This Weeek’s Mortgage Forecast And Mortgage Market Guide View

February 18, 2012 By Leave a Comment
(Note: This is an excerpt from the Weekly Mortgage Market Newletter that we send out to realtors and all those interested on mortgage and finance topic.  If you would like to receive a copy of the newsletter, please send us your e-mail via the quick contact form on the right side bar or leave a comment on this post.)The capital markets were closed on Monday due to Presidents’ Day and the economic calendar is light the rest of the week with just a few reports.

  • On Wednesday Existing Home Sales will be released, followed by the New Home Sales report on Friday. The reports come after last week’s positive Housing Starts data.
  • Thursday brings the weekly Initial Jobless Claims Report, which has steadily declined this year to a more job-friendly level.
  • On Friday, the Consumer Sentiment Report will be released.

In addition to those reports, a number of news stories may move the markets, including additional news out of Greece, the Treasury Department’s auction of $99 Billion worth of government securities, and movement in the Stock Market. All of those news stories have the potential to negatively impact the Bond Market, depending on how they develop.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving – and when they are moving lower, home loan rates are getting worse.

To go one step further – a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, good economic news late last week reversed the improving trend Bonds and home loan rates experienced early in the week. I’ll continue to monitor this situation closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 17, 2012)

 
The Mortgage Market Guide View…
Mileage Rates for 2012If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2012.These mileage rates are used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. So when it comes to filing your taxes this time next year, you’ll need to know these numbers!New for 2012As of January 1, 2012, the standard mileage rates are as follows:

  • Businesses = 55.5 cents per mile driven
  • Medical or moving = 23 cents per mile driven
  • Charitable organizations = 14 cents per mile driven

You’ll notice that the rate for business miles is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. However, the IRS is accepting public comments on this policy.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Remember, if you have questions or concerns, talk to a tax consultant or accountant to discuss your options and unique situation.

Economic Calendar for the Week of February 20 – February 24

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact
Wed. February 22

10:00

 Existing Home Sales

Jan

NA

4.71M

Moderate
Thu. February 23

08:30

 Jobless Claims (Initial)

2/18

NA

NA

Moderate
Fri. February 24

10:00

 Consumer Sentiment Index (UoM)

Feb

NA

72.5

Moderate
Fri. February 24

10:00

 New Home Sales

Jan

NA

307K

Moderate
Filed Under: Blog, Mortgage Market Guide, Mortgage Maui Weekly, Mortgage Tips and Info

Protect Your Identity

February 15, 2012 By Leave a Comment

Avoid Credit Card Scam

Have you heard of the word “phishing”?  This is not new. It’s  a troubling tactic which involves the practice of sending you an email to entice you to a website which appears to be the website of a well known company. The intent is to induce you to reveal personal information which can then be used to steal your identity.

So far, fake websites have been set up to mimic a number of famous banks and retailers.

The pitch of the email messages, which appear to be from a legitimate company, is that your checking account or credit card may have been the subject of fraudulent activity, and your social security number or credit card number is required to authenticate your true identity.  There has even been a threat that if you don’t comply, your account may be closed.  The FBI has called the practice “the hottest and most troubling new scam on the Internet.”

Another concern is that these cyber bandits are creating fake mortgage companies, complete with a website and the little “padlock” in the lower right corner of the browser to confirm you are using a secure connection.  In this case, it would be a secure connection to the criminals who are about to steal your information.

While you may think it can’t happen to you, there’s the chance a very sophisticated operation will buy television, radio or newspaper ads to promote the website as well as the toll free number, rather than using email marketing to generate traffic.  In this manner, the identity thieves would receive instant credibility, on the assumption your viewing of their advertisement via a reputable media outlet would automatically negate any suspicions you might harbor.

The final element of the campaign involves greed, which is an essential ingredient in most successful scams.  And in the mortgage business, where we have just experienced a significant rise in rates, the one and only “hook” which would be required would be advertisement of a rate one percent lower than that offered by legitimate mortgage originators.

The extreme danger of a successful mortgage identity theft ring is that it will serve as a “one stop shopping” vacuum cleaner of your personal information.

Unlike currently publicized scams, where the thief’s goal is to steal your social security number or your credit card number, the mortgage application accumulates everything at once.

The standard form used by most lenders across the country will begin asking for your birth date rather than your age, which will add even more information of high value to criminals.  A person’s birth date is often asked as a “challenge” question when you call customer service representatives to discuss an account.

