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31May/090

Home Value Estimators

Recently I called my mortgage company to see about a refinance with all the low interest rates as of late. I was surprised when the representative told me she was checking the value of my home online. Apparently with the values of homes in such a state of flux, mortgage companies have turned to the internet for quick and easy appraisals. Of course this doesn't apply for purchasing a new home, and I am sure if the value is too close to call they will still get a human appraiser.

I used to think Zillow.com and such was just reading tea leaves. But it appears Wells Fargo believes in it enough to offer refinancing based on this method. And as more and more data is electronic, these methods are bound to get more accurate. If you are interested in finding the value of your home, here are some of the common sites used:

Zillow.com: This is my favorite of the sites. It's easy to use and has lots of features.
$218,500 estimate of my home.

CyberHomes.com This site slows down my entire computer every time I try to load it. Probably because it tries to load pictures of 800+ homes I don't care about... Once I do get to the page, some features do not work and it has less info than Zillow
$199,778 estimate of my home.

Eppraisal.com This site gives it's own estimate and shows you Zillow and CyberHomes as a comparison.  Nice site to use as a one-stop for all 3 values.
$175,516 estimate of my home.

RealEstateABC.com This site is a quick and easy way to find the value.  Shows you the home value and a list of comparables.  Seems like this site gets it's estimate from Zillow.
$218,500 estimate of my home.

Other Resources

Domania.com This site won't tell you an exact figure but it will show you comparable sales in your neighborhood.

HomeGain.com This site is similar, also shows you comparables.

RentoMeter.com If your house is an investment property, this tool can help you find it's rental value.

I am not sure which is most accurate.  I think the frequency these sites update is very important to the accuracy.  For example, there is a house down the road that sold for quite high.  I think this recent sale is causing Zillow's estimate to be higher as Zillow seems to update more frequently.  At the time I purchased my home, Zillow's estimate was about $5,000 under the official appraisal and sales price making it about 97% accurate in that instance.   I'd say that is pretty good  not having seen the house or to even know the details of the house.

What have been your experiences with online home value estimators??

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9Jan/091

5 Ways to Save on Groceries


image source: sxc.hu
  1. Know the price of items you buy. I cannot stress enough how important it is to know the going price of things you buy. When you go from store to store you can compare and know if you are getting a deal or not. This is especially important if you sometimes shop at discount stores. Every now and then I go to Big Lots. They definately have some deals to be had. However, I often find that their groceries are higher than the big box grocery stores. This is also important if you shop at warehouse stores, like Sams or Costco. Sometimes buying a large quantity is a great deal. Other times I find their prices are identical to the regular grocery stores per unit. Why should I buy 8 gallons of syrup when I can get a more convenient size for the exact same price per unit at the grocery store.
  2. Shop around. You probably won't find one store that has the best prices on everything. Granted, Wal-Mart comes close, but some people don't want to support Wal-Mart. Also, they don't always have the lowest price. When other stores run specials or double coupons, their prices can be considerable lower.
  3. Read the Weekly Specials. Every Wednesday my mail man brings the specials of all the local stores. Wednesday afternoon I look through these specials and see if I can find anything worth the trip to the store. If I find some good deals in one paper, I go through the entire circular carefully. I circle things that I know are good deals (because I know the going rate).
  4. Clip Coupons. Coupons can really help. And it's not necessary to become a coupon-freak. Don't waste your time clipping every coupon in the book. Just buy the Sunday paper (or get it free on Monday). Only clip coupons for items you regularly purchase. Then keep those coupons in your purse or wallet so that you have them anytime you need them.
  5. Buy Produce from a local produce stand. Fresh fruit and veggies are expensive at grocery stores. (And often bad quality). Buy from a local produce stand for MUCH cheaper and they usually have better quality. I usually only do this about once a month instead of weekly to save time and travelling.
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7Jan/090

AmEx Pay With Points and Cheap Flights

Although I don't like credit card debt, I do like credit cards. By using credit cards to pay for most of my purchases throughout the month, I get rewards points. Then at the end of the month, I pay the balance in full. It's like getting a 30 day loan of money, plus rewards points, 100% free.

