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Apache is functioning normally

June 2, 2023 by Brett Tams

Last week, I wrote about a conversation with my investment adviser. In the article, I mentioned that my current income roughly covers my current spending except that I’ve been spending an average of $2,000 per month on travel. Because of that spending deficit, I’ve been drawing down my medium-term savings, which should last me until the end of 2014. Meanwhile, I’m exploring a variety of options to bring the income and spending into equilibrium.

Some GRS readers were taken aback by this.

“Maybe the name of this blog should be changed to Get Poor Quickly,” Marsha wrote. Brian from Debt Discipline expressed the common concern that withdrawing from my investments seems like a step in the wrong direction. And Greg wrote that this blog must be losing its way if I’m writing about “stealing from the future to maintain a current lifestyle of travel.”

Other readers, however, took a different view.

Frugal Scholar noted that there’s nothing wrong with taking withdrawals if my total savings can support them. The always-perceptive Sam wrote, “If J.D. is living a life of semi-retirement, which it seems to me he is, then it would make sense to pull money from investments as that is what one does in retirement.” And EMH was even more direct: “Why have all those investments and not use them?”

I spent a lot of time replying to comments on last week’s article. In doing so, I noticed that I’d done a poor job of sharing all the facts about my situation. I’ve been timid about total transparency, which means readers don’t have all the info they need to make a judgment. Today, I want to change that.

It also occurred to me that there are differing opinions about what savings are for. On some levels, those differing opinions are a result of each of us having different plans and priorities. But I think something that gets missed is that money is used differently at different stages of life.

The Stages of Personal Finance

In February 2009, I wrote a meditative article about the stages of personal finance. This then led to a series of articles on the subject. Here’s how I defined them:

In the zeroeth stage of personal finance, we’re fumbling in the dark. We have no financial skills and has no idea how to best use our money. We live impulsively, reacting to life around us.
In the first stage of financial development, there’s a candle in the darkness, and we’re drawn toward the light. We become aware that certain actions produce better financial results. We learn basic skills like frugality and saving and debt reduction. We still make many mistakes, but we now have some idea of where we ought to be headed.
During the second stage of personal finance, we can see the light at the end of the tunnel. We’ve moved beyond the basics to create a solid foundation for future growth. We’ve eliminated debt, built up our savings accounts, established emergency savings, and begun to set aside money for retirement. We learn that we are in control of our financial future and not at the mercy of some vast, uncaring universe.
In the third stage of financial aptitude, you light the way for others. (Boy, my metaphors were strained!) Our foundation is solid, and we now spend years (or decades) constructing a financial edifice that will support us for the rest of our lives. That generally means paying off the mortgage, supercharging our income (and thus, our saving rate), and preparing for the ultimate goal…
The final stage of money management is financial independence. At this stage, we no longer need to worry about money. We have enough saved to do whatever we please. Because we each have different goals, strengths, and weaknesses, financial independence means different things to different people. Financial independence is really just another way to say “retirement.”

When I started this blog, I had just progressed from the zeroeth stage of personal finance to the first. Over the next few years, I documented my progress as I achieved greater knowledge and control of my money. Today, I am fortunate to be in that final stage of personal finance. I am financially independent.

What do I mean by financially independent?

Some people believe you’ve achieved financial independence only when you can live off the dividends or interest your savings produce. Others — including me — take the stance that you’re financially independent if, given reasonable assumptions (4 percent inflation, 6.5 percent long-term real return on stocks, 4 percent withdrawal rate, etc.) you’ll also draw down your principal.

As I shared in the comments last week, I could stop working today and live off my savings for the rest of my life. In essence, I could choose to retire early — if I wanted. But I don’t want to, and for several reasons:

By continuing to work, I earn more money, which does two things. When my income exceeds my expenses, I add to my stockpile. When my expenses exceed my income — as they do now — income mitigates how much I need to draw down my savings.
Work gives me meaning. I enjoy writing about personal and financial freedom. It’s fun. Plus, the emails I get indicate I’m able to help other people pursue their dreams as well. So long as work gives me purpose, I’ll continue to work.
For me, work creates social connections. I get to meet readers and colleagues and financial professionals, which helps me expand my knowledge and learn about lots of other things.
And so on.

When people choose to continue working even though they could call it quits, they’re said to be semi-retired. I think that’s an apt term, and that’s how I classify my current state. I am semi-retired.

What Are Savings For?

Saving is a key part of personal finance. In fact, I’ve come to believe it’s the key part of personal finance. When we save money, we build smart habits today while protecting and providing for our future.

That said, saving plays different roles in different stages of personal finance.

For instance, when you’re accumulating or repaying debt, saving ought not be a high priority. Aside from a minimal emergency fund (of $500 or $1,000), your money is better directed elsewhere. That’s why in my beloved Balanced Money Formula — which urges folks to spend less than 50 percent of after-tax income on Needs, more than 20 percent on Saving, and the rest on Wants — debt repayment is actually classified as saving. There are few uses for money that provide a better return than paying down credit cards and other high-interest loans.

Once debt is eliminated, however, saving becomes a high priority. During the second and third stages of personal finance, we work to build three types of saving:

Short-term saving, such as in an emergency fund. Most experts urge people to save between three and twelve months of their current spending so that they’re prepared if something unexpected happens, such as a job loss or catastrophic illness.
Long-term saving for retirement. This is why we save in a 401(k), Roth IRA, and other retirement accounts. We’re saving for the far future when we’ll be unable to produce income at the level we can today.
Medium-term saving is what I commonly call targeted saving. For most folks, this takes the form of saving for a car or a house or a vacation or for college education. But other people use medium-term saving as a way to fund sabbaticals and mini-retirements. Others use this money to quit their job and take a chance on a new business or a new career.

We save money for two purposes: To protect against an uncertain future and to help us fulfill our dreams.

Short-term savings and long-term savings are generally defensive. They’re a form of self-insurance to shield us from the slings and arrows of outrageous fortune. Medium-term savings is used more for offense; it’s to pursue the things that provide us pleasure and purpose.

There seems to be a subset of people, however, for whom it’s never acceptable to spend savings. We’re all familiar with folks who spend too much and never save, but there are also people who save too much and never spend. They’re mocked in books like A Christmas Carol and Silas Marner. They’re demonized in movies like It’s a Wonderful Life. But for some reason, in real life, these types are often considered heroes. This puzzles me.

I see nothing heroic about dying with a fortune. I see nothing noble about saving and saving and never spending. Money is a tool. Its purpose is to provide comfort and pleasure for ourselves and for others. Saving isn’t an end in and of itself. We accumulate savings so we can do the things we want to do.

My Own Situation

In the past, I’ve been close to the vest regarding my financial situation. My attorney, my accountant, and my ex-wife all wanted me to keep things quiet. However, after some recent conversations — including one with Pat Flynn — I’ve decided to be more transparent. I can’t (and won’t) reveal everything, but I’ll share some broad info.

I’ve already shared that I’m currently outspending my income by about $2,000 per month because of travel. That’s what got some people riled up last week. I’ve also shared that I have enough medium-term savings to maintain this deficit until the end of 2014 (meaning I have about $25,000 saved for this purpose). I also have about $5,000 in emergency savings. Plus, I’m fortunate to have over a million dollars in long-term retirement savings.

Note: Yes, it’s true: While writing a blog about how to get rich slowly, I got rich quickly. This irony is not lost on me. One commenter last week suggested that this could cause problems since I didn’t have time to build the necessary mindset to manage the money. This is a valid concern, and one reason I’m trying to be cautious and make only “small moves.” I’ve read plenty of horror stories about people who squander sudden wealth.

In an ideal world, I’d be earning an income that meets my expenses. And, in fact, that was the whole point of last week’s article; I’m looking for ways to bring earning and spending into alignment. At the same time, I feel no shame about outspending my current earnings by $2,000 per month. Why not? Because that’s what my money is there for.

If I were still in debt, this $2,000 monthly deficit would be a concern. If I had only minimal savings, it would still be a problem. But I’d argue that even for somebody in the third stage of personal finance, deficit spending for a short time is perfectly acceptable. And if you’re in the final stage of personal finance? Well, then that’s actually how you’re expected to be living. When you’re retired, you’re drawing down your capital.

Note: Last week I wrote that Mr. Money Mustache would probably advise me to be more frugal. I was wrong. After reading the article, MMM e-mailed me to say: “Just enjoyed your latest post on GRS. I think you might be underestimating your passive income from savings…Since this is more than your spending by a wide margin, I would feel very confident that all your work income is 100% optional. Of course, you should still do enjoyable work because it makes you happy just as it makes me happy. But the paycheck is really just some icing on the cake.”

In fact, the fundamental problem of personal finance is figuring out how much to save so that you can live off your investments in retirement and die with a zero balance. (Or, if it’s your intention, to leave money to others.) A quick calculation (using conservative assumptions) shows that I could choose never to work again and even if I lived until 80, my assets would allow me to live on about $4,000 per month for the rest of my life. If I sold my condo, that number would climb to $5,000 per month.

And if I chose to spend $2,000 per month, which was the idea that created such a fuss last week? According to FIRECalc, my money will probably never run out! And, in fact, because of the extraordinary power of compounding, my savings will continue to grow forever.

The Bottom Line

Last week’s discussion was fascinating. If I were to draw down my savings in one fell swoop in order to buy a car or to purchase a house, I doubt anyone would object to my actions. After all, that’s how we think savings should be spent. But because I’m choosing instead to use my savings to fund travel and to buy time while I look for additional ways to make income, some people think I’m being foolish.

I suspect that even after this long discussion of saving and retirement, there will still be folks who believe it’s irresponsible for me (or anyone else, for that matter) to draw down savings for this sort of thing. If that’s you, tell us what you find objectionable. Under what conditions do you believe it’s okay to draw down savings? Does it matter which phase of personal finance you’ve reached? How do you decide when it’s okay to use the money you’ve saved to do the things you want to do?

Source: getrichslowly.org

Apache is functioning normally

June 2, 2023 by Brett Tams

This is the second post from Hilary Stockton, who is the founder of TravelSort, which helps savvy travelers earn millions of miles without flying, redeem them for first-class flights, and stay in luxury hotels at wholesale prices. Follow her on Twitter @TravelSort.

I often get asked about the impact on one’s credit score of churning or signing up for multiple rewards credit cards, especially by those new to earning a million or more frequent flyer miles and points via credit cards. It’s definitely important to protect your credit score, and no one should sign up for a slew of new credit cards without taking the time to understand how your credit score works and whether you should be applying for new credit cards at all.

1. Only sign up for new credit cards if:

You don’t have any credit card or other high-interest debt
You always pay your credit card bill off in full every statement
You have a steady income
You don’t plan to apply for a mortgage, refinancing, student loan or other major loan within the next year or so
You aren’t tempted to spend more by having more credit cards

If you do have any credit card or other high-interest debt, paying that off is far more important than earning miles, points, or any other kind of credit card reward. You also shouldn’t apply for a number of new credit cards if you plan to get a mortgage, refinancing or other major loan in the next year or so, because you want to ensure you’re offered the best possible interest rate.

2. Have a FICO credit score range 720 or above

FICO scores from the three credit bureaus (Equifax, Experian and Transunion) range from 300 to 850. You’ll need a credit score of at least 710 to apply for rewards credit cards, and preferably 720 or higher.

3. Get a free copy of your credit report

You’re entitled to a free copy of your credit report every year, which you should check to ensure there are no inaccuracies. If there are, you should dispute them, since they’re likely negatively impacting your score and your ability to not only be approved for the best travel rewards credit cards but also being able to secure the best possible interest rate for loans.

4. Know the difference between FAKO and FICO

Unfortunately, there are a lot of places offering to sell you your credit score that are completely worthless, because the score they’re providing isn’t the one that’s actually being used when determining whether to approve you for a new credit card or loan. These fake credit scores have been nicknamed “FAKO.” Even the credit bureaus themselves sell FAKO, so as not to have to pay to FICO to provide your actual FICO score. See more about this at Credit Score: FICO or FAKO?