Key information which you will freely give away if dealing with a fake mortgage company either on the phone or on the Internet will include your full name, address, phone number, social security number, previous addresses, number of children and ages, your occupation, the name of your employer, length of employment, business phone number, current salary, previous employer and previous salary, name of your co-borrower with all associated information, list of bank accounts and retirement accounts with account numbers and current balances, list of credit cards with account numbers and current balances, information about your current mortgage or landlord, the make and model and value of your automobiles, addresses of your other owned real estate and whether or not you are a U.S. citizen.  If the scam goes beyond a first conversation, you will also give away your signature and perhaps an application fee.  It will generally take you one month to figure out you’ve been scammed, by which time your entire identity plus your credit report may have been obtained.

So, you have a choice.  Either deal with local mortgage professionals who will handle your financing needs, or take a chance with somebody on the other end of an Internet or telephone connection, and watch what happens next.

If you are looking for a local and trusted mortgage provider, contact us, and we will be happy to assist you.

Filed Under: Blog, Mortgage Tips and Info

The Maui Mortgage Market Guide – Week of 1-30-12

February 1, 2012 By Leave a Comment

 

If at first you don’t succeed, try, try again. Last week, that popular idiom could have applied to the Gross Domestic Product (GDP) Report. Read on to learn why…and how all the week’s news impacted Bonds and home loan rates.The Advanced GDP reading – or first of three readings – for the 4th Quarter of 2011 came in at 2.8%, a bit below expectations of 3.2%. This number will be

revised two more times, but if the final GDP remains at 2.8%…then the overall GDP for 2011 would be a scanty 1.57%. That is certainly a “Gross”

Domestic Product, when you consider that the government has underwritten more than half of that economic growth with the Payroll Tax benefit.

Also in the news last week, the Fed’s Policy Statement after its regularly scheduled Federal Open Market Committee meeting was pretty much the same

story as recent Statements, including stable long-term inflation expectations, a tepid economic recovery, and fragile job market. But there was one big

exception to their norm. The Policy Statement said there will be “exceptionally low levels for the Federal Funds Rate at least through late 2014.” This

is a huge change from the previous statements of “low rates until mid-2013.”

On the surface, extending the zero interest policy until 2015 tells us the Fed thinks the economy will just be slogging along, and accommodative

monetary policy will be required to keep the economy growing at least at a modest pace. One could argue that recent economic data is better of late and

that all this loose monetary policy is unnecessary. But the Fed has spoken, and as the old adage goes: “Don’t fight the Fed.”

In news out of Europe, yields in European Bonds have come down…and by quite a bit. This sparked some optimism that Europe’s Long-term Refinance

Operation (LTRO) has helped alleviate some pressure in the peripheral countries in the Eurozone, like Spain and Italy. So what’s the takeaway? In honor

of the upcoming Super Bowl, here’s a football analogy: think of the LTRO as a super punt or “kick of the can” down the road. Europe needs to play a

serious offensive line by creating a tighter fiscal union, implementing austerity measures, and developing growth strategies to help pay down the

enormous debt.

The bottom line is that Bonds and home loan rates remain at historic best levels, which means now is

still a great time to purchase or refinance a home.

Let me know if I can answer any questions at all for you or your clients.
Forecast for the Week
Economic reports will be plentiful – and important – this week:

  • The week kicks off Monday with the Core Personal Consumption Expenditure (PCE), which is the Fed’s favored gauge of inflation. Thisreport will be closely watched, since any hint of an uptick in inflation could push Bond prices lower and, in turn, move home loan rates higher.
  • Manufacturing will also be in the spotlight with the Chicago PMI on Tuesday, followed by the ISM Index on Wednesday.
  • Consumer Confidence will also be delivered on Tuesday.
  • The ADP Private Employment Report will be released on Wednesday and comes before the government’s total job’s report on Friday.
  • As usual, Initial Jobless Claims will be released on Thursday. This week’s report comes after an uptick of 21,000 last week.
  • Finally, on Friday the government’s monthly Employment Report will be released. The Employment Report consists of Non-farm Payrolls, the Unemployment Rate, Average Workweek and Hourly Earnings. This is an important report that can have abig impact on the markets. So I’ll be watching it closely.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong

economic news normally has the opposite result.

As you can see in the chart below, Bonds and home loan rates remain near their historic bests. I’ll be watching closely to see which way they move

next.