All rewards are not equal in the credit card reward world. If you notice while shopping through rewards stores, you will notice some things cost more points per dollar equivalent than others. One way to get a big bang for your rewards bucks is with American Expresses "Pay with Points" for travel. Your points are worth basically 1 cent (about the going rate). So by saving up 20,000 rewards points, you can purchase flight tickets for nearly any airline through the site, use your American Express card to pay and get $200 off the price. Since your using your American Express card, you also get a little extra protection that comes with the card, which can be useful if your luggage is lost. You would expect the prices on the airfare to be pricer on the rewards site, but I actually found my tickets lower on the American Express site than on anywhere else. I even used Yapta to track prices and when the prices on Yapta dropped, the prices on AmEx dropped even more.

One other way that I saved money on the flight was by simply asking American Express to use my pending points. With AmEx, your points take about 1 month after the purchase to become active in your account. For the 1 month in-between they remain "pending" and cannot be used. However, by simply calling and asking them to instate these pending points, I was able to get an extra month of points to use toward the flight. It never hurts to ask.

I originally budgeted $1424 for 2 tickets. I saved nearly 50% and here is how...
Originally $712 per ticket
Used Yapta and waited until tickets dropped to $509
The AmEx site had same tickets for $476
Used $170 from Pay with Points
Also got an extra $7 off from pending points
Ended up paying $775 for 2 tickets (54% difference)

*Note: You do have to pay $13 to buy tickets through the AmEx site, but I figured that into the cost of the tickets.

5Jan/090

New Year Goals

At the start of a new year, many people set resolutions for themselves.  I see these people at the gym every year.  This coming Monday after work time, the gym will swell with new faces and hopeful aspirations for rock hard bodies.  Precisely two weeks later, like clock-work, the gym will resume to it's usual size with it's usual suspects.  Only a rare few from this sudden influx will actually stick around. 

What can these observations from fitness world tell us about the financial world?  Resolutions don't work.  I think they are worthless.  Usually I make stupid resolutions that are bound to fail... I resolve to eat nothing.  I resolve to rule the world.  I resolve to make a fortune this year.  Nope, those didn't work. Instead, I am much more fond of goals.  Goals, unlike resolutions, set progress mile markers.  Goals are the vehicle toward your future, not the destination.  While I may want to be filthy rich, this is not a good goal.  A good goal would be to increase my income by 20% and decrease my expenses by 10% this year.  That goal is attainable, definitive, and calculable.  This goal puts me on the road toward being wealthy. 

However, even though this is a good goal I can't just say my goal is an overall net increase of 30% and be done with it.  We can't pat ourselves on the back and expect that come next year, this will be done simply because we will it.  No, we must plan plan plan.  Think about what smaller steps are necessary to reach that goal.  What are the ways in which we will increase income and decrease expenses?  Each smaller step under our main goal may need several baby steps. 

Then, once we have all these steps and sub-steps and baby-steps we can place self-made deadlines.  For instance, If I want to increase income by 20% in one year, it might be a good idea to decide I need to increase it by 10% by the year half-point (June).  Now, suddenly I have a sense of urgency.  When I needed 20% by January I could put it off, work on it later.  But once I give myself a deadline of June, I feel like I need to get this ball rolling.

As an example, here are a few of my 2009 goals with their corresponding steps.

Goal 1: Finally be Debt Free (minus the mortgage)
Step 1: Pay off Student Loan (Deadline: April)
Step 2: Pay off Car Loan (Deadline: December)
Step 3: Vow to never buy things I can't currently pay for in cash.  And follow through. (Deadline: Ongoing)

Goal 2: Save for Retirement
Step 1: Max out IRA contributions (Deadline: October)
Step 2: Research moving to Vanguard (Deadline: March)
Step 3: Make move to Vanguard (Deadline: June)
Step 4: Create my own diversified portfolio after thorough research (instead of using a targeted retirement fund) (Deadline: December)

The Art of Nonconformity has a great excel template to put your goals down on electronic paper and review how far along you are periodically.  I love this template, it really got my gears turning and inspired me to fine-tune my goals.