5. Understand the factors influencing your credit score

Your FICO credit score is determined by these factors:

35 percent is payment history: If you always pay on time, don’t carry any credit card balances and have no delinquent accounts, bankruptcies or similar against you, you’re fine. But make sure you continue to monitor your credit report to guard against inaccuracies.
30 percent is credit utilization: This factor looks at the percentage of your credit line that you’re using. So, for example, if you have a $10,000 credit line on a card, you don’t want to maxing it out every month; in fact, you should ideally only be using a small percentage (under 10 percent) of your credit line. If you have a major purchase, pay it off immediately rather than waiting until the payment due date.
15 percent is length of credit history: Just as the description implies, this factor measures your average age of accounts.
10 percent is types of credit used: This factor looks at the various types of credit you use, such as home mortgage payments, car payments and credit card payments. It also helps explain why, frustratingly, some folks who rent yet own their own car and have never missed a credit card payment can have a lower credit score than a much more indebted homeowner with a leased car who is nevertheless making payments in full and on time.
10 percent is new credit: This factor accounts for the hard pulls or inquiries that result from applying for new credit, such as a mortgage, car loan, student loan, and new credit cards. Each new hard pull does knock a few points off your score, although in most cases your score recovers within 90 days to six months.

6. Keep utilization low on personal credit cards

Due to how important credit utilization is in calculating your credit score, I always recommend you keep your credit utilization as low as possible on your personal cards:

Pay off major purchases right after they’re incurred, even before your statement close.
If you incur business expenses, ensure they go on a business credit card or charge card. Business credit card utilization is NOT reported to the credit bureaus.

7. Apply for new credit cards on the same day, as close in time as possible

The reason most serious credit card churners apply for multiple credit cards simultaneously, or as close in time as possible on the same day, is two-fold:

By not applying for any credit cards for a few months you can avoid being rejected for “too many recent credit inquiries.”
If you’re applying for two or three personal cards from the same bank, your hard pulls may be merged into one, reducing the impact on your credit score.

8. Don’t close your oldest credit cards

As mentioned above, credit history accounts for about 10 percent of your FICO score calculation. That’s why you want to always keep at least one or two credit cards that you never close. Make sure they’re no annual fee cards, and preferably a no annual fee card that still earns rewards.

9. Avoid closing a credit card without first transferring the credit line to another open card

Be careful when closing credit cards that you don’t lose the credit line. Opening new credit cards can actually help your credit score over the long term if it increases your total amount of credit relative to your utilization. So, when you do decide to close a credit card, ask the representative to transfer the credit line to one of your other credit cards from the same bank.

10. Stop applying for new credit cards about one year before applying for a mortgage or major loan

As I mentioned in the first tip, it’s key to not let lucrative credit card rewards blind you to the importance of securing the lowest possible interest rate for a mortgage or other major loan. Stop applying for new credit cards about one year before you apply for a major loan, continue to always pay your balance off in full every statement, and aim to keep your credit utilization at 10 percent or lower for all your personal credit cards.

Source: getrichslowly.org

Apache is functioning normally

June 2, 2023 by Brett Tams

Eligible Discover cardholders will save at the pump this summer and when they make purchases without swiping a card.

Gas stations (including public electric vehicle (EV) charging stations).
Digital wallets.

While gas stations return as a Discover bonus category for the 10th consecutive year, digital wallet payments like Apple Pay and Samsung Pay are making their second appearance. Be sure to add your eligible Discover card as the default payment method in your digital wallet so you don’t miss out on those extra rewards. Note that using digital wallets to make purchases at gas stations will earn only a total of 5% back (up to the combined spending cap).

Discover bonus rewards categories for 2023
Q1 (Jan. 1–March 31)	Grocery stores*. Drugstores. Select streaming services.
Q2 (April 1–June 30)	Restaurants. Wholesale clubs.
Q3 (July 1–Sept. 30)	Gas stations. Digital wallets.
Q4 (Oct. 1–Dec. 31)	TBD (In 2022: Amazon.com; digital wallets).
*The grocery stores category does not include grocery purchases at Walmart or Target or at other superstores or wholesale clubs.

🤓Nerdy Tip

For the first time in the past five years, Discover has elected not to release its entire 5% bonus calendar all at once in January, meaning cardholders must wait for categories to be revealed quarterly. The release of the full year’s bonus calendar had been a distinctive feature, making it easier for cardholders to time their purchases. But this move puts Discover in line with other 5% rotating-bonus-category cards, like the Chase Freedom Flex℠.

Bonus categories can be activated online at Discover.com, through the mobile app or by calling 800-347-2683. Bonus rewards will not be applied retroactively, and only qualifying purchases made after activation will earn 5% back.

The gas station category includes purchases inside or at the pump at standalone gas stations but may exclude stations affiliated with supermarkets and wholesale clubs. Public EV charging stations are included.

You’ll also earn 5% back when you use a digital wallet like Apple Pay or Google Pay to check out online or in store with your smartphone, tablet or wearable.

Cash back may be redeemed for a statement credit, direct deposit, gift card or charitable donation. Discover’s Pay With Cashback Bonus program also allows cardholders to use rewards to pay for merchandise with select merchants.

Source: nerdwallet.com

Apache is functioning normally

June 2, 2023 by Brett Tams

The Offer

Direct link to offer

Sign up for the AAdvantage Aviator Red World Elite MasterCard and receive a signup bonus of 70,000 AAdvantage miles after you make your first purchase in the first 90 days and pay the $99 annual fee

Card Details

No foreign transaction fee
Annual fee of $99 is not waived the first year
First checked bag free, for the primary cardmember and up to 4 companions on eligible bags when traveling on domestic itineraries operated by American Airlines
Group 5 boarding, for the primary cardmember on domestic itineraries operated by American Airlines
25% inflight savings on food, beverages, and headsets on American Airlines-operated flights
Earn 2x miles on all eligible American Airlines purchases
Earn 1x points on all other purchases

Our Verdict

We recently had on-and-off a 60,000 offer with annual fee waived. This 70,000 offer without the fee waiver will be a better deal for some people. This is probably the best offer on a card with no minimum spend.

We’ll be adding it to our best credit card bonus list. Read through these things you should know about Barclaycard credit cards before asking any basic questions in the comments.

Source: doctorofcredit.com

Apache is functioning normally

June 1, 2023 by Brett Tams

You must identify and understand your money attitude before you can make any financial changes. Otherwise, you are destined to make the same mistakes time and time again.

There is a say “Attitude is everything.” I honestly believe that. Your attitude towards every aspect of your life plays a vital role in how you think and act. But, did you know that your attitude can also affect the way you handle money?

Your money attitude is often the reason why you spend too much, are in debt or fear your finances. But, that doesn’t have to mean you can’t make a change.

Changing your financial outlook begins with your money attitude. If you don’t first get to the root of your problem, you will be destined to make the same mistakes time and time again.

WHAT IS YOUR MONEY ATTITUDE?

There are four different money attitudes with which you may identify. And, it is possible that you fall under more than one. However, when you ask yourself these questions, you should lean more towards one than the other. Read these below to figure out which one you to which you relate.

You can use a checklist to help you better identify your attitude when it comes to your finances. They will help you make the changes necessary to take control of your money.

ADORING

If you adore money, it means you love to spend it. In many cases, you buy things (often on credit) just because you enjoy shopping. You don’t worry about the fact that you must pay for it later. You look at the credit card bill and focus only on the minimum payment.

Simply put, you love to spend money. That’s it.

ENTITLED

This attitude can is best described as “keeping up with the Joneses.” However, did you know that in all likelihood, the Joneses are up to their eyeballs in debt? Why would you want to keep up with someone who lives their life that way?

The truth is, the Joneses are showing you what you want to see. For all you know, they fight over money every night. Their kids may resent their parents for pushing them too hard. You can’t judge a book by its cover, so don’t hold yourself to an idea about which you know very little.

AVOIDANCE

If you feel you don’t deserve money, then this money attitude is yours. It isn’t even just a feeling of not deserving money. You may also feel anxious or stressed at the mere thought of money. You don’t handle it well.

Avoidance is one of the most difficult attitudes to change. That doesn’t mean it is impossible. It means that you may have to work a bit harder to make it happen.

CAUTIOUS

You might be careful with your money. Some may call you frugal. Others may call you a miser. Whatever the name, you need to learn to let go once in a while.

This cautious person refuses to spend money. They are afraid to let it go and fear that it will be gone, never to return. When you are overly cautious with money, you risk opportunities.

CHANGE YOUR MONEY ATTITUDE

Now that you know which attitude you have, now is the time to make changes. It is something only you can do. No one can do it for you.

IF YOU ARE ADORING

The first step in overcoming your love of money is to cut off its head. That means drastic changes. You should cut up your credit cards. If they prompt you to spend without limit, then this is the first change you need to make.

If you like to spend your free time in the store, you’ll need to find new hobbies. Find something to do with the time you would usually spend walking the aisles hunting for the treasures you believe you need.

The final thing to do is to make a list of everything you love in this life. Don’t leave anything off of your list. Got it? Good. Now, go through the list and cross off everything that does not love you in return. You’ll notice that what remains are the people in your life (and maybe a pet). Those other things? They’re just things. They do not matter.

IF YOU ARE ENTITLED

To start, you have to determine why you feel the need to keep up with them. There could be a reason why you feel this way.

You may hate your job and use these things to compensate. Low self-worth is another reason you buy items as you want to impress your friends. It could even be that you had nothing growing up and feel you are due. You owe it to that poor child.

If you use money to keep up with another individual, take a look at their life and determine what part of it intrigues you. He may have an amazing job that you would love to have; so maybe you should find one that makes you equally as happy.

You are only entitled to be happy and need to look at your life in that way. Things won’t make you happy.

IF YOU AVOID MONEY

If you don’t feel you deserve money, you need to ask yourself one question: Why not? It could be due to things you’ve done in your past.

Whatever the reason, you need to know that everyone deserves to make money. You need it to survive. You don’t need more than you can handle, but you do need enough to support yourself and your family.

The truth is, avoiding your finances doesn’t make money issues go away. In fact, it makes them worse. For example, if you found a lump on your neck, would you avoid it and hope it went away? No. You’d go to the doctor to figure out what it was, and then do whatever is needed to remove or treat it.

IF YOU ARE CAUTIOUS

When you refuse to spend money, you risk missing out on opportunities. What about that once-in-a-lifetime trip? You could miss the chance to go to dinner to meet the person of your dreams or make a key career connection. You don’t want to live your life with regrets.

I’m not saying to go crazy. I’m telling you that you need to give yourself permission to spend money.

When you set up your budget, just add an item that gives you permission to spend. It will be OK. I promise.

IS YOUR MONEY ATTITUDE THAT IMPORTANT?

I have heard many people tell me that this really doesn’t matter as it doesn’t have that much bearing on your finances. The truth is that it can control the way you look at money – even if you aren’t aware of it.

In 2002, when I declared bankruptcy, I never took the time to understand what lead me down that path. Let me rephrase that. I never took the time to understand why I spent so much money and racked up that much debt. I walked out of the courtroom that day, thinking I’d never make any mistakes with money again. Boy, did I get that wrong!!

Around 18 months after that happened, I married the love of my life. We didn’t go crazy spending money, but we did accumulate debt. Here I was, a couple of years removed from the bankruptcy and debt was building back up again. Are you kidding me?!?!?

When my husband and I decided that we wanted to work ourselves out of debt, I felt the same way I had years earlier. I came to realize that I simply put a Band-Aid on an open wound when I declared bankruptcy. I never took the time to understand why I did this to myself.

It took a lot of soul searching and understanding, but I figured it out. I had a mix of entitled and adoring attitudes. I never had money growing up. When I became an adult, I thought I owed my younger self the opportunity to experience these things. This, in turn, led me to adore money. I loved spending and I loved getting things.

This time around, I did not have debt due to excessive purchases. However, we had still overspent and were struggling to make ends meet. When we both committed to making the change, we talked about money and the way it made us felt.

Together, I helped him with his money avoidance, and he helped me with my entitled attitudes. It’s been more than seven years now that we’ve been debt free. It has a lot to do with understanding our money attitudes.

CAN YOU REALLY CHANGE YOUR MONEY ATTITUDE?

