Countdown to Financial Fitness: Saving Money on Heating Costs

Countdown to Financial Fitness: Saving Money on Heating Costs: Winter is coming; in fact, in many parts of the country, it feels like it's already here. Time to review those reminders about how to ...

Saving Money on Heating Costs

Winter is coming; in fact, in many parts of the country, it feels like it's already here. Time to review those reminders about how to save money heating your home.

1.      Change the filter in your furnace. Not only is a filthy furnace filter a fire hazard, but a fresh filter will help your furnace run more efficiently.

2.      Replace worn weather stripping around doors and windows. Repair cracks where your precious heat could be escaping. Seal around ductwork and cable/electrical outlets. Bring your attic insulation up to code or better.

3.      Wrap hot water heaters and pipes. Turn the temperature down a few degrees if you don't relish scalding showers.

4.      Close the flue in your chimney when you're not burning a fire in the fireplace.

5.      Close heating vents in rooms you're not using.

6.      Open blinds and curtains during the day, especially in sun-facing rooms. Close them at night to preserve heat.

7.      Put a timer on your thermostat so you'll use less heat when you're away or sleeping. And turn down the temperature! Just as it's wasteful to keep your house like a meat locker in the summertime, you don't need to live in a sauna during the winter. Put on a sweater and some warm socks and save 10-30% on your heating bills.

What tips do you have for saving money on heating costs? I'd love to hear your comments.

For more savings tips, get Live Well, Grow Wealth.

Countdown to Financial Fitness: Navigating New York

Countdown to Financial Fitness: Navigating New York: New York City has always intimidated me. Exciting, yes, especially during the holidays. But it's one of those places that stomps all ov...

Navigating New York

New York City has always intimidated me. Exciting, yes, especially during the holidays. But it's one of those places that stomps all over you while you stop to marvel at the skyscrapers.

My memories from previous trips to New York include getting ripped off by cab drivers who refused to take us the most direct route to our destination. They salivate when they spot a tourist. And everything is so much more expensive in New York!

So I wasn't thrilled when my husband suggested spending Thanksgiving weekend in New York City. A friend's daughter was marching in the Macy's Thanksgiving Day parade and he wanted to go there to show hometown support.

Also, my sister-in-law owns an apartment in the City. She said we could stay there… except… She'd been renovating the bathroom for six months, and it still wasn't done. Not only was there no shower curtain (or anything to hang it from) but the toilet had not yet been installed.

Not confident that the bathroom would be finished in time for our visit, we decided to book a hotel. My husband shopped around, pronounced the Manhattan hotel rates exorbitant, and booked a Hampton Inn across the river in New Jersey. Nice property, but it was across the river in New Jersey. Even with the bargain rate, we'd be spending almost $400 on accommodations, not to mention transportation to and from the City each day. We were excited that the hotel had a shuttle to the Newark airport. But it was only TO the Newark airport. When we arrived, we'd be on our own to get to the hotel. Ka-ching!

Fortunately, my sister-in-law's toilet was installed at the eleventh hour, so we were able to cancel our hotel reservations and stay at the apartment. Free accommodations in a central location. Much better. Next problem was figuring out how to get there.

Working for the airlines, we fly space available. We knew there was a train from the JFK airport into Manhattan, but the flights looked better to LaGuardia. No one could tell us anything about public transportation into the City from LaGuardia—other than cabs.

When we arrived LaGuardia, we found a Visitor Information desk. After the attendant got off the phone, she turned out to be quite helpful. She told us we could buy a Metro card from a machine at the airport and then get on the E train; there was a stop only about three blocks from the apartment. A public bus, the Q70, links the LaGuardia airport with the Metro station (Jackson Heights / Roosevelt Avenue).

It costs $1.00 to purchase a Metro card, and then you have to fill it. Ours is good for a little over a year, and we can keep refilling it in ten-dollar increments until it expires. The woman at the Visitor Center suggested starting with the minimum amount since rides are only $2.75 each. The bus link is also $2.75, but supposedly you can get transfers to and from the subway. The bus link was free during Thanksgiving week, so we didn't have to figure out how to do a transfer. We got into town for $5.50 and walked to my sister-in-law's apartment from the subway station. I was feeling much better about our trip's affordability!