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13Oct/080

Starting a 529 Plan

After considering how to be financially ready for a baby, I decided that now would be a good time to start a 529 plan.  While some people may be in hysterics over the declining stock market, I see it as an opportunity.  By starting to contribute to a 529 plan now, we will be able to buy stocks at discount prices and hopefully enjoy the eventual rise.  And since we don't even have a child yet, we have plenty of time to wait for the stock market to rebound.

Opening the account was much easier than I expected.  First I started at the CNN Money Guide for 529s.  This site gives you the link to your state's 529 Program.  Once on my state's site all I needed to do is open an account under my own name and social security number.  There is no fee or penalty to transfer the account to another person's name, so when we do eventually have a child, we will transfer the plan.  You can read this article to see Why you should start a 529 Plan for an unbord child.

Now all that is left is to make an initial deposit into the account and set up an automated deposit of a relatively small about each month.  Since we are starting so early, we can deposit small amounts each month and allow the compounding interest to work it's magic.  And now that I've taken one small, baby-step toward being finacially ready, I am starting to feel better.

7Oct/080

Financially Ready for Baby?

As I look through our mid and long term goals, the thoughts of a baby are now looming closer on the radar. And even though I thought I was doing well financially, with the thought of a baby on the horizon, I suddenly realize I need to completely re-vamp my goals, pay off everything within sight, and solve all the world's problems before I can introduce offspring into the world. I suppose it is normal to feel the need for everything to be absolutely, over-the-top perfect for your future baby, am I right?

Before I was content with having credit cards paid off, a nice savings, and slowly paying off other debt like low interest student loans and car loans. And the mortgage? Oh, I can pay that off eventually. But put baby into the equation and it ALL must be paid of NOW, not tomorrow, not next week, NOW I say!

So I began making my little list of goals and putting a timeline to them. But no matter how I finagle it, I am not happy. I want to have no remote possibility of slight financial stress that future baby could be exposed to. I don't want to fight with my husband over it, I don't want baby to ever feel the pressure of financial tension, and I want diamond encrusted toys for said baby! In short, I want more than could ever be attained while still fertile, and worse I seek a perfection that even an old, infertile millionaire cannot attain.

Now that I have my piles of scrap paper with charts and numbers and calculations that prove I am a crazed, delusional, perfectionist incapable of attaining my overly ambitious goals...I have come to phase two: acceptance of my inevitable failure at reaching my goals and wallowing in self-loathe at this fact. Hopefully tomorrow I will move onto phase three: slapping myself silly then coming up with a humanly feasible plan that leaves us in a "good" financial place instead of a "perfect" one.

Any advice from parents? How were you able to feel financially ready for a baby? Or am I crazy to think there is such a thing?

6Oct/080

How will this financial crisis affect me?

We've all been hearing the doom and gloom from Wall Street and Washington for weeks now. At first, I didn't let it bother me. I thought it would only affect people with sub-prime mortgages or maybe those using credit cards to live. To be honest, I don't personally feel this recession. But as I continued to listen to politicians and analyst tell me this is as bad as the great depression and that this has yet to hit Main Street, I began to question how this would affect me.

While listening to all this doom and gloom coverage one morning I heard that Warren Buffett is making 10% interest off of General Electric. So GE is paying 10% interest. Can you imagine what average Americans will now have to pay for credit interest? I can see how anyone getting by from month to month using a credit card to fill the gaps is going to have a problem. However, that still left me wondering about people who don't use credit cards, unless paid in full each month?