It will take some time to change the way you look at money and your money attitude. I promise that it won’t happen in one day. It may not even change next week. You may find it’s still the same three months from now.

The point is that you can now recognize your attitude and work with it. You’ll no longer fight your feelings about money. Instead, understanding the way you look at money – and the problems it creates – is a good thing.

Change cannot begin until you know what you need to change.No matter your attitude toward money, there are things that everyone needs to do:

Determine your financial goals. Decide what’s important to you — and only you. Not the Joneses, not your childhood self. Once you know where you want to go, you can create a plan to turn your dreams and goals into reality.
Figure out why you’re being held back. You have to understand why you feel the way you do about money. That allows you to move onto the final step.
Make the changes needed to allow you to move forward. If you don’t change the way you look at money, you’ll never succeed in your financial reboot. You might have the right budget and financial plan, but if you don’t change how you deal with money on a fundamental level, you’ll continue to have financial failures over and over again.

Now that you know your money attitude and are ready to change it, you’re ready to move on to the fun part: the action plan for your budget, your debt, and beyond!

If you want to really take control of your finances, check out the Financial Reboot ebook. It is a guide to help you not only identify your money attitude but create a budget, control your spending and change your financial future.

Source: pennypinchinmom.com

Apache is functioning normally

June 1, 2023 by Brett Tams

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America has lots of old houses. According to the National Association of Home Builders, the average owner-occupied structure is about 40 years old in 2016. For reference, that’s higher than the U.S. median age of 38.8.

In some parts of the country, the housing stock is far older. On average, owner-occupied housing in New York, Massachusetts, and Pennsylvania is more than 50 years old. Though there are exceptions to the rule, homes tend to be older throughout the Northeast and Midwest and in urban cores across the country.

By contrast, newer homes and bona fide new construction homes are more common in Southern and Western cities in general, and in suburban and exurban communities across the country. For example, the median age of owner-occupied homes in Nevada is barely 20 years old.

What Counts As an Older Home?

As a general rule of thumb, homes built after 1990 are considered newer, and homes built before 1940 are considered old or antique. But housing age is a subjective condition that turns on numerous factors, including construction style and quality, local climate and geology, and work done over the life of the home.

The most important factors include:

Construction style and quality. Prefabricated and mobile homes are generally constructed to lower quality standards than solidly built Tudors, Craftsmans, or Colonials. Mass-produced houses, which tend to be newer, can have quality issues as well. However, custom-built new homes may be constructed even more solidly and durably than older homes. Ultimately, construction quality comes down to the quality of the materials used and the skill and diligence of the builders.
Climate and geology. Climate — particularly humidity, temperature extremes, and storms — accelerate the aging process. Homes in the eastern half of the U.S. are more likely to experience problems attributable to these issues, such as roof damage and basement or foundation moisture, than homes in coastal California cities like San Francisco and Los Angeles. Geological factors that can accelerate the aging process include seismic activity, sinkholes and limestone geology, and high water tables.
Renovations. In some cases, antique homes are updated so dramatically that it’s difficult to define their age any longer. For instance, my wife’s parents owned a farmhouse built in the 1880s. But successive owners thoroughly updated, modernized, and expanded the house over the years. In fact, the only original components were an old cinder block foundation and basement (now completely encased by a newer, expanded foundation and basement) and a few structural supports rising above the original footprint. Most other components dated from the 1970s or later. So is it really fair to say the house was an original 1880s farmhouse?

Common Older Home Problems & Potential Solutions

Even well-maintained older homes can present problems that owners of newer homes simply don’t need to deal with. These include health hazards such as asbestos and mold, serious pest problems that can lead to structural issues, and issues with utility systems like wiring and plumbing.

1. Lead and Asbestos

Lead and asbestos are two hazardous materials that were used in residential applications until relatively recently.

Lead is a neurotoxic metal that’s particularly harmful to children. It’s commonly found in exterior and interior paint made before 1978. It’s also found in substantial quantities in pre-World War II plumbing systems and in smaller quantities in water pipes installed before the mid-1980s.

Asbestos is a naturally occurring fibrous material that causes a serious form of lung cancer and other respiratory problems. It was a ubiquitous insulation and fireproofing material until the mid-1970s. Successive EPA actions banned most asbestos applications by the late 1980s, but the agency never required building owners to remove existing asbestos products. Accordingly, many older crawlspaces, walls, and pipes still contain asbestos insulation.

If you determine that you need professional help to deal with either of these environmental issues, use a resource like HomeAdvisor to find reputable, pre-vetted contractors in your area.

Possible Solutions: Lead Paint

When you buy a home built before 1978, you’re usually required to affirm your understanding that the home may contain lead paint. If you’re uncomfortable with the idea of coexisting with lead paint, invest in professional lead paint removal services.

According to HouseLogic, professional removal of lead paint costs $8 to $15 per square foot, or about $10,000 for a typical whole-house project. The medical literature isn’t conclusive on the matter, and some housing experts say it’s fine to leave lead in place as long as it’s not disturbed. But removal is recommended for homeowners with small children.

Possible Solutions: Lead Plumbing

If your home’s plumbing system is very old, it could still contain measurable quantities of lead. The most cost-effective way to deal with this is a water filtration system, either for the entire house ($1,000 to $3,000, depending on house size and system quality) or the kitchen tap ($200 to $1,000, depending on brand and quality).

Replacing the home’s entire piping system is the only way to ensure totally lead-free water, but doing so can cost upwards of $10,000.

If your home is older but has had significant plumbing upgrades — plastic-looking or shiny copper pipes being giveaways — then the only remaining lead elements could be in the service line branching out from the water main under your street. That bad news is that replacing a service line means digging up your front yard or sidewalk (or both) at significant expense: anywhere from $3,000 to $5,000 for a short line to $15,000 or more for a longer line.

Fortunately, more and more states and cities subsidize lead service line replacement costs, so check with your local water department or state health department before paying out of pocket.

Possible Solutions: Asbestos

Though direct, prolonged exposure to asbestos is a serious health hazard, insulation tucked away in inaccessible walls is not likely to pose a direct risk. However, removal is recommended if you plan on knocking down walls, expanding your home’s footprint, or attempting other expansive projects likely to uncover asbestos-laden material.

Asbestos removal costs vary greatly by project size and location. The general range is $5 to $20 per square or linear foot, which doesn’t really narrow it down. Think of it this way: a single pipe or wall runs in the high three- or low four-figure range, while a whole-house project costs $10,000 to $30,000, depending how extensive the asbestos is.

2. Termite Damage

Over time, termites can devastate homes’ wooden and wood-like components, including floors, structural supports, and drywall. The problem is particularly acute in the southern half of the country, where termites are active for most or all of the year. Older homes are more likely to have active termite infestations or preexisting termite damage due to compromised foundations or drywall.

Depending on the length and severity of the infestation, termite damage repairs can range from cosmetic fixes (such as replacing damaged floorboards) that cost a few hundred dollars to structural remediation projects that can cost $10,000 or more.

Signs of termite damage include:

Sagging or buckling floors
Pinpoint holes in drywall
Hollow-sounding wood supports or floorboards
Bubbling or peeling paint

Possible Solutions: Prevention

Prevention is the cheapest and least invasive termite solution:

Remove all loose wood vectors — including shrubbery, mulch, building materials, and stacked firewood — from contact with the lowermost portion of your house.
Prevent water from pooling near or against your home’s foundation by filling in low ground or installing a surface drainage system.
Use treated lumber (toxic to termites) for decks and other wooden structures attached to your house.
Remove dead stumps and root systems from areas near the house.
Seal visible foundation cracks, which provide ready entry for termites.

Your prevention costs depend on what’s necessary. They range from basically free (if you don’t account for the value of your time) for removing shrubbery and mulch, to a few thousand dollars for termite-proof decks or elaborate drainage systems.

Possible Solutions: Ongoing Infestations

For infestations in progress, hire a pest control professional to shrink or eliminate the colony. Exterminators typically charge $3 to $20 per linear foot (as measured around the home’s perimeter), according to HomeAdvisor. The average home’s perimeter ranges from 150 to 200 feet, so expect comprehensive treatment to cost anywhere from $450 to $3,200.

Bear in mind that your actual all-in cost will depend on the foundation type, the infestation’s severity, and the treatment type used. Chemical, tenting, and bait treatments tend to be cheaper than heat or fumigation.

If you catch the problem before you buy, perhaps during a professional home inspection (which costs $200 to $500 and is highly advisable before you purchase a home anyway), get a repair estimate from a general contractor. Then negotiate with the seller to cover part or all of the repair costs, as well as the cost of professional pest control services if the infestation is still in progress.

3. Mold and Mildew Damage

Over time, homes exposed to excessive moisture often develop mold and mildew problems. Though particularly common in basements and bathrooms of wet-climate homes, moisture-related microorganism growth can occur anywhere. The problem is more likely to occur in old homes because moisture more readily seeps through cracked foundations and leaky pipes. However, since infestations can start inside walls, it’s possible to walk through a mold-infested older home for sale without realizing there’s a problem.

While small amounts of indoor mold growth are permissible and even expected, uncontrolled growth can worsen allergies and other respiratory problems (such as asthma) even in healthy children and adults. More serious infections can develop in the very young, the very old, and those with compromised immune systems.

Also, mold eats away at its host surfaces, particularly wood, drywall, grout, and other porous or semiporous substances. Unchecked mold infestations can cause structural problems and render a home temporarily or permanently uninhabitable.

Possible Solutions

Your mold and mildew solution will depend on the severity of the problem:

Prevention: As with termite infestations, the best solution to mold and mildew is prevention. Buying a dehumidifier (anywhere from $100 to $500 new, plus $30 to $100 in annual electricity costs) for your basement or crawlspace can work wonders. Ensuring proper ventilation through a combination of floor or ceiling fans and open windows during dry, mild weather can help on higher floors.
Minor Infestations: You can treat small mold infestations, such as on an isolated area of a basement or bathroom wall, with store-bought mold spray, abrasive sponges or brushes, kitchen gloves, and lots of elbow grease.
Major Infestations.: For larger infestations, the spray-and-scrub approach is impractical. According to HGTV, whole-home mold remediation can cost as much as $5,000 and possibly more if the infestation affects hard-to-reach areas like the attic, basement crawl spaces, or inside the walls. To reduce remediation costs, make sure your homeowners insurance policy covers mold cleanup before you buy an older home, and consider switching policies (using a comparison engine like PolicyGenius to save time) if your policy doesn’t.

4. Plumbing Problems

The biggest danger of an old or substandard plumbing system is the possibility of a pipe failure that floods the home or causes major water damage in the walls and floors. A serious failure can temporarily render the home uninhabitable and cost tens of thousands of dollars to clean up, though the damage is often covered by homeowners insurance. It can also cause longer-term problems, such as mold infestations.

Before purchasing an older home, ask the seller how old the plumbing system is and about the material used in supply (fresh water) and drainage pipes. Whereas brass and copper pipes typically last 50 years or more, steel pipes can wear out after as little as 20, according to HouseLogic. Pipes made from PEX, an increasingly common plastic material in fresh water piping, typically last 40 or 50 years.

Special care is warranted if your drainage pipes are made of polybutylene, a grayish, flexible plastic material used from the 1970s to the 1990s. Chlorine, which is found in bleach and other household cleaners, corrodes polybutylene pipes over time and can lead to spontaneous failure.

Root damage is another old home plumbing issue that’s particularly common in heavily vegetated neighborhoods — which also tend to be older and thus have more old houses. Over time, tree roots work their way into older drainage pipes under or outside the home’s foundation, busting through pipe joints and tapping the year-round supply of nutrient-rich water flowing within.

Without proper maintenance, this leads to clogs and backups that can interrupt washing routines and cause water damage in low-lying parts of the house. Remember that tree roots can travel a long way underground. There may be no obvious culprit near your main drain outlet, but that mature tree across the street or around the side of your house could be responsible.

Possible Solutions: Pipes

If you’re eying a home with polybutylene pipes, ask the seller to install (and pay for) new pipes or knock the replacement costs off the purchase price. If they refuse, consider whether you can put up with the inconvenience and cost of replacing the pipes yourself, which you should do as soon as your budget allows to minimize failure risk.