 

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jan 27, 2012)

 

Japanese Candlestick Chart
The Mortgage Market Guide View…

 
Share This Site…And Try it YourselfEvery once in a while, you come across a website that’s just plain fun. This is one of those sites.We’ve all seen websites that provide stats about what happened the year you were born. The website whathappenedinmybirthyear.com/takes it a step further. It doesn’t just offer stats andfacts. Instead, it provides a picture of the world you grew up in – including what it looked like and how it was different than the world we live intoday.

But it’s more than just a fun website.

For one thing, it provides you with a light-hearted reason to connect with your clients on a personal level. You can share the site with them on social

media or in one of your outreach pieces (such as a newsletter or email).

In addition, this site offers you a unique way to better understand your clients. If you know when a client was born, you can simply type in the year.

In return, you’ll get a picture of that client’s social influences that have helped shape him or her. And that’s exactly the kind of information you

need to put yourself in your clients’ shoes and understand them a little better. Of course, it doesn’t hurt that it’s entertaining too!

Try the site today…and consider sharing it with your clients as a way to connect with them on a more personal level.

 

Economic Calendar for the Week of January 30 – February 03

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. January 30
08:30
 Personal Income
Dec
0.4%
0.5%
0.1%
Moderate
Mon. January 30
08:30
 Personal Spending
Dec
0.2%
0.0%
0.1%
Moderate
Mon. January 30
08:30
 Personal Consumption Expenditures and Core PCE
Dec
0.2%
0.2%
0.1%
HIGH
Mon. January 30
08:30
 Personal Consumption Expenditures and Core PCE
YOY
NA
1.8%
1.7%
HIGH
Tue. January 31
08:30
 Employment Cost Index (ECI)
Q4
0.4%
0.4%
0.3%
HIGH
Tue. January 31
09:45
 Chicago PMI
Jan
62.5
60.2
62.2
HIGH
Tue. January 31
10:00
 Consumer Confidence
Jan
67.0
61.1
64.8
Moderate
Wed. February 01
08:15
 ADP National Employment Report
Jan
200K
325K
HIGH
Wed. February 01
10:00
 ISM Index
Jan
54.5
53.9
HIGH
Thu. February 02
08:30
 Jobless Claims (Initial)
1/28
375K
377K
Moderate
Thu. February 02
08:30
 Productivity
Q4
0.7%
2.3%
Moderate
Fri. February 03
08:30
 Non-farm Payrolls
Jan
155K
200K
HIGH
Fri. February 03
08:30
 Unemployment Rate
Jan
8.5%
8.5%
HIGH
Fri. February 03
08:30
 Hourly Earnings
Jan
0.2%
0.2%
HIGH
Fri. February 03
08:30
 Average Work Week
Jan
34.4
34.4
HIGH
Fri. February 03
10:00
 ISM Services Index
Jan
53.0
52.6
Moderate

 

 

Equal Housing Lender

 

Filed Under: Blog, Mortgage Market Guide, Mortgage Maui Weekly, Slider Tagged With: , ,

TEDxMaui 2012 (Morning Session)

January 24, 2012 By Leave a Comment

I am sitting here in my office at Hawaii’s Premiere Mortgage Company trying so hard to concentrate on the newsletter I need to write. But my mind is still stuck on TEDxMaui.   At 2:00 PM I finally decided to go with the flow and write a post about TEDxMaui because that’s where my heart and brain is right now.  My thoughts keep on going back to the profound and inspirational talks I heard yesterday. I know I have to re-visit some of them, and I also know I want to share some of the “words” and “thoughts” I gathered.  So please join me as I reminisce some of my favorite talks from yesterday:

Show Day #TEDxMaui2012

The first speaker was Dr. Elizabeth Kapu’uwailani Lindsey.  I love the way she told her stories, some from when she was a little girl, and some from when she was grown.  The food for thought I learned from her is the same one she learned from a Pacific island  when he said “You have watches, but you have no time”.  Isn’t this so true in our modern culture?  With our technology we have developed so many high tech gadgets to save us time, and yet one of the most often complain I hear around (which I am guilty of) is that “I just don’t have the time”. “We have watches…  but we have no time ….”.  With this we should also remember that “faster is not always better and more is not always enough”….

There is one more story she told that got me teary eyed.  That’s when she took her Tutu (might be Auntie Tutu) out for a celebration because she got this awesome new job.  Throughout their celebration her Tutu never asked about the job though she was aware that that is what the celebration is for. NO, she didn’t ask what company it was, no she didn’t care how much the pay would be, she only had one question and it moved me to tears.  Tutu asked “Baby girl … will this make your heart happy?”.  Oh what wisdom our kupunas have!