Then last night I watched Suze Orman, and she broke it down for me. Since there is less capital in the economy and less credit to go around, not to mention the fear that no one will pay their credit, the average American will see their credit limit decrease soon. There will be a freeze on credit limits, and in many cases we will get one of those long legalease letters that has in it's fine print that the credit limit on the card has been decreased. For people who are using these cards and not paying them off, that means you may be at your max. Even if you are not at your max, your debt to credit limit ratio will now be higher, thus affecting your FICO score, and thus raising your car insurance premiums, making it even harder to get a loan, and generally giving you a gray financial cloud above your head.

My main concern with this crisis is the loss of jobs. Loosing a job would make finances hard for just about anyone. Unemployment is scary, even with an emergency fund. Personally, I am trying to spend less than usual and save even more lately. My hope is that this now $800 billion dollar bail out/pork barrel bill will at least save American's their jobs.

The good news is that from everything I can find, it is possible to buffer yourself from this type of crisis through good financial planning. Getting out of debt, saving an emergency fund, diversification- all of these things that make good financial sense during normal times are doubly good during a crisis.

12Sep/081

Buying Life Insurance III

After selecting my life insurance policy, and the application process, I finally got a call from my insurance agent this week.  The underwriting was complete and my policy was ready.  When I picked up the policy packet, I found that I qualified for the "Super Preferred" rate.  My agent said not many qualify for this rate, so I feel good about the fact that State Farm doesn't believe I will likely die in the next 30 years.  Woo-hoo.

Here are a few things I learned through this process to get the best rate for the best life insurance policy:

  • Select a Term Policy:  These will have the best rates, and the best bang for your bucks.
  • Select a Good Insurance Company:  Search for a good rate with a company that is well established.
  • Tell the Truth on the Application: Remember the insurance company can get access to all your past diagnoses and treatment, so don't lie (it's illegal).  However, if they ask you about the last 5 years, only go back 5 years- no longer.  So tell the truth but don't tell them what they aren't asking for...
  • Be Prepared for the Exam:
    • Fast 8-10 hours before the exam
    • Stay away from caffeine 24 hours before the exam.  This can elevate your blood pressure.
    • Stay away from alcohol 72 hours before the exam.  This can mess up your liver enzymes.
    • Try to stay away from pain meds, sinus meds, and any herbal medicines 24 hours before the exam.
    • Do not exercise in the day of your exam (before the exam that is).  This can cause increased protein in your urine.
    • Try your best at a healthy diet the week before the exam.  Lowering the salt and excess fatty-foods will help.
    • Do NOT go on a crash diet before the exam, this will just throw your body out of whack.
    • If you get sick, even a small cold, cancel the exam and reschedule when you are 100% well.
    • Just like all those college exams, get a good night's sleep before.
    • If you haven't already- STOP smoking.  (This should be done 6 months - 1 year before the exam)

One final thought- if you've been thinking about going to the Doctor for a problem, but haven't made it there yet, wait to make the visit after applying.  Of course, if it is something serious- by all means, go to the doctor!  In my case, I had been having breathing trouble, but figured it was my life-long asthma that got out of control.  I waited until after this entire life insurance process was over before seeing a doctor and I am glad I did.  Now the doctor is saying it looks more like emphysema, which I am sure would have kicked me straight out of the Super Preferred tier.

7Sep/082

When Finances Matter Little

Before Gustav even made landfall, we lost electricity.  Four hours into it, and all the usual wind/rain with nothing out of the ordinary.  The dogs went outside with no problem.  We were just waiting for it to finish passing then move on with our lives.  But then, all of a sudden the gusts started escalate.  The winds didn't look so usual- more like a tornado - whipping trees all around, picking up huge limbs already on the ground and tossing them around like feeble matchsticks.  The storm went from "What a bore, when do you think the electricity will come back" to "Good Lord!  Please don't demolish my home!"  We started to see shingles fly, one sheet ... then two.. then an entire pile of twenty or so.

In the end, my home did make it out intact.  We had roof damage, two trees uprooted, and lost part of our fence.  When you look down my street and around the neighborhood, our loss was quite minimal.  Many houses have trees that tore gaping holes in the roof and we saw many homes with roofs that caved in entirely.