For other common pipe materials, you simply need to ascertain the system’s age and target a date several years before the end of its life expectancy. If you plan on still owning the house when that date arrives, begin saving for a full system replacement now, keeping in mind the effects of inflation.

In a 1,500 square-foot house with two bathrooms, whole-house pipe replacement costs range from $4,000 to $10,000, according to HouseLogic. The exact amount depends on the pipe material and number of water fixtures. Larger homes and homes with more bathrooms cost more than $10,000, so budget accordingly.

Possible Solutions: Root Damage

Root damage fixes can be even costlier. Replacing a root-infested main drain pipe typically requires excavation, a notorious cost multiplier. Expect to pay up to $25,000 if the repair crew needs to dig under the slab or dig a trench in your front yard. Other factors include the length of the pipe and required depth of excavation.

Root-and-line jobs, which remove existing roots and install impermeable liners that prevent further intrusion, are nearly as expensive: $5,000 to $15,000, on average.

Periodic root removals are much easier on the wallet: anywhere from a couple hundred bucks to around $1,000, depending on the severity of the problem. But they need to be repeated every couple years, and even then, the problem slowly worsens over time.

5. Foundation or Structural Problems

Over time, nature catches up with even the most solidly built homes. Older homes are prone to a variety of foundation and structural problems, such as:

Major cracks or unevenness in the slab or perimeter foundation wall
Corrosion, dry rot, or moisture damage in pilings or concrete foundation supports
Damaged piers (support footings)
Dry rot or moisture damage in above-ground studs

These issues are particularly common, and tend to occur sooner, in regions with abundant soil moisture, unstable bedrock, seismic activity, and other perils. Though alert homeowners generally catch structural problems before they render homes uninhabitable, remediation is costly and inconvenient.

Signs of foundation or structural problems include:

Doors that jam or fail to latch (though this can be a sign of localized moisture damage too)
Visible diagonal wall cracks that grow over time
Visible cracks wider than 1/8″ in basement or crawlspace walls
Cracked tile or concrete floors
Persistently stuck windows (also a possible sign of localized moisture damage)
Floors that are bowed or have a clear slope in one direction
Unexplained water in your basement or sealed crawlspace, especially after heavy rain or snowmelt

Possible Solutions

Any apparent foundation or structural issue requires an expert opinion from a structural engineer ($500, on average). Addressing a modest foundation issue, such as a crack in the perimeter wall, can cost a few hundred dollars. More serious problems, such as uneven soil that requires support piers underneath the foundation, can cost $10,000 or more. And in seismically active areas, foundation anchor bolts are required or recommended — at a cost of at least $1,500 apiece. Many homeowners insurance policies don’t cover these costs.

If the foundation requires extensive repair or wholesale replacement, costs can quickly escalate. Expect to pay a minimum of $25,000 and as much as $100,000 to raise your home and replace the foundation, per HomeAdvisor. Again, homeowners insurance often doesn’t cover these costs. If you’re seriously thinking about buying an older home with obvious foundation damage, factor repair costs into your offer price or ask the seller to address the problems before closing.

Also, note that the cost of repairing secondary issues related to foundation damage (such as damaged upper-level flooring, walls, and doors) varies greatly and can add thousands or tens of thousands of dollars to your project. So the total bill to make your home “like new” after a full foundation replacement — assuming that’s even possible — could well exceed $100,000.

6. Radon

Radon is a radioactive gas that occurs naturally in certain types of bedrock. An Environmental Protection Agency shows elevated radon potential across broad swathes of the Northeast, Midsouth, Midwest, and Intermountain West, but it can occur anywhere.

Radon enters homes through cracks in the foundation perimeter and basement walls, which are more common in older homes. The gas then circulates throughout poorly ventilated houses over time. Though it’s not acutely toxic and has little impacton health when encountered intermittently and in small doses, radon is the leading cause of lung cancer for nonsmokers. Exposure over the generally accepted safe concentration is not recommended for long periods.

Possible Solutions

Radon mitigation typically involves capturing gas in the soil or rock surrounding the foundation and piping it up to a rooftop vent, then sealing foundation cracks to prevent further leakage. It can also involve installing one or more depressurization vents outside the house (venting radon before it reaches the foundation), as well as negative-pressure fans that essentially blow radon from the basement or lowest level back into the soil.

According to Kansas State University, the average cost of a radon mitigation system is about $1,200. But the actual cost can vary between a few hundred dollars to more than $3,000, depending on the home’s size, foundation type, and the problem’s severity.

Amazon sells radon testing kits for less than $20, though you may need to pay to ship the kit to a certified lab for analysis. Still, your all-in cost should be under $50, making for an inexpensive way to see if you need to call in the professionals.

7. Roof Problems

Older homes tend to have older, possibly deteriorating roofs. This presents numerous problems, including pest infestations, interior water damage, and less-effective insulation. Problems stemming from a compromised roof, particularly once interior leaks begin occurring regularly, can cost tens of thousands of dollars to fix and may not be covered by homeowners insurance.

Warning signs of potential roof issues include:

Missing or damaged shingles
Crumbling roof cement
Bowed or sagging gutters
Persistent moisture in the attic
Evidence of water damage in the upper floors
Critters in the attic or upper crawlspaces

Possible Solutions

Before you buy an older home, assess the roof’s age and condition to the best of your ability. Unless the seller put the roof on, they might not be aware of when it was installed, so consider hiring a roof inspector ($100 to $800) if there are obvious signs of wear.

Next, consider the likely lifespan of your current roof and its potential replacement:

Shingles. On sloping roofs, asphalt shingles typically remain in good shape for 15 to 20 years. Treated wood shingles last 20 to 30 years.
Metal. Metal roofs are typically warranted for 20 to 40 years, though they often last longer and require little maintenance.
Tile and stone. Tile and stone roofs can last up to 100 years with proper installation and maintenance.

Within these categories, construction quality matters. For example, on sloping shingle roofs, a rubber or thermoplastic coating layer can mean the difference between a roof that goes bust at 15 years and one that keeps on chugging well beyond that. Of course, no matter the material, a roof’s actual lifespan depends on installation quality, prior maintenance record, roof slope, and local climate.

Replacement costs vary greatly by material, but you can expect to spend anywhere from $5,000 to more than $15,000 to replace an entire asphalt shingle roof. Slate (stone) roofs cost $20,000 to $40,000 to replace, on average. In both cases, inflation has done a number on project budgets due to surging material costs.

If the roof’s problems are confined to a small area and the roof isn’t near the end of its predicted lifespan, you can save money by replacing or repairing only the damaged section. If the roof is older or widely damaged, it makes long-term financial sense to replace the entire thing, or at least one whole side.

8. Inefficient Windows

Old homes are more likely to have older, inefficient windows. The primary downside of inefficient windows is higher electricity bills because the home’s climate control system has to work harder to compensate for leaks.

According to the Federal Government’s ENERGY STAR program, installing the most efficient class of windows in your entire home can reduce your annual electric bill by as much as $600, depending on the size of your home and where you live. You may also be eligible to claim federal tax credits under the Inflation Reduction Act, up to $1,200 per project. This credit must be shared with other types of projects, such as wall and attic insulation, if you’re doing more than one in a single tax year).

Possible Solutions

Address inefficient windows temporarily with passive heating and cooling methods, such as shutting windows and blinds on hot days and opening them at night, and by using plastic film ($10 to $20, on average) to seal leaks during the winter. Sealing cracks around your windows and reinforcing your home’s insulation, a more permanent solution, can cost upward of $1,000.

The ultimate leaky-windows solution is simply to replace old windows with more efficient ones. While judicious window replacement is often cited as one of the top home improvement projects to reduce long-term homeownership costs, bear in mind that super-efficient windows are costly. Installing them in your entire house could set you back $10,000 or more, meaning you might never earn back your investment even after accounting for the tax credits and energy savings.

9. Inadequate or Unsafe Electrical Systems

Electrical problems fall into two categories: convenience and safety.

First, convenience: Unless their electrical systems have been updated, older homes lack sufficient numbers of electrical outlets to address our collective addiction to electronic devices. They might also not have enough power supply to handle energy-hungry modern appliances, such as whole-house heat pumps, induction stoves, and electric vehicle chargers.

Second, and even more importantly, safety: The lifespan of electrical wiring itself is limited by the lifespan of the wire’s insulation. Wiring installed before 1960 lasts roughly 70 years, while newer wiring is estimated to last at least 100 years. Once the insulation deteriorates to the point that the actual wire is exposed, the risk of electrical fire, shocks, short circuits, and localized (single- or multiroom) power failures increases dramatically. Don’t let your home’s wiring reach that point.

Electrical service panels and circuit breakers are also prone to deterioration. Service panels last 60 or 70 years, while breakers last 30 or 40. Failing panels and breakers can cause shock, power failure, fire, and other dangers.

Note that water damage, fire, pest infestation, and other unusual events can harm some or all of an electrical system’s components, necessitating repair or replacement long before they reach their life expectancy.

Possible Solutions

Electrical work is dangerous and confusing for novices, so avoid taking the DIY route with your electrical project. Instead, hire a licensed electrician.

A qualified electrician typically takes 30 to 60 minutes to install a single outlet, at a cost of anywhere from about $100 to about $500, but the average cost is on the lower side of this range. If a new circuit is required, the cost will be higher, though not excessively so.

A new service panel starts at about $900, but a higher-amp option (which may be required for high-power appliances) costs more: up to $2,500 for new 200-amp service and up to $4,000 for new 400-amp service.

10. Failing or Inefficient Mechanicals and Appliances

Old homes are more likely to have old mechanical equipment, such as water heaters, furnaces, and air conditioning units, as well as older household appliances. Mechanical and appliance lifespan varies by item, brand, and workload. On average, expect major mechanical equipment and appliances to age as follows:

Water heater: 10 to 15 years
Furnace: 15 to 30 years
Central air conditioning system: 15 to 25 years
Refrigerator: 15 to 20 years
Washers and dryer: 10 to 15 years

Equipment near the end of its useful life is more prone to failure, raising the possibility of an inconvenient or dangerous situation — such as the heat going out in the dead of winter or an electrical fire — that needs to be addressed immediately. Moreover, older equipment is usually less energy-efficient, resulting in ballooning utility costs.

Possible Solutions

Older homes with recently updated mechanical equipment and appliances typically fetch a premium. If you’re fine with buying older mechanicals and appliances, research each unit and determine about how much longer it can be expected to last. Draw up a replacement schedule commensurate with your time horizon and begin saving for the most pressing projects. If your furnace has 15 years left and you plan on selling in five, replacement isn’t necessary.

Mechanical and appliance replacement costs vary by item and brand.

Natural gas furnaces cost about $3,000 to $7,000, on average, with existing ductwork. Heat pumps may cost less if they can be tied into existing ductwork. Ductless heat pumps typically cost $5,000 or more per zone, though you may get a deal on systems with three or more zones. Heat pumps have lower operating costs because they’re much more efficient than either gas or traditional electric heaters, however.

Efficient tankless water heaters can cost as much as $6,000, though the average installation cost (per Fixr) is closer to $3,000. Traditional gas or electric tank heaters cost even less, in the $1,000 to $2,500 range. A heat pump water heater costs $2,000 to $5,000, but the lifetime operating costs are lower than gas or traditional electric.

Thanks to the Inflation Reduction Act, your heat pump purchase may qualify for an impressive federal tax credit — up to $2,000 or 30% of the total project cost. State tax credits and utility rebates may stack on top of this incentive, saving you up to $8,000 in some places. So even if the out of pocket cost is a bit higher, your net cost is likely to be lower than a conventional appliance.

If you plan ahead to replace your old water heater or laundry machine, finding room in your household budget won’t be an impossible task. Set up an interest-bearing, FDIC-insured savings or money market account earmarked specifically for the project.

But an unexpected replacement can really set you back, particularly if there’s damage involved. A family friend recently had to replace his old dryer after a massive electrical fire was sparked by faulty wiring and exacerbated by a clogged dryer vent. Including cleanup, the bill came to more than $20,000, though his homeowners insurance policy covered most of the cost.

11. Unhelpful, Unfinished, or Outdated Updates

Older homes typically have more than one previous resident, and sometimes a lot more. All those past homeowners had license to do what they wished with the property.