Show Day #TEDxMaui2012

The next speaker was Dr. Arthur Medeiros. At first I was not sure where he is going with his talk.  Would it be a lot of the “don’t cut the trees, don’t destroy our forest kind of talk” I wondered.  But no, it was deeper than that.  It was passion combined with science, responsibility, hardwork, and community.  But more importantly it was about having a vision, and actually doing something about it, no matter how small in the beginning. It’s also about resiliency. Despite the thought that he had that he may never see the fruit of his labor, Dr. Medeiros did something in order for the future generation to be “saved”.  The watershed restoration project that he started and is now growing is fascinating.  The illustration of the before and after was astonishing. He thought he would not see the fruit of his labor, but he is seeing them now.   You can hear in his voice his excitement when he talks about the new native plant keikis sprouting, he speaks of them as if they were his own kids.  And in a way, they were ….

Show Day #TEDxMaui2012

The next favorite speaker of mine is Byron Washom.   Actually, I almost missed his talk.  When I was looking at the brochure, I picked his session as probably one that I would skip.  I  thought he was going to talk about solar power, alternative energies, and all that.  Not that I am against solar power and alternative energy, it was just I have heard enough of it for now that I was not sure I would want to sit and listen about it again.  However, I decided to stay, and boy was I glad I stayed. It was a pleasure listening to him talk. He had a fascinating childhood – he grew up in Midway Atoll.  His life stories of creativity and not being hindered by boundaries inspired me. I love it when he said “encourage your children to go in the end of the bridge … (you would have to watch the video to find out the end of that quote because I can’t remember the exact word used and I don’t want to misquote him ).  Lastly, here’s what I will always remember from him.  It’s when he said  that “there is always a place for someone who is passionate”, and,  “if you follow your passion, you will always be welcome wherever you go.”.

Hmm… is getting longer and I am not even halfway done. I think I will stop here for now and will do a part 2 tomorrow.  So this post is the “morning session” post, Stay tuned for the afternoon session post.

 

- Liza

Photo Credit: All photos used here are taken by Peter Liu Photography and posted at his Kaiscapes Flckr page.  used with permission.

 

 

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Shopping For A Condo

January 13, 2012 By Leave a Comment

Enticed by the beauty of Maui, many people have decided to either make Maui their fulltime home or a place to escape to when weather turns cold.  For years, a condominium has been an affordable option to achieve the goal of owning property on Maui. There is a great pleasure in sitting on an oceanfront lanai with beautiful views of the surrounding islands and being in the heart of the community  in which you live and work.  Condos on Maui come in many different shapes, sizes and locations.

Your local mortgage professional can be of great assistance in explaining that condominiums come in a variety of classifications.  Before you start shopping for your Maui dream, understand how lenders have classified condominiums.  This affects the financing that is available to you.

In general, Conforming Condominiums are those for which a greater percentage of the occupancy is utilized as primary residences with a small percentage of units being used as long term rentals or second homes. Meeting certain agency requirements of Fannie Mae, Freddie Mac or FHA, this classification of condominiums are afforded the most liberal financing terms.

Resort and/or Condo Hotels are the next classification.  These condos generally have a larger percentage of the units being utilized as short term vacation rentals, second homes and a smaller percentage of primary residences. In general, you will find these condo complexes are in desirable areas close to the beach, golf courses or recreational areas. Financing on resort and condo hotels has become more constrained in recent years with fewer banks willing to lend due to national agency guidelines.  As a result the banks require a greater down payment of the purchase price.  The interest rates offered are also higher than those available on conforming condos.

If you’re shopping for a condo in Hawaii, call your local mortgage professional.  They can help advise you about the classification and financing options available for the condominium you have in mind.  Better yet, contact us, and we will be glad to assist you.

 

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The Best Is Yet To Come

January 10, 2012 By Leave a Comment

 

In 1964, Frank Sinatra recorded the song “The Best is Yet to Come” on his album “It Might As Well Be Swing”, accompanied by Count Basie, under the musical direction of Quincy Jones.

Living on Maui and looking at the emerging signs of recovery it may be useful to revisit those timeless lyrics and listen to our hearts for a bit of inspiration, sound advice and trust in ourselves as we move forward. Here they are:

 Out of the tree of life I just picked me a plum

You came along and everything’s startin’ to hum

Still, it’s a real good bet, the best is yet to come

While numbers are important in any economic forecasting, it is also important to remember that how we think about the future can have an impact on what eventually happens. Economists call it consumer confidence. For me, that confidence comes from an appreciation of Maui’s beauty and of the Aloha Spirit that defines who we are, how we treat each other and how we see the World.