New York is a great city for exploring on foot, but it's huge, so the Metro card came in handy when we had to travel a long distance in a relatively short time. When we went out with my husband's two sisters, we took cabs. Depending on the distance, a cab was almost as cheap as for the four of us to ride the Metro. The secret was to catch the cab going in the correct direction and get out a block or two shy of the destination if it meant avoiding extra traffic lights and U-turns. It helps to know the City which, fortunately, my sister-in-law does.

We found New Yorkers very helpful—from subway workers, to shopkeepers, to policemen. I left feeling much more comfortable with the city, and willing to go back. After all, I still have a Metro card.

Sharon Marchisello is the author of Live Well, Grow Wealth

Countdown to Financial Fitness: #GivingTuesday

Countdown to Financial Fitness: #GivingTuesday: For  # GivingTuesday , I am supporting the Fayette Humane Society, where I have been a volunteer for over a decade. The Fayette Humane Socie...

#GivingTuesday

For #GivingTuesday, I am supporting the Fayette Humane Society, where I have been a volunteer for over a decade. The Fayette Humane Society is dedicated to ending the needless suffering of unwanted cats and dogs through adoption and an aggressive spay/neuter program.

I started out fostering cats, then bringing them to adoptions and working the adoption event, then leading adoptions, then grant writing and contributing to the newsletter, and now I've been on the Board of Directors since 2011. We don't have a facility or employees, so our overhead is very low--which means over 90% of any donation goes directly to helping the animals.

I just released Live Well, Grow Wealth, my self-help book about basic personal finance and have pledged any royalties I earn from sales today to the Fayette Humane Society. 

Please check it out:
Live Well, Grow Wealth
https://www.amazon.com/Live-Well-Grow-Wealth-C…/…/1986446123
It would make a great gift for a new graduate or retiree, or for anyone trying to get back on track financially.

Countdown to Financial Fitness: Live Well, Grow Wealth

Countdown to Financial Fitness: Live Well, Grow Wealth: At long last, I have updated my personal finance book and plan to release it on Amazon in time for Black Friday. What better Christmas gift...

Live Well, Grow Wealth

At long last, I have updated my personal finance book and plan to release it on Amazon in time for Black Friday. What better Christmas gift than a self-help book to get you started on your New Year's Resolutions?

Live Well, Grow Wealth was originally released on Smashwords as an e-book, Live Cheaply, Be Happy, Grow Wealthy. It can be described as Personal Finance 101, a commonsense guide to shrinking your financial footprint. Based on my experience of living frugally, investing, and retiring early, I compare achieving financial fitness to maintaining a healthy weight. In ten easy-to-follow steps, Live Well, Grow Wealth will show ordinary people how to build wealth by living within their means without compromising their values.

Here are the ten steps that will be discussed in detail in Live Well, Grow Wealth:

1.       Live Within Your Means

2.       Find the Best Value

3.       Get out of Debt

4.       Build an Emergency Fund

5.       Save for Retirement

6.       Begin to Invest (basics)

7.       Consider Relationships

8.       Teach Your Children

9.       Get Completely out of Debt (pay off long-term debt, like a mortgage)

10.    Invest More (stocks and covered calls)

I hope you'll check it out and share it with someone who can benefit!
Available now at Amazon and other online outlets!

Countdown to Financial Fitness: Time Management and Finances

Countdown to Financial Fitness: Time Management and Finances: When I was still working, I was good at time management. I had to be. Projects had deadlines. Meetings could not be missed. In one departme...

Time Management and Finances

When I was still working, I was good at time management. I had to be. Projects had deadlines. Meetings could not be missed. In one department, our manager gave us all Franklin Planners and sent us to a class to teach us how to use them.

Before I entered the corporate world, I worked for five years as an airport gate agent. Getting the flight out on schedule was my primary responsibility, and a myriad of perfectly-timed, integrated tasks had to be completed in order to accomplish that objective.

After I retired, I lost my time-management mojo. At first, it was a form of rebellion. I didn't have to wake up to an alarm or adhere to an agenda. I'd have oodles of free time that was all my own.

I had a long list of projects I promised my husband I would tackle once I retired. (Many of them involved cleaning and organizing.) They're not done yet. In fact, most haven't even been started.

At last week's Weight Watcher's meeting, we discussed time management and its importance to a successful weight-loss journey. Planning healthy meals so you don't grab high-calorie fast food when there's nothing in the refrigerator. Carving out time for a good breakfast so you're not tempted by sugary snacks mid-morning. Fitting exercise into your daily routine.