While many older homes retain the charm and function of their original construction, others have a host of unhelpful or anachronistic updates that detract from the homeowner’s experience and potentially add to the cost of ownership. Particularly costly updates that may need to be rectified shortly after moving in include:

Poorly designed, inadequate, or simply tasteless kitchens
Illegal basement bedrooms (lacking egress windows, for instance)
Incomplete projects, such as a partially finished basement or partially laid patio

Before we bought our current house, my wife and I went to an open house at a 100-year-old home with a half-finished basement, half-finished screen porch, and a literally transparent exterior paint job. The home had been purchased just a few months earlier for far less than the current asking price, suggesting the current owner had attempted to flip the house and had become overwhelmed. Our real estate agent remarked, “It looks like this guy ran out of money and bailed.”

Possible Solutions

As long as they’re not unsafe, you can live with unhelpful or outdated features until you have room in your budget to fix them. The cost of said fixes varies widely. A full kitchen update typically runs north of $20,000, while replacing outdated moldings or rectifying a hideous interior paint job might cost only a few hundred.

Half-finished add-ons, such as the porch at the abandoned flip mentioned above, are another matter. They can be unsafe, particularly for small children, and may provide access points for insects and rodents. Think twice about buying an older home with too many wonky updates or haphazard design touches, as they often disguise bigger problems.

For instance, we found out later that the abandoned flip had serious foundation problems that would cost tens of thousands of dollars to fix. The scale of the foundation issue likely compelled the flipper to walk away from the property before completing the job.

12. Substandard or Unsafe Features

Older homes sometimes have too much charm. Depending on the style, location, and history of a particular house, some original features may be obsolete, not up to current building codes, or actually unsafe. Examples include:

Old laundry chutes
Servants’ staircases
Staircases leading nowhere (commonplace in houses that were once divided into multiple dwelling units)
Steep staircases
Low ceilings
Blocked-off chimneys
Nonworking fireplaces

Our current home is by far the nicest place we’ve ever lived, but it nevertheless has a steep, winding staircase we’d feel uncomfortable allowing a toddler to traverse, as well as an obsolete chimney that’s showing early signs of deterioration.

Possible Solutions

Many jurisdictions are lenient about substandard or against-code features in owner-occupied residences, relative to rental or commercial properties. Accordingly, you likely won’t be required to fix such issues after taking possession of your older home unless they threaten other properties (for example, by directing excessive storm runoff toward neighboring foundations). However, fixing these issues can preserve or increase your home’s value, not to mention enhance the safety and comfort of its occupants.

Some problems have straightforward, affordable solutions. For example, childproofing our steep staircase simply involves installing a latching door or child gate at the entrance. Others, such as a crumbling chimney, require regular upkeep (repairing flashing and any damaged roof materials) that can cost a few hundred dollars per year.

Potential Benefits of Owning an Older Home

You wouldn’t guess it from the litany of potential problems owners of old houses can face, but old-home ownership has its benefits too. Older homes are often conveniently located in established, amenity-rich neighborhoods; inside, they offer abundant charm and equity-building opportunities.

1. Convenient Location

Because most cities grow outward over time, older homes tend to be located closer to employer- and amenity-rich downtown cores. A convenient location offers many time-saving and healthful benefits, such as shorter commutes (and the opportunity to use public transit or commute by bike) and easier shopping trips.

By contrast, newer owner-occupied homes tend to be built where land is cheapest, often on the edges of existing towns and cities. Such places aren’t always convenient.

However, these rules aren’t universal. Big cities have plenty of newly built condos downtown or close by, and many rural homes are quite old.

2. Hard-to-Duplicate Original Features

Though some older homes lack character, many showcase charming, period-specific features that are pleasing to the eye and may increase resale value. For instance, the built-in storage and display cabinets in our older home’s dining room definitely influenced our purchasing decision because it was both aesthetically pleasing and practical. In our region, the only new homes that contain such built-in furnishings were well out of our price range and preferred neighborhood.

3. More Established Neighborhood

In towns and cities, older homes are often located in established neighborhoods with long-term homeowners who care about the area and community, mature landscaping and tree cover, and a general sense of community. Such areas are also more likely to be connected to municipal infrastructure, such as sewer and water systems.

By contrast, less-established neighborhoods tend to have less community engagement, particularly if the homes are very new and most residents are busy professionals without the time to engage their neighbors. Plus, newer subdivisions look bleak until newly planted trees and shrubs fill out.

4. Potential for Better Construction Quality

Depending on the building style and location, an older home may be constructed more solidly and durably than newer homes. This is particularly true for budget-friendly new homes in recent subdivisions, which are typically built by big companies with the ability to cheaply mass-produce the structures.

Then again, some of America’s original suburbs were mass-produced housing tracts built shortly after World War II. When considering any home built to standardized specifications, learn as much as possible about the materials, methods, and labor used by the construction company.

5. More Opportunities to Build Equity

Creative, enterprising, diligent homeowners see opportunity in older homes’ shortcomings. Every poorly designed kitchen, unfinished basement, or non-landscaped yard is a project in waiting. A well-chosen, well-executed renovation or update can boost a home’s appraised value, and its eventual resale value, by more than the project’s cost.

Your budget is likely to limit the scope of your vision, particularly right after you move in. But equity-building projects become more manageable when they’re planned and budgeted for well ahead of time. My wife and I are already kicking around ideas (and saving) for a finished basement and brand-new detached garage, even though we won’t start on either project anytime soon.

Final Word

Even a charming, beautifully staged older home in a convenient, tight-knit neighborhood is likely to have some of the drawbacks mentioned above. If you choose to fix most or all issues as they arise, you’ll likely end up spending tens of thousands of dollars during your time in the home.

Alternatively, if you choose to ignore serious issues or do only the bare minimum to fix them, you’ll likely have to accept a lower sales price or cover the cost of major repairs just before selling. Either way, you could limit or negate the overall return on your real estate investment by purchasing an older home.

That’s not to say that newer homes don’t require major repair and upkeep investments over time. And new homes often come with additional expenses that owners of older homes aren’t likely to face, such as homeowners association fees. Ultimately, it’s more important to choose the home that feels right to you and your family than to obsess over what could go wrong with your new abode.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Apache is functioning normally

June 1, 2023 by Brett Tams

From the Kansas City Chiefs to St. Louis’s Gateway Arch, Missouri has plenty to offer both residents and visitors. As a result, there are plenty of Missouri banks. In fact, it can be tough to narrow down the options.

17 Best Banks in Missouri

From online banking apps to small community banks and large financial institutions, Missouri has a little of everything. Here are some of the best Missouri banks to kick off your search.

1. First Midwest Bank

Founded in Poplar Bluff, First Midwest Bank has branches and ATMs in Poplar Bluff, Columbia, Greenville, Piedmont, Puxico, Van Buren, and Williamsville. Currently, First Midwest is offering $.10 cash back per swipe of your First Midwest Dime-a-Time debit card.

Recently, First Midwest merged with Old National Bank to expand its service area and offerings to Indiana, Illinois, and Kentucky.

Pros:

Cash back with each debit card purchase
No monthly maintenance fees with most checking accounts
Wide variety of account options

Cons:

2. U.S. Bank

Missouri residents looking for a national bank with branches in Missouri might like U.S. Bank. You’ll find branches and ATMs in 25 different states, along with a mobile app that allows you to transfer funds, pay bills with bill pay, and split a check with Zelle.

U.S. Bank’s current special on CDs means you can earn up to 4.75% APY. Small business owners should consider U.S. Bank’s current checking bonus, which offers $500 if you open a new account and deposit $5,000. Deposit $15,000 and earn a $750 bonus.

Pros:

Robust mobile banking features
Up to $750 bonus for business checking account
Wide range of banking services

Cons:

3. Chime

Chime is a mobile banking solution with competitive interest rates on savings accounts. You’ll get fee-free¹ ATM access nationwide at any MoneyPass, Allpoint, and VisaPlus Alliance ATM, as well as access to your direct deposit up to two days early². Electronic deposit customers also qualify for up to $200 in overdraft protection through SpotMe⁵, although Chime charges no fees for overdrafts.

Pros:

No fees on checking account
Up to 2.00% APY³ on savings accounts
No overdraft fees

Cons:

No physical branches
No cash deposit options

4. GO2bank

GO2bank is an online banking solution with a full-featured mobile app and access to free ATM withdrawals and deposits through partners. Your account with GO2bank will include a checking account with no maintenance fees and a high-yield savings account.

If you’re interested in building credit, you can qualify for a GO2bank Secured Visa Credit Card, which reports your on-time payments to credit bureaus and requires no credit check.

Pros:

Fee-free checking account with direct deposit
Up to 4.50% APY on savings accounts
Cash deposits at 90,000+ retail locations nationwide

Cons:

No physical branches
Direct deposit necessary for free checking

5. Commerce Bank

Kansas City residents should consider Commerce Bank, a community bank with locations throughout the area. You’ll also find ATMs and branches throughout Missouri, as well as in 10 other states. You’ll find a wide variety of checking account and loan options, as well as savings accounts and CDs.

Not only will you get in-person customer service at a branch, but you can chat with a live banker at any time in the Commerce Bank CONNECT app. You’ll choose the banker and connect with the same representative every time.

Pros:

Branches and ATMs in 11 states
Free account includes full mobile banking services
Competitive rates on loans

Cons:

No fee-free ATMs outside the service area
Low interest rates on savings accounts and CDs

6. Regions Bank

With branches in Missouri, Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas, Regions Bank is a great option if you travel within the Midwest and Southeast.

Regions Bank offers a variety of banking services, including wealth management services and support for small business owners. With DepositSmart ATMs, you can skip the branch and deposit your funds at an ATM.

Pros:

DepositSmart ATMs let you deposit cash and checks without visiting a branch
Flexible requirements to waive checking account fees
Checking accounts for students and seniors

Cons:

Low rates on savings accounts
No branches or ATMs outside the Midwest and South

7. Axos Bank

If you don’t need a local branch, online banking might be an option. Axos Bank offers online services through its website and mobile banking app. There are multiple checking account options, including accounts with no monthly maintenance fees and rewards.

Axos offers unlimited ATM fee reimbursements, so you can use your debit card anywhere in the U.S. Currently, Axos has a $100 bonus for new checking account holders who open an account and have at least $1,500 in electronic deposits within the first 30 days.

Pros:

$100 bonus for new rewards checking account
Up to 3.30% APY on checking accounts
Unlimited reimbursements for out-of-network ATM fees

Cons:

No physical branches
Low interest rates on savings accounts

8. Central Bank

Central Bank is a regional bank with more than 130 locations in Missouri, Kansas, Illinois, and Oklahoma. You’ll find multiple checking account options, including a fee-free account with all the basic features.

You’ll enjoy free ATM transactions at any Central Bank ATM, as well as more than 37,000 ATMs nationwide. Central Bank also has robust business banking options, including loans and multiple checking options.

Pros:

Fee-free ATM withdrawals at 37,000+ MoneyPass locations nationwide
Personalized customer service at branches
Wide range of loan options available

Cons:

$50 minimum deposit to open
Branches in Missouri are mainly in the southwest and central part of the state

9. Bank of America

There are benefits to going with a national bank, including access to banking services while traveling and a broad range of features. As one of the largest national banks, Bank of America has competitive offerings, including a variety of checking account options and wealth management services.

Business customers can earn a $200 bonus for opening a new account and depositing $5,000 in the first 30 days. Individual banking customers should check out the $200 rewards bonuses on new credit cards.

Pros:

3,900 branches and 15,000 ATMs nationwide
Robust free mobile banking features
Wide range of personal and business credit cards

Cons:

Low interest rates on savings accounts
Long waits for customer service

10. Great Southern Bank

Great Southern is headquartered in Springfield, with branches in Missouri, Arkansas, Iowa, Kansas, Minnesota, and Nebraska. You’ll find multiple checking account options, with a free basic checking account.

Although Great Southern’s checking accounts require minimum deposits, there are three options with only a $25 minimum opening deposit required. That includes a second chance account designed to help those who struggle to establish an account due to their banking history.