Was Frank far off? Not at all.  If you’ve been following the string of positive economic news over the past several weeks, there are some reasons to believe that the economy is getting better.  On Jan 6, New York Times reported that “U.S. economy gains steam as 200,000 Jobs are added”. On the same day, the November Mortgage Monitor Report released by Lender Processing Services Inc. (LPS) shows that while mortgage delinquencies at the end of November 2011 were nearly 25 percent less than the January 2010 peak, the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted.

Perhaps it is a bit too early to get excited about economic recovery, but I think it’s good to keep a positive attitude.  Let’s keep the momentum going … the best is yet to come.

 

* Photo Credit: mauipic.com Used with permission

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TED Talks We Like – TEDxMaui Is Almost Here!

January 5, 2012 By Leave a Comment

There are hundreds of TED Talks recorded and uploaded on the web.  Some are better than others.  Inspired by the recent post of TEDxMaui, we decided to put together some of the TED Talks we also like.

TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes. TED stands for Technology, Entertainment, Design, and TEDTalks cover these topics as well as science, business, development and the arts.

For the benefit of our readers, we chose the ones that lean towards helping entrepreneurs, realtors, brokers and businessmen. Take a seat, and enjoy these videos.  They are not only educational but pretty entertaining as well.

 

1. Seth Godin  on The Tribes We Lead

Godin argues the Internet has ended mass marketing and revived a human social unit from the distant past: tribes. Founded on shared ideas and values, tribes give ordinary people the power to lead and make big change. He urges us to do so.

 

2. Tom Wujec: Build a Tower, Build A Team

Tom Wujec from Autodesk presents some surprisingly deep research into the “marshmallow problem” — a simple team-building exercise that involves dry spaghetti, one yard of tape and a marshmallow. Who can build the tallest tower with these ingredients? And why does a surprising group always beat the average?

 

3.  Ron Gutman and The Hidden Power Of Smiling

Ron Gutman reviews a raft of studies about smiling, and reveals some surprising results. Did you know your smile can be a predictor of how long you’ll live — and that a simple smile has a measurable effect on your overall well-being? Prepare to flex a few facial muscles as you learn more about this evolutionarily contagious behavior.

 

TEDxMaui takes place on Sunday, January 22nd, 2012 at the Maui Arts & Cultural Center.  This all-day event will  present innovative and inspiring speakers and performers?who have the courage to dream and change the world with revolutionary ideas. Tickets are on sale at the Maui Arts & Cultural Center box office on a first-come, first-serve basis. TEDxMaui encourages students, local business owners, entrepreneurs, and any and all open-minded individuals seeking education and inspiration to attend.









 
		

		
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Your Best Mortgage Strategy

		
		
January 3, 2012  By  Leave a Comment 
		

			
Choosing the Best Mortgage BrokerIt’s been said, that good financing is the foundation of real estate.  There has been more awareness of this Truth in recent months.  It is also more apparent that working with reputable companies and people is important and imperative with the many changes in lending guidelines and tightening that is occurring.


The qualifications of your loan officer and company are critical. The vast majority of people in lending now are unable to deal effectively with the current climate we are in now.  In a survey of experienced Real estate, investors and Realtors as to certain qualities to look for when you select a mortgage lender.  Work with a company that is both a Banker and a Broker.  You need the options available with a Broker and the low rates of a Banker.


* Experience counts – Work with a person who has a minimum of 14 years in the mortgage business, preferably as a Broker.  Lending guidelines have been easy for the past 8-10 years.  People who were successful prior to the past decade know how to excel in the market.


* Have an Advocate – someone who will represent you in the process.  That would make it necessary to work with someone with many Lending sources so they do not have an allegiance to any one lender.  A person receiving payment by a Bank or a developer or a real estate company, really has his or her own interests at heart, not yours.


* Reputation – to a lender is like location to real estate find at least 10 people who have had experience with the lender you are considering. You could be risking you Purchase with this person.


* Check Credentials / affiliations -  ex., The Mortgage Bankers Assoc., the Mortgage Brokers Assoc., the Better Business Bureau, and the Chamber of Commerce.  Screen their members, also check for complaints with DCCA.