Time management is also important to achieving and maintaining financial fitness. By paying bills on time, you avoid unnecessary late charges and interest—not to mention keeping your credit rating high, which can save you money next time you apply for a loan or credit card. Filing your tax returns and estimated payments by the deadline to avoid penalty. Funding IRAs and HSAs to maximize tax savings. Ordering and reviewing your free annual credit reports. Using up flexible spending accounts so you don't leave money on the table. Taking advantage of gift certificates, sales, and coupons before they expire—provided they offer a discount on products or services you plan to buy anyway.

Without proper time management, so many good intentions can slip through the cracks.

For many years, I bought Franklin Planner refills. But as Microsoft Outlook grew more robust, I started managing much of my time electronically. It was cumbersome and inefficient to mark appointments in more than one calendar. After I retired, I didn't have as many meetings to keep track of, so I started to view the Franklin Planner refills as an unnecessary expense.

But now my system has disintegrated into a free pocket calendar and to-do lists jotted on scraps of paper. The lists sometimes get misplaced before everything has been checked off, and some incomplete tasks never make it to a fresh list.

Part of my frustration with my time management failure has to do with unrealistic expectations about how much I can accomplish in a day. The vision of unlimited time available in retirement was a mirage. Still, I believe getting a handle on time management will make me more productive… or at least, make me feel more productive.

The first step to time management is planning. Every day. You might argue that you don't have time to plan your day, but if you don't take a few minutes to set goals and figure out how you're going to achieve them, how will you know when you've accomplished them?

The next step is to divide long-term goals into manageable tasks. When you set your goals and timeline (which should be done before you get to the day-to-day planning), break the project into bite-size pieces so the goal post doesn't seem so daunting. For example, if you want to write a novel by the end of the year, you might set a daily word count. Or start with tasks like creating an outline, developing character biographies, researching topics that will be addressed in the book, etc.

If your goal is to build an emergency fund, your tasks might be: create a budget, set up a savings account, identify ways to fund the account, cancel that subscription to a service you don't use, etc.

Each day, prioritize your tasks. The Franklin Planner course taught us to assign tasks A, B, or C priorities, and then number each task in the category by the order in which you plan to work on them. Start with the A list. When it's complete, move to the B list, and then C. Tasks labeled A are the most important; they must be done today, and they usually support a long-term goal. (Often, they're the hardest and the ones we tend to put off.) Tasks labeled B are important, but could be postponed if you run out of time today. Tasks labeled C are nice to do but have no sense of urgency. Often, we fill up our days handling C-level tasks and procrastinate tackling the A-level tasks.

Sometimes writing down a task and assigning it a high priority might be the only way it will get done. Like exercise.

The same task could shift in priority from day to day. For example, if I'm home by myself, washing the dishes and vacuuming the floor might be considered C-level tasks. But if I'm having a dinner party tonight, those tasks rise in importance. At the beginning of the month, renewing your vehicle registration tag might be assigned a B priority; on the last day of the month, if it's still not done, it's an A.

You may find that some tasks should be deleted from your list, or perhaps handled by someone else. Looking at your prioritized list can help you say "no" or "help" without guilt—which is a great time-saver.

At the end of each day, it's important to review your task list and determine what has been completed, what needs to continue into the next day, what tasks should be deferred, canceled, or delegated to someone else. That way nothing is inadvertently forgotten. And checking off those A-level tasks can give you a great sense of accomplishment.

What tips do you have for time management? I'd love to hear your comments and suggestions!

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.

Countdown to Financial Fitness: Paying Off Your Mortgage

Countdown to Financial Fitness: Paying Off Your Mortgage: Several months ago, I wrote a post about the pros and cons of paying off your mortgage early. I promised that in a future post, I'd tel...

Paying Off Your Mortgage

Several months ago, I wrote a post about the pros and cons of paying off your mortgage early. I promised that in a future post, I'd tell you how to do it. Well, here goes.

The best forty dollars I ever spent was to attend a one-day class at a community college near my Seattle home on how to prepay your mortgage. My husband talked me into going.

I had heard people mention "making double payments" to accelerate repaying their mortgages. But our mortgage payment was already over a thousand dollars a month, a big chunk of our income; how could we possibly make double payments?

Early in the life of a mortgage, the bulk of your payment consists of interest. "Double payments" simply means paying two months' worth of principal. When you make a principal payment before it is due, you cut out the interest associated with that payment.