Pros:

Fee-free ATM transactions at Allpoint ATMs nationwide
Branches across six states
Competitive rates on personal loans

Cons:

Checking accounts require a minimum deposit to open
Limited customer service hours

11. Belgrade State Bank

Belgrade State Bank is a local bank with checking and savings accounts. While there are limited ATMs and branches, Belgrade’s out-of-network ATM fee is only $1. This is in addition to the fees that will be charged by the third-party bank.

Belgrade has robust business banking options, including a fee-free checking account that includes 1,000 items per month, with a $0.25 charge per transaction after.

Pros:

Free checking with enrollment in e-statements
No minimum balance requirement for checking accounts
Competitive rates of personal loans

Cons:

Limited branch and ATM footprint
$50 minimum deposit to open

12. PNC

PNC is one of the biggest national banks with 26 branches in Missouri. Although PNC only has branches in 29 states, you’ll enjoy fee-free access to your cash at more than 60,000 ATMs nationwide, thanks to PNC’s partner network.

Pros:

Access to more than 60,000 ATMs nationwide
Branches in 29 states
Competitive mobile banking features

Cons:

Low interest rates on savings account
Accessible banking services, including support for non-English-speaking customers

13. Mid-Missouri Bank

Mid-Missouri Bank is one of the best banks for both the small business owner and the consumer. You’ll find 14 branches across Missouri, as well as ATMs within the coverage area. There are two checking accounts.

One issues an annual percentage yield on your balance, while the other offers cash back on debit card purchases. Mid-Missouri offers competitive rates on personal loans, including auto, home, and home equity lines of credit.

Pros:

14 branches across Missouri
Basic account earns cash back or APY
Up to $25 in ATM fees refunded each month

Cons:

Lower APY on savings account than competitors
Limited number of branches and ATMs

14. Bank of Missouri

Bank of Missouri is one of the best banks in Missouri for its checking account perks. You’ll have three options: a bank account that earns 3.05% APY, an account that earns cash back on debit transactions, and an account that offers iTunes, Amazon, or Google Play refunds each month.

This bank’s checking accounts come with no monthly maintenance fees and refunds on up to $25 monthly in out-of-network ATM withdrawals.

Pros:

Rewards and interest-bearing checking accounts
No monthly fee on checking and savings accounts
Competitive rates on CDs

Cons:

Low rates on savings account
Limited number of branches and ATMs

15. UMB Bank

UMB Bank is one of the longest-running Missouri banks, having been in existence for more than a century. You’ll find branches throughout Missouri, as well as in Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona, and Texas.

UMB also offers online banking options that make it easy to transfer funds and deposit checks. One downside to UMB is its ATM footprint. You’ll pay $2 if you can’t find a UMB ATM, and those are limited to its service area.

Pros:

Robust mobile banking options
Fee-free checking account available
Competitive rates on CDs

Cons:

Minimum deposits required for all checking accounts
Low interest rates on savings account

16. Simmons Bank

If you’re looking for the best checking account among banks in Missouri, consider Simmons Bank, which offers impressive checking and savings accounts with plenty of branches throughout Missouri.

You’ll get fee-free cash withdrawals nationwide at MoneyPass ATMs, along with fee-free checking that requires no minimum balance or opening deposit.

Pros:

Fee-free checking options
Multiple checking and savings accounts
Fee-free cash access at MoneyPass ATMs nationwide

Cons:

Competitive rates on CDs
Minimum deposit on savings account

17. First State Community Bank

First State Community Bank has more than 50 branches throughout Missouri for that in-person customer service. You’ll also get free access to ATMs in the MoneyPass network for cash withdrawals while you’re traveling.

The basic account, Free eChecking, offers all the features you’ll likely need with no monthly fee as long as you sign up for electronic statements.

Pros:

Fee-free cash access at MoneyPass ATMs nationwide
Fee-free checking option when you sign up for electronic statements
Round up debit transactions to boost your savings

Cons:

Opening deposit required for checking
Limited branch locations

Frequently Asked Questions

What is the most popular bank in Missouri?

Like most states, Missouri has plenty of large corporate banks with branches in the area. Some consumers will always prefer that option due to the wealth of banking services and access to ATMs nationwide. Bank of America has a strong presence in Missouri, as does U.S. Bank.

But when it comes to popularity, locals tend to cite smaller banks. Central Bank is often mentioned as a favorite, in part due to its heavy presence throughout Missouri. Commerce Bank also often tops lists of the best banks in Missouri.

If you go with a local bank, look for one that’s covered by the Federal Deposit Insurance Corporation and pay close attention to whether you’ll have access to cash withdrawals at ATMs while traveling.

What is the best bank for small businesses in Missouri?

Those looking for business accounts typically have different criteria than those searching for personal accounts. You might be more interested in being able to invoice customers, for instance, or track spending for tax purposes.

If you’re a freelancer in Missouri, take a look at Axos for your small business banking. U.S. Bank has great money management features, so if that’s a priority, take a look at its small business banking services.

Which Missouri bank has the best customer service?

As valuable as it can be to have a bank account with no monthly maintenance fees or plenty of ATMs, sometimes it’s all about getting help when you need it. If you like in-person service, go with a small brick-and-mortar option with branches that are convenient to you. First State and Bank of Missouri are both great traditional banking options.

For some people, though, the best banks are those that offer easy-to-use remote customer service. Whether that means getting help via a chatbot or connecting with a representative by phone, narrow the options to something that works for you. Ally Bank has been recognized for its 24/7 customer support, primarily because you’ll get an estimate of how long you’ll have to wait on hold before you launch the call.

Which Missouri bank is the most reliable?

As long as you go with an FDIC-insured bank, your funds will be protected up to $250,000. Still, nobody wants to stress over a bank eventually going under. Large corporate banks like Bank of America and U.S. Bank have a long history and an impressive asset value that protects them from default.

But there are plenty of reliable local banks in Missouri as well. First State has been in business for 150 years, and Central Bank was founded in 1902. Both are unlikely to go anywhere and if they did, it would be to merge with another bank or join a parent company.

The best banks are the ones that fill your needs while also keeping fees at a minimum. It’s important to compare at least a few options to make sure you’re getting the best deal for your Missouri banking needs.

1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

2. Early access to direct deposit funds depends on the timing of the submission of the payment ﬁle from the payer. Chime generally make these funds available on the day the payment ﬁle is received, which may be up to 2 days earlier than the scheduled payment date.

3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May, 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.

Source: crediful.com

Apache is functioning normally

June 1, 2023 by Brett Tams

Our rights as women have come a long way since we earned the power to vote on August 26, 1920.

But the financial playing field between men and women still isn’t level. Not even close.

To help you make waves in your own financial life, I interviewed several Millennial and Gen Z women to find out what financial advice they’d give to other women today

Here’s what they had to say.

What’s Ahead:

1. “Don’t be afraid to negotiate your salary.”
2. “Take advantage of any employer match ASAP.”
3. “Avoid high-interest debt.”
4. “It is SO cliché, so hear me out… please start saving early for retirement!”
5. “Start using a spending plan or budget. Zero it out each month, and save the rest.”
6. “As a Millennial myself, the best money advice I would give women in their 20s and 30s is to diversify how you save and spend money.”
7. “Protect yourself and your people financially.”
8. “Educate yourself so you understand how money, interest, and debt works.”
9. “Sign up for Experian Boost. It’s free and will report monthly bills that generally don’t boost your credit like a phone bill, gas, and power!”
10. “When you buy your first home, pay biweekly (most working people get paid on these terms anyway). You’ll make one extra payment a year, shaving off seven years of your loan life on a 30-year mortgage!”
11. “When it comes to money, you can have your cake and eat it too.”
12. “Do not share bank accounts with anyone you’re dating but not married to, even if you live together.”
13. “Do not lease your car. Take out a loan instead.”
14. “Be a minimalist, especially if you rent.”
15. “The greatest gift you can give yourself is to save and invest early.”
16. “Becoming a financially grown-up woman means unlearning a lot of money lessons society taught us as girls: that men are better at money and math (they’re not), that investing is scary (it’s not), and that the best route to financial stability is to marry a high earner (absolutely not!).”
17. “Surround yourself with people with similar money values.”
18. “Make saving a habit as soon as you start making income.”
19. “Budget, but give yourself room to indulge.”
20. “Cash back offers are everywhere, from brands like Rakuten, to credit card perks, to apps like Coupons.com. Use them!”
21. “Learn to use credit cards wisely.”
22. “Get a side gig by turning a passion into a money-making opportunity.”
23. “Know your worth and advocate for yourself when negotiating.”
24. “Set goals and actively work toward them.”
25. “Forget FOMO. Don’t be afraid to say no.”
Summary

1. “Don’t be afraid to negotiate your salary.”

Anna Barker, Founder of LogicalDollar, offered me this advice.

There’s no question that it can be scary to ask for more money. Especially as women, we often internalize the feeling that we’re going to be seen as pushy or demanding if we ask for a raise.

However, various studies show this is actually one of the reasons women end up earning less over their lifetimes than men, who tend to be more likely to ask for more money.

2. “Take advantage of any employer match ASAP.”

Barker also talked with me about retirement. One of the best things that you can do for your future financial security is to start investing as early as possible.

If your employer offers any matching of your 401(k) contributions, this is basically free money and you should do everything you can to invest up to the limit of the match.

3. “Avoid high-interest debt.”

According to Barker, a big money mistake that a lot of women in their 20s and 30s make is signing up for high-interest credit cards. To be clear, credit cards can actually be a great tool if used correctly — which primarily involves paying the balance off in full by the end of each billing cycle.

The problems start to arise once those interest-free periods run out and you realize you’re not able to immediately pay off the debt you’ve accrued.

4. “It is SO cliché, so hear me out… please start saving early for retirement!”

Heather Albrecht, Financial Coach and Founder of Balance Financial Coaching, discussed this with me.

It’s hard because when you’re young, you seem to have SUCH a long time until that money is needed. But the math doesn’t lie.

Starting young makes it easier because you can save less. Gosh, I wish I had made the space in our spending plan to save earlier even though it seemed impossible. The $25 here or there would have been huge by now.

5. “Start using a spending plan or budget. Zero it out each month, and save the rest.”

Albrecht also spoke with me here. And I have to say if I had been able to get myself into the mindset of “saving money is spending money on my future freedom” at a younger age, there would have been a lot less stress at times.

Budgeting doesn’t have to be difficult, either. Just pick the right method and it’ll become just another habit.

6. “As a Millennial myself, the best money advice I would give women in their 20s and 30s is to diversify how you save and spend money.”

Siobhan Alvarez, Founder of Budget Baby Budget, shared this wisdom with me.

I am a big believer in not being dependent on one checking and savings account! I have a long-term high-yield savings account for an emergency fund, a savings account at my local bank for big purchases, a checking account for everyday expenses; and a checking account for fun purchases throughout the month.

This has helped me not only pay off a huge amount of debt over the past few years but do it in a way so I didn’t feel like I was missing out on life and fun!

7. “Protect yourself and your people financially.”

Brittney Burgett, Head of Communications at Bestow, gave this little nugget of advice. Emergency savings, disability insurance, and life insurance matter, especially if you have financial dependents.

Insurance, in particular, is more affordable to buy the younger and healthier you are. I, for example, have life insurance because I own a home.

My mom is my beneficiary, so if anything were to happen to me, the payout from a policy would enable her to continue the mortgage payments and decide later on what to do with my house — keep it, rent it or sell it. Life insurance would give her flexibility when it’s needed most.

8. “Educate yourself so you understand how money, interest, and debt works.”

Lindsay Feldman, Publicist and Founder of BrandBomb Marketing, broke down this for me.

It wasn’t until I really started reading financial books and listening to podcasts that I really began to take control over my financial situation. Understanding how money, interest, and debt works are key to being able to make your money work for you. I look at everything differently now which has empowered me to make smarter decisions.

9. “Sign up for Experian Boost. It’s free and will report monthly bills that generally don’t boost your credit like a phone bill, gas, and power!”

Feldman offered up a way for folks to finally help their credit the easy way. Experian Boost™ is free and it takes just a few minutes to sign-up.

Always be on the lookout for ways to improve your credit – it’ll only help you in the long run.

