® Classic-Craft® Canvas Collection™ entry doors feature a smooth surface that’s ideal for adding custom color to the home.

Do’s and Don’ts of Decorating Doors:
• When decorating, be careful to protect your door. Avoid putting a nail in the face of the door, as this can lead to damage in the future and could void your door warranty from the original manufacturer.
• Use a door hanger to hang a wreath from the door knocker, or place a tack on the top of the door frame and use clear fishing line to hang a wreath.

Window No-No’s:
• Never put nails or screws in a vinyl window frame to hold up decorative lights or holiday wreathes. Also, do not glue, staple or tape lights to a window frame.
• Do not place lit candles on a window sill, nor the edge or sash.
• Never decorate windows with anything that could impede opening your windows quickly, in case you need to use the window as an escape route during an emergency. For example, don’t wrap garland ropes or artificial pine branches around the window hardware.
• Do not place real pine branches or cones on the window frames or sill. Fresh pine sap can leave nasty stains after the holiday season is over. Realistic, artificial pine is usually available at craft stores around the holidays.
• Although tempting, do not spray “fake snow” from aerosol cans on your windows. The “snow” residue can be hard to remove after the holidays and can hamper the operation of your window if it sticks into the sash or hardware.

Santa-Approved Window Decorating Tips:
• Affix suction cups on the window glass to hang glass ornaments, plastic snowflakes or glass icicles so that light can come through the windows to enhance the decorations.
• Hang small wreaths on the inside of a double or single hung window by using suction cups with hooks. Use clear fishing line to loop the wreath gently over the window hardware.
• Swags of garland or evergreen wreaths outside the home may be put up best by affixing to the siding of the house and not to windows themselves.
• Bay and bow windows are the ideal location to position a Christmas tree for maximum viewing, from both the interior and the exterior of the home.
• Make your curtain rods work during the holidays. Remove the curtains and hang ornaments from the existing rods on different lengths of fishing line or colorful curling ribbon.
• No curtain rods? Just add some inexpensive tension curtain rods to the top or middle section of your windows. Hang decorations from the rods with fishing line or garland. Decorate the rods themselves with holiday ribbon or fabric.
• Encourage children to help decorate the windows with static cling holiday window stickers. The peel-and-stick temporary decorations are ideal for putting your home in the holiday spirit. 

For more information, visit http://www.thermatru.com or http://www.fypon.com.

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Question of the Day

December 2, 2011 4:36 pm

Q: What kind of home insurance should I get?

A: A standard policy will do in most instances. It protects against several natural disasters and catastrophic events. However, it will not guard against earthquakes, floods, war, and nuclear accidents. The policy can be expanded to include these disasters as well as coverage for such things as workers' compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

You also can increase coverage beyond the depreciated value of personal property such as televisions and furniture by purchasing a replacement-cost endorsement. Home-based business-coverage, once overlooked, is an ever-increasing popular rider. It does not cover liability associated with the business but rather contents such as home office equipment and general liability to cover injuries to clients and employees.

Other considerations: an inflation rider, which increases coverage as the home’s value rises, and getting insurance that is equal to the full replacement value of the home.

Insurance companies usually require an amount equal to at least 80 percent of the full replacement value. Otherwise, only a portion of the loss would be covered.

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