* Lender – Make sure your lender is FHA & VA approved as well as affiliated with local Banks and mainland lenders.  In the current market, you want to be sure that you are getting the best program. Research is vital to any loan. Things are changing quickly in the industry, having many options is critical.


* Longevity and Size – The nation’s finest lenders are very discerning when taking on correspondents.  They look at for the company which has been in business for a long time and check to see if their work is professional done.  On the other hand working with a friend or relative may limit your options.


* Speed – Speed up the process by having your lender prepare your documents and fund your loan, in their office.


* Preapproved – Get a reputable local lender to give you a preapproval letter. This will give you more negotiating power.


* Be patient, thorough and fast, – with the changes in the lending climate, there is more paperwork required.  The faster you respond to requests made, the quicker you will be in your home.


* Bank statements – You will need all pages, not just one.  This is one example of slowing down your loan process.


* Look for a Home – not a bargain.  Too many people make decisions only on price and give up qualities they really did want in a Home. It is a mistake to purchase a home only on price alone.  Make it a priority to get quality the first time.  It is not a bargain if you end up selling the house in a couple of years to purchase the one you really wanted in the beginning.  Real Estate commissions and mortgage costs can all add up.


* Credible – Your lender can be a very big disappointment.  Make sure you work with people who are credible, reliable, and knowledgeable and who have the resources for a successful loan.  It is essential that they have your best interests at heart.


 
		

		
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Better Money Management For 2012

		
		
December 28, 2011  By  Leave a Comment 
		

			
Creative Commons - photo by Brad Montgomery ob Flckr


Most of us regard budgeting much as we view dieting. Both are seen as involving self-denial, even though we may say they’re activities we need to pursue. Finding ways to consider budgeting in a different light can help us reach financial success, however.


Since January is a time of self-improvement resolutions, here are some ideas to go over regarding setting up a household budget:


 1. Don’t let your spending habits control you. Begin by understanding that you are in charge of what you spend. Even long-standing bills generally result from choices we made in the past. Deciding to delay a purchase doesn’t mean you can’t have the vacation or audio equipment you want. Instead, you’re simply choosing not to purchase it today. Ultimately budgeting comes down to priorities. But start by calling it a “spending plan,” rather than a budget. You then can see yourself as being in control, instead of following a script.


2. Start by listing basic expenses such as your mortgage, utilities, groceries, and vehicle outlays. Add up these stable costs, which are necessary to everyday life. Subtract that sum from your income to see what you have left as discretionary dollars. It’s this amount which requires a spending plan: How much  goes to clothes and entertainment, and what is saved for vacation and education funds? No matter how  high your income is, it’s possible to outspend what you earn. It’s not uncommon to see high-profile celebrities in financial trouble because they couldn’t control their spending. Once you’re aware of how  much is available for you to spend as you wish, then you can decide where that money goes. Often it’s  helpful to track how you spend your discretionary funds for a month, just to understand where your  money goes. You then can decide if you’d rather spend those dollars differently. And like a dieter, try to  learn what throws you off your resolve. For example, you may have a special trip or social function which will account for most of next month’s discretionary spending. Look forward to that occasion, but recognize you’ll have to cut back on shopping which you might otherwise do around that time. If it looks  like your spending will exceed your plan, then it’s time to make decisions. Select priorities, and put what you can’t afford on a “wish list” for later.


3. Don’t forget to plan for irregular expenses such as insurance premiums and tuition payments. Adjust your discretionary spending ahead of time so you can pay those special bills when they’re due. Also try looking at your spending within different time frames. You may find it works to plan your use of discretionary funds over one- or two-week periods, rather than a month at a time.


 4. Recognize your goal is to spend so that your life is enriched without increasing your debts. Just as a dieter over time can alter his or her eating habits, many spenders find that working in the yard or talking with friends is as much fun as going to the mall. Forming a new habit is hard at first. But people who used to struggle to pay their bills can gain immense satisfaction by spending less than they earn, and saving a cushion for unexpected expenses.


 


 
		

		
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Happy Holidays!

		
		
December 22, 2011  By  Leave a Comment 
		

			
That Time Of Year





That time of year’s come ’round again,

So we wish you all the best.

The joy that comes from knowing you

Makes us feel that we’ve been blessed.


So we’ll share with you our feelings

At this special time of year:

May your holidays be a delight,

Filled with happiness and cheer.
Happy Holidays!


* This Poem is written By Karl and Joanna Fuchs. 


It echoes our feelings of appreciation of you. It is our desire to wish you all a bright holidays!


 
		

		
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