Feldman shares a great tip that can help homeowners own their home sooner (and pay wayyy less in interest). If it’s possible, work those extra payments into your budget.

11. “When it comes to money, you can have your cake and eat it too.”

Youmna Rab, Founder of Brilliantly Budgeting offered me this quote.

You don’t need to save every penny you earn and give up your favorite indulgences like spa days or dinners out.

If you make a plan for your money, you can enjoy what you like while also saving money for the future.

12. “Do not share bank accounts with anyone you’re dating but not married to, even if you live together.”

Shannon Vissers, the Financial and Retail Analyst of Merchant Maverick, shared some tough love here.

If you break up or your partner spends on things you don’t agree with, you’ll have no legal recourse to get your money back apart from suing them in small claims or court (which is expensive and stressful and may not go in your favor).

13. “Do not lease your car. Take out a loan instead.”

Vissers makes a good point here as well. A lease is essentially a very expensive car rental, and it’s a bad choice unless you’re wealthy enough to comfortably afford this luxury.

This doesn’t mean you can’t get a new car when you’re young. Rather than leasing a car out of your price range, opt to finance a cute, reliable car that you’ll own in three or five years (ideally three). You’ll build credit history this way and, in a few years, you won’t even have a monthly car payment.

14. “Be a minimalist, especially if you rent.”

While this tip may not be for everyone, there’s a good reason Visser’s offers this pearl of wisdom as well.

A good case can be made for spending on experiences when you’re young – trips, concerts, etc. — but overspending on retail goods is another story. Ever heard of the saying, what you own, owns you?

It’s true.

Remember, you’ll have to deal with all your clothes, shoes, furniture, kitchen items, knick-knacks, etc. the next time you move — and your headaches will be compounded if you have to move to a smaller place.

15. “The greatest gift you can give yourself is to save and invest early.”

Sarah Jane Paulson, CFP® at Valkyrie Financial, gave me this bit of guidance.

The classic pay yourself first mentality is the easiest way to a financially strong future. Build that emergency fund (or F*** You fund, if you prefer) of three to six months worth of expenses in a separate account other than your everyday checking.

Then go out and open an IRA or Roth for yourself. Put your money into cheap, diverse index funds and keep adding to it. The greatest money strength you have on your side is that you have years for the market to create an avalanche out of the first few snowflakes of money you invest.

16. “Becoming a financially grown-up woman means unlearning a lot of money lessons society taught us as girls: that men are better at money and math (they’re not), that investing is scary (it’s not), and that the best route to financial stability is to marry a high earner (absolutely not!).”

Sara Rathner, credit cards expert at NerdWallet, wanted to share this with other women.

So throw all those old lessons in the garbage, because that’s where it belongs. Now, today, learn everything you can about managing your finances on your own.

There is nothing more empowering than being the boss of your own life, and of being an equal partner in your relationships. No one will ever care as much about your money as you will.

17. “Surround yourself with people with similar money values.”

Sue Hirst, Co-Founder and CFO of CFO On-Call shared her experience when we talked.

When I was in my 20s, I used to hang out with many people who didn’t share my money values. As a result, almost every time I went out with my friends, I splurged money recklessly due to peer pressure.

This was one of the top reasons I was unable to save as much money as I would have liked each month. Looking back, I wish I had either told my friends directly that I wasn’t comfortable spending huge amounts of money routinely, or made new friends whose financial values aligned with my own.

18. “Make saving a habit as soon as you start making income.”

Imani Francies, Finance Expert at US Insurance Agents, shared this little mind shift.

Saving becomes easier when you look at yourself with the same significance that you look at your power bill or any other bill. No matter what, you are going to do your best to pay your power bill. You should feel the same way about putting money into your savings.

Paying yourself first every month is investing in your future. Even if you can only put $5 into a savings account once a month, start early.

19. “Budget, but give yourself room to indulge.”

Lisa Thompson, Savings Expert at Coupons.com, offered up ALLLL the good tips when I spoke with her.

What’s your weakness: designer handbags, weekend getaways, fine dining with a great bottle of champagne? Make room for things you love by controlling what you spend in other areas.

20. “Cash back offers are everywhere, from brands like Rakuten, to credit card perks, to apps like Coupons.com. Use them!”

Thompson also offers this bit of advice. Refuse to pay full price for anything until you’ve looked for an offer. If you can pair a coupon or cash back offer with a store discount or sale, bam! That’s a savvy way to shop.

21. “Learn to use credit cards wisely.”

To tack on, Thompson also had this to say.

She makes a good point, too. Today, there are so many options for credit cards that offer perks from cash back to miles to points, as well as incentives, like a free Dash Pass for DoorDash or money toward a Peloton membership. The key, of course, is to not carry a balance and pay so much interest that it cancels out the perks. But if you can learn to use credit cards wisely by paying them off each month, the perks and incentives can help make everything from dining out to travel more affordable.

22. “Get a side gig by turning a passion into a money-making opportunity.”

Finally, Thompson ended our conversation with the quote above.

Do you love essential oils? Make balms, rollerballs, and pillow sprays, and sell them on Etsy or at pop-up shops.

Do you love thrifting, going to estate sales, and visiting antique shops? Find items worth more than what you’re paying and resell them! Facebook Marketplace is the perfect spot for that, and it’s free.

If you can turn a hobby into a source of income, that’s extra money for you to invest, save, or use as your slush/entertainment fund.

23. “Know your worth and advocate for yourself when negotiating.”

Amy Maliga, Personal Finance Consultant at Take Charge America, tells it like it is with her wise advice above.

Since the gender pay gap is still a real thing (ugh), it’s important to do your research on salaries for your position and advocate for yourself when negotiating a new job or discussing your annual performance review.

24. “Set goals and actively work toward them.”

Maliga offered me a simple but strong piece of advice above.

Whether it’s buying a home, starting a business, or embarking on world travel, setting financial goals gives a structure and framework to how you plan your finances.

25. “Forget FOMO. Don’t be afraid to say no.”

Maliga also makes a good point here.

TikTok made me buy it – or did it?

It’s way too easy to shop these days, and social media knows exactly what it takes to get you to press “add to cart.” When you’re tempted to buy something you hadn’t planned on, or friends are trying to talk you into activities you can’t afford, keep those long-term financial goals in mind, and don’t be afraid to say no.

Summary

We celebrate Women’s Equality Day every August 26th to commemorate the day the 19th Amendment finally recognized that women have the right to vote. But that same equality hasn’t trickled to the financial space yet, where the gender pay gap, wealth gap, and investing gap still exist today.

We’ve made a lot of progress over the decades, but a lot still needs to happen at the company, state, and national levels to achieve equal pay and equal opportunities for equal work. Until then, I hope these financial tips from awesome Millennial and Gen Z women serve as inspiration for how you can up the ante in your own financial life.

Are there any tips you’d add to the list? Let me know in the comments below!

Source: moneyunder30.com

Apache is functioning normally

June 1, 2023 by Brett Tams

Airbnb is a vacation rental website that changed the travel industry in many ways by building a home-sharing community.

With Airbnb, you can book an entire place or reserve a room in someone else’s home for family getaways, workaways and group travel. Whether you’re looking for a boutique hotel, a forest cabin or a UFO-shaped home, Airbnb has got you covered with its more than 6 million listings.

Does Airbnb offer discounts?

For years, Airbnb offered cash bonuses through its referral program to both the referee and a first-time Airbnb user. Unfortunately, the referral program is no longer active, and you can’t share referral codes with your friends anymore.

Now that the Airbnb referral program is done, you might wonder, “How can I get a discount on Airbnb?” Luckily, you can take advantage of several money-saving methods.

How to get discounts on Airbnb

Reserve a longer stay

Many hosts offer discounts when you reserve their place for a week or a month, so if you’re wondering how to get discounts on Airbnb, one of the answers is to book a longer stay.

If you have a lot of time off or work remotely, we recommend booking an Airbnb for at least seven days to get a weekly discount or at least 28 days to get a monthly discount.

The discount isn’t a fixed percentage and varies. Some hosts don’t offer it at all, so the only way to find out how much a long-term discount will be is to start your search on Airbnb.com.

The discount is applied automatically, so you won’t see it reflected until you click on the listing. Under price details, you should see the nightly price multiplied by the number of nights, a weekly or monthly stay discount, a cleaning fee (if one is charged) and an Airbnb service fee.

The monthly discount is typically much higher than the weekly discount, so you can save a lot of money by booking a longer stay.

Extend your trip by a few nights

Use the trick above to your advantage and extend your stay by several days even if you don’t need that many nights. Sometimes, broadening a booking window can decrease your total price if you fall into the sweet weekly or monthly discount spot.

Let’s take a look at an example. We found a 24-night stay at an Airbnb property that costs $1,127.

However, by extending the stay to 31 nights instead, the price drops to $612, which makes a huge difference for your budget.

You can apply the same thinking to shorter stays (around a week). Extending your stay by a day can either yield savings or get you another night for the same price as before.

We found an example of a six-night stay and a seven-night stay charging roughly the same amount of money after the weekly discount was applied to the seven-night stay.

Book recently added properties

If booking an Airbnb with no reviews terrifies you, the platform offers a way to offset the fears by offering a special discount.

You can get a special offer by booking a stay for a recently added Airbnb listing. The first three bookings made on a new listing receive a discount. You can stack the weekly or monthly discounts with special offers, as well.

However, it might be risky, especially when you don’t know what to expect from the vacation rental or the host.

Scroll down to the host to see if they have other listings and read the reviews left for those properties. Seeing positive reviews for the host and their other listings can put your mind at ease.

Take advantage of an early bird discount

Some hosts attach an early bird discount to their listings. Each host sets their own timeline for how far in advance you have to book to get the early bird discount, but it can be as few as 60 days, so you don’t have to plan your next vacation a year in advance.

If you are booking far in advance — a year out or so — familiarize yourself with the property’s cancellation policy to avoid surprises in case you need to cancel.

Even if the discount is small, anything helps with getting a more afforable Airbnb.

Purchase discounted Airbnb gift cards

Another way to get a more affordable Airbnb is to buy discounted Airbnb gift cards.

Although this method won’t save you a ton of money, you can still save a few bucks, especially when you take advantage of the previously mentioned discounts too.

You can purchase discounted Airbnb gift cards on websites like Sam’s Club or Raise and save a little cash. For example, a $200 Airbnb gift card is going for $193.92 from Sam’s Club and for $188.69 from Raise.

Use a rewards card to pay for Airbnb

It won’t get you an immediate discount, but you’ll earn the rewards toward a future points redemption.

Another suggestion is to use specific credit cards to purchase Airbnb gift cards at stores and earn a rewards multiplier. For example, buying digital Airbnb gift cards from Staples will earn 5% back — on the first $25,000 spent — with the Ink Business Cash® Credit Card.

Book through an airline portal

This isn’t a direct way to save cash per se, but several airlines offer ways to earn frequent-flyer miles on Airbnb stays. Earning airline rewards is akin to getting a small discount on an Airbnb booking.

You’ll earn airline miles by making Airbnb reservations through the following airline programs.

Airline loyalty program	First-time Airbnb user bonus	Ongoing earning rate
ANA Mileage Club	A discount coupon for 3,000 Japanese yen ($22.70) and 2 miles per 200 yen ($1.50) spent with Airbnb.	1 mile per 200 yen ($1.50).
British Airways Executive Club		3 Avios per £1/€1/$1.
Delta SkyMiles		1 SkyMile per $1.
Qantas Frequent Flyer	500 bonus points on the first Airbnb booking.	1 Qantas point per 1 Australian dollar (67 cents).

Keep in mind that to earn airline miles, you must go through the airline’s respective portal they have in partnership with Airbnb. Make sure to enter your frequent-flyer number at the time of booking or no miles will be awarded.

Message the host

This is by no means a guaranteed method of receiving a discount on your Airbnb stay, but in the words of the great Wayne Gretzky, “You miss 100% of the shots you don’t take.” It’s possible to contact an Airbnb host before you make a booking through their listing.

So, if you’re on Airbnb wondering how to get a discount, message a host and ask whether they’d come down on the price before you reserve a stay. If they agree, they’ll send you an offer via a special link, and you can see the new rate before you lock down the reservation.