When you purchase a house and secure a mortgage, you should receive an amortization schedule from your lender. If it's not included in the huge packet of papers you receive at closing, ask for one or create your own. An amortization schedule states the amount borrowed, the terms, and the total amount of interest that will be paid by the loan's end date (assuming you stay in the house and make regular payments throughout the life of the loan, without ever refinancing). There will be a breakdown of each month's payment showing how much of the total goes to principal, and how much to interest, as well as the loan balance after each month's payment.

Our teacher ran an amortization schedule for each student in the class, using the loan parameters we provided. We could then use this schedule to track our own prepayments and reconcile with our lender's statement at the end of each year. Now it's easy to create your own amortization schedule online, in Microsoft Excel, or using one of many other readily available computer programs or apps.

For example, let's look at a thirty-year fixed loan for $200,000 with a five-percent interest rate. The payments would be $1073.64 a month, and you would have spent a total of $386,511.57 by the payoff date, assuming you never moved or refinanced. After thirty years, the total interest paid would be $186,511.57, almost as much as the original amount borrowed. Those numbers can be quite intimidating the first time you sign your life away to acquire a mortgage. When my husband and I bought our first home, our interest rate was 10.5 percent on a thirty-year loan, so the figures were even more dramatic.

Here's what an amortization schedule for the thirty-year, five-percent loan for $200,000 with a monthly payment of $1073.64 would look like: 

Payment #	Amount	Interest	Principal	Loan Balance
1	$1073.64	$833.33	$240.31	$199,759.69
2	$1073.64	$832.33	$241.31	$199,518.38
3	$1073.64	$831.33	$242.32	$199,276.06
4	$1073.64	$830.32	$243.33	$199,032.74
5	$1073.64	$829.30	$244.34	$198,788.40
6	$1073.64	$828.28	$245.36	$198,543.04
7	$1073.64	$827.26	$246.38	$198,296.66
8	$1073.64	$826.24	$247.41	$198,049.25
9	$1073.64	$825.21	$248.44	$197,800.81
10	$1073.64	$824.17	$249.47	$197,551.34
11	$1073.64	$823.13	$250.51	$197,300.83
12	$1073.64	$822.09	$251.56	$197,049.27

If you decide to make double payments, you don't need to pay $1073.64 x 2. You simply pay next month's principal along with this month's payment: $1073.64 + 241.31. Now your loan balance has been reduced to $199,518.38 instead of $199,759.69, and you have saved $832.33 in interest. Next month, you will be on payment #3. If you send month #4's principal (243.33) along with it, you'll be on payment #5 by the third month of your loan. Continue these steps and in six months you'll have knocked a full year off your loan payments and saved almost $5000 in interest over the life of the loan. Notice how much faster the loan balance declines; in this example, your balance after six months is the same as it would have been after one year of normal payments:

Payment #	Amount	Interest	Principal	Balance
1	$1314.95	$833.33	$240.31	$199,759.69
		$832.33	$241.31	$199,518.38
2	$1316.97	$831.33	$242.32	$199,276.06
		$830.32	$243.33	$199,032.74
3	$1319.00	$829.30	$244.34	$198,788.40
		$828.28	$245.36	$198,543.04
4	$$1321.05	$827.26	$246.38	$198,296.66
		$826.24	$247.41	$198,049.25
5	$1323.11	$825.21	$248.44	$197,800.81
		$824.17	$249.47	$197,551.34
6	$1325.20	$823.13	$250.51	$197,300.83
		$822.09	$251.56	$197,049.27

Of course, when you use this prepayment method, the principal payments increase a little each month, which could become difficult to manage eventually if your income is not going up. But the beauty of this system is that you are not locked into making the additional principal payment, so if money is tight one month, you can skip or reduce it, or you can stop any time and go back to your regular payment schedule. The initial savings has still been realized.

Think about this option when you first apply for a loan; the sooner you begin prepayments, the more interest you'll save. As you can see from any amortization schedule, the lender collects the bulk of the interest up front, when the loan balance is highest. People who refinance over and over don't reduce their loan balance much over time; most of what they pay is interest, and they perpetually carry a mortgage. ("But it's tax deductible!" they argue.) If you're afraid you might not be able to manage the payments on a fifteen-year loan, take out a thirty-year loan and prepay it, using the double-declining principal strategy to cut your repayment time in half.

You can also customize your amortization schedule to prepay a fixed amount each month, for example, sending your lender an extra $100 toward reducing the principal. Every little bit saves way more interest down the road.

Have you ever thought about pre-paying your mortgage? I'd love to hear your comments.

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.