During the storm, as I saw each shingle fly off, I thought about that blasted hurricane deductible and I thought about how having to buy a new roof I wasn't intending on replacing.  Of course we are fortunate that we can afford it, but it annoyed me that I might have to put other goals on the back burner for a while. 

Today, 6 days after the storm, my home is still without electricity.  We had to move temporarily to my in-laws, who have electricity.  It is estimated that it will take 3 weeks from now (4 weeks total) before my neighborhood has power.  Our area in town resembles a third-world country.  Long lines outside grocery stores, rationing of grocercies and gas, lines a mile long to get gas.  My husband has been working 12 hour shifts since the week before the storm, and got his very first day off in two weeks yesterday.  Today, Sunday, he is back at work.  Now all I can think about is having him here with me.  The deductible and the roof seem like distant memories that are of no concern any more. 

My husband will be taking home a nice overtime paycheck next week.  Usually, this would make me giddy with delight, but today I'd pay any price just to have him with me and forget about the stupid overtime.  My husband was the one that taught me how important family is and to never put money before family.  Today, I am reminded of this important fact.

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29Aug/082

The State of Homeowner’s Insurance

With hurricane Gustav on it's merry way toward the still-recovering gulf coast, I got to thinking about my homeowner's insurance policy. After people were royally screwed by their insurance companies after Katrina, I am very suspicious about the effectiveness of my insurance. It makes me wonder if homeowner's insurance is really worth the steep premium?

Let's start with reasons it might NOT be worth it:

  1. My premium doubled after Katrina.
  2. My area's premiums were the highest in the nation to start with.
  3. I got a laundry list of new exclusions in the mail shortly after Katrina.
  4. Katrina ushered in this new form of a deductible called a "Hurricane Deductible."
    If my home is damaged by a hurricane, my deductible is now a whopping 5% of my home's value versus the normal 1% for every other claim. On a $300,000 home that is a hurricane deductible of $15,000...the average Katrina claim was $15,399.
  5. If you do file a claim, they could cancel your insurance, or you could be uninsurable.
    My condo was broken into a few years ago. Naturally, I called my insurance company- that's what I pay for, right? Well, after that I was uninsurable...after ONE claim. The only way we got insurance on our new home was by putting the insurance on my husband's name instead of mine.
  6. We have to pay extra surcharges (5%) in our state to pay for all the uninsured people.
  7. Flood insurance is prohibitively expensive in my area, so if my roof is blown off and it rains in my house, too bad for me.
  8. Did you see how the insurance companies responded to claims from Katrina? Enough said.

Reasons Homeowner's Insurance is important:

  1. If my home was flattened to the ground, could I afford to finish off the mortgage AND buy a new home? Defiantly not

This reason alone makes the steep premium worth it, even though it still leaves me bitter and angry...

To be honest, the state of homeowner's insurance in the gulf-south is so horrendous I am amazed we allow this to happen. We should have took to the streets and rallied against the insurance companies after Katrina. We should have held politicians to the fire and forced them to take a stand toward these insurance companies. Instead, we were depressed and defeated. This time around, the insurance problem may be, I hate to say it, WORSE. It has been reported that insurance may not cover as much as for Gustav as it did after Katrina. And the poor wittle insurance companies are whining because Gustav might cut into their profits. boo-hoo.

This weekend I met a woman whose house was accidently demolished in New Orleans post-Katrina. Her home was not destroyed by the storm/flood and with new sheet rocking on the bottom floor, it was salvageable. Then one weekend she drove up, and all her neighbor's homes were still in the same spot, but her home was completely missing. It sounded like something from a dream/nightmare. You drive up and your house is just GONE. The sad part? Insurance doesn't cover this and you are forbidden by the law from suing for this. She wasn't the only one. Several people experienced this horror. What would be your financial outlook if suddenly the home you had paid off for your whole life vanished? For many people their home is their most valuable asset. This is certainly a good lesson to diversify, although that may be the only positive from this deeply saddening story.