This approach might not work with every host, but it’s worth a shot, especially on short-notice bookings.

🤓Nerdy Tip

Be polite and respectful to the host when requesting an Airbnb discount, even if they decline your request.

The bottom line

The cost of travel has increased significantly over the past year, according to NerdWallet’s Travel Price Index, so we don’t blame you if you’re looking to save money. If you’re looking for an Airbnb discount, you can get one by:

Booking an extended stay.
Adding some days to your booking.
Booking new-host listings.
Taking advantage of early bird pricing.
Purchasing discounted Airbnb gift cards.
Using a rewards card to pay for your Airbnb.
Booking an Airbnb through an airline portal.
Messaging the host.

At least one of these options, or multiple, will let you score an Airbnb property for less.

(Top photo courtesy of Airbnb)

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

Apache is functioning normally

June 1, 2023 by Brett Tams

The Great Financial Crisis of the late 2000s was the worst economic calamity since the Great Depression. Most agree that lax regulation of banks and other financial institutions set the stage for the risky lending and trading practices that caused it.

Congress responded to the crisis — and attempted to prevent anything similar from happening again — by passing the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Named for then-Sen. Chris Dodd and then-Rep. Barney Frank, Dodd-Frank was a sweeping piece of legislation that imposed new restrictions on how financial institutions operate and enshrined new protections for individual borrowers, bank account users, and investors.

Not everyone was happy with the outcome. Right away, banks and their Congressional allies worked to weaken it. They claimed partial victory in 2018 with the passage of the Economic Growth, Regulatory Relief & Consumer Protection Act, which eliminated or softened key parts of Dodd-Frank.

Some argue that this set the stage for the failure of Silicon Valley Bank and a handful of other big regional banks in 2023. The truth is more complicated — and more interesting.

What Is the Dodd-Frank Act of 2010?

The Dodd-Frank Act of 2010 is a financial regulation and consumer protection law that significantly changed how banks and investment firms operated.

For most consumers, Dodd-Frank’s most visible provisions were a slew of new protections for borrowers and the creation of the Consumer Financial Protection Bureau (CFPB), which among other things helped track and enforce those new regulations.

Less visibly but perhaps even more consequentially, Dodd-Frank fundamentally changed federal oversight and regulation of the financial industry. Along these lines, its key elements included:

Creating new financial oversight agencies. Dodd-Frank authorized two new financial regulatory agencies: the Financial Stability Oversight Council and the Office of Financial Research. It tasked these agencies with monitoring banks’ financial health and risk-taking behavior in the hopes of spotting trouble before it threatens the wider financial system.
Giving the Federal Reserve new powers to regulate big banks. Dodd-Frank gave the Federal Reserve new powers to monitor systemically important (“too big to fail”) banks. It set the threshold to qualify as a systemically important bank at $50 billion in assets.
Prohibiting banks from making certain speculative investments (Volcker Rule). Named for former Federal Reserve Chair Paul Volcker, this provision banned banks from trading financial assets with their own money for the purpose of turning a profit. It also prevented banks from owning hedge funds, private equity funds, or venture capital funds.
Establishing a new process for winding down failed companies. Dodd-Frank created the Orderly Liquidation Authority and tasked it with winding down major corporate failures in a way that minimized economic fallout.
More aggressively regulating the financial instruments that caused the Great Financial Crisis. Dodd-Frank tightened regulations on credit-default swaps, the complex financial instruments that sparked the Great Financial Crisis. It didn’t ban them outright but did require that they be sold through clearinghouses or stock exchanges, similar to many other market-traded securities.

Partial Dodd-Frank Act Repeal in 2018 — Economic Growth, Regulatory Relief & Consumer Protection Act

In 2018, Congress passed the Economic Growth, Regulatory Relief & Consumer Protection Act.

The law was specifically intended to repeal parts of the Dodd-Frank Act that were unpopular with the financial industry and other business interests. However, it left large swathes of Dodd-Frank intact, including the CFPB and some other important consumer protections.

Changes Affecting Smaller Community Banks

Most Economic Growth Act provisions applied to community banks with less than $10 billion in assets. The biggest change was exempting these banks from the Volcker Rule, but there were a lot more technical tweaks that combined to significantly reduce their regulatory burden. If you’re interested in the details, Indiana Sen. Todd Young’s office put out a comprehensive, easy-to-understand fact sheet at the time.

Notably, the Economic Growth Act didn’t exempt banks as big as Silicon Valley Bank, First Republic Bank, or Signature Bank from the Volcker Rule. However, an important Federal Reserve policy change did relax the Volcker Rule in 2020, allowing bigger banks to invest their own money in venture capital funds and other risky assets.

Change Affecting Larger Regional Banks

The act’s most consequential change applied to much larger banks. This raised the too-big-to-fail threshold from $50 billion to $250 billion in assets. Dozens of banks that previously counted as too big to fail were exempted overnight, including several banks that failed in 2023: Signature Bank, Silicon Valley Bank, and First Republic Bank.

They were no longer subject to direct supervision by the Federal Reserve and could reduce the amount of capital they held in reserve. Silicon Valley Bank, in particular, deployed some of its now-excess capital in investments that eventually lost significant value.

Only the biggest banks in the United States — fewer than 20 at the time — remained subject to the stricter scrutiny that came with too big to fail status. Importantly, Silicon Valley Bank aggressively lobbied Congress to raise the too-big-to-fail threshold high enough to exempt it. It had a clear motive to do so, as it primarily served tech entrepreneurs and venture capitalists awash in risky investment opportunities the Volcker Rule prevented it from pursuing.

This was the Economic Growth Act change that may have contributed to the 2023 banking crisis. Combined with the Federal Reserve’s relaxation of the Volcker Rule, it set the stage for banks to take greater risk with less supervision, which many believe contributed directly to the failures of 2023.

Did the Economic Growth, Regulatory Relief & Consumer Protection Act Contribute to the 2023 Banking Crisis

To understand the 2023 banking crisis, it’s crucial to understand the economic and regulatory environment leading up to it.

Looser regulatory oversight. The increase in the too-big-to-fail threshold excluded all three of the banks that failed in 2023. This meant that they were no longer subject to direct supervision by the Federal Reserve and the requisite frequent stress tests, which measure banks’ capacity to endure various hypothetical-but-realistic economic scenarios.
Lower liquidity requirements. They also weren’t required to maintain as much liquidity, or capital in reserve. Essentially, they could shrink their rainy-day funds and use more of their cash to make loans or buy interest-paying bonds.

More freedom to take risks. With less oversight and liquidity, they were free to operate with more discretion than before. But with less cash on hand, they had less margin for error and faced graver consequences if things went wrong. For example, Silicon Valley Bank continued to hold low-interest bonds on its balance sheet even after the Federal Reserve began raising interest rates in 2022. As the value of those bonds plummeted, the bank had no choice but to declare a multibillion-dollar loss on them — just as the tech economy hit the skids, drying up a vital source of new deposits and investment income.
Lots of uninsured deposits. This had nothing to do with Dodd-Frank or the Economic Growth Act, but it did mean that these banks’ financial troubles spooked investors and the banks’ own customers more than they otherwise would have. All three of the banks that failed in 2023 catered disproportionately to high-net-worth individuals and businesses with far more than the $250,000 FDIC insurance limit in their accounts. For example, many of Silicon Valley Bank’s clients were rich venture capitalists and tech entrepreneurs.
Vulnerability to bank runs. Lots of uninsured deposits and disproportionate exposure to specific industries increased these banks’ vulnerability to bank runs, where customers all try to withdraw their cash at once. This happened most dramatically at Silicon Valley Bank, which saw more than $40 billion in attempted withdrawals just before it failed. But many First Republic and Signature Bank customers took flight before those banks failed as well.
Regulatory failures. Had these banks still qualified as too big to fail, they would have faced stricter scrutiny from regulators that may well have prevented their collapse. But it’s not like they faced none at all after 2018. In fact, reports following Silicon Valley Bank’s collapse suggest that regulators were concerned about what was going on inside the bank in 2022. They just didn’t take action early enough or decisively enough to make a difference.

The underlying cause of these banks’ troubles — particularly Silicon Valley Bank’s — was more akin to a basic management failure than the sort of wild speculation that caused the Great Financial Crisis. In Silicon Valley Bank’s case, everyone knew interest rates were going up, so it’s not clear why Silicon Valley Bank held onto those bonds for so long. That said, Dodd-Frank existed in part to prevent such questionable decision-making, and regulators could have done more to enforce what remained of it.

All this is to say that the Economic Growth Act may have sparked the 2023 banking crisis by weakening the too-big-to-fail standard. But its role was a supporting one at best. Rising interest rates, jumbo-sized accounts, bad management, and lax regulatory action were all more important.

FAQs About Dodd-Frank & the Economic Growth Act

We’ve seen how partial Dodd-Frank repeal may have sparked a new banking crisis, but that’s not the law’s only legacy. Conversations about Dodd-Frank and partial repeal also touch on questions like these.

Did the Dodd-Frank Act Hurt the Economy?

It depends who you ask. The Dodd-Frank Act authorized some important new consumer protections and created a new agency (the CFPB) focused solely on protecting everyday folks’ finances.

Consumer advocates would say that’s a good thing, but many business owners and trade groups — not to mention financial institutions — argue that it increased the cost and complexity of doing business to the economy’s detriment.

Likewise, Dodd-Frank restricted or prohibited banks from engaging in certain risky financial behaviors, like proprietary trading. Those rules made markets calmer and more predictable while reducing the risk of bank failures.

But they also cut into banks’ profits and may have discouraged legitimate investment activity. Even former Congressman Barney Frank soured on his own bill over time — though, in his new career as Signature Bank director, he was hardly a neutral party.

Is the Dodd-Frank Act Still in Effect?

Yes, the Dodd-Frank Act is still in effect. However, the Economic Growth Act significantly weakened key aspects of it. By encouraging larger banks to take more risks, this may have contributed to a spate of bank failures in early 2023.

Is the Volcker Rule Still in Effect?

The Volcker Rule is technically still in effect. However, the Economic Growth Act exempted banks with less than $10 billion in assets. Unrelated rule changes adopted by the Federal Reserve in 2020 loosened some of its provisions for all financial institutions.

Today, the Volcker Rule restrictions on proprietary trading are no longer quite so strict. Banks now also have more leeway to invest in venture capital funds and securitized loans (the sorts of instruments that contributed to the Great Financial Crisis).

Does the Consumer Financial Protection Bureau Still Exist?

Yes, the CFPB still exists. The Economic Growth Act had little direct effect on its operations.

The Trump Administration significantly weakened the CFPB through a combination of neglect and administrative rule changes that favored financial institutions. But the Biden Administration reversed many of these changes.

The agency remains a political football, with Republicans generally opposed and Democrats generally in favor.

What Happened to Barney Frank?

Barney Frank retired from Congress in 2013. He published a memoir in 2015, the same year he joined the board of Signature Bank. He told The Financial Times that he took the job because he needed to make money and didn’t want to become a political lobbyist. According to SEC filings, Signature Bank paid Frank about $2 million between 2015 and 2023.

What Happened to Chris Dodd?

No one knows.

Just kidding. Dodd retired from the Senate in 2011 and became chairman of the Motion Picture Association of America. He held that job until 2017, then went into private legal practice with the law firm Arnold & Porter. More recently, he advised President Joe Biden’s 2020 campaign and served on his vice presidential selection committee.

Final Word

The 2023 banking crisis was a far cry from the Great Financial Crisis 15 years earlier. Though it saw two of the biggest bank failures in history — Silicon Valley Bank and First Republic Bank — it didn’t crash financial markets or spark an economic calamity.

The damage was minimal because the causes were different. Whereas the Great Financial Crisis was the culmination of years of irresponsible risk-taking by banks big and small, greased by the effective repeal of a longstanding law that prevented such risk-taking, the 2023 banking crisis was the regrettable result of more basic management failures at a handful of regional banks. And though the partial repeal of another law — Dodd-Frank — may have played a supporting role, the correlation is far less clear.

Add it to the pile of evidence that history often rhymes but rarely repeats.

Source: moneycrashers.com